Briggs & Stratton Corporation Reports Fiscal 2017 Fourth Quarter And Full-Year Results
MILWAUKEE, Aug. 16, 2017 /PRNewswire/ -- Briggs & Stratton Corporation (NYSE: BGG) today announced financial results for its fourth fiscal quarter and year ended July 2, 2017.
For the fiscal 2017 fourth quarter:
-- Fiscal fourth quarter net sales were $474 million, a decrease of $28
million or 5.6% from $502 million for the prior year. Continued high
growth in commercial turf and lawn care, commercial job site, and
commercial engines was offset by softness in residential sales.
-- Quarterly gross profit margin of 21.3% increased from GAAP gross profit
margin of 18.7% and was consistent with adjusted gross profit margin of
21.4% last year, as an improved product mix and manufacturing
efficiencies offset the impact of lower volumes.
-- Fourth quarter net income was $19.7 million, an increase from GAAP net
income of $5.3 million and slightly lower than adjusted net income of
$20.1 million last year. On a diluted per-share basis, earnings were
$0.46, an increase from $0.12 (GAAP) and consistent with $0.46
(adjusted) last year.
For the fiscal 2017 full year:
-- Fiscal 2017 net sales were $1.79 billion, down 1.3% from $1.81 billion
for fiscal 2016. Fiscal 2017 was a record year for net sales of
commercial type products, amounting to $434 million, a 7% increase
compared to last year.
-- Gross profit margin of 21.5% increased from GAAP gross profit margin of
20.0% and adjusted gross profit margin of 21.1% last year, due to
manufacturing efficiency improvements and favorable sales mix, including
a higher proportion of commercial sales and higher margins on new
products.
-- Net income was $56.7 million, an increase from GAAP net income of $26.6
million and adjusted net income of $55.0 million last year. Fiscal 2017
diluted earnings per share were $1.31, an increase from $0.60 (GAAP) and
$1.25 (adjusted) last year. We achieved earnings growth of over 20% in
fiscal 2017 after factoring out higher ERP upgrade costs, the negative
impact of foreign exchange, higher pension costs and a higher tax rate.
Stock repurchase and dividend update:
-- The company paid $24.1 million in cash dividends to shareholders during
fiscal 2017.
-- The company repurchased $19.7 million of common stock under the
company's share repurchase program during fiscal 2017. The company
currently has approximately $30.5 million remaining under the current
authorization, which expires on June 29, 2018.
Fiscal 2018 outlook:
-- For fiscal 2018, the company estimates net sales in a range of $1.87
billion to $1.92 billion, for projected annual growth of 4.5% to 7.5%.
Projections reflect modest market growth assumptions plus a return to
more normalized channel inventories.
-- Fiscal 2018 diluted earnings per share are estimated to be $1.31 to
$1.48. Factoring out the absence of hurricanes, higher expected ERP
upgrade costs, higher expected interest expense and a change in tax
rate, the midpoint of the earnings range shows growth for fiscal 2018 of
approximately 25% compared to fiscal 2017.
"We achieved earnings within our guidance range for fiscal 2017 on the meaningful progress made to diversify our business and drive operational excellence," stated Todd J. Teske, Briggs & Stratton's Chairman, President and Chief Executive Officer. "During the year, we delivered strong sales growth in commercial products and commercial engines to gain share and improve gross profit margins. New, innovative products, with the features our customers want, also contributed to profitability and our success in maintaining our leadership position in engines." Teske continued, "Lower-than-expected shipments of residential outdoor power equipment and engines resulted from certain North America channel partners making unexpected changes to their merchandising and inventory stocking levels during the spring selling season compounded by regional pockets of suboptimal growing conditions. We have observed improved growing conditions throughout the season but continue to see a cautious approach to reordering as channel partners have focused on controlling inventory to abnormally low levels. Looking ahead, we remain optimistic about the future, as reflected in the outlook for fiscal 2018, as well as today's announcement of our business optimization program, which will drive further advancements in operational excellence and provide capacity for the production of high-growth products."
Business Optimization Program
In addition to quarterly and full-year financial results, today the company announced the launch of a business optimization program that is designed to drive efficiencies and expand capacity in commercial engines and cutting equipment. The program entails expanding production of Vanguard commercial engines into the company's existing large engine plants, which are located in Georgia and Alabama, and expanding Ferris commercial mower production capacity in a new, modern facility which is located close to the current manufacturing location in New York. "We have successfully grown commercial sales by $180 million, or more than 70%, over the last five years," said Teske. "Our launch of this business optimization program will lay the foundation for continued profitable growth. These actions are expected to enable the highly dedicated and skilled teams at our U.S. plants to more effectively produce our commercial offerings."
Production of Vanguard engines in the company's U.S. plants is expected to be phased in beginning in late fiscal 2018 through the middle of fiscal 2019. Currently, the majority of Vanguard engines are sourced from overseas. Production of Ferris commercial mowers is expected to begin in the new facility in the latter half of fiscal 2018, and the exit from the existing plant and remote warehouse is planned for fiscal 2019. The business optimization program also includes the project costs for the integration and go-live efforts associated with the company's ERP upgrade and the anticipated operational excellence efficiency improvements. The go-live for the ERP upgrade is expected towards the end of fiscal 2018, subsequent to the peak seasonal shipment period.
We project that the business optimization program will generate $30 million to $35 million of annual pre-tax savings, in addition to supporting profitable commercial growth. We estimate the savings will be achieved over a three-year period beginning in fiscal 2019. Total pre-tax expenses related to the business optimization program are expected to be approximately $50 million to $55 million, of which $24 million to $28 million is expected be recognized in fiscal 2018.
Outlook:
For fiscal 2018, we anticipate net sales to be in a range of $1.87 billion to $1.92 billion for growth of 4.5% to 7.5%. This sales range contemplates that the markets for commercial products will grow mid-single digits and that we will continue to gain market share in the categories of commercial turf and lawn care, commercial job site, and commercial engines. We anticipate modest market growth for the U.S. residential lawn and garden market in addition to some normalization of channel inventory levels. Our outlook does not include any positive impact of storms, whereas fiscal 2017 net sales included a modest benefit from Hurricane Matthew.
For fiscal 2018, we estimate mid-point growth in net income of approximately 6%, to be in a range of $56 million to $64 million, or $1.31 to $1.48 per diluted share, prior to the impact of costs related to our business optimization program or the benefit of any share repurchases. Operating margins before business optimization costs are expected to be approximately 5.6% to 5.8%. Compared to fiscal 2017, operating margins are expected to improve due to favorable sales mix from growth of commercial products, product margin expansion and operational efficiency improvements.
The improvement in operating margins is anticipated to be tempered by incremental pre-tax expenses of $4 million to $6 million ($0.06 to $0.09 per diluted share) for completing the build-out phase of the ERP system upgrade. We also anticipate increased interest expense of approximately $2.5 million ($0.04 per diluted share) due to rising interest rates and higher average borrowings. The effective tax rate is projected to return to a more normal rate, in a range of 31% to 33%, from 28.9% for fiscal 2017, for an increased expense of $0.06 per diluted share. After factoring out the absence of hurricane benefits, the increased ERP upgrade costs, higher interest expense and the change in tax rate, the midpoint of our earnings range for fiscal 2018 contemplates approximately 25% growth in earnings compared with fiscal 2017. Capital expenditures are projected to be $80 million to $90 million, which includes the majority of expenditures associated with the business optimization program.
Conference Call Information:
The Company will host a conference call tomorrow at 10:00 AM (ET) to review this information. A live webcast of the conference call will be available on our corporate website: http://investors.basco.com.
Also available is a dial-in number to access the call real-time at (877) 233-9136. A replay will be offered beginning approximately two hours after the call ends and will be available for one week. Dial (855) 859-2056 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 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 our 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 we compete; changes in laws and regulations; changes in customer and OEM demand; changes in prices of raw materials and parts that we purchase; 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 restructuring actions; and other factors disclosed from time to time in our SEC filings or otherwise, including the factors discussed in Item 1A, Risk Factors, of the Company's Annual Report on Form 10-K and in its periodic reports on Form 10-Q. We undertake 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(TM), 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 June
(In Thousands, except per share data)
------------------------------------
Three Months Ended June Twelve Months Ended June
----------------------- ------------------------
FY2017 FY2016 FY2017 FY2016
------ ------ ------ ------
NET SALES $474,105 $502,191 $1,786,103 $1,808,778
COST OF GOODS SOLD 372,975 405,768 1,402,274 1,438,166
RESTRUCTURING CHARGES - 2,471 - 8,157
--- ----- --- -----
Gross Profit 101,130 93,952 383,829 362,455
ENGINEERING, SELLING, GENERAL
AND ADMINISTRATIVE EXPENSES 74,164 85,502 297,538 305,482
RESTRUCTURING CHARGES - 608 - 2,038
GOODWILL IMPAIRMENT - - - 7,651
TRADENAME IMPAIRMENT - 2,683 - 2,683
EQUITY IN EARNINGS OF UNCONSOLIDATED
AFFILIATES (1) 3,737 655 11,056 1,760
----- --- ------ -----
Income from Operations 30,703 5,814 97,347 46,361
INTEREST EXPENSE (5,135) (4,890) (20,293) (20,033)
OTHER INCOME 927 4,679 2,607 9,028
--- ----- ----- -----
Income before Income Taxes 26,495 5,603 79,661 35,356
PROVISION FOR INCOME TAXES 6,768 254 23,011 8,795
----- --- ------ -----
Net Income $19,727 $5,349 $56,650 $26,561
======= ====== ======= =======
EARNINGS PER SHARE
Basic $0.46 $0.12 $1.31 $0.61
Diluted 0.46 0.12 1.31 0.60
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 42,063 42,631 42,178 43,019
Diluted 42,302 42,896 42,263 43,200
(1) Beginning in
the third
quarter of
fiscal 2016,
the Company
classifies
its equity in
earnings of
unconsolidated
affiliates
within Income
from
Operations.
Prior to the
third quarter
of fiscal
2016, equity
in earnings
from
unconsolidated
affiliates is
classified in
Other Income.
See Adjusted
Segment
Information
tables for
prior year
equity in
earnings of
unconsolidated
affiliates
amounts.
Supplemental International Sales Information
(In Thousands)
-------------
Three Months Ended June Twelve Months Ended June
----------------------- ------------------------
FY2017 FY2016 FY2017 FY2016
------ ------ ------ ------
International sales based on
product shipment destination $99,910 $105,282 $540,088 $509,775
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets as of the End of June
(In Thousands)
-------------
CURRENT
ASSETS: FY2017 FY2016
------ ------
Cash and
Cash
Equivalents $61,707 $89,839
Accounts
Receivable,
Net 230,011 191,678
Inventories 374,879 386,065
Prepaid
Expenses
and
Other
Current
Assets 22,844 28,419
Total
Current
Assets 689,441 696,001
------- -------
OTHER ASSETS:
Goodwill 161,649 161,568
Investments 51,677 52,757
Other
Intangible
Assets,
Net 100,595 104,164
Deferred
Income
Tax
Asset 64,412 98,203
Other
Long-
Term
Assets,
Net 18,325 17,701
Total
Other
Assets 396,658 434,393
------- -------
PLANT AND EQUIPMENT:
At Cost 1,104,583 1,056,893
Less -
Accumulated
Depreciation 739,703 730,620
Plant and
Equipment,
Net 364,880 326,273
------- -------
$1,450,979 $1,456,667
========== ==========
CURRENT LIABILITIES:
Accounts
Payable $193,677 $181,152
Accrued
Liabilities 136,701 137,149
Total
Current
Liabilities 330,378 318,301
------- -------
OTHER LIABILITIES:
Accrued
Pension
Cost 242,908 310,378
Accrued
Employee
Benefits 21,897 23,483
Accrued
Postretirement
Health
Care
Obligation 35,132 38,441
Other
Long-
Term
Liabilities 39,537 51,099
Long-
Term
Debt 221,793 221,339
Total
Other
Liabilities 561,267 644,740
------- -------
SHAREHOLDERS' INVESTMENT:
Common
Stock 579 579
Additional
Paid-In
Capital 73,562 72,020
Retained
Earnings 1,107,033 1,074,437
Accumulated
Other
Comprehensive
Loss (300,026) (338,450)
Treasury
Stock,
at Cost (321,814) (314,960)
Total
Shareholders'
Investment 559,334 493,626
------- -------
$1,450,979 $1,456,667
========== ==========
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In Thousands)
-------------
Twelve Months Ended June
------------------------
CASH FLOWS
FROM
OPERATING
ACTIVITIES: FY2017 FY2016
------ ------
Net Income $56,650 $26,561
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation
and
Amortization 56,183 54,400
Stock
Compensation
Expense 4,923 5,109
Goodwill
and
Tradename
Impairment - 10,334
Pension
Settlement
Expense - 20,245
Loss on
Disposition
of Plant
and
Equipment 857 751
Provision
for
Deferred
Income
Taxes 10,316 2,194
Equity in
Earnings
of
Unconsolidated
Affiliates (11,056) (4,947)
Dividends
Received
from
Unconsolidated
Affiliates 9,067 6,119
Non-Cash
Restructuring
Charges - 3,903
Changes in Operating Assets and Liabilities:
Accounts
Receivable (41,655) 23,917
Inventories 11,204 (7,933)
Other
Current
Assets (1,759) 1,231
Accounts
Payable,
Accrued
Liabilities
and
Income
Taxes 8,152 (14,016)
Other, Net (12,538) (12,941)
Net Cash
Provided
by
Operating
Activities 90,344 114,927
------ -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital
Expenditures (83,141) (64,161)
Proceeds
Received
on
Disposition
of Plant
and
Equipment 1,027 1,359
Cash Paid
for
Acquisitions,
Net of
Cash
Acquired - (3,074)
Cash Paid
for
Investment
in
Unconsolidated
Affiliates - (19,100)
Proceeds
on Sale
of
Investment
in
Marketable
Securities 3,343 -
Other, Net - (860)
Net Cash
Used in
Investing
Activities (78,771) (85,836)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments
on Long-
Term Debt - (1,851)
Debt
Issuance
Costs - (932)
Treasury
Stock
Purchases (19,680) (37,441)
Payment of
Acquisition
Contingent
Liability (1,625) -
Stock
Option
Exercise
Proceeds 7,770 12,389
Payments
Related
to Shares
Withheld
for Taxes
for Stock
Compensation (1,750) (3,104)
Cash
Dividends
Paid (24,054) (23,617)
Net Cash
Used in
Financing
Activities (39,339) (54,556)
------- -------
EFFECT OF
EXCHANGE
RATE
CHANGES (366) (3,086)
---- ------
NET
DECREASE
IN CASH
AND CASH
EQUIVALENTS (28,132) (28,551)
CASH AND
CASH
EQUIVALENTS,
Beginning 89,839 118,390
CASH AND
CASH
EQUIVALENTS,
Ending $61,707 $89,839
======= =======
Liquidity and Capital Resources:
Net debt at July 2, 2017 was $161.4 million (total debt, excluding debt issuance costs, of $223.1 million less $61.7 million of cash), or $28.1 million higher than net debt of $133.3 million (total debt, excluding debt issuance costs, of $223.1 million less $89.8 million of cash) at July 3, 2016. Cash flows provided by operating activities for fiscal 2017 were $90.3 million compared to $114.9 million in fiscal 2016. The decrease in cash provided by operating activities was primarily related to changes in working capital, including higher accounts receivable due to timing of sales and collections year over year. During fiscal 2017, the Company repurchased approximately 996,000 shares on the open market at an average price of $19.77 per share. As of July 2, 2017, the Company had remaining authorization to repurchase up to approximately $30.5 million of common stock with an expiration date of June 29, 2018.
SUPPLEMENTAL SEGMENT INFORMATION
Engines Segment:
----------------
Three Months Ended June Twelve Months Ended June
----------------------- ------------------------
(In Thousands) FY2017 FY2016 FY2017 FY2016
------ ------ ------ ------
Net Sales $292,511 $315,046 $1,098,809 $1,142,815
Gross Profit as Reported $70,663 $64,049 $262,036 $252,833
Restructuring Charges - - - 464
Pension Settlement Expense - 11,135 - 11,135
Adjusted Gross Profit $70,663 $75,184 $262,036 $264,432
======= ======= ======== ========
Gross Profit % as Reported 24.2% 20.3% 23.8% 22.1%
Adjusted Gross Profit % 24.2% 23.9% 23.8% 23.1%
Segment Income as Reported $26,949 $8,449 $84,165 $60,645
Restructuring Charges - - - 1,354
Litigation Charges - - - 2,825
Pension Settlement Expense - 20,245 - 20,245
Adjusted Segment Income $26,949 $28,694 $84,165 $85,069
======= ======= ======= =======
Segment Income % as Reported 9.2% 2.7% 7.7% 5.3%
Adjusted Segment Income % 9.2% 9.1% 7.7% 7.4%
Fourth Quarter Highlights
-- Starting in fiscal 2017, we implemented new sales terms for engines
shipped to overseas customers, resulting in earlier revenue recognition
compared to the terms we used during previous fiscal years. The change
in terms caused units sold and net sales to be higher in the first half
of the fiscal year compared to the second half. As a result of the
change, units sold and net sales were lower in the fourth quarter of
fiscal 2017 by approximately 39,000 units and $7 million, respectively.
-- Using comparable sales terms, engine sales volumes decreased by 4% or
approximately 80,000 engines in the fourth quarter of fiscal 2017. The
decrease was due to channel partners taking a different approach to
merchandising and inventory stocking this season compounded by regional
pockets of suboptimal spring weather. Partially offsetting the decrease
were higher sales of Vanguard commercial engines.
-- Gross profit percentage increased due to manufacturing efficiency
improvements and favorable sales mix including a higher proportion of
commercial engine sales and margin lift on new products. The gross
profit percentage improved despite a 2% decrease in production units
compared to last year.
-- ESG&A decreased by $9.6 million (GAAP) and $0.4 million (adjusted)
compared to last year due to lower compensation cost, partially offset
by the investment in our ERP system upgrade.
Fiscal Year Summary
-- Net sales decreased by $44.0 million or 3.9% primarily due to lower
shipments of engines in North America due to channel partners taking a
different approach to merchandising and inventory stocking this season
compounded by regional pockets of suboptimal spring weather. Partially
offsetting the decrease were higher sales of Vanguard commercial
engines. Gross profit percentage increased by 170 basis points. Adjusted
gross profit percentage increased by 70 basis points despite lower
production of 5% year over year due to manufacturing efficiency
improvements and favorable sales mix including a higher proportion of
commercial engine sales and margin lift on new products. Engineering,
selling, general and administrative costs (ESG&A) decreased $9.2
million. Adjusted ESG&A (which only included adjustments in the prior
year) increased by $2.7 million, primarily due to $4.0 million of higher
spend related to our ERP upgrade. Equity in earnings of unconsolidated
affiliates increased by $4.2 million.
Products Segment:
-----------------
Three Months Ended June Twelve Months Ended June
----------------------- ------------------------
(In Thousands) FY2017 FY2016 FY2017 FY2016
------ ------ ------ ------
Net Sales $203,371 $216,271 $778,378 $772,154
Gross Profit as Reported $30,066 $29,530 $121,141 $110,944
Restructuring Charges - 2,471 - 7,693
Acquisition Related Charges - - - 250
Adjusted Gross Profit $30,066 $32,001 $121,141 $118,887
======= ======= ======== ========
Gross Profit % as Reported 14.8% 13.7% 15.6% 14.4%
Adjusted Gross Profit % 14.8% 14.8% 15.6% 15.4%
Segment Income (Loss) as
Reported $3,353 $(3,008) $12,530 $(9,775)
Restructuring Charges - 3,079 - 8,841
Goodwill Impairment - - - 7,651
Tradename Impairment - 2,683 - 2,683
Acquisition Related Charges - - - 276
Adjusted Segment Income $3,353 $2,754 $12,530 $9,676
====== ====== ======= ======
Segment Income (Loss) % as
Reported 1.6% -1.4% 1.6% -1.3%
Adjusted Segment Income % 1.6% 1.3% 1.6% 1.3%
Fourth Quarter Highlights
-- Net sales decreased by $12.9 million, primarily due to lower sales of
pressure washers resulting from lesser category merchandising support at
retail and cool spring temperatures. Partially offsetting the sales
decrease were higher sales of commercial lawn & garden and jobsite
equipment, generators, and service parts.
-- Gross profit percentage increased by 110 basis points. Adjusted gross
profit percentage was consistent with last year as manufacturing
efficiency improvements and favorable sales mix, including higher sales
of commercial products and service parts, were offset by 25% lower
manufacturing throughput.
-- ESG&A decreased by $1.8 million compared to last year due to lower
compensation cost.
Fiscal Year Summary
-- Net sales increased by $6.2 million or 0.8%, primarily due to higher
sales of commercial lawn & garden and jobsite equipment and generators,
which includes the higher shipments related to Hurricane Matthew.
Pressure washer sales decreased due to lesser category merchandising
support at retail and cool spring temperatures. Gross profit percentage
increased 120 basis points. Adjusted gross profit percentage improved by
20 basis points year over year due to favorable sales mix, which
included higher sales of commercial products. The profitability
improvement was achieved despite 8% lower production throughput. ESG&A
increased $1.3 million, primarily due to higher spend of $1.3 million
related to our ERP upgrade.
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 our business trends and to understand our performance. In addition, we may utilize non-GAAP financial measures as a guide in our 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 June
(In Thousands, except per share data)
------------------------------------
Three Months Ended June
-----------------------
FY2017 Adjustments FY2017 FY2016 Adjustments(1) FY2016
Reported Adjusted Reported Adjusted
-------- -------- -------- --------
Gross Profit
Engines $70,663 $ - $70,663 $64,049 $11,135 $75,184
Products 30,066 - 30,066 29,530 2,471 32,001
Inter-Segment Eliminations 401 - 401 373 - 373
--- --- --- --- --- ---
Total $101,130 $ - $101,130 $93,952 $13,606 $107,558
Engineering, Selling, General
and Administrative Expenses
Engines $45,885 $ - $45,885 $55,443 $9,110 $46,333
Products 28,279 - 28,279 30,059 - 30,059
------ --- ------ ---
Total $74,164 $ - $74,164 $85,502 $9,110 $76,392
Segment Income (Loss) (2)
Engines $26,949 $ - $26,949 $8,449 $20,245 $28,694
Products 3,353 - 3,353 (3,008) 5,762 2,754
Inter-Segment Eliminations 401 - 401 373 - 373
Total $30,703 $ - $30,703 $5,814 $26,007 $31,821
Reconciliation from Segment
Income (Loss) to Income before
Income Taxes:
Equity in Earnings of
Unconsolidated Affiliates (2) - - - - - -
Income from Operations $30,703 $ - $30,703 $5,814 $26,007 $31,821
Income before Income Taxes 26,495 - 26,495 5,603 22,664 28,267
Provision for Income Taxes 6,768 - 6,768 254 7,905 8,159
----- --- ----- --- ----- -----
Net Income $19,727 $ - $19,727 $5,349 $14,759 $20,108
Earnings Per Share
Basic $0.46 $ - $0.46 $0.12 $0.34 $0.46
Diluted 0.46 - 0.46 0.12 0.34 0.46
(1) For the fourth
quarter of
fiscal 2016,
includes pre-
tax
restructuring
charges of
$3,079
($2,001 after
tax), pre-
tax pension
settlement
charges of
$20,245
($13,160
after tax),
pre-tax
tradename
impairment
charge of
$2,683
($1,771 after
tax), and a
pre-tax gain
on the sale
of an
investment in
marketable
securities of
$3,343
($2,173 after
tax).
(2) For all
periods
presented,
equity in
earnings of
unconsolidated
affiliates is
included in
segment
income
(loss).
Beginning
with the
third quarter
of fiscal
2016, the
Company
classifies
its equity in
earnings of
unconsolidated
affiliates
within income
from
operations.
Prior to the
third quarter
of fiscal
2016, equity
in earnings
of
unconsolidated
affiliates is
classified in
other income.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Adjusted Segment Information for the Twelve Month Periods Ended June
(In Thousands, except per share data)
------------------------------------
Twelve Months Ended June
------------------------
FY2017 Adjustments FY2017 FY2016 Adjustments(1) FY2016
Reported Adjusted Reported Adjusted
-------- -------- -------- --------
Gross Profit
Engines $262,036 $ - $262,036 $252,833 $11,599 $264,432
Products 121,141 - 121,141 110,944 7,943 118,887
Inter-Segment Eliminations 652 - 652 (1,322) - (1,322)
--- --- --- ------ --- ------
Total $383,829 $ - $383,829 $362,455 $19,542 $381,997
Engineering, Selling, General
and Administrative Expenses
Engines $184,496 $ - $184,496 $193,716 $11,935 $181,781
Products 113,042 - 113,042 111,766 26 111,740
------- --- ------- ---
Total $297,538 $ - $297,538 $305,482 $11,961 $293,521
Segment Income (Loss) (2)
Engines $84,165 $ - $84,165 $60,645 $24,424 $85,069
Products 12,530 - 12,530 (9,775) 19,451 9,676
Inter-Segment Eliminations 652 - 652 (1,322) - (1,322)
Total $97,347 $ - $97,347 $49,548 $43,875 $93,423
Reconciliation from Segment
Income (Loss) to Income before
Income Taxes:
Equity in Earnings of
Unconsolidated Affiliates (2) - - - 3,187 - 3,187
Income from Operations $97,347 $ - $97,347 $46,361 $43,875 $90,236
Income before Income Taxes 79,661 - 79,661 35,356 40,532 75,888
Provision for Income Taxes 23,011 - 23,011 8,795 12,104 20,899
------ --- ------ ----- ------ ------
Net Income $56,650 $ - $56,650 $26,561 $28,428 $54,989
Earnings Per Share
Basic $1.31 $ - $1.31 $0.61 $0.64 $1.25
Diluted 1.31 - 1.31 0.60 0.65 1.25
(1) For the twelve
months of
fiscal 2016,
includes pre-
tax
restructuring
charges of
$10,195
($6,672 after
tax),
goodwill
impairment
charge of
$7,651 which
is not
deductible
for income
tax purposes,
pre-tax
tradename
impairment
charge of
$2,683
($1,771 after
tax), pre-
tax
acquisition-
related
charges of
$276 ($180
after tax),
pre-tax
litigation
charges of
$2,825
($1,836 after
tax), pre-
tax pension
settlement
charges of
$20,245
($13,160
after tax),
and a pre-
tax gain on
the sale of
an investment
in marketable
securities of
$3,343
($2,842 after
tax).
(2) For all
periods
presented,
equity in
earnings of
unconsolidated
affiliates is
included in
segment
income
(loss).
Beginning
with the
third quarter
of fiscal
2016, the
Company
classifies
its equity in
earnings of
unconsolidated
affiliates
within income
from
operations.
Prior to the
third quarter
of fiscal
2016, equity
in earnings
of
unconsolidated
affiliates is
classified in
other income.
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SOURCE Briggs & Stratton Corporation
