Brunswick Corporation announced that its Life Fitness Division has been in negotiations regarding a potential settlement of a lawsuit with Precor, a manufacturer of fitness equipment. The lawsuit involves a dispute over patent rights held by Precor relating to the design of a cross trainer.
Although the parties have not reached a final settlement of the lawsuit, in light of developments in connection with the negotiations, the company decided in May 2003 to establish a $25 million reserve related to the potential resolution of the litigation. The provision related to this reserve will be included in the financial statements to be issued with the company’s quarterly report on Form 10-Q to be filed today. As a result of this reserve, the company will report 2003 first quarter net earnings of $3.8 million, or $0.04 per diluted share. Previously, the company had reported net earnings of $19.8 million, or $0.22 per diluted share, for the first quarter.
