Briggs & Stratton Corporation Reports Results for the Third Quarter of Fiscal 2001

Apr 19, 2001, 01:00 ET from Briggs & Stratton Corporation

    MILWAUKEE, April 19 /PRNewswire/ --
     Briggs & Stratton Corporation (NYSE:   BGG)
 
     Briggs & Stratton today announced third quarter net income of
 $29.9 million or $1.38 per diluted share.  Third quarter net income from the
 prior year was $42.1 million or $1.84 per share.
     Major contributing factors to the 29% decrease in net income were lower
 production levels, the impact of a strong dollar on exports to Europe, lower
 shipments of service components and greater interest expense.  Net sales for
 the third quarter were $430.2 million or 8% lower than last year's third
 quarter net sales of $468.7 million.
     For the first nine months of fiscal 2001, net income was $43.5 million or
 $2.01 per diluted share compared to $98.5 million or $4.28 per share in fiscal
 2000, excluding a $10.4 million gain on a foundry disposition in fiscal 2000.
 Net sales for nine months were $978.9 or 18% lower than the $1,189.8 million
 in the comparable prior year period.
     The net income decrease for nine months was the result of the shift in
 sales mix to smaller engines which contribute less gross profit dollars, the
 impact of a strong dollar on exports to Europe, an engine unit sales decrease
 of 7% and lower production levels.
     We presently estimate that fourth quarter net sales for our engine
 business may be 6-8% lower than those of the same period last year.  Current
 projections for earnings for the fourth quarter fall in a range of $.52 to
 $.72 per diluted share.  The primary reasons for our expectation of lower
 earnings are the projected lower utilization of production facilities this
 year as we try to reduce finished goods inventory by fiscal year-end, the
 lower sales volume and higher interest expense.
     As previously reported, we do not expect the acquisition of Generac
 Portable Products, Inc., which is expected to close in the fiscal fourth
 quarter, to significantly impact our fourth quarter results.
     The reason for the wide range of earnings estimates in the fourth quarter
 is our inability to predict how the weather for the remainder of the fourth
 quarter will affect consumer demand.  At this time we can only estimate
 different scenarios for demand and production because neither we, nor our
 customers have a good sense of how the spring selling season will play out.
     Fiscal 2002 will be the first full year with Generac included in our
 results. Our current estimates project our net income to be in a range of
 $3.30 - $3.50 per share.  In addition to our previously disclosed Generac
 projections for fiscal 2002, we anticipate slightly higher engine sales and
 production levels and increases in interest expense.  Sales are projected to
 approach $1.7 billion.  Operating income margins, which include an estimate of
 $66 million for depreciation and amortization, will be approximately 9%.
 Interest expense is projected at $52 million and we are assuming the same tax
 rate between years.
     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
 its corporate website:  http://www.briggsandstratton.com .  Also available is
 a dial-in number to access the call real-time at 877-679-9054.  A replay will
 be offered beginning approximately two hours after the call ends and will be
 available for one week.  Dial 800-615-3210 to access the replay.  The pass
 code will be 5078873.
 
 
                 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
     Consolidated Statements of Earnings for the Fiscal Periods Ended March
                     (In Thousands, Except Per Share Data)
 
                               Third Quarter               Nine Months
                             2001          2000         2001         2000
 
     NET SALES             $430,221      $468,678     $978,857    $1,189,849
 
     COST OF GOODS SOLD     343,826       366,838      797,058       932,904
 
       Gross Profit on
        Sales                86,395       101,840      181,799       256,945
 
     ENGINEERING, SELLING,
      GENERAL AND
      ADMINISTRATIVE
      EXPENSES               33,649        33,285      100,017        96,121
 
       Income from
        Operations           52,746        68,555       81,782       160,824
 
     INTEREST EXPENSE        (8,804)       (6,816)     (21,689)      (15,151)
 
     GAIN ON DISPOSITION OF
      ASSETS                     --            --           --        16,545
 
     OTHER INCOME, Net        3,497         5,027        8,970        10,645
 
       Income Before
        Provision for
        Income Taxes         47,439        66,766       69,063       172,863
 
     PROVISION FOR INCOME
      TAXES                  17,550        24,710       25,550        63,960
 
     NET INCOME             $29,889       $42,056      $43,513      $108,903
 
       Average Shares
        Outstanding          21,599        22,842       21,600        23,021
 
     BASIC EARNINGS PER
      SHARE                   $1.38         $1.84       $ 2.01         $4.73
 
     Diluted Average Shares
      Outstanding            21,612        22,866       21,614        23,104
 
     DILUTED EARNINGS PER
      SHARE                   $1.38         $1.84        $2.01         $4.71
 
     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," "intend," "may," "objective,"
 "plan," "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, our ability to successfully
 forecast demand for our products and appropriately adjust our manufacturing
 levels; changes in our operating expenses; our ability to complete our
 proposed acquisition of Generac Portable Products, Inc. and successfully
 integrate it into our operations; changes in interest rates; the effects of
 weather on the purchasing patterns of consumers and original equipment
 manufacturers ("OEMs"); changes in the expected speed and timing of the
 reduction of generator inventories of Generac and other generator
 manufacturers and retailers which had been built up in anticipation of Y2K
 concerns; actions of engine manufacturers and OEMs with whom we compete; the
 seasonal nature of our business; changes in laws and regulations, including
 accounting standards; work stoppages or other consequences of any
 deterioration in our employee relations; changes in consumer 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; 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 Balance Sheets as of the End of Fiscal March 2001 and 2000
                                 (In Thousands)
 
     CURRENT ASSETS:                                    2001           2000
       Cash and Cash Equivalents                      $30,126        $13,805
       Accounts Receivable                            386,617        433,866
       Inventories                                    294,901        239,941
       Other                                           61,322         58,825
          Total Current Assets                        772,966        746,437
 
     OTHER ASSETS:
       Investments                                     49,631         48,207
       Prepaid Pension                                 27,018          2,100
       Capitalized Software                             6,808          6,820
          Total Other Assets                           83,457         57,127
 
     PLANT AND EQUIPMENT,
      at Cost                                         863,549        825,014
       Less - Accumulated Depreciation                464,031        432,198
 
          Net Plant and Equipment                     399,518        392,816
                                                   $1,255,941     $1,196,380
 
 
     CURRENT LIABILITIES:                               2001           2000
       Accounts Payable                              $106,030       $134,957
       Domestic Notes Payable                         336,770        216,469
       Foreign Loans                                   13,908         18,647
       Current Maturities on Long-Term Debt                --         15,000
       Accrued Liabilities                            156,037        171,545
          Total Current Liabilities                   612,745        556,618
 
     OTHER LIABILITIES:
       Deferred Revenue on Sale of
        Plant & Equipment                              15,574         15,711
       Deferred Income Tax Liability                   12,226          2,565
       Accrued Pension Cost                            12,557         10,740
       Accrued Employee Benefits                       13,180         13,892
       Postretirement Health Care
        Obligation                                     65,584         65,706
       Long-Term Debt                                  98,666        113,461
          Total Other Liabilities                     217,787        222,075
 
     SHAREHOLDERS' INVESTMENT:
       Common Stock and Additional
        Paid-in Capital                                36,332         36,767
       Retained Earnings                              745,421        701,027
       Accumulated Other Comprehensive Loss            (5,690)          (633)
       Unearned Compensation on
        Restricted Stock                                 (331)          (244)
       Treasury Stock, at Cost                       (350,323)      (319,230)
          Total Shareholders' Investment              425,409        417,687
                                                   $1,255,941     $1,196,380
 
 
                     Consolidated Statements of Cash Flows
                                 (In Thousands)
                                                 Nine Months Ended Fiscal March
     CASH FLOWS FROM OPERATING ACTIVITIES:              2001           2000
       Net Income                                     $43,513       $108,903
       Depreciation and Amortization                   41,685         38,158
       (Gain) Loss on Disposition of
        Plant and Equipment                               371        (16,271)
       Provision (Credit) for Deferred
        Income Taxes                                    6,611         (4,062)
       Increase in Accounts Receivable               (249,365)      (239,750)
       Increase in Inventories                        (37,128)      (103,852)
       (Increase) Decrease in Other
        Current Assets                                  2,341         (1,928)
       Increase in Accounts Payable and
        Accrued Liabilities                            12,457         57,160
       Other, Net                                     (25,033)       (17,609)
         Net Cash Used in Operating Activities       (204,548)      (179,251)
 
     CASH FLOWS FROM INVESTING ACTIVITIES:
       Additions to Plant and Equipment               (48,645)       (53,861)
       Proceeds Received on Disposition
        of Plant and Equipment                          2,770         23,882
       Other, Net                                       2,933          5,141
          Net Cash Used in Investing Activities       (42,942)       (24,838)
 
     CASH FLOWS FROM FINANCING ACTIVITIES:
       Net Borrowings on Loans and Notes Payable      288,513        216,957
       Dividends                                      (20,072)       (20,683)
       Purchase of Common Stock for Treasury           (6,118)       (43,188)
       Proceeds from Exercise of Stock Options            275          5,561
          Net Cash Provided by Financing Activities   262,598        158,647
 
     EFFECT OF EXCHANGE RATE CHANGES                   (1,971)        (1,559)
 
     NET INCREASE (DECREASE) IN CASH AND CASH
      EQUIVALENTS                                      13,137        (47,001)
 
     CASH AND CASH EQUIVALENTS, Beginning              16,989         60,806
 
     CASH AND CASH EQUIVALENTS, Ending                $30,126        $13,805
 
 

SOURCE Briggs & Stratton Corporation
    MILWAUKEE, April 19 /PRNewswire/ --
     Briggs & Stratton Corporation (NYSE:   BGG)
 
     Briggs & Stratton today announced third quarter net income of
 $29.9 million or $1.38 per diluted share.  Third quarter net income from the
 prior year was $42.1 million or $1.84 per share.
     Major contributing factors to the 29% decrease in net income were lower
 production levels, the impact of a strong dollar on exports to Europe, lower
 shipments of service components and greater interest expense.  Net sales for
 the third quarter were $430.2 million or 8% lower than last year's third
 quarter net sales of $468.7 million.
     For the first nine months of fiscal 2001, net income was $43.5 million or
 $2.01 per diluted share compared to $98.5 million or $4.28 per share in fiscal
 2000, excluding a $10.4 million gain on a foundry disposition in fiscal 2000.
 Net sales for nine months were $978.9 or 18% lower than the $1,189.8 million
 in the comparable prior year period.
     The net income decrease for nine months was the result of the shift in
 sales mix to smaller engines which contribute less gross profit dollars, the
 impact of a strong dollar on exports to Europe, an engine unit sales decrease
 of 7% and lower production levels.
     We presently estimate that fourth quarter net sales for our engine
 business may be 6-8% lower than those of the same period last year.  Current
 projections for earnings for the fourth quarter fall in a range of $.52 to
 $.72 per diluted share.  The primary reasons for our expectation of lower
 earnings are the projected lower utilization of production facilities this
 year as we try to reduce finished goods inventory by fiscal year-end, the
 lower sales volume and higher interest expense.
     As previously reported, we do not expect the acquisition of Generac
 Portable Products, Inc., which is expected to close in the fiscal fourth
 quarter, to significantly impact our fourth quarter results.
     The reason for the wide range of earnings estimates in the fourth quarter
 is our inability to predict how the weather for the remainder of the fourth
 quarter will affect consumer demand.  At this time we can only estimate
 different scenarios for demand and production because neither we, nor our
 customers have a good sense of how the spring selling season will play out.
     Fiscal 2002 will be the first full year with Generac included in our
 results. Our current estimates project our net income to be in a range of
 $3.30 - $3.50 per share.  In addition to our previously disclosed Generac
 projections for fiscal 2002, we anticipate slightly higher engine sales and
 production levels and increases in interest expense.  Sales are projected to
 approach $1.7 billion.  Operating income margins, which include an estimate of
 $66 million for depreciation and amortization, will be approximately 9%.
 Interest expense is projected at $52 million and we are assuming the same tax
 rate between years.
     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
 its corporate website:  http://www.briggsandstratton.com .  Also available is
 a dial-in number to access the call real-time at 877-679-9054.  A replay will
 be offered beginning approximately two hours after the call ends and will be
 available for one week.  Dial 800-615-3210 to access the replay.  The pass
 code will be 5078873.
 
 
                 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
     Consolidated Statements of Earnings for the Fiscal Periods Ended March
                     (In Thousands, Except Per Share Data)
 
                               Third Quarter               Nine Months
                             2001          2000         2001         2000
 
     NET SALES             $430,221      $468,678     $978,857    $1,189,849
 
     COST OF GOODS SOLD     343,826       366,838      797,058       932,904
 
       Gross Profit on
        Sales                86,395       101,840      181,799       256,945
 
     ENGINEERING, SELLING,
      GENERAL AND
      ADMINISTRATIVE
      EXPENSES               33,649        33,285      100,017        96,121
 
       Income from
        Operations           52,746        68,555       81,782       160,824
 
     INTEREST EXPENSE        (8,804)       (6,816)     (21,689)      (15,151)
 
     GAIN ON DISPOSITION OF
      ASSETS                     --            --           --        16,545
 
     OTHER INCOME, Net        3,497         5,027        8,970        10,645
 
       Income Before
        Provision for
        Income Taxes         47,439        66,766       69,063       172,863
 
     PROVISION FOR INCOME
      TAXES                  17,550        24,710       25,550        63,960
 
     NET INCOME             $29,889       $42,056      $43,513      $108,903
 
       Average Shares
        Outstanding          21,599        22,842       21,600        23,021
 
     BASIC EARNINGS PER
      SHARE                   $1.38         $1.84       $ 2.01         $4.73
 
     Diluted Average Shares
      Outstanding            21,612        22,866       21,614        23,104
 
     DILUTED EARNINGS PER
      SHARE                   $1.38         $1.84        $2.01         $4.71
 
     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," "intend," "may," "objective,"
 "plan," "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, our ability to successfully
 forecast demand for our products and appropriately adjust our manufacturing
 levels; changes in our operating expenses; our ability to complete our
 proposed acquisition of Generac Portable Products, Inc. and successfully
 integrate it into our operations; changes in interest rates; the effects of
 weather on the purchasing patterns of consumers and original equipment
 manufacturers ("OEMs"); changes in the expected speed and timing of the
 reduction of generator inventories of Generac and other generator
 manufacturers and retailers which had been built up in anticipation of Y2K
 concerns; actions of engine manufacturers and OEMs with whom we compete; the
 seasonal nature of our business; changes in laws and regulations, including
 accounting standards; work stoppages or other consequences of any
 deterioration in our employee relations; changes in consumer 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; 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 Balance Sheets as of the End of Fiscal March 2001 and 2000
                                 (In Thousands)
 
     CURRENT ASSETS:                                    2001           2000
       Cash and Cash Equivalents                      $30,126        $13,805
       Accounts Receivable                            386,617        433,866
       Inventories                                    294,901        239,941
       Other                                           61,322         58,825
          Total Current Assets                        772,966        746,437
 
     OTHER ASSETS:
       Investments                                     49,631         48,207
       Prepaid Pension                                 27,018          2,100
       Capitalized Software                             6,808          6,820
          Total Other Assets                           83,457         57,127
 
     PLANT AND EQUIPMENT,
      at Cost                                         863,549        825,014
       Less - Accumulated Depreciation                464,031        432,198
 
          Net Plant and Equipment                     399,518        392,816
                                                   $1,255,941     $1,196,380
 
 
     CURRENT LIABILITIES:                               2001           2000
       Accounts Payable                              $106,030       $134,957
       Domestic Notes Payable                         336,770        216,469
       Foreign Loans                                   13,908         18,647
       Current Maturities on Long-Term Debt                --         15,000
       Accrued Liabilities                            156,037        171,545
          Total Current Liabilities                   612,745        556,618
 
     OTHER LIABILITIES:
       Deferred Revenue on Sale of
        Plant & Equipment                              15,574         15,711
       Deferred Income Tax Liability                   12,226          2,565
       Accrued Pension Cost                            12,557         10,740
       Accrued Employee Benefits                       13,180         13,892
       Postretirement Health Care
        Obligation                                     65,584         65,706
       Long-Term Debt                                  98,666        113,461
          Total Other Liabilities                     217,787        222,075
 
     SHAREHOLDERS' INVESTMENT:
       Common Stock and Additional
        Paid-in Capital                                36,332         36,767
       Retained Earnings                              745,421        701,027
       Accumulated Other Comprehensive Loss            (5,690)          (633)
       Unearned Compensation on
        Restricted Stock                                 (331)          (244)
       Treasury Stock, at Cost                       (350,323)      (319,230)
          Total Shareholders' Investment              425,409        417,687
                                                   $1,255,941     $1,196,380
 
 
                     Consolidated Statements of Cash Flows
                                 (In Thousands)
                                                 Nine Months Ended Fiscal March
     CASH FLOWS FROM OPERATING ACTIVITIES:              2001           2000
       Net Income                                     $43,513       $108,903
       Depreciation and Amortization                   41,685         38,158
       (Gain) Loss on Disposition of
        Plant and Equipment                               371        (16,271)
       Provision (Credit) for Deferred
        Income Taxes                                    6,611         (4,062)
       Increase in Accounts Receivable               (249,365)      (239,750)
       Increase in Inventories                        (37,128)      (103,852)
       (Increase) Decrease in Other
        Current Assets                                  2,341         (1,928)
       Increase in Accounts Payable and
        Accrued Liabilities                            12,457         57,160
       Other, Net                                     (25,033)       (17,609)
         Net Cash Used in Operating Activities       (204,548)      (179,251)
 
     CASH FLOWS FROM INVESTING ACTIVITIES:
       Additions to Plant and Equipment               (48,645)       (53,861)
       Proceeds Received on Disposition
        of Plant and Equipment                          2,770         23,882
       Other, Net                                       2,933          5,141
          Net Cash Used in Investing Activities       (42,942)       (24,838)
 
     CASH FLOWS FROM FINANCING ACTIVITIES:
       Net Borrowings on Loans and Notes Payable      288,513        216,957
       Dividends                                      (20,072)       (20,683)
       Purchase of Common Stock for Treasury           (6,118)       (43,188)
       Proceeds from Exercise of Stock Options            275          5,561
          Net Cash Provided by Financing Activities   262,598        158,647
 
     EFFECT OF EXCHANGE RATE CHANGES                   (1,971)        (1,559)
 
     NET INCREASE (DECREASE) IN CASH AND CASH
      EQUIVALENTS                                      13,137        (47,001)
 
     CASH AND CASH EQUIVALENTS, Beginning              16,989         60,806
 
     CASH AND CASH EQUIVALENTS, Ending                $30,126        $13,805
 
 SOURCE  Briggs & Stratton Corporation