Fishing & Boating News
Brunswick to retain and reinvent Sea Ray business
Sea Ray sale process ended; Company will restructure Sea Ray to focus on growth opportunities in sport boat and cruiser; Discontinue Sea Ray sport yacht and yacht models and wind down production in 2018
(Jun 26, 2018 - METTAWAI IL)
Brunswick Corporation (NYSE: BC) today announced it:
"Over the last several months, we have engaged in a thorough sale process for the Sea Ray business, which we believed would generate the highest value for our shareholders," Brunswick Chairman and Chief Executive Officer Mark Schwabero explained. "Although there was interest in the business, the offers we received did not reflect an appropriate value for this premium brand, and did not meet our expectations. The lower value was largely due to the persistently weak financial performance of the yacht product category, which complicated and obscured the value of the remainder of Sea Ray.
"As the sale process neared conclusion, we started to evaluate other strategic options beyond our original plan to sell the Sea Ray business in its entirety," Schwabero continued. "Based on that re-assessment, we have concluded that our best opportunity to maximize value is to retain the Sea Ray brand and refocus the business on the sport boat and cruiser product portfolio. As part of the transformation of Sea Ray, we will discontinue sport yacht and yacht models and begin an orderly wind down of yacht production.
"These combined actions will create a revitalized Sea Ray that will benefit from continuing synergy with our broader marine portfolio -- and with targeted ongoing investment - we believe will offer increasingly attractive profitability and cash flow returns. We believe that this is the best solution to generate value for our dealers and shareholders now and in the future," Schwabero said.
"Sea Ray remains one of the most aspirational and premium recreational boat brands, and our sport boats and cruisers set the industry standard," said David Foulkes, president - Marine Consumer Solutions. "We will focus our resources on advancing our position in these segments, with an emphasis on the growing and evolving 24 - 40-foot categories. Moving forward, Sea Ray will continue to offer new products, features and services that leverage our technology and innovation initiatives aimed at enhancing the quality of the consumer boating experience."
Sea Ray will begin to wind down sport yacht and yacht production in the third quarter at its Sykes Creek and Palm Coast, Fla., facilities, involving the elimination of as many as 825 positions. Palm Coast is targeted for closure as soon as practical in 2018, while a portion of Sykes Creek will continue to operate for the foreseeable future to support customer service and warranty obligations, along with other operational requirements.
"We will maintain the capability to provide outstanding service and support to our dealers and installed base of all Sea Ray customers, consistent with the Sea Ray brand promise and history," Schwabero said. "We appreciate the dedication and commitment our employees and the communities that support our operations and will help them through this transition."
The expected impact on 2018 performance and long-term planning targets will be addressed as part of the Company's conference call today as well as the second quarter earnings call.
Going forward, Brunswick will report results of Sea Ray on a GAAP basis in continuing operations, rather than the previous classification as discontinued operations in recent financial reports. Sea Ray Sport Yacht and Yacht financial results will be excluded from the Company's as adjusted, non-GAAP results of continued operations to offer a clearer comparison to go-forward operations. In addition, the Company's as adjusted financial information will include the results of the Sea Ray Sport Boat and Cruiser business.
Conference call scheduled today
The Company will hold a conference call today about the Sea Ray announcement at 10 a.m. CDT June 25, 2018, hosted by Mark Schwabero, chairman and chief executive officer, William Metzger, senior vice president and chief financial officer, and Ryan Gwillim, vice president - investor relations.
Security analysts and investors wishing to participate via telephone should call 888-771-4371 (passcode: Brunswick). Callers outside of North America should call 847- 585-4405 (passcode: Brunswick) to be connected. These numbers can be accessed 15 minutes before the call begins, as well as during the call.
To listen via the Internet, go to ir.brunswick.com. Please go to the website at least 15 minutes before the call to register, download and install any needed audio software.
A replay of the conference call will be available through midnight EDT July 2, 2018, by calling 888-843-7419 or international dial 630-652-3042 (passcode: 4718 7022#). The replay also will be available at www.brunswick.com.
Additional risk factors are included in the Company's Annual Report on Form 10-K for 2017 and the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018. Forward-looking statements speak only as of the date on which they are made, and Brunswick does not undertake any obligation to update them to reflect events or circumstances after the date of this news release or for changes by wire services or Internet service providers.
Phone:903-882-8877 or 903-882-8878 — Fax: 972-619-8776