-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, qDtOh6ERG8Dv5BjE0R2f0Z/zpX2dEwtNGaTY6yjc3iLmmkkvCjhr9IOXXX8hUsDh L0ERipk06NmEXfpV/WSLDA== 0000950124-95-000187.txt : 19950515 0000950124-95-000187.hdr.sgml : 19950515 ACCESSION NUMBER: 0000950124-95-000187 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950101 FILED AS OF DATE: 19950214 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRIGGS & STRATTON CORP CENTRAL INDEX KEY: 0000014195 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 390182330 STATE OF INCORPORATION: WI FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01370 FILM NUMBER: 95510642 BUSINESS ADDRESS: STREET 1: 12301 W WIRTH ST CITY: WAUWATOSA STATE: WI ZIP: 53222 BUSINESS PHONE: 4142595333 MAIL ADDRESS: STREET 1: P.O. BOX 702 CITY: MILWAUKEE STATE: WI ZIP: 53201 10-Q 1 10-Q DATED 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 1, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_______________ to _______________ Commission file number 1-1370 BRIGGS & STRATTON CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) A Wisconsin Corporation 39-0182330 - --------------------------------- --------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
12301 West Wirth Street, Wauwatosa, Wisconsin 53222 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) 414/259-5333 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No_____. Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at Class February 13, 1995 - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCK, par value $0.01 per share 28,927,000 Shares
This report updates the description of the Registrant's Rights Agreement on the Registrant's Registration Statement on Form 8-A filed on January 5, 1990 to register the Rights under Section 12 of the Securities Exchange Act of 1934. See Part II, Item 5 herein. -1- 2 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES INDEX
Page No. -------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Condensed Balance Sheets - January 1, 1995, July 3, 1994 and December 26, 1993 3 Consolidated Condensed Statements of Income - Three Months and Six Months Ended January 1, 1995 and December 26, 1993 4 Consolidated Condensed Statements of Cash Flows - Six Months Ended January 1, 1995 and December 26, 1993 5 Notes to Consolidated Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 7 PART II - OTHER INFORMATION Item 5. Other Information 10 Item 6. Exhibits and Reports on Form 8-K 10
-2- 3 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands of dollars)
ASSETS ------ January 1 July 3 December 26 1995 1994 1993 --------- ------- ----------- CURRENT ASSETS: (Unaudited) (Unaudited) Cash and cash equivalents $ 10,956 $221,101 $ 7,765 Receivables, net 288,973 122,597 261,617 Inventories - Finished products and parts 109,970 55,847 72,213 Work in process 35,004 27,078 25,154 Raw materials 5,469 2,745 3,988 ---------------------------------- Total inventories $150,443 $ 85,670 $101,355 Future income tax benefits 32,349 32,868 28,732 Prepaid expenses 20,001 20,548 15,535 ---------------------------------- Total current assets $502,722 $482,784 $415,004 ---------------------------------- PREPAID PENSION COST $ 7,873 $ 8,681 $ 8,069 ---------------------------------- PLANT AND EQUIPMENT, at cost: $692,563 $669,593 $663,563 Less - Accumulated depreciation and unamortized investment tax credit 390,223 383,703 372,669 ---------------------------------- Total plant and equipment, net $302,340 $285,890 $290,894 ---------------------------------- $812,935 $777,355 $713,967 ==================================
LIABILITIES & SHAREHOLDERS' INVESTMENT CURRENT LIABILITIES: Accounts payable $ 58,798 $ 56,364 $ 54,539 Domestic notes payable 1,750 - - Foreign loans 21,595 21,323 20,043 Accrued liabilities 109,506 119,954 103,655 Dividends payable 7,232 - 6,364 Federal and state income taxes 13,571 9,103 12,190 ---------------------------------- Total current liabilities $212,452 $206,744 $196,791 ---------------------------------- DEFERRED INCOME TAXES $ 9,660 $ 12,317 $ 14,834 ---------------------------------- ACCRUED EMPLOYEE BENEFITS $ 15,918 $ 15,423 $ 14,625 ---------------------------------- ACCRUED POSTRETIREMENT HEALTH CARE OBLIGATION $ 65,341 $ 64,079 $ 63,008 ---------------------------------- LONG-TERM DEBT $ 75,000 $ 75,000 $ 75,000 ---------------------------------- SHAREHOLDERS' INVESTMENT: Common stock- Authorized 60,000,000 shares, $.01 par value Issued and outstanding 28,927,000 shares on Jan. 1, 1995, and 14,463,500 shares on July 3, 1994 and Dec. 26, 1993 $ 289 $ 145 $ 145 Additional paid-in capital 42,059 42,358 42,883 Retained earnings 393,388 362,136 308,019 Cumulative translation adjustments (1,172) (847) (1,338) ---------------------------------- Total shareholders' investment $434,564 $403,792 $349,709 ---------------------------------- $812,935 $777,355 $713,967 ==================================
The accompanying notes are an integral part of these statements. -3- 4 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (In thousands of dollars except amounts per share) (Unaudited)
Three Months Ended Six Months Ended ------------------ ----------------- Jan. 1 Dec. 26 Jan. 1 Dec. 26 1995 1993 1995 1993 ------ ------- ------ ------ NET SALES $366,717 $328,937 $594,562 $527,509 COST OF GOODS SOLD 283,193 256,556 471,239 426,932 -------- -------- -------- -------- Gross profit on sales $ 83,524 $ 72,381 $123,323 $100,577 ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 26,697 23,792 48,973 43,639 -------- -------- -------- -------- Income from operations $ 56,827 $ 48,589 $ 74,350 $ 56,938 INTEREST EXPENSE (2,121) (2,161) (4,212) (4,187) OTHER INCOME(EXPENSE), net 557 539 3,859 4,737 -------- -------- -------- -------- Income before provision for income taxes $ 55,263 $ 46,967 $ 73,997 $ 57,488 PROVISION FOR INCOME TAXES 21,550 18,330 28,860 22,430 --------- -------- -------- -------- Net income before cumulative effect of accounting changes $ 33,713 $ 28,637 $ 45,137 $ 35,058 -------- -------- -------- -------- CUMULATIVE EFFECT OF ACCOUNTING CHANGES FOR: Postretirement health care, net of income taxes $ - $ - $ - $(40,232) Postemployment benefits, net of income taxes - - - (672) Deferred income taxes - - - 8,346 -------- -------- -------- -------- $ - $ - $ - $(32,558) -------- -------- -------- -------- Net income $ 33,713 $ 28,637 $ 45,137 $ 2,500 ======== ======== ======== ======== PER SHARE DATA* - Net income before cumulative effect of accounting changes $ 1.17 $ .99 $ 1.56 $ 1.21 Cumulative effect of accounting changes - - - (1.12) ------ ------ ------ ------ Net income $ 1.17 $ .99 $ 1.56 $ .09 ====== ====== ====== ====== Cash dividends $ .25 $ .22 $ .48 $ .44 ====== ====== ====== ======
* Based on 28,927,000 shares outstanding. All per share amounts have been adjusted for the 2-for-1 stock split in November 1994. The accompanying notes are an integral part of these statements. -4- 5 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS Increase(Decrease) in Cash and Cash Equivalents (In thousands of dollars) (Unaudited)
Six Months Ended ------------------------------ Jan. 1, 1995 Dec. 26, 1993 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 45,137 $ 2,500 Adjustments to reconcile net income to net cash provided by operating activities - Cumulative effect of accounting changes, net of taxes - 32,558 Depreciation 22,662 20,132 Gain on disposition of plant and equipment (7) (2,493) (Increase)decrease in operating assets - Accounts receivable (166,376) (136,636) Inventories (64,773) (27,290) Other current assets 1,066 (1,444) Other assets 808 (467) Increase(decrease) in liabilities - Accounts payable and accrued liabilities 3,686 29,459 Other liabilities (900) 3,147 ---------- -------- Net cash used by operating activities $(158,697) $(80,534) --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Sale of short-term investments $ - $ 70,422 Additions to plant and equipment (41,416) (20,351) Proceeds received on sale of plant and equipment 2,032 7,075 --------- -------- Net cash provided by (used in) investing activities $ (39,384) $ 57,146 --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings on domestic and foreign loans $ 2,022 $ 4,116 Dividends (13,885) (12,728) Purchase of common stock for treasury (295) - Proceeds received on exercise of stock option 140 - --------- -------- Net cash used in financing activities $ (12,018) $ (8,612) --------- -------- EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS $ (46) $ 264 --------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS $(210,145) $(31,736) CASH AND CASH EQUIVALENTS, beginning 221,101 39,501 --------- -------- CASH AND CASH EQUIVALENTS, ending $ 10,956 $ 7,765 ========= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 4,180 $ 4,187 ========= ======== Income taxes paid $ 26,748 $ 22,704 ========= ========
The accompanying notes are an integral part of these statements. -5- 6 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. However, in the opinion of the Company, adequate disclosures have been presented to make the information not misleading, and all adjustments necessary to present fair statements of the results of operations and financial position have been included. All of these adjustments are of a normal recurring nature. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. On October 19, 1994, shareholders approved a doubling of the authorized common stock shares to 60,000,000. This allowed the Company to effect a 2-for-1 stock split previously authorized by the Board of Directors. The distribution on November 14, 1994 increased the number of shares outstanding from 14,463,500 to 28,927,000. The amount of $145,000 was transferred from the additional paid-in capital account to the common stock account to record this distribution. On January 18, 1995, the Board of Directors approved an amendment to the Shareholder Rights Plan to change the termination date of the rights issued under the Plan from January 5, 2000 to July 1, 1996. -6- 7 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following is Management's discussion and analysis of certain significant factors which have affected the Company's results of operations and financial condition during the periods included in the accompanying consolidated condensed financial statements. RESULTS OF OPERATIONS SALES Net sales for the second quarter of the current fiscal year increased 11% or $37,780,000 when compared to the same period last year. The major factor effecting this improvement was a 6% increase in the number of engines sold between years because of a strong economy. Other factors adding to the increase were step-up sales within the same horsepower category, increases in sales of higher horsepower engines, and modest selling price increases. Although domestic engine sales increased, export sales increased at a greater rate. This was due to timing differences and improving economies in Europe. A large portion of the increased engine sales were sold for industrial application uses, which have a tendency to use larger horsepower engines. Service sales also showed increases in the quarter. Lock dollar sales were up 17%, whereas lock unit sales increased 12%. This reflects the continuing trend to higher unit price lock sets in a strong U.S. car and truck industry. Sales in the comparable six-month periods ending in December showed most of the same trends as described above, except for export sales, which had a lower first quarter in the current year. Inventories of lawn and garden equipment in distribution channels at the end of the 1994 summer selling season were low for the third consecutive year. Economic forecasts continue to be favorable. Equipment manufacturers' outlook continues to be optimistic. The Company's engine orders reflect that optimism, and therefore, if the weather continues to cooperate, the remainder of the year is expected to have higher sales than the preceding year. GROSS PROFIT Gross profit for the second fiscal quarter increased $11,143,000 or 15% when compared to the same quarter last year. This improvement compares to the 11% increase in sales dollars and results from the spreading of fixed costs over a larger number of engine units and improved efficiencies. It was partially offset by a significant increase in aluminum costs, the major raw material in engines, and other increases in manufacturing costs. -7- 8 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION (Continued) These same factors caused the increase in gross profits of $22,746,000 or 23% when comparing the first six months of fiscal 1995 to the same period in fiscal 1994. ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Expenses in this category increased $2,905,000 or 12% when comparing the two second fiscal quarters. This is a result of increases in marketing, advertising and professional services related to increased engine emission work. These same factors applied to the six-month comparisons. INTEREST EXPENSE Interest expense did not show any significant changes, both in the quarterly comparison and the six-month comparison. There was a modest increase in the level of foreign borrowings. Average interest was comparable between years. OTHER INCOME This category showed a 3% increase in the quarterly comparison but a 19% decrease in the six-month comparison. The first quarter of last year contained a $2,800,000 gain on the sale of a facility in Germany, with no comparable item in the current year. This amount was reflected in the six-month comparison only. Partially offsetting this loss of income was an increase in interest income in the current year of $1,700,000 due to more investable funds. PROVISION FOR INCOME TAXES This category reflects a 39% tax rate in each of the comparable periods. Management estimates this rate will be in effect for the entire fiscal year. CUMULATIVE EFFECT OF ACCOUNTING CHANGES The preceding fiscal year contained an adjustment for the cumulative effect of accounting changes made at the beginning of the first fiscal quarter. This was the result of adopting Financial Accounting Standards Numbers 106, 112 and 109, which were fully described in the Company's 1994 fiscal year annual report and previous year Forms 10-Q. These net charges totaled $32,558,000 for the year and will not be repeated in the current or subsequent fiscal years. -8- 9 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION (Continued) FINANCIAL CONDITION The following comments apply to the change in financial condition of the Company since the preceding fiscal year end in June 1994. Combined cash and cash equivalents decreased $210,145,000 since the end of the previous fiscal year. $158,697,000 was used by operating activities for the following major reasons: (1) a $166,376,000 increase in accounts receivable due to extended payment terms and increased sales activity late in the second quarter and (2) a $64,773,000 increase in inventories, almost all of which is finished and partly finished inventories, and represents goods manufactured in anticipation of shipment during the Company's busiest season in the third fiscal quarter. These amounts were partially offset by the $67,799,000 amount that was generated in operations from net income and depreciation. Another major use of cash was the purchase of plant and equipment, which totaled $41,416,000 for the fiscal year. This was $21,065,000 greater than the preceding year and includes initial expenditures for the previously announced major projects which include new engine plants, plant expansions, and a new foundry. The new engine plants will be located in Auburn, Alabama; Statesboro, Georgia; and Rolla, Missouri. It was previously estimated that the incremental capital expenditures for these engine plants and plant expansions will total $112,000,000 over a three-year period. This amount has subsequently been increased by $12,000,000, primarily to reflect more current construction cost estimates at two of the three plants. The new foundry, located in Ravenna, Michigan, is projected to cost $20,000,000 over a two-year period. Company management intends to finance all of these expenditures from operating cash flow and available lines of credit. Late in the second fiscal quarter the Company reached an agreement with the union representing most hourly employees in the Milwaukee area plants on a three-year contract that will take effect when the current contract expires July 31, 1995. Supplemental retirement benefits in the new contract will require the company to take a charge of approximately $.30 per share in the fourth fiscal quarter. Late last fiscal year the Company announced its intent to spin off the automotive lock business, STRATTEC SECURITY CORPORATION, to its shareholders. Shares of STRATTEC will be distributed on February 27, 1995 to holders of record on February 16, 1995. In connection with this spin-off, subsequent to January 1, 1995, the Company has obtained additional debt of $7,000,000. This debt carries a floating interest rate equal to the Federal Funds Rate plus one-half percent and matures on March 1, 1996. It will be assumed by STRATTEC SECURITY CORPORATION as part of the spin-off. -9- 10 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION On January 18, 1995, the Board of Directors approved an amendment to the Shareholder Rights Plan to change the termination date of the rights issued under the Plan from January 5, 2000 to July 1, 1996. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits.
Exhibit Number Description ------ ----------- 4.1 Amendment to Shareholder Rights Plan 27 Financial Data Schedule (b) Reports on Form 8-K. There were no reports on Form 8-K for the second quarter ended January 1, 1995.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BRIGGS & STRATTON CORPORATION ----------------------------- (Registrant) Date: February 13, 1995 /s/ R. H. Eldridge --------------------------------------- R. H. Eldridge Secretary-Treasurer Date: February 13, 1995 /s/ J. E. Brenn ---------------------------------------- - - J. E. Brenn Vice President and Controller
-10- 11 BRIGGS & STRATTON CORPORATION EXHIBIT INDEX
Exhibit Number Description ------- ----------- 4.1 Amendment to Shareholder Rights Plan (Filed herewith) 27 Financial Data Schedule (Filed herewith)
-11- EX-4.1 2 EX-4.1 1 BRIGGS & STRATTON CORPORATION Form 10-Q for Quarterly Period Ended January 1, 1995 Exhibit No. 4.1 AMENDMENT TO SHAREHOLDER RIGHTS PLAN RESOLVED, that Section 7 of the Briggs & Stratton Rights Agreement dated December 20, 1989 is amended to provide that the "Final Expiration Date" under the Rights Agreement shall be July 1, 1996. EX-27 3 EX-27
5 1 U.S. DOLLARS 6-MOS JUL-2-1995 JUL-4-1994 JAN-1-1995 1 10,956,000 0 288,973,000 0 150,443,000 502,722,000 692,563,000 390,223,000 812,935,000 212,452,000 0 289,000 0 0 434,275,000 812,935,000 594,562,000 594,562,000 471,239,000 471,239,000 45,114,000 0 4,212,000 73,997,000 28,860,000 45,137,000 0 0 0 45,137,000 1.56 1.56
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