Briggs & Stratton Corporation Reports Fiscal 2018 Fourth Quarter And Full-Year Results
MILWAUKEE, Aug. 15, 2018 /PRNewswire/ -- Briggs & Stratton Corporation (NYSE: BGG) today announced financial results for its fiscal fourth quarter and year ended July 1, 2018.
For the fiscal 2018 fourth quarter:
-- Fiscal fourth quarter net sales were $502 million, an increase of $28
million or 5.8% from $474 million for the prior year. Continued high
growth in commercial turf and lawn care, commercial job site, commercial
engines and generators was offset by year-over-year softness in
residential lawn and garden sales.
-- Quarterly GAAP gross profit margin of 21.6% and adjusted gross profit
margin of 22.0% increased from gross profit margin of 21.3% last year
driven by favorable sales mix due to higher sales of commercial
offerings. Manufacturing efficiency improvements and higher pricing
offset material and freight cost increases.
-- Fourth quarter GAAP net loss of $11.8 million included business
optimization charges, pension settlement charges, senior note repurchase
premiums, and the impact of implementing tax reform. Excluding these
items, adjusted net income was $20.1 million, or $0.47 per diluted
share, which was slightly higher than $0.46 per diluted share for the
fourth quarter of fiscal 2017.
For the fiscal 2018 full year:
-- Fiscal 2018 net sales were $1.88 billion, up $95.2 million or 5.3% from
$1.79 billion for fiscal 2017. The company set a new record for sales of
commercial products, amounting to $505 million, an increase of 16%
compared to last year.
-- Full year GAAP gross profit margin of 21.2% was down from 21.5% for
fiscal 2017. Adjusted gross profit margin of 21.5% was comparable with
last year. Products adjusted segment operating margins of 3.3% improved
by 170 basis points from last year.
-- Full year GAAP net loss of $11.3 million, or $0.28 per diluted share,
included business optimization charges, pension settlement charges,
senior note repurchase premiums, and the impact of implementing tax
reform. Excluding these items, adjusted net income was $55.8 million, or
$1.29 per diluted share.
Capital allocation update:
-- Capital expenditures of $103 million were elevated from prior years to
fund the business optimization program.
-- The company paid $24.0 million in cash dividends to shareholders during
fiscal 2018.
-- The company repurchased $10.3 million of common stock under the
company's share repurchase program during fiscal 2018.
-- The capital structure was strengthened by making a $30 million voluntary
pension plan contribution and repurchasing approximately $22.3 million
of the company's high yield senior notes.
"Ongoing robust shipments of commercial products sustained growth for the quarter and year, and demonstrated the effectiveness of our diversification strategy," stated Todd J. Teske, Chairman, President and Chief Executive Officer. "We are very pleased with the growth in commercial job site products, supported by new customers and channels. Placement of our Vanguard commercial engines powering more applications remains solidly on track. Shipments of Ferris commercial mowers finished the quarter on an upward trend, as weather conditions improved. This growth offset weakness in residential sales, which resulted from a severely delayed mowing season from a prolonged wet and cold spring across much of North America, compounded by inventory reductions among mass retailers in Europe and the U.S. being taken in anticipation of brand transitions. While these issues presented a challenge to achieving our planned sales this season, we are confident in our ability to maintain our market-leading placement in residential engines next season, based on discussions with channel partners. There has been good progress to date with line reviews as consumers continue to recognize the Briggs & Stratton brand for its innovation and reliability. We are well positioned to benefit from recovery to a more normalized environment."
Teske added, "I am pleased with the progress made in fiscal 2018 to position the company for improving performance. In addition to the contributions from the acquisition of assets of Ground Logic and recently Hurricane Power, we are on track with our business optimization initiatives to deliver $30-$35 million in annual profit improvement by 2021. We enter fiscal 2019 ramping up production in our new Ferris mower facility, which provides needed capacity and greater manufacturing efficiency. In addition, we will be increasing domestic production of Vanguard commercial engines, with the on-shoring of engines from overseas and strong customer demand for our expanded line of horizontal-shaft engines. Our upgraded ERP system successfully went live at the beginning of July, and we expect to begin accruing the benefits from a more streamlined platform. Taken together, we continue to expect to drive growth, efficiency and innovation as more people depend on Briggs & Stratton for power to get the job done."
Fiscal 2019 Outlook:
-- Net sales are expected to be in a range of $1.93 billion to $1.99
billion for growth of approximately 2.5% to 5.8% (5.5% to 9.0% growth
excluding storm-related sales of approximately $55 million for fiscal
2018)
-- Markets for commercial products are expected to grow mid-single
digits and we anticipate continued market share gains in the
categories of commercial job site, commercial engines and commercial
turf and lawn care, in addition to the benefit of the recent asset
acquisitions.
-- Residential sales, excluding fiscal 2018 storm volume, are expected
to grow approximately 3% to 5%, which includes market improvement on
more normal spring weather andsome normalization of channel
inventory levels in the U.S. and Europe.
-- We expect to hold our market-leading residential engine placement
for the upcoming lawn and garden season.
-- Net income is expected to be in a range of $58 million to $66 million,
or $1.35 to $1.55 per diluted share, prior to the impact of costs
related to our business optimization program, acquisition costs or the
benefit of any share repurchases. This contemplates year-over-year
midpoint growth of approximately 11%.
-- Operating margins before business optimization costs and acquisition
costs are expected to be approximately 5.3% to 5.5%. Compared to fiscal
2018, operating margins are expected to improve due to favorable sales
mix from growth of commercial products and business optimization program
savings of $6 million to $8 million. Higher material and freight costs
are expected to be offset by pricing, efficiency improvements and
product cost improvements.
-- Interest expense is expected to be approximately $24.5 million and other
income to be approximately $1 million, which includes approximately $2
million of pension expense that would have previously been reported in
operating income.
-- Tax rate before business optimization costs and acquisition costs are
expected to be in a range of 24% to 26%, which includes the benefit of a
full fiscal year under tax reform.
-- The company anticipates capital expenditures to be approximately $65
million.
-- Pre-tax charges associated with the business optimization program are
expected to be approximately $27 million to $32 million in fiscal 2019.
Total program cost estimate remains unchanged at $50 million to $55
million.
Conference Call Information:
The company will host a conference call tomorrow at 10:00 AM (ET) to review the fourth 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 5254579. 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; 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 June
----------------------------------------------------------------
(In Thousands, except per share data)
Three Months Ended June Twelve Months Ended June
----------------------- ------------------------
FY2018 FY2017 FY2018 FY2017
------ ------ ------ ------
NET SALES $501,694 $474,105 $1,881,294 $1,786,103
COST OF GOODS SOLD 393,017 372,975 1,483,212 1,402,274
Gross Profit 108,677 101,130 398,082 383,829
ENGINEERING, SELLING, GENERAL
AND ADMINISTRATIVE EXPENSES 129,655 74,164 374,145 297,538
EQUITY IN EARNINGS OF UNCONSOLIDATED
AFFILIATES 2,819 3,737 9,257 11,056
----- ----- ----- ------
Income (Loss) from Operations (18,159) 30,703 33,194 97,347
INTEREST EXPENSE (6,153) (5,135) (25,320) (20,293)
OTHER INCOME 745 927 3,227 2,607
--- --- ----- -----
Income (Loss) before Income Taxes (23,567) 26,495 11,101 79,661
PROVISION (BENEFIT) FOR INCOME TAXES (11,742) 6,768 22,421 23,011
------- ----- ------ ------
Net Income (Loss) $(11,825) $19,727 $(11,320) $56,650
======== ======= ======== =======
EARNINGS (LOSS) PER SHARE
Basic $(0.29) $0.46 $(0.28) $1.31
Diluted $(0.29) $0.46 $(0.28) $1.31
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 41,947 42,063 42,068 42,178
Diluted 41,947 42,302 42,068 42,263
Supplemental International Sales Information
--------------------------------------------
(In Thousands)
Three Months Ended June Twelve Months Ended June
----------------------- ------------------------
FY2018 FY2017 FY2018 FY2017
------ ------ ------ ------
International sales based on
product shipment destination $102,069 $99,910 $534,607 $540,088
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets as of the End of June
-------------------------------------------------
(In Thousands)
CURRENT ASSETS: FY2018 FY2017
------ ------
Cash and Cash Equivalents $44,923 $61,707
Accounts Receivable, Net 182,801 230,011
Inventories 411,831 374,879
Prepaid Expenses and Other
Current Assets 39,651 22,844
Total Current Assets 679,206 689,441
------- -------
OTHER ASSETS:
Goodwill 163,200 161,649
Investments 50,960 51,677
Other Intangible Assets, Net 95,864 100,595
Deferred Income Tax Asset 12,149 64,412
Other Long-Term Assets, Net 20,507 18,325
Total Other Assets 342,680 396,658
------- -------
PLANT AND EQUIPMENT:
At Cost 1,175,165 1,104,583
Less -Accumulated
Depreciation 753,085 739,703
Plant and Equipment, Net 422,080 364,880
------- -------
$1,443,966 $1,450,979
========== ==========
CURRENT LIABILITIES:
Accounts Payable $204,173 $193,677
Short-Term Debt 48,036 -
Accrued Liabilities 131,897 136,701
Total Current Liabilities 384,106 330,378
------- -------
OTHER LIABILITIES:
Accrued Pension Cost 189,872 242,908
Accrued Employee Benefits 20,196 21,897
Accrued Postretirement Health
Care Obligation 30,186 35,132
Other Long-Term Liabilities 49,228 39,537
Long-Term Debt 199,954 221,793
Total Other Liabilities 489,436 561,267
------- -------
SHAREHOLDERS' INVESTMENT:
Common Stock 579 579
Additional Paid-In Capital 76,408 73,562
Retained Earnings 1,071,480 1,107,033
Accumulated Other
Comprehensive Loss (252,272) (300,026)
Treasury Stock, at Cost (325,771) (321,814)
Total Shareholders' Investment 570,424 559,334
------- -------
$1,443,966 $1,450,979
========== ==========
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
-------------------------------------
(In Thousands)
CASH FLOWS FROM OPERATING
ACTIVITIES: FY2018 FY2017
------ ------
Net Income (Loss) $(11,320) $56,650
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating
Activities:
Depreciation and Amortization 58,258 56,183
Stock Compensation Expense 6,675 4,923
Loss on Disposition of Plant
and Equipment 1,915 857
Provision for Deferred Income
Taxes 35,351 10,316
Equity in Earnings of
Unconsolidated Affiliates (12,230) (11,056)
Dividends Received from
Unconsolidated Affiliates 10,911 9,067
Pension Settlement 41,157 -
Pension Cash Contributions (30,000) -
Changes in Operating Assets and Liabilities:
Accounts Receivable 47,180 (41,655)
Inventories (37,446) 11,204
Other Current Assets (4,759) (1,759)
Accounts Payable, Accrued
Liabilities and Income Taxes (10,345) 8,152
Other, Net (2,624) (12,538)
Net Cash Provided by
Operating Activities 92,723 90,344
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (103,203) (83,141)
Proceeds Received on
Disposition of Plant and
Equipment 339 1,027
Cash Paid for Acquisitions,
Net of Cash Acquired (1,800) -
Proceeds on Sale of
Investment in Marketable
Securities - 3,343
Increase to Restricted Cash (4,295) -
Net Cash Used in Investing
Activities (108,959) (78,771)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings on Revolver 48,036 -
Long Term Note Payable 7,685 -
Debt Issuance Costs (1,154) -
Treasury Stock Purchases (10,312) (19,680)
Repayments of Long Term Debt (22,261) -
Payment of Acquisition
Contingent Liability - (1,625)
Stock Option Exercise
Proceeds and Tax Benefits 3,772 7,770
Payments Related to Shares
Withheld for Taxes for Stock
Compensation (1,396) (1,750)
Cash Dividends Paid (23,951) (24,054)
Net Cash Provided by (Used
in) Financing Activities 419 (39,339)
--- -------
EFFECT OF EXCHANGE RATE
CHANGES (967) (366)
---- ----
NET DECREASE IN CASH AND CASH
EQUIVALENTS (16,784) (28,132)
CASH AND CASH EQUIVALENTS,
Beginning 61,707 89,839
CASH AND CASH EQUIVALENTS,
Ending $44,923 $61,707
======= =======
SUPPLEMENTAL SEGMENT INFORMATION
Engines Segment:
----------------
Three Months Ended June Twelve Months Ended June
----------------------- ------------------------
(In Thousands) FY2018 FY2017 FY2018 FY2017
------ ------ ------ ------
Net Sales $275,775 $292,511 $1,066,318 $1,098,809
Gross Profit as Reported $69,217 $70,663 $252,645 $262,036
Business Optimization 822 - 2,854 -
Adjusted Gross Profit $70,039 $70,663 $255,499 $262,036
======= ======= ======== ========
Gross Profit % as Reported 25.1% 24.2% 23.7% 23.8%
Adjusted Gross Profit % 25.4% 24.2% 24.0% 23.8%
Segment Income (Loss) as Reported $(25,912) $26,949 $10,678 $84,165
Business Optimization 46,671 - 53,913 -
Adjusted Segment Income $20,759 $26,949 $64,591 $84,165
======= ======= ======= =======
Segment Income (Loss) % as Reported -9.4% 9.2% 1.0% 7.7%
Adjusted Segment Income % 7.5% 9.2% 6.1% 7.7%
Fourth Quarter Highlights
-- Engine sales unit volumes decreased by 17%, or approximately 325,000
engines, in the fourth quarter of fiscal 2018 compared to the same
period last year. Sales were lower due to certain channel partners
decreasing their orders due to a delayed start of spring weather and to
further reduce channel inventory in advance of anticipated brand
transitions next season. Sales into Europe were also lower due to a
delayed start of spring weather and certain channel partners reducing
orders to lower channel inventory levels in advance of new emissions
requirements applicable to engines beginning in calendar 2019. Partially
offsetting the decrease were higher sales of Vanguard commercial engines
and service parts as well as higher pricing year-over-year.
-- GAAP gross profit percentage compared to last year increased 90 basis
points and adjusted gross profit margins were higher by 120 basis points
due to favorable sales mix, including a higher proportion of commercial
engine sales and service parts. Manufacturing efficiencies and higher
pricing offset a 16% decrease in manufacturing volume and higher
material and freight costs.
-- GAAP engineering, selling, general and administrative (ESG&A) compared
to last year increased by $51.0 million primarily due to the $41.2
million non-cash fourth quarter pension settlement charge. Adjusted
ESG&A increased $5.5 million compared to last year primarily due to the
timing of incentive compensation expense, higher marketing costs and the
investment in our ERP system upgrade.
Fiscal Year Summary
-- Net sales decreased by $32.5 million or 3.0% primarily due to declines
in residential engine sales in North America and Europe due to the
unusual spring weather and reductions in channel inventory. Partially
offsetting the decrease were higher sales of Vanguard commercial engines
and higher pricing. GAAP gross profit percentage decreased by 10 basis
points. Adjusted gross profit percentage increased by 20 basis points
compared to last year due to manufacturing efficiency improvements. The
improvement in gross margins was offset by 8% lower production volumes.
Efficiency gains and higher pricing offset material and freight cost
increases. ESG&A costs increased $62.7 million. Adjusted ESG&A increased
by $14.6 million, primarily due to $3 million of higher spending related
to our ERP upgrade, higher marketing costs, and funding growth
initiatives.
Products Segment:
-----------------
Three Months Ended June Twelve Months Ended June
----------------------- ------------------------
(In Thousands) FY2018 FY2017 FY2018 FY2017
------ ------ ------ ------
Net Sales $250,162 $203,371 $904,007 $778,378
Gross Profit as Reported $39,363 $30,066 $144,933 $121,141
Business Optimization 1,281 - 3,775 -
Adjusted Gross Profit $40,644 $30,066 $148,708 $121,141
======= ======= ======== ========
Gross Profit % as Reported 15.7% 14.8% 16.0% 15.6%
Adjusted Gross Profit % 16.2% 14.8% 16.4% 15.6%
Segment Income as Reported $7,656 $3,353 $22,012 $12,530
Business Optimization 2,855 - 8,113 -
Adjusted Segment Income $10,511 $3,353 $30,125 $12,530
======= ====== ======= =======
Segment Income % as Reported 3.1% 1.6% 2.4% 1.6%
Adjusted Segment Income % 4.2% 1.6% 3.3% 1.6%
Fourth Quarter Highlights
-- Net sales increased by $46.8 million, primarily due to higher sales of
commercial mowers and job site products as well as higher sales of
generators and pressure washers.
-- The gross profit percentage increased by 90 basis points compared to
last year. The adjusted gross profit percentage increased 140 basis
points compared to last year primarily due to favorable sales mix on
proportionately higher sales of commercial products and the benefit of a
5.5% increase in production throughput. Higher pricing offset higher
material costs. Higher freight costs offset a portion of the margin
improvement.
-- GAAP ESG&A increased by $4.5 million compared to last year and adjusted
ESG&A increased by $2.9 million due to higher commissions expense on
increased sales volume and higher costs associated with investments to
upgrade our ERP system and growing commercial offerings.
Fiscal Year Summary
-- Net sales increased by $125.6 million or 16%, primarily due to higher
sales of commercial lawn and garden and job site equipment and
generators. The active storm season this past year resulted in
approximately $55 million of storm generator sales, or an increase of
$40 million from storm sales in fiscal 2017. Gross profit percentage
increased by 40 basis points compared to last year. Adjusted gross
profit percentage improved by 80 basis points year over year due to the
contribution margin from hurricane-related sales, favorable sales mix
from proportionately higher sales of commercial products and higher
pricing. The margin improvement was partially offset by a reduction in
manufacturing throughput of approximately 3.5% and higher freight 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 June
-------------------------------------------------------------------
(In Thousands, except per share data)
Three Months Ended June
-----------------------
FY2018 Adjustments(1) FY2018 FY2017 Adjustments FY2017
Reported Adjusted Reported Adjusted
-------- -------- -------- --------
Gross Profit
Engines $69,217 $822 $70,039 $70,663 $ - $70,663
Products 39,363 1,281 40,644 30,066 - 30,066
Inter-Segment Eliminations 97 - 97 401 - 401
--- --- --- --- --- ---
Total $108,677 $2,103 $110,780 $101,130 $ - $101,130
Engineering, Selling, General and
Administrative Expenses
Engines $96,861 $45,515 $51,346 $45,885 $ - $45,885
Products 32,794 1,573 31,221 28,279 - 28,279
------ ----- ------ ---
Total $129,655 $47,088 $82,567 $74,164 $ - $74,164
Equity in Earnings of
Unconsolidated Affiliates
Engines $1,732 $334 $2,066 $2,171 $ - $2,171
Products 1,087 - 1,087 1,566 - 1,566
-----
Total $2,819 $334 $3,153 $3,737 $ - $3,737
Segment Income (Loss)
Engines $(25,912) $46,671 $20,759 $26,949 $ - $26,949
Products 7,656 2,855 10,511 3,353 - 3,353
Inter-Segment Eliminations 97 - 97 401 - 401
Total $(18,159) $49,526 $31,367 $30,703 $ - $30,703
Interest Expense $(6,153) $211 (5,942) $(5,135) $ - $(5,135)
Income (Loss) before Income Taxes (23,567) 49,737 26,170 26,495 - 26,495
Provision (Benefit) for Income
Taxes (11,742) 17,779 6,037 6,768 - 6,768
------- ------ ----- ----- --- -----
Net Income (Loss) $(11,825) $31,957 $20,132 $19,727 $ - $19,727
Earnings (Loss) Per Share
Basic $(0.29) $0.76 $0.47 $0.46 $ - $0.46
Diluted (0.29) 0.76 0.47 0.46 - 0.46
(1) For the fourth
quarter of
fiscal 2018,
business
optimization
expenses
include $1.0
million ($0.6
million after
tax) of non-
cash charges
related
primarily to
plant &
equipment
impairment
and
accelerated
depreciation,
and $7.3
million ($4.6
million after
tax) of cash
charges
related
primarily to
employee
termination
benefits,
lease
terminations,
professional
services and
plant
rearrangement
activities.
ESG&A
includes
$41.2 million
($29.6
million after
tax) of non-
cash charges
related to
the pension
settlement.
Tax expense
also includes
a $3.1
million
benefit
associated
with the Tax
Cuts and Jobs
Act of 2017
comprised of
$3.9 million
to revalue
deferred tax
assets and
liabilities
offset by a
$0.8 million
charge to
record the
impact of the
inclusion of
foreign
earnings. The
company
recognized in
interest
expense $0.2
million ($0.2
million after
tax) for
premiums paid
to repurchase
senior notes
after
receiving
unsolicited
offers from
bondholders.
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
------------------------
FY2018 Adjustments(1) FY2018 FY2017 Adjustments FY2017
Reported Adjusted Reported Adjusted
-------- -------- -------- --------
Gross Profit
Engines $252,645 $2,854 $255,499 $262,036 $ - $262,036
Products 144,933 3,775 148,708 121,141 - 121,141
Inter-Segment Eliminations 504 - 504 652 - 652
--- --- --- --- --- ---
Total $398,082 $6,628 $404,710 $383,829 $ - $383,829
Engineering, Selling, General and
Administrative Expenses
Engines $247,201 $48,096 $199,105 $184,496 $ - $184,496
Products 126,944 4,339 122,605 113,042 - 113,042
------- ----- ------- ---
Total $374,145 $52,435 $321,711 $297,538 $ - $297,538
Equity in Earnings of
Unconsolidated Affiliates
Engines $5,234 $2,964 $8,198 $6,625 $ - $6,625
Products 4,023 - 4,023 4,431 - 4,431
-----
Total $9,257 $2,964 $12,221 $11,056 $ - $11,056
Segment Income
Engines $10,678 $53,913 $64,591 $84,165 $ - $84,165
Products 22,012 8,113 30,125 12,530 - 12,530
Inter-Segment Eliminations 504 - 504 652 - 652
Total $33,194 $62,026 $95,220 $97,347 $ - $97,347
Interest Expense $(25,320) $2,228 $(23,092) $(20,293) $ - $(20,293)
Income before Income Taxes 11,101 64,254 75,355 79,661 - 79,661
Provision for Income Taxes 22,421 (2,836) 19,585 23,011 - 23,011
------ ------ ------ ------ --- ------
Net Income (Loss) $(11,320) $67,090 $55,770 $56,650 $ - $56,650
Earnings (Loss) Per Share
Basic $(0.28) $1.57 $1.29 $1.31 $ - $1.31
Diluted (0.28) 1.57 1.29 1.31 - 1.31
(1) For the twelve
months of
fiscal 2018,
business
optimization
expenses
include $4.8
million ($3.4
million after
tax) of non-
cash charges
related
primarily to
plant &
equipment
impairment
and
accelerated
depreciation,
and $16.1
million
($11.4
million after
tax) of cash
charges
related
primarily to
employee
termination
benefits,
lease
terminations,
professional
services and
plant
rearrangement
activities.
ESG&A
includes
$41.2 million
($29.6
million after
tax) of non-
cash charges
related to
the pension
settlement.
Tax expense
also includes
a $21.1
million
charge
associated
with the Tax
Cuts and Jobs
Act of 2017
comprised of
$13.8 million
to revalue
deferred tax
assets and
liabilities
and $7.3
million to
record the
impact of the
inclusion of
foreign
earnings.
The company
recognized in
interest
expense $2.2
million ($1.6
million after
tax) for
premiums paid
to repurchase
senior notes
after
receiving
unsolicited
offers from
bondholders.
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SOURCE Briggs & Stratton Corporation
