8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 21, 2005

BRIGGS & STRATTON CORPORATION

(Exact name of registrant as specified in its charter)

Wisconsin	1-1370	39-0182330
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

12301 West Wirth Street, Wauwatosa, Wisconsin 53222

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code (414) 259-5333

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On January 21, 2005, Briggs & Stratton Corporation issued a press release announcing fiscal 2005 second quarter results as of December 26, 2004 in the press release furnished as Exhibit 99.1.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(a) Not applicable

(b) Not applicable

(c) Exhibits. The following exhibit is being furnished herewith:

99.1 Press Release dated January 21, 2005 announcing results for the second quarter of fiscal 2005.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

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: January 21, 2005	By:	/s/ James E. Brenn
		James E. Brenn
		Senior Vice President and Chief Financial Officer Duly Authorized Officer

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated January 21, 2005 announcing results for the second quarter of fiscal 2005.

4

EX-99.1

Exhibit 99.1

BRIGGS & STRATTON CORPORATION REPORTS RESULTS FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF FISCAL 2005

MILWAUKEE, January 21, 2005/PR Newswire/-Briggs & Stratton Corporation (NYSE:BGG)

Briggs & Stratton today announced fiscal 2005 second quarter consolidated net sales of $503.7 million and consolidated net income of $7.1 million or $.14 per diluted share. The second quarter of fiscal 2004 had consolidated net sales of $416.0 million and net income of $20.6 million or $.43 per diluted share. The majority of the $87.7 million or 21% increase in consolidated net sales was due to the inclusion of $72.4 million of sales from the Simplicity Manufacturing, Inc. (“Simplicity”) acquisition in July of 2004. The Engine business segment was primarily responsible for the remainder of the increase through price improvement and a mix of shipments that favored higher priced product. Consolidated net income declined $13.5 million between years due to a $30.0 million ($19.7 million after tax) increase in the reserve for uncollectible receivables for a trade receivable due from a bankrupt customer. Without the write down of the trade receivable, consolidated net income for the second quarter improved over the same period a year ago due to the price improvement and favorable mix of engine product sold in the Engine business segment.

For the first six months of fiscal 2005, the Company had consolidated net sales of $942.7 million and consolidated net income of $5.6 million or $.11 per diluted share. For the same period a year ago, consolidated net sales were $747.4 million and consolidated net income was $24.7 million or $.54 per diluted share. The majority of the $195.3 million or 26% increase in consolidated net sales was due to the inclusion of $151.9 million of sales from the Simplicity acquisition. The Engine business segment was primarily responsible for the remainder of the increase resulting from a mix of shipments that favored higher priced product and price improvement experienced in the second quarter. Consolidated net income declined $19.1 million between the comparative six-month periods due to a $40.0 million ($26.4 million after tax) increase in the reserve for uncollectible receivables. Without the write down of the trade receivable, consolidated net income for the first six months of fiscal 2005 improved over the same period a year ago for the same reasons identified above for the second quarter.

Engines:

Fiscal 2005 second quarter net sales were $374.9 million versus $357.8 million for the same period a year ago, an increase of 5%. The increase resulted from improved pricing and a mix of engine shipments that favored higher priced products. Engine unit shipments were flat between quarters. Sales for the first half of fiscal 2005 were $629.0 million versus $592.2 million in the prior year, a 6% improvement. The factors contributing to the increase are the same as those described for the second quarter, although engine shipment units were down approximately 2% for the first six months of fiscal 2005 as compared to the same period a year ago.

Income from operations for the second quarter of fiscal 2005 was $14.5 million, down $20.9 million from the same period in the prior year. The major reason for the decrease in income from operations was the $30 million write down of the trade receivable. Without the write down, income from operations improved over the same period a year ago. Favorable factors affecting the second quarter results were the improvement in revenues from our selling price increases and a sales mix that favored higher margined product. Material and component costs continue at levels significantly higher than last year, but were more than offset by the favorable factors in the second quarter.

Income from operations for the first half of fiscal 2005 was $9.9 million, down $28.9 million from the same period a year ago. The major reason for the decrease in income from operations was the $40 million write down of the trade receivable. Without the write down, income from operations improved over the same period a year ago. Favorable factors affecting the results for the first six months were the improvement in revenues from our selling price increases, a sales mix that favored higher margined product and increased production levels, primarily in the first quarter, which allowed for a better spreading of fixed costs. As in the second quarter, material and component costs were significantly higher than last year.

Power Products:

Fiscal 2005 second quarter net sales were $170.6 million, a $73.0 million increase over the same period a year ago. The increase in net sales was primarily the result of having $72.4 million of sales from our Simplicity acquisition. Generator sales were up approximately 15%, primarily because of unit volume resulting from continuing replenishment of retail inventories that were depleted by the active hurricane season. Pressure washer sales were down approximately 13% because of a unit volume decrease. Retail sales of pressure washers increased year over year, but our shipments of pressure washer units declined as retailers lowered their inventories in anticipation of new product offerings in the spring.

Net sales for the first six months of fiscal 2005 were $392.9 million, a $169.7 million increase over the same period a year ago. A major factor in the increase was the inclusion of $151.9 million of net sales from our Simplicity acquisition. Generator product accounted for the rest of the increase, with sales up approximately 23% because of unit volume increases associated with the significant hurricane season. The generator increase was offset by a pressure washer sales decrease of approximately 15%. As previously discussed, unit volume reductions described above account for a majority of the decline.

There was a loss from operations of $.7 million in the second quarter of fiscal 2005, a decline of $5.8 million from the gain of $5.2 million a year ago. The major factor for the decline was a $4.0 million operating loss associated with the Simplicity acquisition. The loss is the result of the application of purchase accounting rules that increased the cost of sales by $4.6 million. The remainder of the decline was primarily due to increased costs associated with premium freight to satisfy retail demand for generators, increased material and component costs and lower production volumes for pressure washers that had an unfavorable impact on the spreading of fixed costs.

Income from operations for the first six months of fiscal 2005 was $4.5 million, a reduction of $10.0 million from the operating income generated for the same period a year ago. One factor for the decline was a $4.8 million operating loss associated with the Simplicity acquisition. As in the second quarter, the operating loss at Simplicity is the result of purchase accounting rules on acquired inventory that have increased the cost of sales by $9.6 million for the six-month period. The remainder of the decline was caused by the same factors discussed for the second quarter, in addition to lower unit prices on pressure washers, the majority of which occurred in the first quarter.

General:

Other income was greater in both the second quarter and first six months of fiscal 2005 due to the recognition of dividends on preferred stock that we hold. The effective tax rate is approximately 34% in the second quarter and first six months of fiscal 2005 versus the 32% used in the corresponding periods last year.

Other Matters:

We have made an offer of $125.0 million for all tangible and intangible assets, excluding real estate, of the North American operations of Murray, Inc. As of January 21, 2005 Murray, Inc. has not yet received approval of the sale by the bankruptcy court. If all required approvals are received within the next two weeks we anticipate completion of the transaction by mid March. We estimate that we will record an extraordinary gain in the range of $20.0 to $30.0 million in the second half of fiscal 2005. We believe our net income will be $3.0 to $5.0 million lower as we absorb some of the operating losses of Murray, Inc. while they produce finished goods that we will sell to retailers for the upcoming lawn and garden season.

Outlook:

We are adjusting our forecast of net income for fiscal 2005 to incorporate the incremental $30.0 million trade receivable written down in the second quarter, our estimate of the operating loss associated with the Murray asset acquisition and our estimate of the potential extraordinary gain. Consequently, we have changed our previous net income forecast of $150 to $160 million to a range of $143 to $160 million. In addition, we continue to address the cost increases that we are seeing on raw materials and components, and we do not believe there is any significant relief from the levels we are currently experiencing, other than the impact of price increases implemented to date.

We project that third quarter net sales will be approximately 30% greater than last year, while net income could improve in the range of 13% to 15%.

The Company will host a conference call at 10:00 AM (EST) on January 21, 2005 to review this information. A live web cast of the conference call will be available on its corporate website: http://www.briggsandstratton.com/shareholders . Also available is a dial-in number to access the call real-time at (866) 802-4328. A replay will be offered beginning approximately two hours after the call ends and will be available for one week. Dial (888) 266-2081 to access the replay. The pass code will be 621548.

This release contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. The words “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “intend”, “may”, “objective”, “plan”, “project”, “seek”, “think”, “will”, and similar expressions are intended to identify 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 ability to successfully forecast demand for our products and appropriately adjust our manufacturing and inventory levels; changes in our operating expenses; changes in interest rates; the effects of weather on the purchasing patterns of consumers and original equipment manufacturers (OEMs); actions of engine manufacturers and OEMs with whom we compete; the seasonal nature of our business; changes in laws and regulations, including environmental, tax, pension funding and accounting standards; work stoppages or other consequences of any deterioration in our employee relations; work stoppages by other unions that affect the ability of suppliers or customers to manufacture; acts of war or terrorism that may disrupt our business operations or those of our customers and suppliers; changes in customer and OEM demand; changes in prices of raw materials and parts that we purchase; changes in domestic economic conditions, including housing starts and changes in consumer disposable income; changes in foreign economic conditions, including currency rate fluctuations; new facts that come to light in the future course of litigation proceedings which could affect our assessment of those matters; our ability to successfully integrate the Simplicity acquisition; and other factors that may be disclosed from time to time in our SEC filings or otherwise. Some or all of the factors may be beyond our control. We caution you that any forward-looking statement reflects only our belief at the time the statement is made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made.

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Consolidated Statements of Earnings for the Fiscal Periods Ended December

(In Thousands, except per share data)

(Unaudited)

	Second Quarter						Six Months
	2004			2003			2004			2003
NET SALES	$	503,700		$	415,984		$	942,695		$	747,379
COST OF GOODS SOLD		397,558			325,138			765,735			596,338
Gross Profit on Sales		106,142			90,846			176,960			151,041
ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		92,658			52,170			160,618			98,070
Income from Operations		13,484			38,676			16,342			52,971
INTEREST EXPENSE		(8,795	)		(9,596	)		(16,914	)		(19,428	)
OTHER INCOME, Net		6,081			1,265			9,014			2,708
Income before Provision for Income Taxes		10,770			30,345			8,442			36,251
PROVISION FOR INCOME TAXES		3,710			9,710			2,870			11,600
Net Income	$	7,060		$	20,635		$	5,572		$	24,651
Average Shares Outstanding		51,193			44,176			51,361			44,242
BASIC EARNINGS PER SHARE	$	0.14		$	0.47		$	0.11		$	0.56
Diluted Average Shares Outstanding		51,751			50,208			51,906			50,192
DILUTED EARNINGS PER SHARE	$	0.14		$	0.43		$	0.11		$	0.54

Segment Information

(In Thousands)

(Unaudited)

	Second Quarter						Six Months
	2004			2003			2004			2003
NET SALES:
Engines	$	374,874		$	357,848		$	628,986		$	592,196
Power Products		170,568			97,614			392,867			223,163
Inter-Segment Eliminations		(41,742	)		(39,478	)		(79,158	)		(67,980	)
Total*	$	503,700		$	415,984		$	942,695		$	747,379
*Includes international sales of	$	88,056		$	112,365		$	169,914		$	168,170
GROSS PROFIT ON SALES:
Engines	$	88,681		$	80,867		$	132,926		$	123,373
Power Products		17,849			11,891			42,047			27,961
Inter-Segment Eliminations		(388	)		(1,912	)		1,987			(293	)
Total	$	106,142		$	90,846		$	176,960		$	151,041
INCOME FROM OPERATIONS:
Engines	$	14,528		$	35,432		$	9,852		$	38,712
Power Products		(656	)		5,156			4,503			14,552
Inter-Segment Eliminations		(388	)		(1,912	)		1,987			(293	)
Total	$	13,484		$	38,676		$	16,342		$	52,971

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets as of the End of Fiscal December

(In Thousands)

(Unaudited)

	2004			2003
CURRENT ASSETS:
Cash and Cash Equivalents	$	24,078		$	119,323
Accounts Receivable, Net		330,954			339,822
Inventories		563,806			336,742
Deferred Income Tax Asset		74,418			52,892
Other		25,139			23,038
Total Current Assets		1,018,395			871,817
OTHER ASSETS:
Goodwill		248,799			154,070
Investments		45,190			41,693
Prepaid Pension		83,102			77,879
Deferred Loan Costs, Net		5,744			7,275
Other Long-Term Assets, Net		107,873			9,954
Total Other Assets		490,708			290,871
PLANT AND EQUIPMENT:
At Cost		959,913			873,683
Less - Accumulated Depreciation		535,119			512,770
Plant and Equipment, Net		424,794			360,913
	$	1,933,897		$	1,523,601
CURRENT LIABILITIES:
Accounts Payable	$	139,382		$	119,726
Short-Term Borrowings		164,077			1,269
Accrued Liabilities		206,908			193,526
Total Current Liabilities		510,367			314,521
OTHER LIABILITIES:
Deferred Income Tax Liability		106,190			60,621
Accrued Pension Cost		21,768			21,401
Accrued Employee Benefits		14,487			14,143
Accrued Postretirement Health Care Obligation		78,530			47,419
Other Long-Term Liabilities		15,148			15,050
Long-Term Debt		360,941			501,356
Total Other Liabilities		597,064			659,990
SHAREHOLDERS’ INVESTMENT:
Common Stock and Additional Paid-in Capital		55,156			37,191
Retained Earnings		915,884			832,062
Accumulated Other Comprehensive Income (Loss)		6,289			(5,424	)
Unearned Compensation on Restricted Stock		(1,753	)		(1,018	)
Treasury Stock, at Cost		(149,110	)		(313,721	)
Total Shareholders’ Investment		826,466			549,090
	$	1,933,897		$	1,523,601

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	Six Months Ended Fiscal December
	2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	5,572		$	24,651
Depreciation and Amortization		35,837			32,290
Loss on Disposition of Plant and Equipment		1,279			3,066
Provision for Deferred Income Taxes		(29,392	)		(1,514	)
Increase in Accounts Receivable		(76,021	)		(137,861	)
Increase in Inventories		(165,404	)		(127,605	)
(Increase) Decrease in Other Current Assets		994			(5,150	)
(Decrease) Increase in Accounts Payable and Accrued Liabilities		(11,920	)		7,927
Other, Net		(6,931	)		(6,718	)
Net Cash Used in Operating Activities		(245,986	)		(210,914	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Plant and Equipment		(39,382	)		(23,144	)
Proceeds Received on Disposition of Plant and Equipment		332			299
Proceeds Received on Sale of Certain B&S Canada Assets		4,050			—
Cash Paid for Acquisition, Net of Cash Received		(223,113	)		—
Dividends Received		12,017			3,500
Refund of Cash Paid for Acquisition		—			5,686
Net Cash Used in Investing Activities		(246,096	)		(13,659	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings (Repayments) on Loans and Notes Payable		160,950			(1,671	)
Dividends		(8,694	)		(7,285	)
Proceeds from Exercise of Stock Options		17,648			24,701
Net Cash Provided by Financing Activities		169,904			15,745
EFFECT OF EXCHANGE RATE CHANGES		3,862			3,336
NET DECREASE IN CASH AND CASH EQUIVALENTS		(318,316	)		(205,492	)
CASH AND CASH EQUIVALENTS, Beginning		342,394			324,815
CASH AND CASH EQUIVALENTS, Ending	$	24,078		$	119,323