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  1. #1

    Merc backs Reggie

    WASHINGTON, N.C.--(BUSINESS WIRE)--July 18, 2003--Fountain Powerboat
    Industries, Inc. (NASDAQ: FPWR) President and Chief Executive Officer Reginald
    M. Fountain, Jr. announced the implementation of an $18 million long-term
    financing arrangement with Bank of America, the proceeds of which are being
    used by the company to refinance existing long-term debt, pay current
    liabilities, and provide additional operating funds.
    Fountain Powerboats has reported three consecutive quarters of operating
    profit and is in the process of closing its fourth fiscal quarter ended on
    June 30 during which it recorded strong sales. Mr. Fountain stated, "We
    believe the results of our operations during fiscal 2003, combined with the
    new financing, put us in a strong financial position going into our 2004
    fiscal year."
    The loan is secured by certain assets of Fountain Powerboats and Mr.
    Fountain and has been guaranteed by Brunswick Corporation, a division of which
    supplies marine engines used in the company's products.

    Glad to see fountain get this loan to provide liquidy for the company and their dealers.

  2. #2
    Registered Platinum Member THEJOKER's Avatar
    My Boats:
    Being a great husband and dad , boats , golf
    Join Date
    Nov 2000
    Lake Lanier - N. Georgia


    How do you make a million dollars in the boating business? Start with millions - borrow 18 million to keep going and sell to Mercury! Mercury Power Boats has begun! BH

  3. #3
    Forum Regulator VIP Member Sydwayz's Avatar
    My Boats:
    37' Active Thunder AVH; 17' Speedliner Cat OB
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    May 2001
    Bajas with beaks for 2004?

  4. #4
    VIP Member VIP Member Back4More's Avatar
    My Boats:
    353 Fastech
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    Feb 2002
    Lake Michigan
    Interest rates are down and now is the time to borrow money for whatever.
    Merc will some day own Fountain because they want the location...Lake X be done soon.
    Merc needs Reggie, I'd bet that Fountain sold more Merc HP motors than any other.

  5. #5
    Platinum Member Platinum Member CigDaze's Avatar
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    Cigarette 35 Cafe Racer
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    St. Petersburg, FL
    Originally posted by Sydwayz
    Bajas with beaks for 2004?

    I wonder if Brunswick has ulterior motives.

  6. #6
    Registered Von Bongo's Avatar
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    1997 Cig Kevlar - powered by Boyd
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    Dec 2001
    Iowa - Missouri
    Um, I don't see too many guarantors on loans that do not have a stake in the company. I would have to think by this that Brunswick already has some ownership.

    If they do not then what is their consideration for signing the guaranty and how could you enforce it in court if you received none? There is more to the story than meets the eye, maybe they do not have ownership, but then they must have some contract to purchase Fountain in place. Otherwise no consideration.

    And yes, Fountain has in the past been Merc's biggest customer for motors with blue paint on them.

  7. #7
    Enjoy the show VIP Member Ron P's Avatar
    Join Date
    Feb 2001
    The Joisey Shore
    I bet if Reggie defaults, Brunswick will own the majority of the stock in Fountain Powerboats.

    Is the company worth 18 million?

  8. #8
    Registered JOHN G's Avatar
    My Boats:
    2001 42 fountain
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    May 2001

  9. #9
    Originally posted by formulafastech
    Reggie owns almost half (2.2 million of about 4.7 million outstanding) of Fountains stock. Depending on what their current debt is, I'd gues that Merc has first lienholder status on the buildings/land in NC. If they do own stock, its less than 5%, because it hasn't been reported. There were a bunch of stories a few years ago that Merc wanted to buy Fountain, without Reggie, but that they backed off because the public sees Reggie as Fountain boats
    formulafastech, I believe you are right on except I would think Bank of America would have the first lien and Brunswick would have the first option in the event of default. There should be a SEC filing on this matter soon which will give more details about the loan and Brunswick's position. I'll keep my eyes out for it.

  10. #10
    Registered racesdad's Avatar
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    07 368 SKATER and shes bad
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    Mar 2002
    racing capitol of the world
    who knows

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