-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PpaywnG+fM2ybi6o7NgTPnlkC9Viqy2TT3BXawI0hHtaF8IhxnHb5dKhEGsRVwz+ 9o+xbuTS3vfI9UEA8ev5yg== 0000950124-96-002134.txt : 19960515 0000950124-96-002134.hdr.sgml : 19960515 ACCESSION NUMBER: 0000950124-96-002134 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 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: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01370 FILM NUMBER: 96563028 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 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 March 31, 1996 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 May 8, 1996 - -------------------------------------------------------------------------------- COMMON STOCK, par value $0.01 per share 28,927,000 Shares -1- 2 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES INDEX Page No. -------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Condensed Balance Sheets - March 31, 1996, July 2, 1995 and April 2, 1995 3 Consolidated Condensed Statements of Income - Three Months and Nine Months Ended March 31, 1996 and April 2, 1995 4 Consolidated Condensed Statements of Cash Flows - Nine Months Ended March 31, 1996 and April 2, 1995 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 6. Exhibits and Reports on Form 8-K 9 -2- 3 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands of dollars) ASSETS
March 31 July 2 April 2 1996 1995 1995 -------- ------ ------- CURRENT ASSETS: (Unaudited) (Unaudited) Cash and cash equivalents $ 59,158 $170,648 $114,247 Receivables, net 273,310 94,116 265,432 Inventories - Finished products and parts 94,840 96,540 87,881 Work in process 31,206 40,107 34,773 Raw materials 4,229 4,027 3,863 -------- -------- -------- Total inventories 130,275 140,674 126,517 Future income tax benefits 34,964 31,376 34,479 Prepaid expenses 14,539 16,516 13,746 -------- -------- -------- Total current assets 512,246 453,330 554,421 PREPAID PENSION COST 1,898 - 12,406 DEFERRED INCOME TAX ASSET 5,907 1,866 - PLANT AND EQUIPMENT - Cost 769,731 726,331 670,867 Less - Accumulated depreciation and unamortized investment tax credit 395,212 383,034 376,472 -------- -------- -------- Total plant and equipment, net 374,519 343,297 294,395 -------- -------- -------- $894,570 $798,493 $861,222 ======== ======== ======== LIABILITIES & SHAREHOLDERS' INVESTMENT CURRENT LIABILITIES: Accounts payable $ 72,996 $ 63,913 $ 80,248 Domestic notes payable 10,000 6,750 1,750 Foreign loans 23,959 19,653 24,764 Accrued liabilities 104,504 108,817 129,930 Dividends payable 7,521 - 7,232 Federal and state income taxes 31,611 (1,878) 21,487 -------- -------- -------- Total current liabilities 250,591 197,255 265,411 DEFERRED INCOME TAX LIABILITY - - 7,383 ACCRUED EMPLOYEE BENEFITS 17,676 16,447 15,966 ACCRUED PENSION COST - 1,606 - ACCRUED POSTRETIREMENT HEALTH CARE OBLIGATION 69,577 68,707 63,566 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 289 289 289 Additional paid-in capital 41,001 41,698 41,775 Retained earnings 440,914 397,627 392,521 Cumulative translation adjustments (478) (136) (689) -------- -------- -------- Total shareholders' investment 481,726 439,478 433,896 -------- -------- -------- $894,570 $798,493 $861,222 ======== ======== ========
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 Nine Months Ended ------------------ ------------------ March 31 April 2 March 31 April 2 1996 1995 1996 1995 -------- ------- -------- ------- NET SALES $460,201 $450,163 $979,035 $1,044,725 COST OF GOODS SOLD 356,119 344,725 790,049 815,964 -------- -------- -------- ---------- Gross profit on sales $104,082 $105,438 $188,986 $ 228,761 ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 30,055 27,742 79,339 76,715 -------- -------- -------- ---------- Income from operations $ 74,027 $ 77,696 $109,647 $ 152,046 INTEREST EXPENSE (2,879) (2,195) (7,855) (6,407) OTHER INCOME, net 1,798 2,100 4,418 5,959 -------- -------- -------- ---------- Income before provision for income taxes $ 72,946 $ 77,601 $106,210 $ 151,598 PROVISION FOR INCOME TAXES 27,720 30,270 40,360 59,130 -------- -------- -------- ---------- Net income $ 45,226 $ 47,331 $ 65,850 $ 92,468 ======== ======== ======== ========== PER SHARE DATA* - Net income $ 1.57 $ 1.64 $ 2.28 $ 3.20 ====== ====== ====== ====== Cash dividends $ .26 $ .25 $ .78 $ .73 ====== ====== ====== ======
* Based on 28,927,000 shares outstanding. 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)
Nine Months Ended ----------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: March 31, 1996 April 2, 1995 -------------- ------------- Net income $ 65,850 $ 92,468 Adjustments to reconcile net income to net cash provided by operating activities - Depreciation 31,704 33,848 Loss on disposition of plant and equipment 1,318 608 (Increase)decrease in operating assets - Accounts receivable (179,194) (160,191) Inventories 10,399 (48,596) Other current assets (1,611) (5,053) Other assets (5,939) 1,252 Increase(decrease) in liabilities - Accounts payable and accrued liabilities 45,780 59,825 Other liabilities 493 (2,004) --------- --------- Net cash used by operating activities $ (31,200) $ (27,843) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to plant and equipment $ (65,341) $ (70,709) Proceeds received on sale of plant and equipment 1,006 2,075 Decrease in cash due to spin-off of lock business - (174) --------- --------- Net cash used in investing activities $ (64,335) $ (68,808) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings from domestic and foreign loans $ 7,556 $ 12,191 Dividends (22,563) (21,117) Purchase of common stock for treasury (1,032) (784) Proceeds from exercise of stock options 335 345 --------- --------- Net cash used by financing activities $ (15,704) $ (9,365) --------- --------- EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS $ (251) $ (838) --------- --------- NET DECREASE IN CASH AND CASH EQUIVALENTS $(111,490) $(106,854) CASH AND CASH EQUIVALENTS, beginning 170,648 221,101 --------- --------- CASH AND CASH EQUIVALENTS, ending $ 59,158 $ 114,247 ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 7,905 $ 6,351 ========= ========= Income taxes paid $ 15,795 $ 53,271 ========= =========
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. During the second quarter of fiscal 1996, the Company recorded a change in an accounting estimate originally made in the last quarter of fiscal 1995. During the last quarter of fiscal 1995, a charge totaling $19,059,000 was added to pension and postretirement health care expenses to reflect the costs of early retirement windows that were offered and accepted at the end of fiscal 1995. In October 1995, when the retirements were to occur, a number of those employees who had accepted the offer canceled their acceptance, and thus a credit totaling $3,477,000 was recorded as a change in the original accounting estimate. The Financial Accounting Standards Board issued SFAS No. 123 "Accounting for Stock-Based Compensation" in October 1995, which establishes financial accounting and reporting standards for stock-based employee compensation. The Company plans to adopt only the pro forma disclosure requirements of this statement, and will continue to apply the accounting provisions of APB Opinion No. 25 to stock-based employee compensation arrangements, as is allowed by the statement. This disclosure will be effective for the financial statements ending in June 1997. -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 third quarter of fiscal 1996 increased 2% or $10,038,000. This was the net result of a $26,420,000 increase in engine sales, partially offset by the lack of lock sales in the current quarter in the amount of $16,382,000 included in last year's third quarter before that business was spun off to shareholders at the end of February 1995. The increase in engine sales was due to a 9% increase in engine unit shipments which occurred in the Company's lower selling price small engine line. Larger engine unit sales remained steady between years. The largest portion of this increase was in the domestic market, although the export markets had small improvements. Service sales showed a decline in the current year. Net sales for the nine months ended March 1996 decreased 6% to $979,035,000. This decrease is almost entirely attributable to the absence of lock sales in the current year. Total engine units sold, however, showed a 3% decrease. There was not a corresponding sales dollar decrease because there were larger decreases in sales of the Company's lower selling price engines than higher selling price engines. Decreases in the domestic market and in service sales were offset by increases in export markets. GROSS PROFIT Gross profit decreased 1% or $1,356,000 between comparable third quarter periods. The gross profit rate decreased less than 1%. Gross profit was generated from the net increase in sales; small reductions in the cost of aluminum, the major raw material used in the manufacture of engines; and lower profit sharing accruals. The favorable effect of these items was offset by the expected costs associated with the transition to new plants and the spreading of fixed costs over fewer engines produced. Nine-month gross profit decreased 17%, or $39,775,000. The gross profit rate decreased from 22% in the previous year to 19% in the current year. The same factors described above were in effect except that lower sales had a negative impact over the nine-month period. There was also the absence of gross profit related to the spun-off lock business. -7- 8 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION (Continued) ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES This category increased $2,313,000 or 8% between comparable quarters. This was due to planned increases in manpower costs related to the Company's service operations and increases in professional services, offset in part by reduced profit sharing accruals and the lack of engineering and selling expenses from the spun-off lock business. The 3% increase in the nine-month comparison is also due to the factors described above. INTEREST EXPENSE Interest expense for the third fiscal quarter increased 31% over the comparable period in the preceding year. The nine- month amount increased 23%. These increases were the result of the use of domestic short-term borrowing to finance increases in accounts receivable and inventories. Substantially all of the current year domestic borrowings were paid off by the end of the quarter. The preceding year had a minimal amount of short-term borrowing. OTHER INCOME This category decreased between years in both the quarterly and nine-month comparisons. These decreases were caused by a reduction in investable funds during the current year for the same reasons described in Interest Expense. PROVISION FOR INCOME TAXES The effective tax rate used for both the quarter and nine-month periods was 38%. This rate is management's estimate of what the rate will be for the entire fiscal year. OUTLOOK A late spring in the eastern half of the United States has clouded the outlook for the fourth quarter. In the few places that have enjoyed warm, wet weather, retail sales of outdoor power equipment have been good, which is encouraging. Where winter has refused to make a timely departure, retail sales have been poor, which is what would be expected. The question for which an answer is awaited: Will warm weather return before consumers decide to postpone purchases until next spring? Until this question is answered, no prediction of fourth quarter results can be made. Company management believes that earnings for the full year will be lower than for last year. -8- 9 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION (Continued) FINANCIAL CONDITION Cash and cash equivalents decreased $111,490,000 since the end of the previous fiscal year. This reduction in cash and the increase in accounts payable and accrued liabilities were used to finance the $179,194,000 seasonal increase in accounts receivable, capital expenditures totaling $65,341,000, and the payment of dividends totaling $22,563,000. Inventories decreased $10,399,000 since the end of the fiscal year. The high level of finished goods inventories carried during most of fiscal 1996 was reduced by shipments late in the third fiscal quarter. A major part of the $65,341,000 in capital expenditures during the first nine months of fiscal year 1996 was for previously announced projects involving three new engine plants, a foundry and plant expansions. These projects were substantially completed during the December quarter and manufacturing operations have begun at these locations. The Company plans to spend approximately $15,000,000 on additional capital expenditures during the final fiscal quarter. CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS Certain statements in this Management's Discussion and Analysis contain forward-looking information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risk and uncertainty. Company results may differ materially from those in the forward-looking statements. Any forward-looking statements are based on management's current views and assumptions and involve risks and uncertainties that could significantly affect final results. These uncertainties could include the effects of weather; actions of competitors; changes in laws and regulations, including accounting standards; customer demand; prices of purchased raw materials and parts; domestic economic conditions; housing starts; and foreign economic conditions, including currency rate fluctuations. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. Exhibit Number Description ------- ----------- 27 Financial Data Schedule (Filed herewith) -9- 10 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART II - OTHER INFORMATION (Continued) (b) Reports on Form 8-K. There were no reports on Form 8-K for the third quarter ended March 31, 1996. 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: May 8, 1996 /s/ R. H. Eldridge --------------------------------------- R. H. Eldridge Executive Vice President & Chief Financial Officer, Secretary-Treasurer Date: May 8, 1996 /s/ J. E. Brenn --------------------------------------- J. E. Brenn Vice President and Controller -10- EX-27 2 FDS
5 9-MOS JUN-30-1996 JUL-03-1995 MAR-31-1996 59,158,000 0 273,310,000 0 130,275,000 512,246,000 769,731,000 395,212,000 894,570,000 250,591,000 0 0 0 289,000 481,437,000 894,570,000 979,035,000 979,035,000 790,049,000 790,049,000 74,921,000 0 7,855,000 106,210,000 40,360,000 65,850,000 0 0 0 65,850,000 2.28 2.28
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