Briggs & Stratton Results for the Q1 and Nine Months of Fiscal 2000
17 April 2000
Briggs & Stratton Corporation Reports Results for the Third Quarter and Nine Months of Fiscal 2000
MILWAUKEE, April 17 Briggs & Stratton Corporation (NYSE: BGG):
Net income for the third quarter was about 1% higher than for last year's
third quarter. Earnings per share increased about 3%. Net sales decreased
approximately 2%. The disposition of our ductile iron foundries earlier in
the fiscal year reduced third quarter sales by 3%. Engine unit shipments
increased 4%.
For the first nine months, net income increased 54%. Earnings per share
were 56% higher. Sales increases and the spreading of costs over more units
produced were the primary contributors to the increase in net income.
The lawn and garden equipment selling season got off to a strong start,
and at this time the strength continues. We are encouraged by this strength,
although we expect demand to weaken later in the fourth quarter, which is the
normal pattern. Even if engine demand weakens, we plan to continue high
production rates because we will need to maintain finished engine inventory at
a level that will allow us to meet next year's demand. Thus we believe that
the fourth quarter will be a good one, although not as good as last year's
unusually strong fourth quarter. At this time we expect record sales and
earnings for the full fiscal year.
F. P. Stratton, Jr.
Chairman and Chief Executive Officer
Briggs & Stratton Corporation
Consolidated Statements of Earnings For Periods Ended March
(In Thousands)
Third Quarter Nine Months
2000 1999 2000 1999
NET SALES $468,678 $476,259 $1,189,849 $1,060,183
COST OF GOODS SOLD 366,838 373,428 932,904 848,269
Gross Profit on Sales 101,840 102,831 256,945 211,914
ENGINEERING, SELLING,
GENERAL AND
ADMINISTRATIVE
EXPENSES 33,285 32,140 96,121 90,495
Income from Operations 68,555 70,691 160,824 121,419
INTEREST EXPENSE (6,816) (5,025) (15,151) (13,183)
GAIN ON DISPOSITION
OF FOUNDRY ASSETS -- -- 16,545 --
OTHER INCOME, Net 5,027 1,250 10,645 5,198
Income Before Provision
for Income Taxes 66,766 66,916 172,863 113,434
PROVISION FOR INCOME
TAXES 24,710 25,103 63,960 42,543
Net Income $42,056 $41,813 $108,903 $70,891
Average Shares
Outstanding 22,842 23,271 23,021 23,399
BASIC EARNINGS PER SHARE $1.84 $1.80 $4.73 $3.03
Diluted Average
Shares Outstanding 22,866 23,357 23,104 23,480
DILUTED EARNINGS
PER SHARE $1.84 $1.79 $4.71 $3.02
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets as of the End of March 2000 and 1999
(In Thousands)
CURRENT ASSETS: 2000 1999
Cash and Cash Equivalents $13,805 $26,166
Accounts Receivable 433,866 342,958
Inventories 239,941 127,926
Other 58,825 51,632
Total Current Assets 746,437 548,682
OTHER ASSETS:
Marketable Securities and
Other Investments 48,207 15,904
Deferred Income Tax Asset -- 5,221
Capitalized Software 6,820 7,545
Total Other Assets 55,027 28,670
PLANT AND EQUIPMENT:
At Cost 825,014 842,040
Less - Accumulated
Depreciation 432,198 444,495
Net Plant and Equipment 392,816 397,545
$1,194,280 $974,897
CURRENT LIABILITIES:
Accounts Payable $134,957 $106,223
Domestic Notes Payable 216,469 81,025
Foreign Loans 18,647 18,952
Current Maturities on Long-Term Debt 15,000 15,000
Accrued Liabilities 171,545 167,334
Total Current Liabilities 556,618 388,534
OTHER LIABILITIES:
Deferred Revenue on Sale of
Plant & Equipment 15,711 15,823
Deferred Income Tax Liability 2,565 --
Accrued Pension Cost 8,640 19,494
Accrued Employee Benefits 13,892 12,984
Postretirement Health Care Obligation 65,706 70,691
Long-Term Debt 113,461 128,256
Total Other Liabilities 219,975 247,248
SHAREHOLDERS' INVESTMENT:
Common Stock and Additional
Paid-in Capital 36,767 37,333
Retained Earnings 701,027 584,316
Unearned Compensation on
Restricted Stock (244) (249)
Unrealized Gain on Marketable
Securities 3,332 192
Cumulative Translation Adjustments (3,965) (1,998)
Treasury Stock, at Cost (319,230) (280,479)
Total Shareholders' Investment 417,687 339,115
$1,194,280 $974,897
Consolidated Statements of Cash Flows
(In Thousands)
Nine Months Ended March
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $108,903 $70,891
Depreciation and Amortization 38,158 35,899
(Gain) Loss on Disposition of
Plant and Equipment (16,271) 391
Credit for Deferred Income Taxes (4,062) (278)
Increase in Accounts Receivable (239,750) (207,600)
Increase in Inventories (103,852) (20,048)
Increase in Other Current Assets (1,928) (3,503)
Increase in Accounts Payable
and Accrued Liabilities 57,160 87,009
Other, Net (17,609) (10,431)
Net Cash Used in Operating Activities (179,251) (47,670)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Plant and Equipment ( 53,861) (43,903)
Proceeds Received on Disposition
of Plant and Equipment 23,882 1,521
Other, Net 5,141 --
Net Cash Used in Investing Activities (24,838) (42,382)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings on Loans and Notes Payable 216,957 81,417
Dividends (20,683) (20,380)
Purchase of Common Stock for Treasury (43,188) (58,006)
Proceeds from Exercise of Stock Options 5,561 28,682
Net Cash Provided in Financing Activities 158,647 31,713
EFFECT OF EXCHANGE RATE CHANGES (1,559) (22)
NET DECREASE IN CASH AND CASH EQUIVALENTS (47,001) (58,361)
CASH AND CASH EQUIVALENTS, Beginning 60,806 84,527
CASH AND CASH EQUIVALENTS, Ending $13,805 $26,166
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.