Brunswick hits 25-year low after Moody's downgrade
Shares of Brunswick Corp. (NYSE: BC) sank to a 25-year intraday low on Oct. 20 after Moody's Investor Services cut the manufacturer's debt ratings to junk status. In addition to its boat portfolio, the company also owns equipment makers Life Fitness, Parabody and Hammer Strength.
Moody's senior credit officer Kevin Cassidy said the agency's review of the company will continue, despite the downgrade of Brunswick's unsecured notes, commercial paper, corporate family rating and probability of default rating.
"The downgrade reflects our concerns that the continuing turmoil in the financial markets will result in a significant contraction in discretionary consumer spending over the foreseeable future and may put pressure on the company's dealer network and its liquidity position," Cassidy said in a statement. "While Moody's believes that Brunswick will continue to attempt to protect its credit metrics and liquidity, we are concerned about the company's reduced financial flexibility as its ability to comply with a financial covenant is uncertain."
Cassidy cut the rating on the company's unsecured notes to "Ba3" from "Baa3" and downgraded its commercial paper rating to not prime from P3. The company also assigned a "Ba2" corporate family rating and a "Ba2" probability of default rating to Brunswick.
The company has struggled as the nation's economy soured and the global market for recreational boats softened. Earlier this month, Brunswick said it was cutting 1,400 jobs, shutting four plants and furloughing workers at three more. The company also expects to record two non-cash impairment charges totaling about $496 million before taxes during the third quarter.
Brunswick shares fell $1.28, or 22.1 percent, to close at $4.49 on Oct. 20. They earlier traded at $3.80, their lowest price since April 1983.
Winmark reports Q3 revenue increase
Winmark Corp. (Nasdaq:WINA), parent of Play It Again Sports, said its third-quarter revenue increased to $9.1 million versus $7.9 million in the same period last year boosted by royalty fees and leasing income.
For the quarter ended Sept. 27, net income was $1.3 million, or $0.24 per share diluted, compared to net income of $1.1 million, or $0.20 per share diluted, in 2007.
"Our results were favorable due to the strength of our retail brands and the skill and hard work of our franchisees. Our leasing business did not grow in this quarter and we do not expect fast growth in this tough economic environment," CEO John Morgan said in a statement.
Iconix CEO exercises options
Iconix Brand Group (Nasdaq: ICON), parent of Danskin Fitness, said CEO and Chairman Neil Cole has exercised options to purchase 660,000 shares of the company's common stock pursuant to 10-year stock options. Of that, 650,000 expired Oct. 14, and the remaining 10,000 shortly after.
In connection with these option exercises, the company withheld 421,214 shares of its common stock to cover Cole's withholding tax liability and the exercise price of the options. After that, Cole received 238,786 shares, bringing his common stock ownership share to 2.8 million.
Finish Line elects board member, declares cash dividend
The board of directors of Finish Line (Nasdaq: FINL) has elected Dolores A. Kunda as a new director of the company. She will serve on the board's compensation and stock option committee. Her term will expire in 2011.
Kunda is the founder of Lapiz, one of the largest Hispanic advertising agencies in the United States and has over 20 years of experience in marketing and advertising to the general market, Mexico, the U.S. Hispanic market and Puerto Rico.
The board also declared a quarterly cash dividend of $0.03 per share of Class A and Class B common stock. The quarterly cash dividend will be payable on Dec. 15 to shareholders of record on Nov. 28.
Nike sues Wal-Mart for patent infringement
Nike (NYSE: NKE) has sued Wal-Mart Stores, alleging it is selling shoes that infringe on Nike's patented designs. Nike said in its complaint that the Wal-Mart shoes too closely resemble its Nike Shox footwear, which have a spring-like device in the heel.
Nike wants Wal-Mart to stop selling the shoes and seeks damages, according to the complaint filed in the U.S. District Court for the Northern District of Illinois.
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