MILWAUKEE, May 7, 2020 /PRNewswire/ -- Briggs &
Stratton Corporation (NYSE: BGG), a recognized global leader in
providing power to get work done, today announced financial results
for its third quarter of fiscal 2020, ended March 29, 2020.
Fiscal Third Quarter 2020 Highlights:
- Net sales of $474 million
declined $107 million, or 18%, from
the prior year, as pandemic-related actions customers took late in
the quarter compounded anticipated short-term impacts in certain
business areas.
- Gross profit margin of 13.4% (GAAP) and adjusted gross profit
margin of 15.2% decreased from gross profit margin of 16.7% (GAAP)
and adjusted gross profit margin of 17.4%, respectively, last
year.
- GAAP net loss was $145 million,
or $3.47 per share, compared with net
income of $8.0 million, or
$0.19 per diluted share, for the
third quarter of fiscal 2019. Net loss for the third quarter of
fiscal 2020 included non-cash goodwill impairment charges of
$67 million related to a recent
review of end markets inclusive of effects related to COVID-19. The
company also recorded a $70 million
non-cash valuation allowance against deferred tax assets.
- Adjusted net loss was $10.8
million, or $0.26 per share,
compared to net income of $14.6
million, or $0.34 per diluted
share, for the prior year.
- The company withdrew its full-year fiscal 2020 guidance on
March 31, 2020, due to the
uncertainly caused by the COVID-19 pandemic.
"As we work through these uncertain times, I want to acknowledge
the exemplary efforts of our entire team to ensure the health and
safety of our communities, customers, business partners and
ourselves," said Briggs & Stratton Chairman, President and
Chief Executive Officer Todd J.
Teske. "I could not be prouder of our employees'
dedication and responsiveness to our customers' needs as we face
these challenging times head on."
Teske continued, "Our third quarter performance reflects the
unexpected and rapid impact this pandemic has had across the global
economy. Our OEM customers and channel partners quickly decreased
business activity in the latter half of March to protect workers
and public health and safety, which impacted our anticipated
shipments. Combined with actions we are taking as part of our
repositioning plan, we are aggressively working to reduce costs,
better manage working capital, and prioritize cash generation.
These actions resulted in the reduction of inventories by
$85 million during the quarter.
Lastly, we recently amended our credit agreement to enhance our
liquidity to better navigate the economic impact of the pandemic as
we continue our work to secure long-term capital for the
business."
Teske concluded, "We remain focused on our strategic priorities,
including the consolidation of our residential engine production
from two facilities to one which will generate up to $14 million in savings, and the commercialization
of our Vanguard commercial battery system. We recognized
$5 million in cost savings during the
quarter from our Business Optimization Program and improved
operating efficiencies. We are also focused on the strategic
repositioning plan we announced in early March, which builds on our
foundation as a clear leader in power application. We also must
continue to address our financial position and liquidity. We will
continue to assess business conditions and move forward with these
strategic goals in mind."
Conference Call Information:
The company will host a conference call today, May 7, 2020, at 10:00 AM
(ET) to review its third 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 4887033. 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 impact of the COVID-19 pandemic on
the company's business, financial position, results of operations
and liquidity including its ability to continue as a going concern
and its ability to access additional funding sources; 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 productive
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; 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 March
(In Thousands,
except per share data)
|
|
|
|
|
Three Months
Ended March
|
|
Nine Months
Ended March
|
|
|
FY2020
|
|
FY2019
|
|
FY2020
|
|
FY2019
|
|
NET SALES
|
|
$
473,535
|
|
$580,196
|
|
$1,225,195
|
|
$1,364,655
|
|
COST OF GOODS
SOLD
|
|
410,071
|
|
483,209
|
|
1,050,460
|
|
1,131,422
|
|
Gross
Profit
|
|
63,464
|
|
96,987
|
|
174,735
|
|
233,233
|
|
|
|
|
|
|
|
|
|
|
ENGINEERING, SELLING,
GENERAL
|
|
|
|
|
|
|
|
|
|
AND ADMINISTRATIVE
EXPENSES
|
|
74,897
|
|
79,521
|
|
232,758
|
|
267,553
|
|
GOODWILL
IMPAIRMENT
|
|
67,480
|
|
-
|
|
67,480
|
|
-
|
|
EQUITY IN EARNINGS OF
UNCONSOLIDATED AFFILIATES
|
|
(2,746)
|
|
(205)
|
|
(537)
|
|
5,786
|
|
Loss from
Operations
|
|
(81,659)
|
|
17,261
|
|
(126,040)
|
|
(28,534)
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
(9,521)
|
|
(9,088)
|
|
(25,390)
|
|
(21,731)
|
|
OTHER INCOME
(EXPENSE)
|
|
(1,773)
|
|
953
|
|
(2,904)
|
|
391
|
|
Loss before Income
Taxes
|
|
(92,953)
|
|
9,126
|
|
(154,334)
|
|
(49,874)
|
|
|
|
|
|
|
|
|
|
|
PROVISION (CREDIT)
FOR INCOME TAXES
|
|
51,653
|
|
1,121
|
|
39,253
|
|
(14,331)
|
|
Net Loss
|
|
$(144,606)
|
|
$
8,005
|
|
$
(193,587)
|
|
$
(35,543)
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER
SHARE
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(3.47)
|
|
$
0.19
|
|
$
(4.65)
|
|
$
(0.86)
|
|
Diluted
|
|
$
(3.47)
|
|
$
0.19
|
|
$
(4.65)
|
|
$
(0.86)
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
Basic
|
|
41,726
|
|
41,527
|
|
41,685
|
|
41,691
|
|
Diluted
|
|
41,726
|
|
41,527
|
|
41,685
|
|
41,691
|
|
Supplemental
International Sales Information
(In
Thousands)
|
|
|
|
Three Months
Ended March
|
|
Nine Months
Ended March
|
|
|
FY2020
|
|
FY2019
|
|
FY2020
|
|
FY2019
|
|
International sales
based on product shipment destination
|
|
$138,771
|
|
$142,817
|
|
$385,406
|
|
$379,468
|
|
BRIGGS &
STRATTON CORPORATION AND SUBSIDIARIES
Consolidated
Balance Sheets as of the End of March
(In
Thousands)
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
FY2020
|
|
FY2019
|
|
Cash and Cash
Equivalents
|
$
44,413
|
|
$
23,863
|
|
Accounts Receivable,
Net
|
236,341
|
|
253,536
|
|
Inventories
|
526,514
|
|
525,210
|
|
Prepaid Expenses and
Other Current Assets
|
36,381
|
|
34,682
|
|
Total Current
Assets
|
843,649
|
|
837,291
|
|
|
|
|
|
OTHER
ASSETS:
|
|
|
|
|
Goodwill
|
100,360
|
|
169,693
|
|
Investments
|
30,554
|
|
46,937
|
|
Other Intangible
Assets, Net
|
95,064
|
|
97,465
|
|
Deferred Income Tax
Asset
|
4,364
|
|
31,031
|
|
Other Long-Term
Assets, Net
|
21,149
|
|
20,365
|
|
Right of Use
Asset
|
103,924
|
|
-
|
|
Total Other
Assets
|
355,415
|
|
365,491
|
|
|
|
|
|
|
|
|
|
PLANT AND
EQUIPMENT:
|
|
|
|
|
At Cost
|
1,238,822
|
|
1,208,747
|
|
Less - Accumulated
Depreciation
|
848,488
|
|
795,467
|
|
Plant and Equipment,
Net
|
390,334
|
|
413,280
|
|
$
1,589,398
|
|
$
1,616,062
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Accounts
Payable
|
$
192,114
|
|
$
272,125
|
|
Short-Term Debt
(1)
|
597,473
|
|
211,545
|
|
Accrued
Liabilities
|
128,987
|
|
143,432
|
|
Short-Term Lease
Obligations
|
11,710
|
|
-
|
|
Total Current
Liabilities
|
930,284
|
|
627,102
|
|
|
|
|
|
OTHER
LIABILITIES:
|
|
|
|
|
Accrued Pension
Cost
|
209,318
|
|
179,487
|
|
Accrued Employee
Benefits
|
21,110
|
|
20,122
|
|
Accrued
Postretirement Health Care Obligation
|
22,035
|
|
25,294
|
|
Other Long-Term
Liabilities
|
77,244
|
|
61,050
|
|
Long-Term Lease
Obligations
|
90,067
|
|
-
|
|
Long-Term
Debt
|
-
|
|
195,464
|
|
Total Other
Liabilities
|
419,774
|
|
481,417
|
|
|
|
|
|
SHAREHOLDERS'
INVESTMENT:
|
|
|
|
|
Common
Stock
|
579
|
|
579
|
|
Additional Paid-In
Capital
|
72,341
|
|
77,523
|
|
Retained
Earnings
|
796,426
|
|
1,018,265
|
|
Accumulated Other
Comprehensive Loss
|
(305,891)
|
|
(255,021)
|
|
Treasury Stock, at
Cost
|
(324,115)
|
|
(333,803)
|
|
Total Shareholders'
Investment
|
239,340
|
|
507,543
|
|
$
1,589,398
|
|
$
1,616,062
|
|
|
|
(1)
|
As a result of the
revolving credit agreement ("ABL Facility") amendment entered into
on April 27, 2020, the Company classifies its outstanding
borrowings under the ABL facility as a short term liability, in
compliance with U.S. Generally Accepted Accounting Principles, due
to the requirement to directly apply cash deposits to repay
outstanding loans
|
|
BRIGGS &
STRATTON CORPORATION AND SUBSIDIARIES
Consolidated
Statements of Cash Flows
(In
Thousands)
|
|
|
Nine Months Ended
March
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
FY2020
|
|
FY2019
|
|
Net Loss
|
$
(193,587)
|
|
$
(35,543)
|
|
Adjustments to
Reconcile Net Loss to Net Cash Used in Operating
Activities:
|
|
|
|
|
Depreciation and
Amortization
|
54,819
|
|
47,385
|
|
Stock Compensation
Expense
|
4,468
|
|
5,496
|
|
Goodwill and
Tradename Impairment
|
67,480
|
|
-
|
|
Pension Settlement
Expense
|
-
|
|
-
|
|
Loss on Disposition
of Plant and Equipment
|
1,412
|
|
66
|
|
Provision for
Deferred Income Taxes
|
36,294
|
|
(19,247)
|
|
Equity in Earnings of
Unconsolidated Affiliates
|
(3,302)
|
|
(8,403)
|
|
Dividends Received
from Unconsolidated Affiliates
|
10,376
|
|
10,510
|
|
Loss on Disposition
of Unconsolidated Affiliates
|
1,000
|
|
-
|
|
Changes in Operating
Assets and Liabilities:
|
|
|
|
|
Accounts
Receivable
|
(41,447)
|
|
(70,876)
|
|
Inventories
|
(26,843)
|
|
(113,407)
|
|
Other Current
Assets
|
(3,301)
|
|
(856)
|
|
Accounts Payable,
Accrued Liabilities and Income Taxes
|
(75,314)
|
|
77,905
|
|
Other, Net
|
(1,633)
|
|
2,079
|
|
Net Cash
Used in Operating Activities
|
(169,578)
|
|
(104,891)
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Capital
Expenditures
|
(43,066)
|
|
(46,379)
|
|
Proceeds Received on
Disposition of Plant and Equipment
|
2,680
|
|
31
|
|
Cash Paid for
Acquisitions, Net of Cash Acquired
|
-
|
|
(8,865)
|
|
Net Cash
Used in Investing Activities
|
(40,386)
|
|
(55,213)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Net Borrowings on
Revolver
|
241,684
|
|
163,509
|
|
Debt Issuance
Costs
|
(6,161)
|
|
-
|
|
Treasury Stock
Purchases
|
-
|
|
(11,937)
|
|
Repayments of Long
Term Debt
|
-
|
|
(5,424)
|
|
Stock Option Exercise
Proceeds and Tax Benefits
|
-
|
|
1,823
|
|
Payments Related to
Shares Withheld for Taxes for Stock Compensation
|
(55)
|
|
(257)
|
|
Cash Dividends
Paid
|
(10,136)
|
|
(11,891)
|
|
Net Cash
Provided by Financing Activities
|
225,332
|
|
135,823
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES
|
(570)
|
|
(239)
|
|
NET DECREASE IN CASH,
CASH EQUIVALENTS AND RESTRICTED CASH
|
14,798
|
|
(24,520)
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH, Beginning 1
|
30,342
|
|
49,218
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH, Ending 2
|
$
45,140
|
|
$
24,698
|
|
|
|
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 $0.8 million of restricted cash as of March 29,
2020 and March 31, 2019, respectively.
|
|
SUPPLEMENTAL
SEGMENT INFORMATION
|
|
|
Engines
Segment:
|
|
|
|
Three Months
Ended March
|
|
Nine Months
Ended March
|
|
(In
Thousands)
|
|
FY2020
|
|
FY2019
|
|
FY2020
|
|
FY2019
|
|
Net Sales
|
|
$269,619
|
|
$336,243
|
|
$
622,163
|
|
$727,351
|
|
|
|
|
|
|
|
|
|
|
Gross Profit as
Reported
|
|
$
45,418
|
|
$
72,529
|
|
$
97,753
|
|
$144,272
|
|
Engine Manufacturing
Consolidation Project
|
|
6,184
|
|
-
|
|
18,136
|
|
-
|
|
Business
Optimization
|
|
-
|
|
623
|
|
223
|
|
1,712
|
|
Adjusted Gross
Profit
|
|
$
51,602
|
|
$
73,152
|
|
$
116,112
|
|
$145,984
|
|
|
|
|
|
|
|
|
|
|
Gross Profit % as
Reported
|
|
16.8%
|
|
21.6%
|
|
15.7%
|
|
19.8%
|
|
Adjusted Gross Profit
%
|
|
19.1%
|
|
21.8%
|
|
18.7%
|
|
20.1%
|
|
|
|
|
|
|
|
|
|
|
Segment Income (Loss) as
Reported
|
|
$
(59,161)
|
|
$
22,833
|
|
$(101,312)
|
|
$ (16,579)
|
|
Engine Manufacturing
Consolidation Project
|
|
6,184
|
|
-
|
|
18,136
|
|
-
|
|
Business
Optimization
|
|
3,281
|
|
5,211
|
|
5,766
|
|
27,083
|
|
Goodwill
Impairment
|
|
55,463
|
|
-
|
|
55,463
|
|
-
|
|
Business
Realignment
|
|
944
|
|
-
|
|
944
|
|
-
|
|
Adjusted Segment Income
(Loss)
|
|
$
6,711
|
|
$
28,044
|
|
$
(21,003)
|
|
$
10,504
|
|
|
|
|
|
|
|
|
|
|
Segment Income (Loss) % as
Reported
|
|
-21.9%
|
|
6.8%
|
|
-16.3%
|
|
-2.3%
|
|
Adjusted Segment Income
(Loss) %
|
|
2.5%
|
|
8.3%
|
|
-3.4%
|
|
1.4%
|
Third Quarter Highlights
- Engine sales unit volumes decreased by approximately 538,000
engines, or 26%, on lower shipments of residential engines. The
majority of this decrease was anticipated due to timing of
shipments based on the company's belief that channel partners would
order sequentially later compared to last year. Shipments also
declined due to the impact of the COVID-19 pandemic causing several
customers to close down or reduce production operations in the
latter half of March.
- Net sales of $270 million
declined 20% from a year ago, including an estimated negative
impact of $10 million from the
COVID-19 pandemic which reduced segment sales by three percentage
points. The company estimates that COVID-19 reduced adjusted
segment income of $6.7 million by
approximately $4 million.
- GAAP gross profit percentage compared to last year decreased
480 basis points and adjusted gross profit margin decreased 270
basis points, predominantly on lower production volumes, and
unfavorable foreign exchange. The decrease in margins was partially
offset by business optimization program savings and manufacturing
efficiency improvements of nearly $6
million.
- Segment results include a non-cash goodwill impairment charge
of $55 million, reflecting current
market conditions, including the uncertainties related to the
COVID-19 pandemic.
- Results also include: $10.4
million in charges consisting of: $6.2 million for the consolidation of the
company's residential engine manufacturing facilities; $3.3 million in business optimization charges;
and a $0.9 million charge related to
the company's strategic repositioning plan.
- GAAP engineering, selling, general and administrative expenses
(ESG&A) declined by $3.3 million.
Adjusted ESG&A decreased $0.4
million.
|
Products
Segment:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended March
|
|
Nine Months
Ended March
|
|
(In
Thousands)
|
|
FY2020
|
|
FY2019
|
|
FY2020
|
|
FY2019
|
|
Net Sales
|
|
$229,368
|
|
$271,209
|
|
$
666,993
|
|
$698,879
|
|
|
|
|
|
|
|
|
|
|
Gross Profit as
Reported
|
|
$
17,789
|
|
$
24,348
|
|
$
77,786
|
|
$
89,402
|
|
Business
Optimization
|
|
489
|
|
3,267
|
|
1,579
|
|
6,978
|
|
Litigation
Settlement
|
|
1,700
|
|
-
|
|
1,700
|
|
-
|
|
Adjusted Gross
Profit
|
|
$
19,978
|
|
$
27,615
|
|
$
81,065
|
|
$
96,380
|
|
|
|
|
|
|
|
|
|
|
Gross Profit % as
Reported
|
|
7.8%
|
|
9.0%
|
|
11.7%
|
|
12.8%
|
|
Adjusted Gross Profit
%
|
|
8.7%
|
|
10.2%
|
|
12.2%
|
|
13.8%
|
|
|
|
|
|
|
|
|
|
|
Segment Income (Loss) as
Reported
|
|
$
(22,755)
|
|
$
(5,682)
|
|
$
(23,924)
|
|
$ (11,513)
|
|
Business
Optimization
|
|
489
|
|
4,407
|
|
2,053
|
|
13,207
|
|
Goodwill
Impairment
|
|
12,017
|
|
-
|
|
12,017
|
|
-
|
|
Litigation
Settlement
|
|
1,700
|
|
-
|
|
1,700
|
|
2,000
|
|
Business
Realignment
|
|
305
|
|
|
|
305
|
|
|
|
Retailer Bankruptcy
Bad Debt Expense
|
|
-
|
|
-
|
|
-
|
|
4,132
|
|
Acquisition Related
Charges
|
|
-
|
|
287
|
|
-
|
|
523
|
|
Adjusted Segment
Income
|
|
$
(8,244)
|
|
$
(988)
|
|
$
(7,849)
|
|
$
8,349
|
|
|
|
|
|
|
|
|
|
|
Segment Income % as
Reported
|
|
-9.9%
|
|
-2.1%
|
|
-3.6%
|
|
-1.6%
|
|
Adjusted Segment Income
%
|
|
-3.6%
|
|
-0.4%
|
|
-1.2%
|
|
1.2%
|
Third Quarter Highlights
- Net sales decreased by $42
million, or 15%, on lower shipments of turf and job site
products as well as lower sales of portable generators. The company
estimates that the COVID-19 pandemic reduced segment sales by
approximately $30 million. The impact
of the pandemic on segment income is estimated at approximately
$7 million.
- Gross profit percentage on a GAAP basis decreased by 120 basis
points from a year ago. The adjusted gross profit percentage
decreased 150 basis points, principally related to unfavorable
sales mix, including the impact of COVID-19, which predominantly
impacted turf product sales through the company's independent
dealer channel, higher material costs and unfavorable foreign
exchange. Offsetting the decrease in adjusted margin were improved
manufacturing efficiencies and business optimization program
savings of nearly $5 million.
- Segment results include a non-cash goodwill impairment charge
of $12 million, related to the job
site business.
- Results also include: $0.5
million in business optimization charges; a $1.7 million charge for litigation settlement,
and a $0.3 million charge related to
the company's strategic repositioning plan.
- GAAP ESG&A expense decreased $1.3
million from a year ago. Adjusted ESG&A expense of
$28.6 million declined $0.2 million from a year ago.
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 March
(In Thousands,
except per share data)
|
|
|
|
Three Months
Ended March
|
|
|
FY2020
Reported
|
|
Adjustments1
|
|
FY2020
Adjusted
|
|
FY2019
Reported
|
|
Adjustments
|
|
FY2019
Adjusted
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
45,418
|
|
$
6,184
|
|
$
51,602
|
|
$
72,529
|
|
$
623
|
|
$
73,151
|
|
Products
|
|
17,789
|
|
2,189
|
|
19,978
|
|
24,348
|
|
3,267
|
|
27,615
|
|
Inter-Segment
Eliminations
|
|
257
|
|
-
|
|
257
|
|
110
|
|
-
|
|
110
|
|
Total
|
|
$
63,464
|
|
$
8,373
|
|
$
71,837
|
|
$
96,987
|
|
$
3,890
|
|
$
100,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering, Selling,
General and Administrative Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
45,983
|
|
$
907
|
|
$
45,076
|
|
$
49,287
|
|
$
3,835
|
|
$
45,452
|
|
Products
|
|
28,914
|
|
305
|
|
28,609
|
|
30,234
|
|
1,428
|
|
28,806
|
|
Total
|
|
$
74,897
|
|
$
1,212
|
|
$
73,685
|
|
$
79,521
|
|
$
5,263
|
|
$
74,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
Impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
55,463
|
|
$
55,463
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
Products
|
|
$
12,017
|
|
12,017
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total
|
|
$
67,480
|
|
$
67,480
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Earnings
of
Unconsolidated Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
(3,133)
|
|
$
3,318
|
|
$
185
|
|
$
(408)
|
|
$
753
|
|
$
345
|
|
Products
|
|
387
|
|
-
|
|
387
|
|
203
|
|
-
|
|
203
|
|
Total
|
|
$
(2,746)
|
|
$
3,318
|
|
$
572
|
|
$
(205)
|
|
$
753
|
|
$
548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
(59,161)
|
|
$
65,872
|
|
$
6,711
|
|
$
22,833
|
|
$
5,211
|
|
$
28,044
|
|
Products
|
|
(22,755)
|
|
14,511
|
|
(8,244)
|
|
(5,682)
|
|
4,694
|
|
(988)
|
|
Inter-Segment
Eliminations
|
|
257
|
|
-
|
|
257
|
|
110
|
|
-
|
|
110
|
|
Total
|
|
$
(81,659)
|
|
$
80,383
|
|
$
(1,276)
|
|
$
17,261
|
|
$
9,905
|
|
$
27,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
$
(9,521)
|
|
$
-
|
|
$
(9,521)
|
|
$
(9,088)
|
|
$
15
|
|
$
(9,073)
|
|
Other Income
(Expense)
|
|
$
(1,773)
|
|
$
20
|
|
$
(1,753)
|
|
$
953
|
|
$
-
|
|
$
953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before
Income Taxes
|
|
(92,953)
|
|
80,403
|
|
(12,550)
|
|
9,126
|
|
9,920
|
|
19,046
|
|
Provision (Benefit)
for Income Taxes
|
|
51,653
|
|
(53,360)
|
|
(1,707)
|
|
1,121
|
|
3,288
|
|
4,409
|
|
Net Income
(Loss)
|
|
$
(144,606)
|
|
$
133,763
|
|
$
(10,843)
|
|
$
8,005
|
|
$
6,632
|
|
$
14,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(3.47)
|
|
$
3.21
|
|
$
(0.26)
|
|
$
0.19
|
|
$
0.15
|
|
$
0.34
|
|
Diluted
|
|
(3.47)
|
|
3.21
|
|
(0.26)
|
|
0.19
|
|
0.15
|
|
0.34
|
|
|
|
1
|
For the third quarter
of fiscal 2020, engine manufacturing consolidation charges include
$4.0 million ($1.0 million after tax) of cash charges and $2.2
million ($0.6 million after tax) of non-cash charges related to the
closure of the engine plant in Murray, Kentucky. Business
optimization expenses include $2.8 million ($0.7 million after tax)
of cash charges and $0.9 million ($0.2 million after tax) to the
warehouse optimization program and the plan to onshore Commercial
engine production. Goodwill Impairment charges include $67.5
million ($67.5 million after tax) of non-cash impairment charges
related to the impairment of Job Site and Engines goodwill.
Gross profit includes $1.7 million ($0.4 million after tax) related
to the settlement of a product liability matter. ESG&A includes
$1.3 million ($0.3 million after tax) related to business
realignment. Tax expense includes a $70.3. million charge to record
a valuation allowance against deferred tax assets and a $7.5
million benefit as a result of the Coronavirus Aid and Relief and
Economic Security Act (CARES Act).
|
|
BRIGGS &
STRATTON CORPORATION AND SUBSIDIARIES
Adjusted Segment
Information for the Nine Month Periods Ended March
(In Thousands,
except per share data)
|
|
|
|
|
Nine Months
Ended March
|
|
|
|
FY2020
Reported
|
|
Adjustments1
|
|
FY2020
Adjusted
|
|
FY2019
Reported
|
|
Adjustments
|
|
FY2019
Adjusted
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
97,753
|
|
$
18,359
|
|
$
116,112
|
|
$
144,272
|
|
$
1,712
|
|
$
145,984
|
|
Products
|
|
77,786
|
|
3,279
|
|
81,065
|
|
89,402
|
|
6,978
|
|
96,380
|
|
Inter-Segment
Eliminations
|
|
(804)
|
|
-
|
|
(804)
|
|
(441)
|
|
-
|
|
(441)
|
|
Total
|
|
$
174,735
|
|
$
21,638
|
|
$
196,373
|
|
$
233,233
|
|
$
8,690
|
|
$
241,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering, Selling,
General and Administrative Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
141,498
|
|
$
2,648
|
|
$
138,850
|
|
$
163,997
|
|
$
22,754
|
|
$
141,243
|
|
Products
|
|
91,260
|
|
779
|
|
90,481
|
|
103,556
|
|
12,884
|
|
90,672
|
|
Total
|
|
$
232,758
|
|
$
3,427
|
|
$
229,331
|
|
$
267,552
|
|
$
35,638
|
|
$
231,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
Impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
55,463
|
|
$
55,463
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
Products
|
|
$
12,017
|
|
12,017
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total
|
|
$
67,480
|
|
$
67,480
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Earnings
of
Unconsolidated Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
(2,104)
|
|
$
3,839
|
|
$
1,735
|
|
$
3,146
|
|
$
2,617
|
|
$
5,763
|
|
Products
|
|
1,567
|
|
-
|
|
1,567
|
|
2,640
|
|
-
|
|
2,640
|
|
Total
|
|
$
(537)
|
|
$
3,839
|
|
$
3,302
|
|
$
5,786
|
|
$
2,617
|
|
$
8,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engines
|
|
$
(101,312)
|
|
$
80,309
|
|
$
(21,003)
|
|
$
(16,579)
|
|
$
27,083
|
|
$
10,504
|
|
Products
|
|
(23,924)
|
|
16,075
|
|
(7,849)
|
|
(11,513)
|
|
19,862
|
|
8,349
|
|
Inter-Segment
Eliminations
|
|
(804)
|
|
-
|
|
(804)
|
|
(441)
|
|
-
|
|
(441)
|
|
Total
|
|
$
(126,040)
|
|
$
96,384
|
|
$
(29,656)
|
|
$
(28,533)
|
|
$
46,945
|
|
$
18,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
$
(25,390)
|
|
$
-
|
|
$
(25,390)
|
|
$
(21,731)
|
|
$
263
|
|
$
(21,468)
|
|
Other Income
(Expense)
|
|
$
(2,904)
|
|
$
20
|
|
$
(2,884)
|
|
$
391
|
|
$
-
|
|
$
391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before
Income Taxes
|
|
(154,334)
|
|
96,404
|
|
(57,930)
|
|
(49,874)
|
|
47,208
|
|
(2,666)
|
|
Provision (Benefit)
for Income Taxes
|
|
39,253
|
|
(50,581)
|
|
(11,328)
|
|
(14,331)
|
|
9,602
|
|
(4,729)
|
|
Net Income
(Loss)
|
|
$
(193,587)
|
|
$
146,985
|
|
$
(46,602)
|
|
$
(35,543)
|
|
$
37,606
|
|
$
2,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(4.65)
|
|
$
3.53
|
|
$
(1.12)
|
|
$
(0.86)
|
|
$
0.90
|
|
$
0.04
|
|
Diluted
|
|
(4.65)
|
|
3.53
|
|
(1.12)
|
|
(0.86)
|
|
0.90
|
|
0.04
|
|
|
|
1
|
For the nine months
ended March 29, 2020, engine manufacturing consolidation charges
include $9.0 million ($5.2 million after tax) of cash charges and
$9.1 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 $5.6 million ($3.2 million after tax)
of cash charges and $2.2 million ($1.3 after tax) to the warehouse
optimization program and the plan to onshore Commercial engine
production. Goodwill Impairment charges include $67.5 million
($67.5 million after tax) of non-cash impairment charges related to
the impairment of Job Site and Engines goodwill. Gross profit
includes $1.7 million ($1.0 million after tax) related to the
settlement of a product liability matter. ESG&A includes
$1.3 million ($0.8 million after tax) related to business
realignment. Tax expense includes a $70.3 million charge to record
a valuation allowance against deferred tax assets and a $7.5
million benefit as a result of the Coronavirus Aid and Relief and
Economic Security Act (CARES Act).
|
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SOURCE Briggs & Stratton Corporation
