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Brunswick announces plan to exit Hatteras and CABO brands

Brunswick Corporation
January 3, 2013
Filed under News

(Thomson Reuters ONE via COMTEX) — LAKE FOREST, Ill. Jan. 3, 2013 — Brunswick Corporation BC +1.16% announced today that its board of directors has authorized the Company to seek a buyer for its Hatteras and CABO brands of motoryachts and sportfishing convertibles.

“This action reflects our decision to exit the sportfishing convertible category and to concentrate our resources in the yacht segment on our remaining brands, Sea Ray and Meridian Yachts. When completed, this action will also contribute to our goal of a break-even or better Boat Segment in 2013, even if the larger sterndrive/inboard fiberglass markets do not improve,” said Brunswick Chairman and Chief Executive Officer Dustan E. McCoy.

“The current plan assumes that the eventual purchaser will retain both the physical plant and the talented workforce of Hatteras/CABO. During the sale process, which we seek to complete in an expeditious manner, Hatteras and CABO will maintain ongoing operations, and we will keep our employees and dealer network informed of our progress.”

As a result of this decision, the Company expects to record charges in the range of $70 million to $80 million, a majority of which will be recorded in the fourth quarter of 2012.

Brunswick purchased Hatteras Yachts in 2001 and CABO in 2006. Both are based in New Bern, N.C.

Comments

3 Responses to “Brunswick announces plan to exit Hatteras and CABO brands”

  1. Michael Joyce on January 4th, 2013 1:59 pm

    If the dealers had any sense they would buy Hatteras. They wind up carrying all the load anyhow. Yacht building is a low margin low volume business and works best when owned by private families who can deal with the historic cycles. Suits and water never did mix well.

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  2. Rick Spellman on January 4th, 2013 7:32 pm

    As I read this announcment the important news is not Hatteras or CABO. It’s Brunswick’s admission that they are doing this in hopes that 2013 will at least be a “break even or better year” and they don’t exactly exude confidence when they also hedge their bet based on ” if the larger sterndrive/inboard fiberglass markets do not improve.” That’s a major chunk of Brunswicks’ boat business. This is a bellweather company in the marine industry. I would be very cautious to do anything involving boats until big players like these guys think it’s safe enough to come up out of their foxholes.

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  3. Arch on March 1st, 2013 1:28 pm

    Despite being on the road to recovery, the marine industry is one middle east conflict away from being back where it was a few years ago. The difference is that most can’t withstand another industry recession when we haven’t even recovered from the last one. So the suits are skittish and should be. Michael is right, but so is Rick. It’s risky out there right now. You have to have the capital and a board willing to weather another possible setback and after the last 5 years, few have an appetite for that.

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