Brunswick Corporation (NYSE: BC) is being hit hard after the company announced that it will accelerate its previously announced efforts to re-size the company and to remove $300 million in fixed costs by the end of 2009.   It said this accelerated step-up is in light of "extraordinary developments within the global financial markets" that are affecting the recreational marine industry.

Brunswick is accelerating its plan to close four boat manufacturingfacilities in early 2009. The three manufacturing facilities beingpermanently closed are located in Pipestone, Minnesota, Roseburg,Oregon, and Arlington, Washington. Its plant in Navassa, North Carolinawill be mothballed.  The company is also temporarily suspending production at three of itsboat manufacturing facilities near Knoxville, Tennessee from the weekof October 27 through the end of 2008.   This plant closure action will result in theeventual elimination of approximately 1,450 hourly and salaried workers.

The company remains on targetto cut fixed costs by $300 million by the end of 2009 over 2007levels.  It expects to end 2008 with more than $125 million offixed-cost reductions with actions completed or underway adding $75million of cost savings this year.

Brunswick expects to report cash at the end of the third quarter ofapproximately $340 million.  But the company also said it is no longerconfident of achieving positive earnings for the full year, excludingrestructuring and impairment charges.

It estimates restructuring charges of $200 to $220 million pre-tax, ofwith approximately $180 million in 2008. These charges include assetwrite-downs, severance and facility closing and other costs with abouthalf of restructuring costs being cash.

The company noted that goodwill and indefinite-lived intangibles wasimpaired and it will record non-cash goodwill and trade name impairmentcharges totaling about $496 million pretax in the third quarter. 

Dustan E. McCoy, Chairman & CEO, called this the most turbulenteconomic times in recent history and noted how the DJIA has dropped3,500point points. He further noted mortgage and housing crises, recordoil prices, and shrinking credit availability for companies andindividuals.  All of this combined has led to eroding the demand forboats and engines at a swifter pace than originally anticipated.

The company’s market cap is $721 million after a 15% drop to $8.28after today’s news.  Analysts have slashed estimates in the last 90days and were already expecting losses for fiscal 2008 of -$0.66 EPS.

Its shares are at new 52-week lows as the 52-week trading range is$8.99 to $24.18.  The last time shares hit these was back in 1990.

Jon C. Ogg
October 9, 2008

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