Briggs & Stratton Corporation Reports Results

31 July 1998

    MILWAUKEE, July 30 /PR Newswire/ -- Briggs & Stratton Corporation
:
    Net income of $27.2 million or $1.13 per share for the fourth quarter of
fiscal 1998 was significantly higher than for the fourth quarter of fiscal
1997. Excluding from the comparison the special charge in last year's fourth
quarter, net income was just slightly higher. Sales were flat. Unit shipments
increased 2%. Demand was strong this spring, as it was last spring, but the
mix was different. The strength this spring was in engines for walk-behind
lawnmowers and power washers. In fact, demand for engines for these products
exceeded our capacity. Last year the strength was in higher horsepower, higher
price engines. Operating efficiency improved, more than offsetting the adverse
affects of the sales mix and stronger dollar.
    For the full fiscal year, net income increased 15%. Sales increased 1%.
Engine unit shipments increased 3%. Income increased because of the absence of
the special charge. Excluding the special charge from 1997 results, net income
decreased 16%. The decrease was a result of the reduced profitability of
export sales, higher administrative expense, and higher interest expense.
    Because we do not know what power equipment inventory levels will be at
the end of summer and because many large retailers have not made their
sourcing decisions, it is too early to make a precise forecast for fiscal
1999. We can report that the outlook for retail sales of outdoor power
equipment continues to be good, assuming normal weather next spring, and that
we are not aware of any changes in customer relationships that would
significantly affect our business. We believe that operating efficiency will
continue to improve, so at this time we expect improved operating results in
fiscal 1999.

                          F. P. Stratton, Jr.
                          Chairman and Chief Executive Officer


    Consolidated Statements of Earnings For Periods Ended June
    (In Thousands)

                              Fourth Quarter              Twelve Months
                            1998          1997         1998          1997

    NET SALES             $379,517      $379,063   $1,327,610    $1,316,413
    COST OF GOODS SOLD     296,924       339,792    1,072,936     1,095,197
    Gross Profit on Sales  $82,593       $39,271     $254,674      $221,216
    ENGINEERING, SELLING,
     GENERAL AND
     ADMINISTRATIVE
     EXPENSES               37,644        32,518      129,986       117,497
    Income from
     Operations            $44,949        $6,753     $124,688      $103,719
    INTEREST EXPENSE        (4,440)       (2,829)     (19,352)       (9,880)
    OTHER INCOME
     (EXPENSE), Net          2,566         1,915        7,809         5,466
    Income Before Provision
     for Income Taxes      $43,075        $5,839     $113,145       $99,305
    PROVISION FOR
     INCOME TAXES           15,870         2,220       42,500        37,740
    Net Income             $27,205        $3,619      $70,645       $61,565
    Average Shares
     Outstanding            24,072        27,424       24,666        28,551
    BASIC EARNINGS
     PER SHARE               $1.13          $.13        $2.86         $2.16
    Diluted Average Shares
     Outstanding            24,151        27,587       24,775        28,678
    DILUTED EARNINGS PER
     SHARE                   $1.13          $.13        $2.85         $2.15


    BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
    Consolidated Balance Sheets as of the End of June 1998 and 1997
    (In Thousands)

    CURRENT ASSETS:                 1998                    1997
    Cash and Cash Equivalents     $84,527                $112,859
    Receivables                   136,629                 129,877
    Inventories                   107,876                 125,957
    Other                          53,014                  49,723
    Total Current Assets         $382,046                $418,416
    OTHER ASSETS:
    Deferred Income Tax Assets     $9,555                 $16,975
    Capitalized Software            9,881                  10,532
    Total Other Assets            $19,436                 $27,507
    PLANT AND EQUIPMENT,
    at Cost                      $812,428                $796,714
    Less - Accumulated
    Depreciation                  420,501                 400,448
    Net Plant and Equipment      $391,927                $396,266
                                 $793,409                $842,189


    CURRENT LIABILITIES:            1998                    1997
    Accounts Payable              $76,915                 $82,166
    Domestic Notes Payable          4,700                   5,000
    Foreign Loans                  14,336                  13,359
    Current Maturities on
     Long-Term Debt                15,000                  15,000
    Accrued Liabilities           111,994                  98,469
    Total Current Liabilities    $222,945                $213,994
    OTHER LIABILITIES:
    Deferred Revenue on Sale of
    Plant & Equipment             $15,893                 $15,966
    Accrued Pension Cost           26,477                  31,891
    Accrued Employee Benefits      12,571                  12,324
    Postretirement Health Care
    Obligation                     70,933                  74,020
    Long-Term Debt                128,102                 142,897
    Total Other Liabilities      $253,976                $277,098
    SHAREHOLDERS' INVESTMENT:
    Common Stock and Additional
    Paid-in Capital               $38,065                 $40,822
    Retained Earnings             533,805                 490,682
    Cumulative Translation
     Adjustments                   (2,110)                 (1,033)
    Treasury Stock, at Cost      (253,272)               (179,374)
    Total Shareholders'
     Investment                  $316,488                $351,097
                                 $793,409                $842,189


    Consolidated Statements of Cash Flows
    (In Thousands)

                                     Twelve Months Ended June
    CASH FLOWS FROM OPERATING
     ACTIVITIES:                    1998                    1997
    Net Income                    $70,645                 $61,565
    Depreciation                   47,511                  43,345
    Amortization of Discount
     on Long-Term Debt                205                      17
    Loss on Disposition of
     Plant and Equipment            1,973                   1,608
    (Increase) in Accounts
     Receivable                    (6,752)                (10,531)
    Decrease in Inventories        18,081                  11,446
    (Increase) in Other
     Current Assets                (3,291)                 (4,409)
    Increase in Accounts Payable
     and Accrued Liabilities        8,274                  25,378
    Other, Net                       (256)                 14,498
    Net Cash Provided in
     Operating Activities        $136,390                $142,917

    CASH FLOWS FROM INVESTING
     ACTIVITIES:
    Additions to Plant and
    Equipment                    $(45,893)               $(71,262)
    Proceeds Received on Sale
     of Plant and Equipment           620                  20,099
    Net Cash Used in Investing
     Activities                  $(45,273)               $(51,163)
    CASH FLOWS FROM FINANCING
     ACTIVITIES:
    Net Borrowings (Repayments) on
     Domestic and Foreign Loans      $677                 $(1,563)
    Net Borrowings (Repayments)
     on Long-Term Debt            (15,000)                 82,880
    Purchase of Common Stock
     for Treasury                 (85,943)               (179,924)
    Dividends                     (27,522)                (30,549)
    Proceeds from Exercise
     of Stock Options               9,288                     185
    Net Cash Used in Financing
     Activities                 $(118,500)              $(128,971)
    EFFECT OF EXCHANGE
     RATE CHANGES                   $(949)                  $(563)
    NET DECREASE IN CASH AND
     CASH EQUIVALENTS            $(28,332)               $(37,780)
    CASH AND CASH EQUIVALENTS,
     Beginning                    112,859                 150,639
    CASH AND CASH EQUIVALENTS,
    Ending                        $84,527                $112,859

    This release contains certain forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. The forward-looking statements
are based on the Company's current views and assumptions and involve risks and
uncertainties that include, among other things, the effects of weather on
the purchasing patterns of the Company's customers and end use purchasers of
the Company's engines; the seasonal nature of the Company's business; actions
of competitors; changes in laws and regulations, including accounting
standards; employee relations; customer demand; prices of purchased raw
materials and parts; domestic economic conditions, including housing starts
and changes in consumer disposable income; and foreign economic conditions,
including currency rate fluctuations. Some or all of the factors are beyond
the Company's control.