Brunswick Corporation : Bayliner to Reposition Product Portfolio and Enter New Categories
Brunswick Will Also Consolidate U.S. Cruiser Production,
Recognize Impairment Charges on Certain Boat Brands
LAKE FOREST, Ill. Oct. 9, 2012 - Citing trends in the global marine marketplace
and the changing needs and desires of today's boat buyer, Brunswick Corporation
(NYSE: BC) today announced that its Bayliner boat brand, long a leader in the
industry, will refine its North American and European product portfolio by
focusing on its core bowrider and deckboat models as well as categories new to
the brand, such as jet boats.
"The complexion of the global marine marketplace continues to evolve, and so
does Brunswick," explained Dustan E. McCoy, Brunswick's chairman and chief
executive officer. "Our continuing challenge is to adapt our brands, models and
technologies to best appeal to today's boating consumers as well as the shifting
global marine marketplace."
"Our current plan reflects a change in focus for Bayliner's global product
portfolio to emphasize and expand its leadership across a broader set of
recreational day boat craft types," explained Andrew E. Graves, president of the
Brunswick Boat Group. "In doing so, we continue Bayliner's legacy of
successfully anticipating and adapting to the marketplace for more than 50
years. Over the next several months, we will introduce an all new line of
bowriders, a new series of deckboats with innovative and modern design, and we
will launch the "Element," our newest concept in affordable boating. In 2013,
Bayliner will enter the jet boat category with a new series of boats. We
believe this effort will solidify our position in the market and offer dealers
and boaters a wide variety of choices and models.
"Additionally, Bayliner will make its Brazil operations the center for its
cruiser business, but will suspend the brand's cruiser sales and production
outside of South America. We will continue to maintain our leadership position
in the North American cruiser segment with our Sea Ray brand," Graves explained.
"This strategic repositioning of Bayliner further reduces the need to maintain
the Brunswick Boat Group's current cruiser production capacity in the U.S.,
particularly in view of current market weakness for cruisers. As a result, we
will consolidate our U.S. cruiser production for Sea Ray into our Palm Coast,
Fla., and Vonore, Tenn., facilities, while producing Bayliner cruisers in
Brazil. This will be more efficient and still allow us to retain capacity equal
to three times our current worldwide cruiser demand, enabling us to adequately
increase production when the market improves."
As a result of this consolidation, Brunswick's cruiser plant near Knoxville,
Tenn., will cease production by the end of 2012. The plant currently has a
full-time workforce of approximately 225. The Company estimates that the
consolidation of U.S. cruiser production will save approximately $10 million -
$12 million a year once implemented.
"Though the U.S. marine marketplace has improved recently, the recovery has been
uneven across the various market segments," McCoy said. "While sales of smaller
boats, such as popular fishing boats and pontoons, have improved, demand for
cruisers and larger boats remains weak. We believe this is due to a number of
factors, including continuing economic uncertainty as well as a cautious and
evolving consumer. The actions announced today are a necessary step in enabling
us to reach our near-term operational and financial objectives, while
positioning the Company to exploit future market growth in the fiberglass boat
segment."
Separately, the Company also concluded that a portion of its long-lived assets
pertaining to certain boat brands, including Hatteras, Cabo and its European and
Asia-Pacific boat brands, have been impaired and that impairment charges related
to these brands will be recognized in the third quarter.
The Company's estimate of total restructuring and impairment charges in the
third quarter will be in the range of $25 million to $32 million pretax. These
charges primarily include non-cash asset write-downs, but also include charges
for severance, facility closing and other costs. Further, the Company
anticipates that additional charges pertaining to these actions will be
recognized in future periods.
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; Attwood marine parts and accessories; Land
'N' Sea, Kellogg Marine, and Diversified Marine parts and accessories
distributors; Bayliner, Boston Whaler, Brunswick Commercial and Government
Products, Cabo Yachts, Crestliner, Cypress Cay, Harris FloteBote, Hatteras,
Lowe, Lund, Meridian, Princecraft, Quicksilver, Rayglass, Sea Ray, Trophy,
Uttern and Valiant boats; Life Fitness and Hammer Strength fitness equipment;
Brunswick bowling centers, equipment and consumer products; Brunswick billiards
tables and foosball tables. For more information, visit
http://www.brunswick.com.
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| Contact: | Bruce Byots |
| | Vice President - Corporate and Investor Relations |
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| Phone: | 847-735-4612 |
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| Email: | bruce.byots@brunswick.com |
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| Contact: | Daniel Kubera |
| | Director - Media Relations and Corporate Communications |
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| Phone: | 847-735-4617 |
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| Email: | daniel.kubera@brunswick.com |
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Source: Brunswick Corporation via Thomson Reuters ONE
[HUG#1647840]
Released October 9, 2012