News Releases

Briggs & Stratton Corporation Reports Fiscal 2019 Third Quarter Results

April 25, 2019 at 4:57 PM EDT

MILWAUKEE, April 25, 2019 /PRNewswire/ -- Briggs & Stratton Corporation (NYSE: BGG) today announced financial results for its third fiscal quarter ended March 31, 2019.

  • Third fiscal quarter net sales decreased 4% to $580 million from $604 million in the prior year.  The decrease is largely driven by continued weather-related market softness in Australia and Europe as well as the impact to U.S. sales from the Sears bankruptcy.
  • Ongoing favorable sales momentum led to 18% growth of engines and products designed for commercial markets, on a trailing twelve-month basis, and accounted for 30% of trailing twelve-month sales.
  • Quarterly GAAP gross profit margin of 16.7% and adjusted gross profit margin of 17.4% decreased from last year's GAAP gross profit margin of 21.6% and adjusted gross profit margin of 21.9%, primarily due to sales mix, lower production volumes as planned, and start-up inefficiencies associated with our business optimization initiatives.
  • Third quarter GAAP net income of $8.0 million, or $0.19 per diluted share, included business optimization charges and acquisition integration charges compared to GAAP net income of $31.9 million, or $0.74 per diluted share in the prior year. Excluding these items, adjusted net income for the fiscal 2019 third quarter was $14.6 million, or $0.34 per diluted share, compared with $36.2 million, or $0.84 per diluted share, for the prior year.
  • The company is revising its fiscal 2019 earnings outlook to $0.45 to $0.55 per diluted share, before business optimization costs and other charges, from previous guidance of $1.10 to $1.30 per diluted share. The revision reflects continued weather-related market softness and the impact of temporary inefficiencies associated with the start-up of business optimization initiatives.
  • The company's preliminary estimates for fiscal 2020 include meaningful sales and earnings improvement from the fiscal 2019 outlook. Net sales for fiscal 2020 are expected to be in a range of $1.98 million to $2.03 million and diluted earnings per share are expected to be in a range of $1.20 to $1.40, excluding business optimization program costs.  Further context will be provided in tomorrow's earnings conference call. 

Briggs & Stratton Corporation logo.  (PRNewsFoto/Briggs & Stratton Corporation) (PRNewsfoto/Briggs & Stratton Corporation)

Todd J. Teske, Chairman, President and Chief Executive Officer, commented, "We were disappointed in the quarterly results. Lower shipments due to the Sears bankruptcy, weather-related softness particularly in Australia and Europe, and inefficiencies from start-up activities related to our business optimization initiatives tempered overall sales performance and reduced quarterly profitability more than previously expected.  While incurring these elevated start-up costs were difficult from a financial performance perspective, they helped enable us to meet important customer delivery commitments on robust sales across commercial lines and position us well for long-term growth."  Teske continued, "Actions are already underway to improve operating performance.  Fulfillment levels in our service parts business have meaningfully improved, and we are now positioned to support demand during the peak season.  Similarly, production of commercial Vanguard engines is increasing, following the on-shoring from our joint venture. Quality and performance for this line remain high, as closer proximity to our primary customer base is helping us win new business. Production is also increasing at our new facility for Ferris mowers and other commercial products. Growing conditions are favorable throughout much of North America and Europe, which set the stage for a more normal grass-cutting season. The much-needed additional capacity is also giving us the resources to meet the higher demand for our innovative commercial products.  Taken together, we are well-positioned to regain momentum on delivering the business optimization program pre-tax savings of up to $40 million by fiscal 2021 and are confident that our strategic actions position us for improving trends in revenue growth, profitability and capital returns as we enter fiscal 2020 and beyond." 

Fiscal 2019 Outlook:

  • Net sales are now expected to be in a range of $1.86 billion to $1.91 billion (previously $1.90 billion to $1.96 billion), a $40 million reduction. The decrease contemplates $30 million in lower sales in Australia and Europe due to unfavorable weather conditions and a cautious retail sentiment. North America service parts sales are anticipated to be $10 million lower than previously estimated due to lower sales to date through the third quarter.
  • Operating margin is expected to be 2.6% to 2.8% (previously 4.5% to 4.8%), before the impact of charges from the business optimization program, bad debt charge, litigation settlement charge or acquisition integration costs. The reduction is due to the company's expectation of lower sales as well as unfavorable sales mix, lower manufacturing volumes and temporarily elevated inefficiencies.
  • Equity in earnings of unconsolidated affiliates is expected to be $11.5 million, and interest expense is expected to be $28.5 million, adjusted for business optimization charges and premiums paid to retire senior notes. Due to lower expected earnings, the consolidated tax rate is expected to be in a range of 10% to 12%.
  • Net income is now expected to be in a range of $19 million to $23 million (previously $47 million to $55 million), or $0.45 to $0.55 per diluted share (previously $1.10 to $1.30 per diluted share), before the impact of charges.
  • The company continues to anticipate capital expenditures of approximately $65 million.
  • The company's business optimization program is expected to generate pre-tax savings of $35 million to $40 million by fiscal 2021 and related total program pre-tax charges are expected to be up to $70 million, including fiscal 2019 program costs of $42 million to $46 million.

Conference Call Information:

The company will host a conference call tomorrow at 10:00 AM (ET) to review the 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 at (877) 233-9136 and enter Conference ID 9389953. 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 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 



FY2019


FY2018


FY2019


FY2018

NET SALES


$580,196


$604,069


$1,364,655


$1,379,599

COST OF GOODS SOLD


483,209


473,796


1,131,422


1,090,196

Gross Profit 


96,987


130,273


233,233


289,403










ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES


79,521


80,156


267,553


245,304

EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATES


(205)


713


5,786


6,438

Income (Loss) from Operations


17,261


50,830


(28,534)


50,537










INTEREST EXPENSE


(9,088)


(8,617)


(21,731)


(19,167)

OTHER INCOME 


953


1,350


391


3,297

Income (Loss) before Income Taxes


9,126


43,563


(49,874)


34,667










PROVISION (CREDIT) FOR INCOME TAXES


1,121


11,675


(14,331)


34,163

Net Income (Loss)


$     8,005


$   31,888


$    (35,543)


$            504










EARNINGS (LOSS) PER SHARE









Basic  


$       0.19


$       0.74


$         (0.86)


$           0.00

Diluted


$       0.19


$       0.74


$         (0.86)


$           0.00










WEIGHTED AVERAGE SHARES OUTSTANDING









Basic  


41,527


42,064


41,691


42,108

Diluted


41,527


42,307


41,691


42,362

 

Supplemental International Sales Information

(In Thousands)




 Three Months Ended March 


 Nine Months Ended March 



FY2019


FY2018


FY2019


FY2018

International sales based on product shipment destination


$142,817


$160,653


$379,468


$432,538

 

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets as of the End of March

(In Thousands)


CURRENT ASSETS:

FY2019


FY2018

Cash and Cash Equivalents

$      23,863


$      56,165

Accounts Receivable, Net

253,536


259,472

Inventories

525,210


438,492

Prepaid Expenses and Other Current Assets

34,682


35,953

Total Current Assets

837,291


790,082





OTHER ASSETS:




Goodwill

169,693


164,213

Investments

46,937


50,224

Other Intangible Assets, Net

97,465


98,021

Deferred Income Tax Asset

31,031


34,886

Other Long-Term Assets, Net

20,365


20,932

Total Other Assets

365,491


368,276









PLANT AND EQUIPMENT:




At Cost

1,208,747


1,161,535

Less - Accumulated Depreciation

795,467


762,186

Plant and Equipment, Net

413,280


399,349


$ 1,616,062


$ 1,557,707









CURRENT LIABILITIES:




Accounts Payable

$    272,125


$    202,822

Short-Term Debt

211,545


131,556

Accrued Liabilities

143,432


157,895

Total Current Liabilities

627,102


492,273





OTHER LIABILITIES:




Accrued Pension Cost

179,487


197,749

Accrued Employee Benefits

20,122


21,787

Accrued Postretirement Health Care Obligation

25,294


29,547

Other Long-Term Liabilities

61,050


53,737

Long-Term Debt

195,464


202,332

Total Other Liabilities

481,417


505,152





SHAREHOLDERS' INVESTMENT:




Common Stock

579


579

Additional Paid-In Capital

77,523


75,001

Retained Earnings

1,018,265


1,089,364

Accumulated Other Comprehensive Loss

(255,021)


(280,546)

Treasury Stock, at Cost

(333,803)


(324,116)

Total Shareholders' Investment

507,543


560,282


$ 1,616,062


$ 1,557,707

 

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In Thousands)



Nine Months Ended March





CASH FLOWS FROM OPERATING ACTIVITIES:

FY2019


FY2018

Net Income (Loss)

$                  (35,543)


$                        504

Adjustments to Reconcile Net Income (Loss) to Net Cash Used in Operating Activities:




Depreciation and Amortization

47,385


43,756

Stock Compensation Expense

5,496


5,312

Loss on Disposition of Plant and Equipment

66


1,595

Provision (Credit) for Deferred Income Taxes

(19,247)


24,744

Equity in Earnings of Unconsolidated Affiliates 

(8,403)


(9,068)

Dividends Received from Unconsolidated Affiliates 

10,510


9,810

Pension Cash Contributions

-


(30,000)

Changes in Operating Assets and Liabilities:




Accounts Receivable

(70,876)


(25,948)

Inventories

(113,407)


(62,780)

Other Current Assets

(856)


(3,430)

Accounts Payable, Accrued Liabilities and Income Taxes

77,905


11,287

Other, Net

2,079


15,198

   Net Cash Used in Operating Activities

(104,891)


(19,020)





CASH FLOWS FROM INVESTING ACTIVITIES:




Capital Expenditures

(46,379)


(77,483)

Proceeds Received on Disposition of Plant and Equipment

31


339

Cash Paid for Acquisitions, Net of Cash Acquired

(8,865)


(1,800)

   Net Cash Used in Investing Activities

(55,213)


(78,944)





CASH FLOWS FROM FINANCING ACTIVITIES:




Net Borrowings on Revolver

163,509


131,556

Long Term Note Payable

-


7,685

Debt Issuance Costs

-


(1,154)

Treasury Stock Purchases

(11,937)


(8,710)

Repayments of Long Term Debt

(5,424)


(19,781)

Stock Option Exercise Proceeds and Tax Benefits

1,823


3,943

Payments Related to Shares Withheld for Taxes for Stock Compensation

(257)


(1,147)

Cash Dividends Paid

(11,891)


(12,007)

   Net Cash Provided by Financing Activities

135,823


100,385





EFFECT OF EXCHANGE RATE CHANGES

(239)


1,090

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(24,520)


3,511

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, Beginning 1

49,218


61,707

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, Ending 2

$                   24,698


$                   65,218


1 Included within Beginning Cash, Cash Equivalents, and Restricted Cash is approximately $4.3 million and $0 of restricted cash as of July 1, 2018 and July 2, 2017, respectively.


2 Included within Ending Cash, Cash Equivalents, and Restricted Cash is approximately $0.8 million and $9.1 million of restricted cash as of March 31, 2019 and April 1, 2018, respectively. 

SUPPLEMENTAL SEGMENT INFORMATION

Engines Segment:




 Three Months Ended March 


 Nine Months Ended March 

(In Thousands)


FY2019


FY2018


FY2019


FY2018

     Net Sales


$ 336,243


$ 384,292


$ 727,351


$ 790,543










     Gross Profit as Reported


$   72,529


$   96,780


$ 144,272


$ 183,428

Business Optimization


623


903


1,712


2,031

     Adjusted Gross Profit


$   73,151


$   97,683


$ 145,984


$ 185,459










     Gross Profit % as Reported


21.6%


25.2%


19.8%


23.2%

     Adjusted Gross Profit %


21.8%


25.4%


20.1%


23.5%










     Segment Income (Loss) as Reported


$   22,833


$   47,718


$  (16,579)


$   35,776

Business Optimization


5,211


2,896


27,083


7,243

     Adjusted Segment Income


$   28,044


$   50,614


$   10,504


$   43,019










     Segment Income (Loss) % as Reported


6.8%


12.4%


(2.3%)


4.5%

     Adjusted Segment Income %


8.3%


13.2%


1.4%


5.4%


Third Quarter Highlights

  • Engine unit volumes decreased by 18%, or approximately 456,000 engines, in the third quarter of fiscal 2019 compared to the same period last year. Domestically, as anticipated, consumer engine sales decreased due to the Sears bankruptcy and the pull forward of shipments to the second quarter to enable channel partners to restock inventory and facilitate brand transitions this year. Sales into Australia and Europe declined by over 25% in the third quarter due to prolonged historic drought conditions in Australia and elevated channel inventories in Europe following last summer's drought. Domestic service parts sales declined slightly year over year. The decrease in sales was mitigated by a nearly 10% increase in commercial Vanguard engine sales and higher pricing to offset cost inflation and tariffs.
  • The gross profit percentage decreased by 360 basis points from last year due to unfavorable sales mix (160 bps), a 14% reduction in manufacturing volume as planned (130 bps) and inefficiencies (100 bps). Unfavorable sales mix was caused by proportionately less sales outside the U.S. and slightly lower service parts sales. Inefficiencies from start-up activities related to the company's ERP upgrade and the on-shoring of Vanguard engines led to temporarily elevated supply chain and labor costs to ensure timely delivery on the robust growth of Vanguard engines and improve the throughput of service parts sales. Higher prices offset higher commodity costs and tariffs. Foreign exchange was slightly favorable to margins in the quarter.
  • GAAP ESG&A expenses were consistent year over year and adjusted ESG&A expenses decreased $3.0 million from last year due to lower employee compensation costs.

 


Products Segment:




 Three Months Ended March 


 Nine Months Ended March 

(In Thousands)


FY2019


FY2018


FY2019


FY2018

     Net Sales


$ 271,209


$ 245,169


$ 698,879


$ 653,845










     Gross Profit as Reported


$   24,348


$   32,773


$   89,402


$ 105,570

Business Optimization


3,267


971


6,978


2,493

     Adjusted Gross Profit


$   27,615


$   33,744


$   96,380


$ 108,063










     Gross Profit % as Reported


9.0%


13.4%


12.8%


16.1%

     Adjusted Gross Profit %


10.2%


13.8%


13.8%


16.5%










     Segment Income (Loss) as Reported


$    (5,682)


$      2,392


$  (11,514)


$   14,356

Business Optimization


4,407


1,309


13,207


5,259

Litigation Settlement


-


-


2,000


-

Retailer Bankruptcy Bad Debt Expense


-


-


4,132


-

Acquisition Related Charges


287


-


523


-

     Adjusted Segment Income (Loss)


$       (988)


$      3,701


$      8,348


$   19,615










     Segment Income (Loss) % as Reported


(2.1%)


1.0%


(1.6%)


2.2%

     Adjusted Segment Income (Loss) %


(0.4%)


1.5%


1.2%


3.0%

Third Quarter Highlights

  • Net sales increased by $26.0 million, or 10.6%, from the same period last year. The increase was primarily due to 16% growth in commercial products on higher sales of Ferris mowers and growth of commercial stand-on blowers from the Hurricane acquisition in early fiscal 2019. Residential sales grew slightly on higher volumes of standby generators and pressure washers, partially offset by lower sales of portable generators and riding mowers following cool spring temperatures in the U.S. Sales also benefited from higher prices to offset cost inflation.
  • The gross profit percentage decreased 440 basis points and adjusted gross profit percentage decreased by 360 basis points compared to the third quarter last year. The decrease in the adjusted gross profit percentage is largely attributed to inefficiencies (180 bps) and unfavorable sales mix (170 bps). Inefficiencies from start-up activities related to the ERP upgrade, elevated international container shipping rates and higher supply chain and labor costs to ensure our ability to meet delivery commitments on the robust growth of Ferris mowers. We also incurred higher labor costs to improve the throughput of service parts to support increased shipments during the peak season. Unfavorable sales mix was driven by lower sales of portable generators due to less spring storms, as well as lower sales of riding mowers through the dealer channel. Strong sales of pressure washers were driven by elevated pollen levels this spring and brand transitions at retail. Partially offsetting the unfavorable sales mix was the favorable impact of higher commercial sales. Increases in pricing largely offset higher material and tariff costs.
  • GAAP ESG&A expenses decreased by $0.8 million and adjusted ESG&A expenses decreased by $1.9 million compared with the previous year from lower employee compensation costs.

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 



  FY2019
Reported


Adjustments1


 FY2019
Adjusted


  FY2018
Reported


Adjustments


  FY2018
Adjusted








Gross Profit













Engines


$         72,529


$              623


$         73,151


$         96,780


$            903


$         97,683

Products


24,348


3,267


27,615


32,773


971


33,744

Inter-Segment Eliminations


110


-


110


720


-


720

Total


$         96,987


$           3,889


$      100,876


$      130,273


$         1,874


$      132,147














Engineering, Selling, General and Administrative Expenses













Engines


$         49,287


$           3,835


$         45,452


$         49,124


$            587


$         48,537

Products


30,234


1,428


28,806


31,032


338


30,694

Total


$         79,521


$           5,263


$         74,258


$         80,156


$            925


$         79,231














Equity in Earnings of
Unconsolidated Affiliates













Engines


$             (408)


$              753


$              345


$                 62


$         1,406


$           1,468

Products


203


-


203


651


-


651

Total


$             (205)


$              753


$              548


$              713


$         1,406


$           2,119














Segment Income (Loss)













Engines


$         22,833


$           5,211


$         28,044


$         47,718


$         2,896


$         50,614

Products


(5,682)


4,694


(988)


2,392


1,309


3,701

Inter-Segment Eliminations


110


-


110


720


-


720

Total


$         17,261


$           9,905


$         27,166


$         50,830


$         4,205


$         55,035














Interest Expense


$         (9,088)


$                 15


$         (9,073)


$         (8,617)


$         2,017


$         (6,600)














Income before Income Taxes


9,126


9,920


19,046


43,563


6,222


49,785

Provision for Income Taxes


1,121


3,288


4,409


11,675


1,876


13,551

Net Income 


$           8,005


$           6,632


$         14,637


$         31,888


$         4,346


$         36,234














Earnings Per Share













Basic  


$             0.19


$             0.15


$             0.34


$             0.74


$           0.10


$             0.84

Diluted


0.19


0.15


0.34


0.74


0.10


0.84



1

For the third quarter of fiscal 2019, business optimization expenses include $1.4 million ($0.9 million after tax) of non-cash charges related to accelerated depreciation, and $8.4 million ($5.6 million after tax) of cash charges related primarily to activities associated with the upgrade to the Company's ERP system, professional services, employee termination benefits, and plant rearrangement activities. The Company recognized $0.2 million ($0.1 million after tax) related to acquisition integration activities. 


 

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 



FY2019
Reported


Adjustments1


FY2019
Adjusted


FY2018
Reported


Adjustments


FY2018
Adjusted








Gross Profit













Engines


$      144,272


$           1,712


$      145,984


$      183,428


$         2,031


$      185,459

Products


89,402


6,978


96,380


105,570


2,493


108,063

Inter-Segment Eliminations


(441)


-


(441)


405


-


405

Total


$      233,233


$           8,690


$      241,923


$      289,403


$         4,524


$      293,927














Engineering, Selling, General and Administrative Expenses













Engines


$      163,997


$         22,754


$      141,243


$      151,154


$         2,582


$      148,572

Products


103,556


12,884


90,672


94,150


2,766


91,384

Total


$      267,553


$         35,638


$      231,915


$      245,304


$         5,348


$      239,956














Equity in Earnings of
Unconsolidated Affiliates













Engines


$           3,146


$           2,617


$           5,763


$           3,502


$         2,630


$           6,132

Products


2,640


-


2,640


2,936


-


2,936

Total


$           5,786


$           2,617


$           8,403


$           6,438


$         2,630


$           9,068














Segment Income (Loss)













Engines


$       (16,579)


$         27,083


$         10,504


$         35,776


$         7,243


$         43,019

Products


(11,514)


19,862


8,348


14,356


5,259


19,615

Inter-Segment Eliminations


(441)


-


(441)


405


-


405

Total


$       (28,534)


$         46,945


$         18,411


$         50,537


$      12,502


$         63,039














Interest Expense


$       (21,731)


$              263


$       (21,468)


$       (19,167)


$         2,017


$       (17,150)














Income (Loss) before Income Taxes


(49,874)


47,208


(2,666)


34,667


14,519


49,186

Provision for Income Taxes


(14,331)


9,602


(4,729)


34,163


(21,104)


13,059

Net Income (Loss)


$       (35,543)


$         37,606


$           2,063


$              504


$      35,623


$         36,127














Earnings (Loss) Per Share













Basic  


$            (0.86)


$             0.90


$             0.04


$             0.00


$           0.84


$             0.84

Diluted


(0.86)


0.90


0.04


0.00


0.83


0.83



1

For the first nine months of fiscal 2019, business optimization expenses include $2.9 million ($2.3 million after tax) of non-cash charges related to accelerated depreciation, and $44.2 million ($34.5 million after tax) of cash charges related primarily to activities associated with the upgrade to the Company's ERP system, professional services, employee termination benefits, and plant rearrangement activities. The Company recognized bad debt expense of $4.1 million ($3.1 million after tax) after a major retailer announced that it had filed for bankruptcy protection. The Company recognized $2.0 million ($1.5 million after tax) for amounts accrued related to a litigation settlement and $0.5 million ($0.3 million after tax) related to acquisition integration activities. Interest expense includes $0.2 million ($0.2 million after tax) for premiums paid to repurchase senior notes. Tax expense includes a $1.1 million charge associated with the Tax Cuts and Jobs Act of 2017 to record the impact of the inclusion of foreign earnings. 

 

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SOURCE Briggs & Stratton Corporation

Investor Relations, Mark A. Schwertfeger, Senior VP and Chief Financial Officer, (800) 365-2759