Briggs & Stratton Corporation Reports Financial Results
31 July 2000
Briggs & Stratton Corporation Reports Results for the Fourth Quarter And Twelve Months of Fiscal 2000
MILWAUKEE - Briggs & Stratton Corporation Fourth quarter net income of
$27.6 million was 22% less than last year's $35.2 million. Diluted earnings per
share decreased 18% to $1.24 per share. Sales decreased 9%. Engine unit
shipments decreased 6%. Demand for engines for lawn and garden equipment held
up surprisingly well in the fourth quarter but was weaker than it was last year,
when engines were in short supply. Operating margins also held up well as we
continued a high level of engine production in preparation for the 2001 selling
season.
For the full fiscal year, reported net income increased 29%. If the gain
on the disposition of our foundry business is excluded, net income increased
19%. Excluding that gain, diluted earnings per share increased 22%. Sales
increased 6%, as did engine unit shipments. Profit margins improved because
costs were spread over more units produced.
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 2001.
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, however, somewhat
concerned about the effect of interest rate increases on the outdoor power
equipment business, which does depend to some degree on new housing
completions. We are not aware of any changes in customer relationships that
would significantly affect our business. At this time we expect results for
fiscal 2001 to be similar to those for fiscal 2000 adjusted for the foundry
gain. However, the seasonal pattern will be different. Because the engine
shortages that were of concern to equipment manufacturers and retailers last
year have disappeared, there is less incentive to take engines in the summer
and early fall. As a result, our first quarter results will be well below the
prior year.
F. P. Stratton, Jr.
Chairman and Chief Executive Officer
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings For Periods Ended Fiscal June
(In Thousands)
Fourth Quarter Twelve Months
2000 1999 2000 1999
NET SALES $400,708 $441,543 $1,590,557 $1,501,726
COST OF GOODS SOLD 318,199 348,102 1,251,103 1,196,371
Gross Profit on Sales 82,509 93,441 339,454 305,355
ENGINEERING, SELLING,
GENERAL AND
ADMINISTRATIVE
EXPENSES 38,104 34,724 134,225 125,219
Income from Operations 44,405 58,717 205,229 180,136
INTEREST EXPENSE (6,116) (3,841) (21,267) (17,024)
GAIN ON DISPOSITION
OF FOUNDRY ASSETS -- -- 16,545 --
OTHER INCOME, Net 5,471 1,461 16,116 6,659
Income Before Provision
for Income Taxes 43,760 56,337 216,623 169,771
PROVISION FOR INCOME
TAXES 16,190 21,127 80,150 63,670
Net Income $27,570 $35,210 $136,473 $106,101
Average Shares
Outstanding 22,138 23,185 22,788 23,344
BASIC EARNINGS PER
SHARE $1.25 $1.52 $5.99 $4.55
Diluted Average Shares
Outstanding 22,156 23,383 22,842 23,459
DILUTED EARNINGS PER
SHARE $1.24 $1.51 $5.97 $4.52
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets as of the End of Fiscal June 2000 and 1999
(In Thousands)
CURRENT ASSETS: 2000 1999
Cash and Cash Equivalents $16,989 $60,806
Receivables 140,097 194,096
Inventories 257,774 137,448
Other 57,137 50,502
Total Current Assets 471,997 442,852
OTHER ASSETS:
Marketable Securities and
Other Investments 50,228 19,024
Deferred Income Tax Asset -- 2,039
Prepaid Pension 5,506 --
Capitalized Software 6,934 7,516
Total Other Assets 62,668 28,579
PLANT AND EQUIPMENT,
at Cost 838,655 859,848
Less - Accumulated
Depreciation 443,075 455,394
Net Plant and Equipment 395,580 404,454
$930,245 $875,885
CURRENT LIABILITIES: 2000 1999
Accounts Payable $117,556 $117,757
Domestic Notes Payable 48,809 4,335
Foreign Loans 13,356 13,824
Current Maturities on
Long-Term Debt -- 15,000
Accrued Liabilities 133,057 131,586
Total Current Liabilities 312,778 282,502
OTHER LIABILITIES:
Deferred Revenue on Sale of
Plant & Equipment 15,679 15,798
Deferred Income Tax Liability 4,011 --
Accrued Pension Cost 11,428 17,306
Accrued Employee Benefits 12,607 13,185
Postretirement Health Care
Obligation 65,765 67,877
Long-Term Debt 98,512 113,307
Total Other Liabilities 208,002 227,473
SHAREHOLDERS' INVESTMENT:
Common Stock and Additional
Paid-in Capital 36,767 37,946
Retained Earnings 721,980 612,807
Accumulated Other Comprehensive
Loss (3,931) (1,732)
Unearned Compensation on
Restricted Stock (226) (235)
Treasury Stock, at Cost (345,125) (282,876)
Total Shareholders'
Investment 409,465 365,910
$930,245 $875,885
Consolidated Statements of Cash Flows
(In Thousands)
Twelve Months Ended Fiscal June
CASH FLOWS FROM OPERATING
ACTIVITIES: 2000 1999
Net Income $136,473 $106,101
Depreciation and Amortization 51,370 49,604
(Gain) Loss on Disposition of
Plant and Equipment (14,167) 2,355
Provision for Deferred Income
Taxes 1,542 4,052
(Increase) Decrease in
Accounts Receivable 51,837 (58,738)
Increase in Inventories (121,685) (29,570)
Increase in Other Current
Assets (2,391) (3,766)
Increase in Accounts Payable
and Accrued Liabilities 1,413 61,697
Other, Net (26,910) (18,992)
Net Cash Provided by
Operating Activities 77,482 112,743
CASH FLOWS FROM INVESTING
ACTIVITIES:
Additions to Plant and
Equipment (71,441) (65,998)
Proceeds Received on
Disposition of Plant
and Equipment 23,511 1,142
Other, Net 5,142 1,205
Net Cash Used in
Investing Activities (42,788) (63,651)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net Borrowings (Repayments)
on Domestic and Foreign
Loans 44,005 (401)
Repayments on Long-Term Debt (30,000) (15,000)
Purchase of Common Stock
for Treasury (69,083) (75,141)
Dividends (27,300) (27,099)
Proceeds from Exercise
of Stock Options 5,561 45,130
Net Cash Used in Financing
Activities (76,817) (72,511)
EFFECT OF EXCHANGE RATE CHANGES (1,694) (302)
NET DECREASE IN CASH AND
CASH EQUIVALENTS (43,817) (23,721)
CASH AND CASH EQUIVALENTS,
Beginning 60,806 84,527
CASH AND CASH EQUIVALENTS,
Ending $16,989 $60,806