Briggs & Stratton Corporation Reports Results
31 July 1998
Briggs & Stratton Corporation Reports Results for the Fourth Quarter and Twelve Months of Fiscal 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.