Brunswick Comments on Rating Agency Action
LAKE FOREST, Ill., July 8 /PRNewswire-FirstCall/ -- Brunswick Corporation (NYSE: BC) commented today on the announcement by Standard & Poor's Rating Services (S&P) that it had lowered its corporate credit rating on Brunswick from BBB- to BB+. Brunswick issued the following statement:
We do not believe today's announcement by S&P will have any significant effect on Brunswick. Both our strong balance sheet and ability to generate cash provide us with substantial liquidity and serve us well in economic circumstances such as those affecting the United States. We will continue to focus on operating our businesses well in these market conditions. Brunswick Acceptance Company, our joint venture with a subsidiary of General Electric Capital Corporation that provides dealer floor-plan financing, is unaffected by this announcement. We are, and expect to remain, in compliance with the financial requirements of the joint venture agreement, in spite of the weak market environment. The venture was recently renewed and extended through June 2014. With regard to our $650 million revolving credit facility, there are no borrowing constraints resulting from the ratings action. We currently do not anticipate any borrowings under the facility for the remainder of 2008. Looking forward, Brunswick anticipates amending the revolving credit agreement to enhance our ability to remain in compliance with the facility's leverage covenant and to ensure sufficient borrowing capacity if the present U.S. recreational marine market downturn continues into 2009. We also intend to refinance our $250 million senior unsubordinated floating rate notes due 2009. We will continue to execute our previously announced plans to resize our company and reduce fixed costs by $300 million. Brunswick expects to generate positive cash flow in 2008 and to end the year with cash in excess of $400 million, up from $267 million at the end of the first quarter of 2008.
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 and products; the ability to successfully complete restructuring efforts in the timeframe and cost anticipated; the ability to amend or maintain credit facilities on terms favorable to the company; the ability of the company's operations to generate expected financial results and levels of cash flow; 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 and their ability to obtain financing for the purchase of company product; 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 success of marketing and cost management programs; 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 ability to repay or refinance existing indebtedness when it becomes due; 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; the effect of weather conditions on demand for marine products and retail bowling center revenues; and the ability to successfully integrate acquisitions. 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 March 29, 2008.
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; MotoTron electronic controls; Albemarle, Arvor, Bayliner, Bermuda, Boston Whaler, Cabo Yachts, Crestliner, Cypress Cay, Harris, Hatteras, Kayot, Lowe, Lund, Maxum, Meridian, Ornvik, Princecraft, Quicksilver, Rayglass, Savage, 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.
SOURCE Brunswick Corporation
Released July 8, 2008