Briggs & Stratton Reports Results for Q3 And 9 Months of Fiscal 1999
15 April 1999
Briggs & Stratton Corporation Reports Results for the Third Quarter And Nine Months of Fiscal 1999
MILWAUKEE, April 14 -- Briggs & Stratton Corporation
Net income for the third quarter was 17% higher than for last year's third
quarter. Earnings per share increased 23%. Net sales were up just 2%.
Engine unit shipments were down 8%. Strong demand in earlier quarters greatly
reduced the small engine inventory from which we usually ship in the third
quarter. Profitability benefited from particularly favorable circumstances.
Demand for all engine models was strong. Production was near capacity,
limited in some cases by component supply constraints. European currency
exchange rates were more favorable than they were in last year's third
quarter. Raw material costs were lower.
For the first nine months, net income increased 63%. Earnings per share
were 74% higher. Sales increases, the spreading of costs over more units
produced and lower raw material costs were the primary contributors to the
increase in net income.
At this time our business continues to be very strong despite slower
retail sales of lawn and garden equipment. The slower start of the spring
selling season is a concern, but last year's early spring sales were unusually
strong. Retail sales of other products, particularly generators, also are
strong. Even if engine demand weakens, we plan to continue high production
rates because we will need to restore finished engine inventories to a normal
level. Thus we believe we will have a good fourth quarter.
F. P. Stratton, Jr.
Chairman and Chief Executive Officer
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings For Periods Ended March
(In Thousands)
Third Quarter Nine Months
1999 1998 1999 1998
NET SALES $476,259 $469,055 $1,060,183 $948,093
COST OF GOODS SOLD 373,428 374,282 848,269 776,012
Gross Profit on Sales$102,831 $94,773 $211,914 $172,081
ENGINEERING, SELLING,
GENERAL AND
ADMINISTRATIVE EXPENSES 32,140 33,103 90,495 92,342
Income from Operations$70,691 $61,670 $121,419 $79,739
INTEREST EXPENSE (5,025) (5,870) (13,183) (14,912)
OTHER INCOME, Net 1,250 1,908 5,198 5,243
Income Before Provision
for Income Taxes $66,916 $57,708 $113,434 $70,070
PROVISION FOR
INCOME TAXES 25,103 21,930 42,543 26,630
Net Income $41,813 $35,778 $70,891 $43,44
Average Shares
Outstanding 23,271 24,514 23,399 24,861
BASIC EARNINGS
PER SHARE $1.80 $1.46 $3.03 $1.75
Diluted Average Shares
Outstanding 23,357 24,600 23,480 25,008
DILUTED EARNINGS
PER SHARE $1.79 $1.45 $3.02 $1.74
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets as of the End of March 1999 and 1998
(In Thousands)
CURRENT ASSETS: 1999 1998
Cash and Cash Equivalents $26,166 $22,616
Receivables 342,958 302,033
Inventories 127,926 134,591
Other 65,436 50,979
Total Current Assets $562,486 $510,219
OTHER ASSETS:
Marketable Securities $2,100 $--
Deferred Income Tax Assets 5,221 14,017
Capitalized Software 7,545 10,604
Total Other Assets $14,866 $24,621
PLANT AND EQUIPMENT,
at Cost $842,040 $816,610
Less - Accumulated
Depreciation 444,495 423,189
Net Plant and Equipment $397,545 $393,421
$974,897 $928,261
CURRENT LIABILITIES: 1999 1998
Accounts Payable $106,223 $78,999
Domestic Notes Payable 81,025 82,942
Foreign Loans 18,952 18,637
Current Maturities on
Long-Term Debt 15,000 15,000
Accrued Liabilities 167,334 142,340
Total Current Liabilities $388,534 $337,918
OTHER LIABILITIES:
Deferred Revenue on Sale of
Plant & Equipment $15,823 $15,913
Accrued Pension Cost 19,494 27,642
Accrued Employee Benefits 12,984 12,862
Postretirement Health Care
Obligation 70,691 75,225
Long-Term Debt 128,256 143,051
Total Other Liabilities $247,248 $274,693
SHAREHOLDERS' INVESTMENT:
Common Stock and Additional
Paid-in Capital $37,333 $38,299
Retained Earnings 584,316 513,320
Unearned Compensation on
Restricted Stock (249) --
Unrealized Gain on Marketable
Securities 192 --
Cumulative Translation
Adjustments (1,998) (1,712)
Treasury Stock, at Cost (280,479) (234,257)
Total Shareholders'
Investment $339,115 $315,650
$974,897 $928,261
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In Thousands)
Nine Months Ended March
1999 1998
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Income $70,891 $43,440
Depreciation and Amortization 35,899 35,677
Loss on Disposition
of Plant and Equipment 391 984
(Increase) in Accounts
Receivable (207,600) (172,156)
(Increase) in Inventories (20,048) (8,634)
(Increase) in Other
Current Assets (12,664) (1,256)
Increase in Accounts Payable
and Accrued Liabilities 87,009 40,704
Other, Net (1,548) 380
Net Cash Used in
Operating Activities $(47,670) $(60,861)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Additions to Plant
and Equipment $(43,903) $(34,192)
Proceeds Received on
Sale of Plant and Equipment 1,521 360
Net Cash Used in
Investing Activities $(42,382) $(33,832)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Net Borrowings on
Domestic and Foreign Loans $81,417 $83,220
Purchase of Common Stock
for Treasury (58,006) (66,433)
Dividends (20,380) (20,802)
Proceeds from Exercise
of Stock Options 28,682 9,027
Net Cash Provided in
Financing Activities $31,713 $5,012
EFFECT OF EXCHANGE RATE CHANGES $(22) $(562)
NET DECREASE IN CASH
AND CASH EQUIVALENTS $(58,361) $(90,243)
CASH AND CASH EQUIVALENTS,
Beginning 84,527 112,859
CASH AND CASH EQUIVALENTS,
Ending $26,166 $22,616
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.