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News Release
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Brunswick
Corporation 1 N. Field Court Lake Forest,
IL 60045
Telephone
847.735.4700 Facsimile 847.735.4750
www.brunswick.com
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| Release: | IMMEDIATE |
| Contact: | Bruce Byots |
| Vice President – Corporate and Investor Relations | |
| Phone: | (847) 735-4612 |
| Contact: | Dan Kubera |
| Director – Media Relations and Corporate Communications | |
| Phone: | (847) 735-4617 |
| Email: | daniel.kubera@brunswick.com |
BRUNSWICK ANNOUNCES AMENDMENT TO
REVOLVING CREDIT FACILITY
LAKE FOREST, Ill., Dec. 19, 2008 –
Brunswick Corporation (NYSE: BC) announced today that it and a group of
financial institutions have completed amending the company’s revolving credit
facility. In light of the current economic and credit climates,
Brunswick had sought various changes to the credit facility to ensure access to
this short-term funding source.
“The
completion of the amendment is an important step for Brunswick, providing us
with liquidity and financial flexibility going forward,” explained Brunswick
Chairman and Chief Executive Officer Dustan E. McCoy. “We believe the
amount available under this facility, combined with the cash on our balance
sheet as well as recent and future cost savings efforts, should provide us the
necessary liquidity to manage effectively through these difficult market and
economic conditions.”
As part
of this amendment, the facility was converted into a secured asset-based
facility, and its size was established at $400 million. Borrowings
under the facility are subject to the value of the borrowing base,
consisting of certain receivables, inventory, and machinery and equipment of the
company’s domestic subsidiaries. The facility contains a minimum
fixed-charges coverage covenant, which is effective when borrowings are within
$60 million of the total borrowing capacity available under the facility. There
are presently no borrowings under the facility; however, there
are previously issued letters of credit, which total approximately $88
million. The amendment to the facility, which remains in place
through May 2012, was led by J.P. Morgan Securities Inc.
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Brunswick
Corporation
Dec.
19, 2008
Page 2
of 4
“This
facility is consistent with our current business needs in terms of size and
structure,” McCoy said. “It provides access to an important source of
liquidity, should we need to supplement our own vigorous cash management
efforts, to fund anticipated working capital needs going forward.”
Additional
information concerning the revolving credit facility, including the entire
Amended and Restated Credit Agreement, can be found under the related Form 8-K
filing.
Joint
venture agreement also modified
In
addition to this amended credit facility, Brunswick Financial Services has also
entered into an agreement with GE Capital Solutions (NYSE: GE) to amend the
terms of its joint venture agreement. The amendment is necessitated by the new
terms of the revolving credit facility, and will synchronize the key financial
covenant in each agreement. The joint venture, Brunswick Acceptance
Company (BAC), began operations in 2003, with the current agreement in place
through 2014. BAC provides wholesale floor plan financing for
qualifying Brunswick marine dealers.
Additional
Form 8-K filed
The
company also announced that it has filed a separate Form 8-K concerning its
previously issued financial statements for the three months and nine months
ended Sept. 27, 2008 (the "September 27 financials"). In preparing
for its year-end 2008 financial statements, the company has determined that it
had incorrectly determined the valuation allowance against deferred tax assets
when it prepared the September 27 financials and, accordingly, will need to
increase its deferred tax valuation allowance as prescribed by the Statement of
Financial Accounting Standards No. 109, “Accounting for Income
Taxes.” This special tax item is a non-cash charge and did not affect
the company's operating loss or operating cash flows for the three months and
nine months ended Sept. 27, 2008. As a result, the company intends to
file amended financial statements in a Form 10-Q/A for the three and nine
month periods ended Sept. 27, 2008 and Sept. 29, 2007 no later than Jan. 30,
2009.
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Brunswick
Corporation
Dec.
19, 2008
Page 3
of 4
Forward-Looking
Statements
Certain
statements in this news release are forward looking as defined in the Private
Securities Litigation Reform Act of 1995. These statements involve
certain risks and uncertainties that may cause actual results to differ
materially from expectations as of the date of this news
release. These risks include, but are not limited to: the effect of
(i) the amount of disposable income available to consumers for discretionary
purchases, and (ii) the level of consumer confidence on the demand for marine,
fitness, billiards and bowling equipment, products and services; the ability to
successfully complete restructuring efforts in the timeframe and cost
anticipated; the ability to successfully complete the disposition of non-core
assets; the effect of higher product prices due to technology changes and added
product features and components on consumer demand; the effect of competition
from other leisure pursuits on the level of participation in boating, fitness,
bowling and billiards activities; the effect of interest rates and fuel prices
on demand for marine products; the ability to successfully manage pipeline
inventories; the financial strength of dealers, distributors and independent
boat builders; the ability to maintain mutually beneficial relationships with
dealers, distributors and independent boat builders; the ability to maintain
effective distribution and to develop alternative distribution channels without
disrupting incumbent distribution partners; the ability to maintain market
share, particularly in high-margin products; the success of new product
introductions; the ability to maintain product quality and service standards
expected by customers; competitive pricing pressures; the ability to develop
cost-effective product technologies that comply with regulatory requirements;
the ability to transition and ramp up certain manufacturing operations within
time and budgets allowed; the ability to successfully develop and distribute
products differentiated for the global marketplace; shifts in currency exchange
rates; adverse foreign economic conditions; the success of global sourcing and
supply chain initiatives; the ability to obtain components and raw materials
from suppliers; increased competition from Asian competitors; competition from
new technologies; the ability to complete environmental remediation efforts and
resolve claims and litigation at the cost estimated; and the effect of weather
conditions on demand for marine products and retail bowling center
revenues. Additional factors are included in the company’s Annual
Report on Form 10-K for 2007 and Quarterly Report on Form 10-Q for the quarter
ended Sept. 27, 2008.
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Brunswick
Corporation
Dec.
19, 2008
Page 4
of 4
About
Brunswick
Headquartered
in Lake Forest, Ill., Brunswick Corporation endeavors to instill "Genuine
Ingenuity"(TM) in all its leading consumer brands, including Mercury and Mariner
outboard engines; Mercury MerCruiser sterndrives and inboard engines; MotorGuide
trolling motors; Teignbridge propellers; Albemarle, Arvor, Bayliner, Bermuda,
Boston Whaler, Cabo Yachts, Crestliner, Cypress Cay, Harris, Hatteras, Kayot,
Lowe, Lund, Maxum, Meridian, Ornvik, Princecraft, Quicksilver, Rayglass, Sea
Ray, Sealine, Triton, Trophy, Uttern and Valiant boats; Attwood marine parts and
accessories; Land 'N' Sea, Kellogg Marine, Diversified Marine and Benrock parts
and accessories distributors; IDS dealer management systems; Life Fitness,
Hammer Strength and ParaBody fitness equipment; Brunswick bowling centers,
equipment and consumer products; Brunswick billiards tables; and Dynamo, Tornado
and Valley pool tables, Air Hockey and foosball tables. For more
information, visit http://www.brunswick.com.
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