Briggs & Stratton Reports Results for the Q4 and Twelve Months of Fiscal 1999
30 July 1999
Briggs & Stratton Corporation Reports Results for the Fourth Quarter and Twelve Months of Fiscal 1999
MILWAUKEE, July 29 -- Briggs & Stratton Corporation
:
Fourth quarter net income increased 29% to $35.2 million. Diluted
earnings per share increased 34% to $1.51 per share. Sales increased 16%.
Engine unit shipments increased 8%. The sales mix was more heavily weighted
to larger engines. Operating margins benefited from high production volume
and lower raw material costs. Demand was strong through mid-June. By late
June we were able not only to give most customers all the engines they wanted
but also to begin to restock our depleted finished engine inventory.
For the full fiscal year, net income increased 50%. Diluted earnings per
share increased 59%. Sales increased 13%. Engine unit shipments increased
8%. Profit margins improved because costs were spread over more units
produced and raw material costs were lower.
Because we do not know what power equipment inventory levels will be at
the end of summer, it is too early to make a precise forecast for fiscal 2000.
We can report that the outlook for retail sales of lawn and garden equipment
continues to be good, assuming normal weather next spring, and that we expect
continued growth in sales of other products. We are not aware of any changes
in customer relationships that would significantly affect our business. At
this time we expect improved results in fiscal 2000.
F. P. Stratton, Jr.
Chairman and Chief Executive Officer
Briggs & Stratton Corporation
Consolidated Statements of Earnings For Periods Ended June
(In Thousands)
Fourth Quarter Twelve Months
1999 1998 1999 1998
NET SALES $441,543 $379,517 $1,501,726 $1,327,610
COST OF GOODS SOLD 348,102 296,924 1,196,371 1,072,936
Gross Profit on Sales 93,441 82,593 305,355 254,674
ENGINEERING, SELLING, GENERAL
AND ADMINISTRATIVE EXPENSES 34,724 37,644 125,219 129,986
Income from Operations 58,717 44,949 180,136 124,688
INTEREST EXPENSE (3,841) (4,440) (17,024) (19,352)
OTHER INCOME, Net 1,461 2,566 6,659 7,809
Income Before Provision for
Income Taxes 56,337 43,075 169,771 113,145
PROVISION FOR INCOME TAXES 21,127 15,870 63,670 42,500
Net Income $35,210 $27,205 $106,101 $70,645
Average Shares Outstanding 23,185 24,072 23,344 24,666
BASIC EARNINGS PER SHARE $1.52 $1.13 $4.55 $2.86
Diluted Average Shares
Outstanding 23,383 24,151 23,459 24,775
DILUTED EARNINGS PER SHARE $1.51 $1.13 $4.52 $2.85
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets as of the End of June 1999 and 1998
(In Thousands)
CURRENT ASSETS: 1999 1998
Cash and Cash Equivalents $60,806 $84,527
Receivables 194,096 136,629
Inventories 137,448 107,876
Other 66,796 53,014
Total Current Assets 459,146 382,046
OTHER ASSETS:
Marketable Securities 2,730 --
Deferred Income Tax Assets 2,039 9,555
Capitalized Software 7,516 9,881
Total Other Assets 12,285 19,436
PLANT AND EQUIPMENT, at Cost 859,848 812,428
Less - Accumulated Depreciation 455,394 420,501
Net Plant and Equipment 404,454 391,927
$875,885 $793,409
CURRENT LIABILITIES: 1999 1998
Accounts Payable $117,757 $76,915
Domestic Notes Payable 4,335 4,700
Foreign Loans 13,824 14,336
Current Maturities on Long-Term Debt 15,000 15,000
Accrued Liabilities 131,586 111,994
Total Current Liabilities 282,502 222,945
OTHER LIABILITIES:
Deferred Revenue on Sale of Plant & Equipment 15,798 15,893
Accrued Pension Cost 17,306 26,477
Accrued Employee Benefits 13,185 12,571
Postretirement Health Care Obligation 67,877 70,933
Long-Term Debt 113,307 128,102
Total Other Liabilities 227,473 253,976
SHAREHOLDERS' INVESTMENT:
Common Stock and Additional Paid-in Capital 37,946 38,065
Retained Earnings 612,807 533,805
Unearned Compensation on Restricted Stock (235) --
Unrealized Gain on Marketable Securities 577 --
Cumulative Translation Adjustments (2,309) (2,110)
Treasury Stock, at Cost (282,876) (253,272)
Total Shareholders' Investment 365,910 316,488
$875,885 $793,409
Consolidated Statements of Cash Flows
(In Thousands)
Twelve Months Ended June
CASH FLOWS FROM OPERATING ACTIVITIES: 1999 1998
Net Income $106,101 $70,645
Depreciation and Amortization 49,604 47,716
Loss on Disposition of Plant and Equipment 2,355 1,973
Provision for Deferred Income Taxes 4,052 7,735
Increase in Accounts Receivable (58,738) (6,752)
(Increase) Decrease in Inventories (29,570) 18,081
Increase in Other Current Assets (10,805) (3,606)
Increase in Accounts Payable and Accrued Liabilities 61,697 8,274
Other, Net (10,748) (7,676)
Net Cash Provided by Operating Activities 113,948 136,390
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Plant and Equipment (65,998) (45,893)
Proceeds Received on Sale of Plant and Equipment 1,142 620
Net Cash Used in Investing Activities (64,856) (45,273)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings (Repayments) on Domestic
and Foreign Loans (401) 677
Repayments on Long-Term Debt (15,000) (15,000)
Purchase of Common Stock for Treasury (75,141) (85,943)
Dividends (27,099) (27,522)
Proceeds from Exercise of Stock Options 45,130 9,288
Net Cash Used in Financing Activities (72,511) (118,500)
EFFECT OF EXCHANGE RATE CHANGES (302) (949)
NET DECREASE IN CASH AND CASH EQUIVALENTS (23,721) (28,332)
CASH AND CASH EQUIVALENTS, Beginning 84,527 112,859
CASH AND CASH EQUIVALENTS, Ending $60,806 $84,527
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.