Brunswick Pulls Plug
PR Newswire 5 Sept. 1997 LAKE FOREST, Ill., Sept. 5 /PRNewswire/ -- Brunswick Corporation said that initiatives underway to streamline its operations and improve global manufacturing costs are expected to result in pre-tax savings aggregating $55 million to $60 million over the next three years. To account for costs associated with these actions, the company said it would take a pre- tax charge of approximately $95 million in the third quarter ending Sept. 30, 1997. On an after-tax basis, the charge is equivalent to approximately $60 million, or $0.60 per share.
Commenting on actions covered by the charge, Brunswick Chairman and CEO Peter N. Larson said, "After considering current and expected market conditions for personal watercraft, we elected to discontinue our efforts in this area. In addition, we will close a boat manufacturing plant in Ireland, outsource the manufacture of certain components in our bowling division, centralize European marketing and customer service in our marine division, consolidate fishing reel manufacturing into one plant in Tulsa, and consolidate other operations to optimize our manufacturing and distribution processes. Cost savings from these initiatives will allow us to strengthen our support of new product introductions, to make further cost refinements to our direct fuel injection technology for outboard engines and to improve manufacturing efficiencies and earnings in both our marine and recreation segments. All of these steps are intended to support Brunswick's position as the leading global consumer products company serving the active recreation markets with number-one brands in fishing, camping, biking, bowling, fitness equipment, pleasure boating and marine propulsion.
The company said that Marine segment projects accounted for approximately three quarters of the charge and Recreation segment programs accounted for the balance. Of the estimated $95 million charge, about 45 percent relates to costs associated with asset write-downs and dispositions, and approximately 30 percent covers estimated severance costs.
Headquartered in Lake Forest, Illinois, Brunswick is a multinational company serving outdoor and indoor active recreation markets with consumer products that include such leading brands as Zebco and Quantum fishing reels and reel/rod combinations; American Camper and Remington camping gear; Igloo coolers and ice chests; Mongoose, Roadmaster and Ride Hard bicycles; Brunswick bowling and family entertainment centers, equipment and consumer products; Brunswick billiards tables; Life Fitness cardiovascular and strength training equipment; Sea Ray, Bayliner and Maxum pleasure boats, Baja high-performance boats, Boston Whaler and Trophy offshore fishing boats; Mercury, Mariner and Force outboard engines and MerCruiser sterndrives and inboard engines.
The estimated cost savings resulting from this charge are forward looking statements, as defined by the Private Securities Litigation Reform Act of 1995, and involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this announcement. These risks include, but are not limited to, the ability to complete the planned initiatives in the time estimated, the success of on- going cost-management programs and shifts in market demand for the company's products.
SOURCE Brunswick Corporation CONTACT: Kathryn J. Chieger, Vice President - Corporate and Investor Relations, of Brunswick, 847-735-4612
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