MILWAUKEE, Jan. 30, 2020 /PRNewswire/ -- Briggs &
Stratton Corporation (NYSE: BGG), a recognized global leader in
providing power to get work done, today announced financial results
for its second quarter of fiscal 2020, ended December 29, 2019.
Fiscal Second Quarter 2020 Highlights
- Net sales of $438 million
declined from $505 million for the
prior year, predominantly driven by the expected impact of the
timing of shipments of small engines to OEMs and lower
storm-related sales, as well as lower than expected sales of job
site products. For the quarter, Engines segment sales declined 19%
and Products segment sales declined 5%.
- Gross profit margin of 15.5% (GAAP) and adjusted gross profit
margin of 17.3% decreased from a gross profit margin of 18.3%
(GAAP) and adjusted gross profit margin of 18.6% for the second
quarter last year primarily as a result of the lower sales volumes
and production. Efficiency improvements in operations continue to
be on track.
- GAAP net loss was $15.3 million,
or $0.37 per share, including pretax
charges of $9.6 million primarily
related to the Company's small engine manufacturing consolidation
initiative. For the second quarter last year, GAAP net loss was
$2.6 million, or $0.07 per share, including pretax charges of
$11.2 million primarily related to
the Company's business optimization program. Excluding these items,
adjusted net loss was $8.1 million,
or $0.20 per share, versus adjusted
net income of $8.4 million, or
$0.20 per diluted share last
year.
Market Dynamics Project Highlights:
- The Company recently completed its previously announced project
to more fully analyze market dynamics to position the business for
more sustained growth and higher returns. The project expanded to
encompass a review of the Company's current portfolio and how to
best focus and simplify the business to be nimbler and compete more
effectively.
- Entering multi-week planning period to finalize steps in the
Company's repositioning plan, which is expected to include certain
asset sales and a renewed focus on the Company's core strength of
power application.
- Plan also includes a shift in the Company's capital allocation
priorities, including the suspension of the dividend, effective
immediately, in an effort to strengthen the balance sheet and
provide additional funds to invest for future initiatives.
- Expects to host special strategic investor call following the
conclusion of its planning process within the next four-to-six
weeks.
Management Commentary:
"Areas of market-related softness drove sales below expectations
and we are incrementally more cautious about the second half of the
year," said Todd J. Teske, Chairman,
President and Chief Executive Officer. "Softer than anticipated
retail activity this fall has left channel inventories of
residential mowers elevated in North
America and Europe and
channel partners have signaled a conservative approach to ordering
for the upcoming season. Despite market conditions, we have
made material progress on several fronts that have positioned us to
meet customer needs during the peak season and deliver efficiency
improvements. We also remain on track to meet our goal for
inventory reduction by fiscal year-end, as part of our focus on
improving working capital and de-levering the balance sheet."
Teske added, "During the first half of the year, we devoted
significant time to our market dynamics project. These efforts have
been very constructive and support our belief that a sharp focus on
our core strength of power application will better position the
Company for long-term sustainable growth and higher returns.
We are currently finalizing the next steps forward for this
plan, which will simplify our business and improve our financial
flexibility. We will announce further details and begin
implementing our plans in the third quarter."
Fiscal 2020 Outlook:
The Company is revising its outlook for fiscal 2020 to reflect
some increased uncertainty related to the upcoming lawn and garden
selling season in North America
and Europe.
|
Current Fiscal
2020 Outlook*
|
Prior Fiscal 2020
Outlook*
|
Net
Sales
|
$1.83 – $1.97
billion
|
$1.91 – 1.97
billion
|
Adjusted Net
Income
|
$3 – $14
million
|
$9 - $17
million
|
Adjusted Earnings
per Diluted Share
|
$0.05 - $0.33 per
share
|
$0.20 - $0.40 per
share
|
Operating
Margins
|
2.1% to
2.9%
|
2.5% to
3.0%
|
Unconsolidated
Affiliate Earnings
|
Approximately $7.5
million
|
Approximately $10.0
million
|
Interest
Expense
|
$35.5
million
|
$34.0
million
|
|
* This outlook
excludes the costs of the business optimization program, the engine
manufacturing consolidation project, and any potential asset
sales.
|
Teske concluded, "Given uncertainty around elevated channel
inventory and ongoing global weather related challenges, we are now
forecasting slightly reduced financial results across our
segments. We also expect slightly higher consolidated
interest expense associated with our ABL credit facility compared
to previous estimates. We remain focused on our key strategic
priorities including the realization of value from our business
optimization program and our small engine production consolidation,
as well as reducing our inventories through the peak season and
strengthening our balance sheet. We believe our strategic
plan focused on power application will complement the hard work
that has been done to improve our business and are excited to share
the final details of that plan with our shareholders and other
stakeholders in a few weeks."
Conference Call Information:
The Company will host a conference call today, January 30, 2020, at 10:00
AM (ET) to review the second quarter financial results. A
live webcast of the conference call will be available on the
Company's corporate website: http://investors.basco.com.
Also available is a dial-in number to access the call real-time.
To join, dial (877) 233-9136 and enter Conference ID 4383007. A
replay will be offered beginning approximately two hours after the
call ends and will be available for one week. Dial (855) 859-2056
and enter the Conference ID to access the replay.
Non-GAAP Financial Measures:
This release refers to non-GAAP financial measures including
"adjusted gross profit", "adjusted engineering, selling, general,
and administrative expenses", "adjusted segment income (loss)",
"adjusted net income (loss)", and "adjusted diluted earnings (loss)
per share." Refer to the accompanying financial schedules for
supplemental financial data and corresponding reconciliations of
these non-GAAP financial measures to certain GAAP financial
measures.
Safe Harbor Statement:
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", "plan", "project", 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 its products; changes in interest rates and foreign
exchange rates; the effects of weather on the purchasing patterns
of consumers and original equipment manufacturers (OEMs); actions
of engine manufacturers and OEMs with whom the Company competes;
changes in laws and regulations, including U.S. tax reform, changes
in tax rates, laws and regulations as well as related guidance;
imposition of new, or changes in existing, duties, tariffs and
trade agreements; changes in customer and OEM demand; changes in
prices of raw materials and parts that the Company purchases;
changes in domestic and foreign economic conditions (including
effects from the U.K.'s decision to exit the European Union); the
ability to bring new production capacity on line efficiently and
with good quality; outcomes of legal proceedings and claims; the
ability to realize anticipated savings from the business
optimization program and restructuring actions; the ability to
maintain or obtain adequate sources of liquidity and access to debt
markets; and other factors disclosed from time to time in the
Company's 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. The Company
undertakes no obligation to update forward-looking statements made
in this release to reflect events or circumstances after the date
of this release.
About Briggs & Stratton Corporation:
Briggs & Stratton Corporation (NYSE: BGG), headquartered in
Milwaukee, Wisconsin, is focused
on providing power to get work done and make people's lives better.
Briggs & Stratton is the world's largest producer of gasoline
engines for outdoor power equipment, and is a leading designer,
manufacturer and marketer of power generation, pressure washer,
lawn and garden, turf care and job site products through its Briggs
& Stratton®, Simplicity®, Snapper®, Ferris®, Vanguard®,
Allmand®, Billy Goat®, Murray®, Branco®, and Victa® brands. Briggs
& Stratton products are designed, manufactured, marketed and
serviced in over 100 countries on six continents. For additional
information, please
visit www.basco.com and www.briggsandstratton.com.
BRIGGS &
STRATTON CORPORATION AND SUBSIDIARIES
|
Consolidated
Statements of Operations for the Periods Ended
December
|
(In Thousands,
except per share data)
|
|
|
|
|
|
|
|
Three Months
Ended December
|
|
Six Months
Ended December
|
|
|
FY2020
|
|
FY2019
|
|
FY2020
|
|
FY2019
|
NET SALES
|
|
$437,941
|
|
$ 505,462
|
|
$751,660
|
|
$784,459
|
COST OF GOODS
SOLD
|
|
369,916
|
|
413,005
|
|
640,389
|
|
648,248
|
Gross
Profit
|
|
68,025
|
|
92,457
|
|
111,271
|
|
136,211
|
|
|
|
|
|
|
|
|
|
ENGINEERING, SELLING,
GENERAL AND ADMINISTRATIVE
EXPENSES
|
|
|
|
|
|
|
|
|
|
79,124
|
|
87,139
|
|
157,861
|
|
187,998
|
EQUITY IN EARNINGS OF
UNCONSOLIDATED AFFILIATES
|
|
946
|
|
3,017
|
|
2,209
|
|
5,990
|
Loss from
Operations
|
|
(10,153)
|
|
8,335
|
|
(44,381)
|
|
(45,797)
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
(8,965)
|
|
(7,482)
|
|
(15,869)
|
|
(12,643)
|
OTHER INCOME
(EXPENSE)
|
|
(388)
|
|
(946)
|
|
(1,131)
|
|
(603)
|
Loss before Income
Taxes
|
|
(19,506)
|
|
(93)
|
|
(61,381)
|
|
(59,043)
|
|
|
|
|
|
|
|
|
|
CREDIT FOR INCOME
TAXES
|
|
(4,162)
|
|
2,511
|
|
(12,400)
|
|
(15,452)
|
Net Loss
|
|
$
(15,344)
|
|
$
(2,604)
|
|
$
(48,981)
|
|
$ (43,591)
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER
SHARE
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.37)
|
|
$
(0.07)
|
|
$
(1.18)
|
|
$
(1.05)
|
Diluted
|
|
$
(0.37)
|
|
$
(0.07)
|
|
$
(1.18)
|
|
$
(1.05)
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
Basic
|
|
41,725
|
|
41,689
|
|
41,664
|
|
41,773
|
Diluted
|
|
41,725
|
|
41,689
|
|
41,664
|
|
41,773
|
Supplemental
International Sales Information
|
(In
Thousands)
|
|
|
|
Three Months
Ended December
|
|
Six Months
Ended December
|
|
|
FY2020
|
|
FY2019
|
|
FY2020
|
|
FY2019
|
International sales
based on product shipment destination
|
|
$144,019
|
|
$148,125
|
|
$246,635
|
|
$236,651
|
BRIGGS &
STRATTON CORPORATION AND SUBSIDIARIES
|
Consolidated
Balance Sheets as of the End of December
|
(In
Thousands)
|
|
CURRENT
ASSETS:
|
FY2020
|
|
FY2019
|
Cash and Cash
Equivalents
|
$
42,230
|
|
$
33,954
|
Accounts Receivable,
Net
|
219,351
|
|
242,232
|
Inventories
|
612,119
|
|
567,256
|
Prepaid Expenses and
Other Current Assets
|
34,141
|
|
38,481
|
Total Current
Assets
|
907,841
|
|
881,923
|
|
|
|
|
OTHER
ASSETS:
|
|
|
|
Goodwill
|
169,451
|
|
169,401
|
Investments
|
46,698
|
|
47,078
|
Other Intangible
Assets, Net
|
94,915
|
|
98,619
|
Deferred Income Tax
Asset
|
56,022
|
|
30,442
|
Other Long-Term
Assets, Net
|
21,438
|
|
19,852
|
Right of Use
Asset
|
107,605
|
|
-
|
Total Other
Assets
|
496,129
|
|
365,392
|
|
|
|
|
|
|
|
|
PLANT AND
EQUIPMENT:
|
|
|
|
At Cost
|
1,231,874
|
|
1,197,673
|
Less - Accumulated
Depreciation
|
834,968
|
|
784,518
|
Plant and Equipment,
Net
|
396,906
|
|
413,155
|
|
$
1,800,876
|
|
$
1,660,470
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accounts
Payable
|
$
215,295
|
|
$
226,536
|
Short-Term
Debt
|
195,175
|
|
314,073
|
Accrued
Liabilities
|
134,463
|
|
132,179
|
Short-Term Lease
Obligations
|
12,368
|
|
-
|
Total Current
Liabilities
|
557,301
|
|
672,788
|
|
|
|
|
OTHER
LIABILITIES:
|
|
|
|
Accrued Pension
Cost
|
213,268
|
|
182,925
|
Accrued Employee
Benefits
|
21,174
|
|
20,174
|
Accrued
Postretirement Health Care Obligation
|
22,752
|
|
26,763
|
Other Long-Term
Liabilities
|
65,606
|
|
56,388
|
Long-Term Lease
Obligations
|
92,945
|
|
-
|
Long-Term
Debt
|
428,300
|
|
196,013
|
Total Other
Liabilities
|
844,045
|
|
482,263
|
|
|
|
|
SHAREHOLDERS'
INVESTMENT:
|
|
|
|
Common
Stock
|
579
|
|
579
|
Additional Paid-In
Capital
|
70,901
|
|
77,310
|
Retained
Earnings
|
940,616
|
|
1,016,205
|
Accumulated Other
Comprehensive Loss
|
(288,983)
|
|
(254,768)
|
Treasury Stock, at
Cost
|
(323,583)
|
|
(333,907)
|
Total Shareholders'
Investment
|
399,530
|
|
505,419
|
|
$
1,800,876
|
|
$
1,660,470
|
BRIGGS &
STRATTON CORPORATION AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(In
Thousands)
|
|
|
Six Months Ended
December
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
FY2020
|
|
FY2019
|
Net Loss
|
$
(48,981)
|
|
$
(43,591)
|
Adjustments to
Reconcile Net Loss to Net Cash Used in Operating
Activities:
|
|
|
|
Depreciation and
Amortization
|
37,491
|
|
32,263
|
Stock Compensation
Expense
|
2,694
|
|
3,177
|
Loss on Disposition
of Plant and Equipment
|
1,421
|
|
66
|
Provision for
Deferred Income Taxes
|
(15,551)
|
|
(19,550)
|
Equity in Earnings of
Unconsolidated Affiliates
|
(2,730)
|
|
(7,854)
|
Dividends Received
from Unconsolidated Affiliates
|
4,300
|
|
10,510
|
Changes in Operating
Assets and Liabilities:
|
|
|
|
Accounts
Receivable
|
(21,092)
|
|
(59,838)
|
Inventories
|
(111,404)
|
|
(157,401)
|
Other Current
Assets
|
852
|
|
1,947
|
Accounts Payable,
Accrued Liabilities and Income Taxes
|
(54,464)
|
|
22,382
|
Other, Net
|
(397)
|
|
1,862
|
Net Cash
Used in Operating Activities
|
(207,861)
|
|
(216,027)
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Capital
Expenditures
|
(34,431)
|
|
(34,234)
|
Proceeds Received on
Disposition of Plant and Equipment
|
15
|
|
12
|
Cash Paid for
Acquisitions, Net of Cash Acquired
|
-
|
|
(8,865)
|
Net Cash
Used in Investing Activities
|
(34,416)
|
|
(43,087)
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Net Borrowings on
Credit Facilities
|
267,757
|
|
266,038
|
Debt Issuance
Costs
|
(4,800)
|
|
-
|
Treasury Stock
Purchases
|
-
|
|
(11,429)
|
Repayments of Long
Term Debt
|
-
|
|
(4,875)
|
Stock Option Exercise
Proceeds and Tax Benefits
|
-
|
|
1,823
|
Payments Related to
Shares Withheld for Taxes for Stock Compensation
|
(55)
|
|
(257)
|
Cash Dividends
Paid
|
(7,936)
|
|
(5,948)
|
Net Cash
Provided by Financing Activities
|
254,966
|
|
245,352
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES
|
(74)
|
|
(336)
|
NET INCREASE
(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
12,615
|
|
(14,098)
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH, Beginning 1
|
30,342
|
|
49,218
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH, Ending 2
|
$
42,957
|
|
$
35,120
|
|
1
|
Included within
Beginning Cash, Cash Equivalents, and Restricted Cash is
approximately $0.8 million and $4.3 of restricted cash as of June
30, 2019 and July 1, 2018, respectively.
|
2
|
Included within
Ending Cash, Cash Equivalents, and Restricted Cash is approximately
$0.7 million and $1.2 million of restricted cash as of December 29,
2019 and December 30, 2018, respectively.
|
SUPPLEMENTAL
SEGMENT INFORMATION
|
|
Engines
Segment:
|
|
|
|
Three Months
Ended December
|
|
Six Months
Ended December
|
(In
Thousands)
|
|
FY2020
|
|
FY2019
|
|
FY2020
|
|
FY2019
|
Net Sales
|
|
$
219,190
|
|
$ 272,018
|
|
$
352,544
|
|
$ 391,108
|
|
|
|
|
|
|
|
|
|
Gross Profit as
Reported
|
|
$
33,192
|
|
$
55,614
|
|
$
52,334
|
|
$
71,551
|
Engine Manufacturing
Consolidation Project
|
|
7,124
|
|
-
|
|
11,951
|
|
-
|
Business
Optimization
|
|
63
|
|
665
|
|
224
|
|
1,088
|
Adjusted Gross
Profit
|
|
$
40,379
|
|
$
56,279
|
|
$
64,509
|
|
$
72,639
|
|
|
|
|
|
|
|
|
|
Gross Profit % as
Reported
|
|
15.1%
|
|
20.4%
|
|
14.8%
|
|
18.3%
|
Adjusted Gross Profit
%
|
|
18.4%
|
|
20.7%
|
|
18.3%
|
|
18.6%
|
|
|
|
|
|
|
|
|
|
Segment Income (Loss) as
Reported
|
|
$
(14,248)
|
|
$
4,658
|
|
$
(42,152)
|
|
$
(39,593)
|
Engine Manufacturing
Consolidation Project
|
|
7,124
|
|
-
|
|
11,951
|
|
-
|
Business
Optimization
|
|
1,595
|
|
7,508
|
|
2,486
|
|
21,871
|
Adjusted Segment Income
(Loss)
|
|
$
(5,529)
|
|
$
12,166
|
|
$
(27,715)
|
|
$
(17,722)
|
|
|
|
|
|
|
|
|
|
Segment Income (Loss) % as
Reported
|
|
-6.5%
|
|
1.7%
|
|
-12.0%
|
|
-10.1%
|
Adjusted Segment Income
(Loss) %
|
|
-2.5%
|
|
4.5%
|
|
-7.9%
|
|
-4.5%
|
Second Quarter Highlights
- Engine sales unit volumes decreased versus the second quarter
of fiscal 2019 by approximately 453,000 engines, or 24%,
principally on the timing of OEM mower builds, which began earlier
in fiscal 2019 to support brand transitions at retail. Revenue
growth in service parts continued to benefit from improved
throughput and order fulfillment rates.
- GAAP gross profit percentage compared to the second quarter
last year decreased 530 basis points and adjusted gross profit
margins decreased 230 basis points, on a 19% decrease in production
volumes and higher material costs, partially offset by business
optimization program savings of $2
million and favorable sales mix on higher service parts
sales.
- GAAP engineering, selling, general and administrative expenses
(ESG&A) declined by $4.6 million
compared to the second quarter of fiscal 2019. Adjusted ESG&A
decreased $0.2 million.
- Adjusted equity in earnings of unconsolidated affiliates
decreased by $1.9 million from the
same period last year due to the ramp down of the Company's
Japanese joint venture that formerly produced Vanguard engines and
a decrease in the Company's service parts distributors'
profitability. This was primarily due to higher shipping costs to
refill channel inventory of service parts.
Products
Segment:
|
|
|
|
Three Months
Ended December
|
|
Six Months
Ended December
|
(In
Thousands)
|
|
FY2020
|
|
FY2019
|
|
FY2020
|
|
FY2019
|
Net Sales
|
|
$
241,984
|
|
$ 254,627
|
|
$
437,625
|
|
$ 427,670
|
|
|
|
|
|
|
|
|
|
Gross Profit as
Reported
|
|
$
35,179
|
|
$
37,577
|
|
$
59,997
|
|
$
65,213
|
Business
Optimization
|
|
441
|
|
834
|
|
1,090
|
|
3,713
|
Adjusted Gross
Profit
|
|
$
35,620
|
|
$
38,411
|
|
$
61,087
|
|
$
68,926
|
|
|
|
|
|
|
|
|
|
Gross Profit % as
Reported
|
|
14.5%
|
|
14.8%
|
|
13.7%
|
|
15.2%
|
Adjusted Gross Profit
%
|
|
14.7%
|
|
15.1%
|
|
14.0%
|
|
16.1%
|
|
|
|
|
|
|
|
|
|
Segment Income (Loss) as
Reported
|
|
$
4,441
|
|
$
4,411
|
|
$
(1,169)
|
|
$
(5,651)
|
Business
Optimization
|
|
857
|
|
3,235
|
|
1,564
|
|
8,802
|
Litigation
Settlement
|
|
-
|
|
-
|
|
-
|
|
2,000
|
Retailer Bankruptcy
Bad Debt Expense
|
|
-
|
|
-
|
|
-
|
|
4,132
|
Acquisition Related
Charges
|
|
-
|
|
170
|
|
-
|
|
235
|
Adjusted Segment
Income
|
|
$
5,298
|
|
$
7,816
|
|
$
395
|
|
$
9,518
|
|
|
|
|
|
|
|
|
|
Segment Income % as
Reported
|
|
1.8%
|
|
1.7%
|
|
-0.3%
|
|
-1.3%
|
Adjusted Segment Income
%
|
|
2.2%
|
|
3.1%
|
|
0.1%
|
|
2.2%
|
Second Quarter Highlights
- Net sales decreased by $13
million, or 5%, compared to the second quarter of fiscal
2019, primarily from lower sales of pressure washers relative to
last year when brand transitions at retail accelerated product
shipments. Storm-related sales of generators declined, as expected,
from less storm activity compared with the same period a year ago.
Sales activities were also affected by a softer market for job site
products. The decrease was partially offset by higher sales of
standby generators and higher pricing.
- Gross profit percentage for the second quarter decreased by 30
basis points from a year ago. The adjusted gross profit percentage
decreased 40 basis points. Reduced manufacturing volume was offset
by higher pricing.
- GAAP ESG&A declined $3.4
million from the second fiscal quarter a year ago. Adjusted
ESG&A decreased by $1.3 million
due to timing of spending.
- Adjusted equity in earnings of unconsolidated affiliates
decreased by $1.0 million versus the
second quarter of fiscal 2019 due to a decrease in the Company's
service parts distributors' profitability. This was primarily due
to higher shipping costs to refill channel inventory of service
parts.
Non-GAAP Financial Measures
Briggs & Stratton Corporation prepares its financial
statements using Generally Accepted Accounting Principles (GAAP).
When a company discloses material information containing non-GAAP
financial measures, SEC regulations require that the disclosure
include a presentation of the most directly comparable GAAP measure
and a reconciliation of the GAAP and non-GAAP financial measures.
Management's inclusion of non-GAAP financial measures in this
release is intended to supplement, not replace, the presentation of
the financial results in accordance with GAAP. Briggs &
Stratton Corporation management believes that these non-GAAP
financial measures, when considered together with the GAAP
financial measures, provide information that is useful to investors
in understanding period-over-period operating results separate and
apart from items that may, or could, have a disproportionately
positive or negative impact on results in any particular period.
Management also believes that these non-GAAP financial measures
enhance the ability of investors to analyze the Company's business
trends and to understand the Company's performance. In addition,
management may utilize non-GAAP financial measures as a guide in
the Company's forecasting, budgeting and long-term planning
process. Non-GAAP financial measures should be considered in
addition to, and not as a substitute for, or superior to, financial
measures presented in accordance with GAAP. The following tables
are reconciliations of the non-GAAP financial measures:
BRIGGS &
STRATTON CORPORATION AND SUBSIDIARIES
|
Adjusted Segment
Information for the Three Month Periods Ended
December
|
(In Thousands,
except per share data)
|
|
|
|
Three Months
Ended December
|
|
|
FY2020
|
|
|
|
FY2020
|
|
FY2019
|
|
|
|
FY2019
|
|
|
Reported
|
|
Adjustments1
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
33,192
|
|
$
7,187
|
|
$
40,379
|
|
$
55,614
|
|
$
665
|
|
$
56,279
|
Products
|
|
35,179
|
|
441
|
|
35,620
|
|
37,577
|
|
834
|
|
38,411
|
Inter-Segment
Eliminations
|
|
(346)
|
|
-
|
|
(346)
|
|
(734)
|
|
-
|
|
(734)
|
Total
|
|
$
68,025
|
|
$
7,628
|
|
$
75,653
|
|
$
92,457
|
|
$
1,499
|
|
$
93,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering, Selling,
General and Administrative Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
48,189
|
|
$
1,493
|
|
$
46,696
|
|
$
52,769
|
|
$
5,915
|
|
$
46,854
|
Products
|
|
30,935
|
|
416
|
|
30,519
|
|
34,370
|
|
2,571
|
|
31,799
|
Total
|
|
$
79,124
|
|
$
1,909
|
|
$
77,215
|
|
$
87,139
|
|
$
8,486
|
|
$
78,653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Earnings
of
Unconsolidated Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
749
|
|
$
39
|
|
$
788
|
|
$
1,814
|
|
$
927
|
|
$
2,741
|
Products
|
|
197
|
|
-
|
|
197
|
|
1,203
|
|
-
|
|
1,203
|
Total
|
|
$
946
|
|
$
39
|
|
$
985
|
|
$
3,017
|
|
$
927
|
|
$
3,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
(14,248)
|
|
$
8,719
|
|
$
(5,529)
|
|
$
4,658
|
|
$
7,508
|
|
$
12,166
|
Products
|
|
4,441
|
|
857
|
|
5,298
|
|
4,411
|
|
3,405
|
|
7,816
|
Inter-Segment
Eliminations
|
|
(346)
|
|
-
|
|
(346)
|
|
(734)
|
|
-
|
|
(734)
|
Total
|
|
$
(10,153)
|
|
$
9,576
|
|
$
(577)
|
|
$
8,335
|
|
$
10,913
|
|
$
19,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
$
(8,965)
|
|
$
-
|
|
$
(8,965)
|
|
$
(7,482)
|
|
$
248
|
|
$
(7,234)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before
Income Taxes
|
|
(19,506)
|
|
9,576
|
|
(9,930)
|
|
(93)
|
|
11,161
|
|
11,068
|
Provision (Benefit)
for Income Taxes
|
|
(4,162)
|
|
2,358
|
|
(1,804)
|
|
2,511
|
|
143
|
|
2,654
|
Net Income
(Loss)
|
|
$
(15,344)
|
|
$
7,218
|
|
$
(8,126)
|
|
$
(2,604)
|
|
$
11,018
|
|
$
8,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.37)
|
|
$
0.17
|
|
$
(0.20)
|
|
$
(0.07)
|
|
$
0.27
|
|
$
0.20
|
Diluted
|
|
(0.37)
|
|
0.17
|
|
(0.20)
|
|
(0.07)
|
|
0.27
|
|
0.20
|
|
|
1
|
For the second
quarter of fiscal 2020, engine manufacturing consolidation charges
include $3.5 million ($2.6 million after tax) of cash charges and
$3.6 million ($2.7 million after tax) of non-cash charges related
to the closure of the engine plant in Murray, Kentucky. Business
optimization expenses include $1.1 million ($0.7 million after tax)
of cash charges and $1.4 million ($1.1 million after tax) of
non-cash charges related to the warehouse optimization program and
the plan to onshore Commercial engine production.
|
BRIGGS &
STRATTON CORPORATION AND SUBSIDIARIES
|
Adjusted Segment
Information for the Six Month Periods Ended December
|
(In Thousands,
except per share data)
|
|
|
|
Six Months
Ended December
|
|
|
FY2020
|
|
|
|
FY2020
|
|
FY2019
|
|
|
|
FY2019
|
|
|
Reported
|
|
Adjustments1
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
52,334
|
|
$
12,175
|
|
$
64,509
|
|
$
71,551
|
|
$
1,088
|
|
$
72,639
|
Products
|
|
59,997
|
|
1,090
|
|
61,087
|
|
65,213
|
|
3,713
|
|
68,926
|
Inter-Segment
Eliminations
|
|
(1,060)
|
|
-
|
|
(1,060)
|
|
(553)
|
|
-
|
|
(553)
|
Total
|
|
$111,271
|
|
$
13,265
|
|
$124,536
|
|
$136,211
|
|
$
4,801
|
|
$141,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering, Selling,
General and Administrative Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
95,515
|
|
$
1,741
|
|
$
93,774
|
|
$114,697
|
|
$
18,919
|
|
$
95,778
|
Products
|
|
62,346
|
|
474
|
|
61,872
|
|
73,302
|
|
11,456
|
|
61,846
|
Total
|
|
$157,861
|
|
$
2,215
|
|
$155,646
|
|
$187,998
|
|
$
30,375
|
|
$157,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Earnings
of
Unconsolidated Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
1,029
|
|
$
521
|
|
$
1,550
|
|
$
3,553
|
|
$
1,864
|
|
$
5,417
|
Products
|
|
1,180
|
|
-
|
|
1,180
|
|
2,437
|
|
-
|
|
2,437
|
Total
|
|
$
2,209
|
|
$
521
|
|
$
2,730
|
|
$
5,990
|
|
$
1,864
|
|
$
7,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
(42,152)
|
|
$
14,437
|
|
$
(27,715)
|
|
$ (39,593)
|
|
$
21,871
|
|
$ (17,722)
|
Products
|
|
(1,169)
|
|
1,564
|
|
395
|
|
(5,651)
|
|
15,169
|
|
9,518
|
Inter-Segment
Eliminations
|
|
(1,060)
|
|
-
|
|
(1,060)
|
|
(553)
|
|
-
|
|
(553)
|
Total
|
|
$
(44,381)
|
|
$
16,001
|
|
$
(28,380)
|
|
$
(45,797)
|
|
$
37,040
|
|
$
(8,757)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
$
(15,869)
|
|
$
-
|
|
$
(15,869)
|
|
$ (12,643)
|
|
$
248
|
|
$ (12,395)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before
Income Taxes
|
|
(61,381)
|
|
16,001
|
|
(45,380)
|
|
(59,043)
|
|
37,288
|
|
(21,755)
|
Provision (Benefit)
for Income Taxes
|
|
(12,400)
|
|
2,779
|
|
(9,621)
|
|
(15,452)
|
|
6,308
|
|
(9,144)
|
Net Income
(Loss)
|
|
$
(48,981)
|
|
$
13,222
|
|
$
(35,759)
|
|
$ (43,591)
|
|
$
30,980
|
|
$ (12,611)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(1.18)
|
|
$
0.32
|
|
$
(0.86)
|
|
$
(1.05)
|
|
$
0.74
|
|
$
(0.31)
|
Diluted
|
|
(1.18)
|
|
0.32
|
|
(0.86)
|
|
(1.05)
|
|
0.74
|
|
(0.31)
|
|
|
1
|
For the six months
ended December 30, 2019, engine manufacturing consolidation charges
include $5.6 million ($4.7 million after tax) of cash charges and
$6.4 million ($5.3 million after tax) of non-cash charges related
to the closure of the engine plant in Murray, Kentucky. Business
optimization expenses include $2.2 million ($1.7 million after tax)
of cash charges and $1.9 million ($1.4 million after tax) of
non-cash charges related to the warehouse optimization program and
the plan to onshore Commercial engine production.
|
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SOURCE Briggs & Stratton Corporation