EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

Investor Relations Contact:

    James E. Brenn, Senior VP and Chief Financial Officer

    (414) 259-5333

BRIGGS & STRATTON CORPORATION REPORTS RESULTS FOR

THE FIRST QUARTER OF FISCAL 2010

MILWAUKEE, WI October 22, 2009/PR Newswire/-Briggs & Stratton Corporation (NYSE:BGG)

Briggs & Stratton Corporation today announced fiscal 2010 first quarter consolidated net sales of $324.6 million and a net loss of $8.7 million or $0.18 per diluted share. Consolidated net sales decreased $133.5 million or 29% from the prior year while the net loss was $6.7 million greater than the same period a year ago. The $133.5 million consolidated net sales decrease was primarily the result of weaker shipments of both portable generators and engines. The increase in the net loss of $6.7 million was primarily the result of lower sales volumes in both reportable segments and a less favorable effective tax rate, partially offset by lower production costs and operating expenses.

Engines:

Fiscal 2010 first quarter net sales were $210.4 million, $48.2 million or 19% less than the prior year. This decrease reflects a 22% decrease in engine unit shipments compared to the same period a year ago. The reduction in engine unit volume was attributable to consumer demand for lawn and garden equipment that was softer than that experienced in the same period a year ago and the decrease in demand for engines for portable generators due to the lack of landed hurricanes this year versus the activity experienced in the first quarter last year.

The fiscal 2010 first quarter loss from operations was $5.9 million, which is $0.4 million more than the $5.5 million loss from operations experienced in the first quarter of fiscal 2009. This increase in the loss from operations over the prior year was the result of a decrease in engine unit shipments and an increased provision for potential uncollectible receivables, offset by lower production costs and operating expenses. The lower production costs are primarily the result of lower costs for purchased materials and components, lower transportation costs and lower warranty expenses. Operating expenses were lower in the fiscal 2010 first quarter compared to the prior year period, due primarily to planned reductions in selling and engineering expenses.

Power Products:

Fiscal 2010 first quarter net sales were $163.6 million, $91.9 million or 36% less than the prior year. The decrease in sales primarily resulted from decreased sales of portable generators due to the lack of hurricanes making landfall in the United States in this year’s first quarter. In addition, unit shipments of all lawn and garden products were soft, especially the premium equipment that we sell through the dealer channel.

The fiscal 2010 first quarter income from operations was $3.6 million, an improvement of $1.0 million from the income from operations of $2.6 million reported in the first quarter of fiscal 2009. This improvement in income from operations between years resulted from lower production costs for materials and components and improved absorption related to the mix of product manufactured, partially offset by lower sales.

General:

Interest expense was lower between years because of lower outstanding borrowings. The effective tax rate was 36% versus the 71% used in the first quarter last year. The effective tax rate for the first quarter of fiscal 2009 was significantly higher than the 2010 period because 2009 included the favorable tax impact of foreign dividends.

Outlook:

The company continues to project that fiscal 2010 net income will be in the range of $40 to $50 million or $0.80 to $1.01 per diluted share. Consolidated net sales are projected to be lower between years primarily due to the absence of hurricane related sales of portable generators and selected price reductions to reflect projected lower commodity costs. Production levels for substantially all products are planned to be lower in fiscal 2010 to decrease our investment in working capital. Operating income margins are projected to be in the range of 4.0% to 5.0%, and interest expense and other income are forecasted at $27 million and $5 million, respectively. The effective tax rate for the full year is projected to be in a range of 31% to 34%.


The company will host a conference call today at 10:00 AM (EDT) to review this information. A live web cast of the conference call will be available on our corporate website: http://www.briggsandstratton.com/shareholders. Also available is a dial-in number to access the call real-time at (866) 837-9779. 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 1398895.

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”, “could”, “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; the ability of ourselves and our customers to secure adequate working capital funding and meet related covenants; 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 consumer confidence; changes in the market value of the assets in our defined benefit pension plan and any related funding requirements; changes in foreign economic conditions, including currency rate fluctuations; the actions of customers of our OEM customers; the ability to bring new productive capacity on line efficiently and with good quality; the ability to successfully realize the maximum market value of assets that may require disposal if products or production methods change; new facts that come to light in the future course of litigation proceedings which could affect our assessment of those matters; and other factors that may be disclosed from time to time in our SEC filings or otherwise, including the factors discussed in Item 1A, Risk Factors, of the company’s Annual Report on Form 10-K and in its periodic reports on Form 10-Q. 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 September

(In Thousands, except per share data)

(Unaudited)

 

     Three Months Ended Fiscal September  
     2009     2008  

NET SALES

   $ 324,608      $ 458,151   

COST OF GOODS SOLD

     272,218        393,432   
                

Gross Profit on Sales

     52,390        64,719   

ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     60,793        64,851   
                

Loss from Operations

     (8,403     (132

INTEREST EXPENSE

     (6,476     (7,897

OTHER INCOME, Net

     1,290        1,199   
                

Loss before Credit for Income Taxes

     (13,589     (6,830

CREDIT FOR INCOME TAXES

     (4,902     (4,874
                

Net Loss

   $ (8,687   $ (1,956
                

Average Shares Outstanding

     49,593        49,563   
                

BASIC EARNINGS (LOSS) PER SHARE

   $ (0.18   $ (0.04
                

Diluted Average Shares Outstanding

     49,593        49,563   
                

DILUTED EARNINGS (LOSS) PER SHARE

   $ (0.18   $ (0.04
                

Segment Information

(In Thousands)

(Unaudited)

 

     Three Months Ended Fiscal September  
     2009     2008  

NET SALES:

    

Engines

   $ 210,404      $ 258,621   

Power Products

     163,606        255,531   

Inter-Segment Eliminations

     (49,402     (56,001
                

Total *

   $ 324,608      $ 458,151   
                

* International sales based on product shipment destination included in net sales

   $ 85,438      $ 111,867   

GROSS PROFIT ON SALES:

    

Engines

   $ 36,400      $ 40,427   

Power Products

     22,030        21,531   

Inter-Segment Eliminations

     (6,040     2,761   
                

Total

   $ 52,390      $ 64,719   
                

INCOME (LOSS) FROM OPERATIONS:

    

Engines

   $ (5,914   $ (5,511

Power Products

     3,551        2,618   

Inter-Segment Eliminations

     (6,040     2,761   
                

Total

   $ (8,403   $ (132
                


BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets as of the End of Fiscal September

(In Thousands)

(Unaudited)

 

CURRENT ASSETS:    2009     2008  

Cash and Cash Equivalents

   $ 26,116      $ 32,607   

Accounts Receivable, Net

     185,127        305,359   

Inventories

     546,109        564,173   

Deferred Income Tax Asset

     53,959        53,345   

Other

     33,893        44,974   
                

Total Current Assets

     845,204        1,000,458   
                

OTHER ASSETS:

    

Goodwill

     254,657        248,571   

Investments

     16,332        19,688   

Prepaid Pension

     —          93,298   

Deferred Loan Costs, Net

     1,565        2,785   

Other Intangible Assets, Net

     91,652        100,847   

Deferred Income Tax Asset

     23,945        —     

Other Long-Term Assets, Net

     9,169        8,654   
                

Total Other Assets

     397,320        473,843   
                

PLANT AND EQUIPMENT:

    

At Cost

     996,873        1,020,992   

Less - Accumulated Depreciation

     640,494        632,959   
                

Plant and Equipment, Net

     356,379        388,033   
                
   $ 1,598,903      $ 1,862,334   
                

CURRENT LIABILITIES:

    

Accounts Payable

   $ 118,360      $ 182,611   

Short-Term Debt

     41,750        141,348   

Accrued Liabilities

     159,676        162,688   
                

Total Current Liabilities

     319,786        486,647   
                

OTHER LIABILITIES:

    

Deferred Income Tax Liability

     —          46,913   

Accrued Pension Cost

     136,051        36,445   

Accrued Employee Benefits

     19,465        18,541   

Accrued Postretirement Health Care Obligation

     152,860        160,223   

Other Long-Term Liabilities

     28,837        33,893   

Long-Term Debt

     247,232        266,617   
                

Total Other Liabilities

     584,445        562,632   
                

SHAREHOLDERS’ INVESTMENT:

    

Common Stock and Additional Paid-in Capital

     79,072        76,142   

Retained Earnings

     1,061,695        1,069,691   

Accumulated Other Comprehensive Income (Loss)

     (242,065     (123,709

Treasury Stock, at Cost

     (204,030     (209,069
                

Total Shareholders’ Investment

     694,672        813,055   
                
   $ 1,598,903      $ 1,862,334   
                


BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

 

     Three Months Ended Fiscal September  
CASH FLOWS FROM OPERATING ACTIVITIES:    2009     2008  

Net Loss

   $ (8,687   $ (1,956

Depreciation and Amortization

     16,152        17,574   

Stock Compensation Expense

     4,187        1,986   

Loss on Disposition of Plant and Equipment

     145        408   

Provision for Deferred Income Taxes

     (2,402     (1,223

Decrease in Accounts Receivable

     78,955        15,829   

Increase in Inventories

     (68,452     (24,497

(Increase) Decrease in Other Current Assets

     7,939        (1,715

Decrease in Accounts Payable and Accrued Liabilities

     (18,297     (6,610

Other, Net

     2,323        (1,906
                

Net Cash Provided (Used) by Operating Activities

     11,863        (2,110
                

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Additions to Plant and Equipment

     (6,969     (11,291

Cash Paid for Acquisition, Net of Cash Acquired

     —          (24,757

Proceeds Received on Disposition of Plant and Equipment

     163        1,694   

Other, Net

     (144     —     
                

Net Cash Used by Investing Activities

     (6,950     (34,354
                

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Net Borrowings on Loans, Notes Payable, and Long-Term Debt

     4,750        38,104   
                

Net Cash Provided by Financing Activities

     4,750        38,104   
                

EFFECT OF EXCHANGE RATE CHANGES

     461        (1,501
                

NET INCREASE IN CASH AND CASH EQUIVALENTS

     10,124        139   

CASH AND CASH EQUIVALENTS, Beginning

     15,992        32,468   
                

CASH AND CASH EQUIVALENTS, Ending

   $ 26,116      $ 32,607