Briggs & Stratton Reports Results for the 2Q and Six Months
15 January 1999
Briggs & Stratton Corporation Reports Results for the Second Quarter and Six Months of Fiscal 1999
MILWAUKEE, Jan. 14 -- Briggs & Stratton Corporation
Second quarter net income more than doubled to $25 million or $1.05 per
share. Net sales increased 17% to $360 million. Engine unit shipments also
increased 17%.
First half net income more than tripled to $29 million or $1.23 per share.
First half net sales increased 22%.
The good first half earnings were a result of shipping engines earlier
this year than last year and, to a lesser extent, the benefits of higher
engine production. Because we shipped more engines in the first and second
quarters, we will ship fewer engines in the third quarter. However, based on
customer expectations, orders actually placed, and favorable econometric
forecasts, and assuming normal spring weather, we expect higher sales and
earnings for the full fiscal year.
F. P. Stratton, Jr.
Chairman and Chief Executive Officer
Consolidated Statements of Earnings For Periods Ended December
(In Thousands)
Second Quarter Six Months
1998 1997 1998 1997
NET SALES $359,943 $308,481 $583,924 $479,038
COST OF GOODS SOLD 288,472 257,584 474,841 401,730
Gross Profit
on Sales $71,471 $50,897 $109,083 $77,308
ENGINEERING, SELLING,
GENERAL AND
ADMINISTRATIVE
EXPENSES 29,107 30,065 58,355 59,239
Income from
Operations $42,364 $20,832 $50,728 $18,069
INTEREST EXPENSE (4,748) (5,248) (8,158) (9,042)
OTHER INCOME, Net 1,801 1,020 3,948 3,335
Income Before Provision
for Income Taxes $39,417 $16,604 $46,518 $12,362
PROVISION FOR INCOME
TAXES 14,780 6,310 17,440 4,700
Net Income $24,637 $10,294 $29,078 $7,662
Average Shares
Outstanding 23,308 24,903 23,467 25,034
BASIC EARNINGS
PER SHARE $1.06 $.41 $1.24 $.31
Diluted Average
Shares Outstanding 23,481 25,054 23,588 25,189
DILUTED EARNINGS
PER SHARE $1.05 $.41 $1.23 $.30
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets as of the End of December 1998 and 1997
(In Thousands)
CURRENT ASSETS: 1998 1997
Cash and Cash Equivalents $2,243 $6,383
Receivables 302,050 245,271
Inventories 172,503 213,239
Other 56,714 48,753
Total Current Assets $533,510 $513,646
OTHER ASSETS:
Marketable Securities $1,680 $--
Deferred Income Tax Assets 6,579 16,334
Capitalized Software 7,472 11,053
Total Other Assets $15,731 $27,387
PLANT AND EQUIPMENT,
at Cost $829,359 $811,895
Less - Accumulated
Depreciation 433,395 413,256
Net Plant and Equipment $395,964 $398,639
$945,205 $939,672
CURRENT LIABILITIES: 1998 1997
Accounts Payable $80,162 $58,733
Domestic Notes Payable 135,020 142,660
Foreign Loans 22,254 18,604
Current Maturities on
Long-Term Debt 15,000 15,000
Accrued Liabilities 137,816 118,769
Total Current Liabilities $390,252 $353,766
OTHER LIABILITIES:
Deferred Revenue on Sale
of Plant & Equipment $15,848 $15,932
Accrued Pension Cost 21,880 30,424
Accrued Employee Benefits 12,843 12,678
Postretirement Health Care
Obligation 69,992 75,197
Long-Term Debt 128,205 143,000
Total Other Liabilities $248,768 $277,231
SHAREHOLDERS' INVESTMENT:
Common Stock and Additional
Paid-in Capital $37,318 $37,905
Retained Earnings 549,265 484,381
Unearned Compensation on
Restricted Stock (263) --
Unearned Loss on Marketable
Securities (64) --
Cumulative Translation
Adjustments (1,341) (1,698)
Treasury Stock, at Cost (278,730) (211,913)
Total Shareholders'
Investment $306,185 $308,675
$945,205 $939,672
Consolidated Statements of Cash Flows
(In Thousands)
Six Months Ended December
CASH FLOWS FROM OPERATING
ACTIVITIES: 1998 1997
Net Income $29,078 $7,662
Depreciation and
Amortization 23,825 22,670
Loss on Disposition of
Plant and Equipment 195 736
Provision for Deferred
Income Taxes 2,450 --
(Increase) in Accounts
Receivable (166,692) (115,394)
(Increase) in Inventories (64,625) (87,282)
(Increase) Decrease in
Other Current Assets (3,252) 970
Increase (Decrease) in
Accounts Payable and
Accrued Liabilities 30,557 (3,133)
Other, Net (4,262) 184
Net Cash Used in
Operating Activities $(152,726) $(173,587)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Plant and
Equipment $(29,881) $(26,124)
Proceeds Received on Sale
of Plant and Equipment 1,382 336
Net Cash Used in
Investing Activities $(28,499) $(25,788)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings on Domestic
and Foreign Loans $138,714 $142,905
Purchase of Common Stock
for Treasury (35,614) (43,501)
Dividends (13,618) (13,963)
Proceeds from Exercise
of Stock Options 8,897 8,045
Net Cash Provided in
Financing Activities $98,379 $93,486
EFFECT OF EXCHANGE RATE CHANGES $562 $(587)
NET DECREASE IN CASH
AND CASH EQUIVALENTS $(82,284) $(106,476)
CASH AND CASH EQUIVALENTS,
Beginning 84,527 112,859
CASH AND CASH EQUIVALENTS,
Ending $2,243 $6,383
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; foreign economic conditions, including currency
rate fluctuations; the ability of the Company's customers and suppliers to
meet year 2000 compliance; and unanticipated internal year 2000 issues. Some
or all of the factors are beyond the Company's control.