Briggs & Stratton Earnings 2020-03-29

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

bgg-20200329

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

FORM 10-Q

______________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 1-1370

________________________________________________

BRIGGS & STRATTON CORPORATION

(Exact name of registrant as specified in its charter)

____________________________________________________


Wisconsin						39-0182330
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

12301 West Wirth Street, Wauwatosa, Wisconsin 53222

(Address of Principal Executive Offices) (Zip Code)

(414) 259-5333

(Registrant’s telephone number, including area code)

___________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (par value $0.01 per share)	BGG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:


Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


Class						Outstanding at April 24, 2020
COMMON STOCK, par value $0.01 per share						42,453,535 Shares

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

INDEX


		Page No.

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets – March 29, 20 20 and June 30, 2019	3

	Condensed Consolidated Statements of Operations – Three and Nine Months Ended March 29, 20 20 and March 3 1, 2019	5

	Condensed Consolidated Statements of Comprehensive Loss – Three and Nine Months Ended March 29, 20 20 and March 3 1 , 2019	6

	Condensed Consolidated Statements of Shareholders' Investment – Three and Nine Months Ended March 29, 20 20 and March 3 1 , 20 19	7

	Condensed Consolidated Statements of Cash Flows – Nine Months Ended March 29, 20 20 and March 31, 2019	9

	Notes to Condensed Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53

Item 4.	Controls and Procedures	53

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	54

Item 1A.	Risk Factors	54

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57

Item 6.	Exhibits	58

Signatures			59

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

ASSETS



	March 29, 2020		June 30, 2019
CURRENT ASSETS:
Cash and Cash Equivalents	$	44,413	$	29,569
Accounts Receivable, Net	236,341		198,498
Inventories -
Finished Products	358,011		344,277
Work in Process	153,993		145,182
Raw Materials	14,510		12,547
Total Inventories	526,514		502,006


Prepaid Expenses and Other Current Assets	36,381		32,404
Total Current Assets	843,649		762,477
OTHER ASSETS:
Goodwill	100,360		169,682
Investments	30,554		49,641

Other Intangible Assets, Net	95,064		96,738
Long-Term Deferred Income Tax Asset	4,364		43,172
Other Long-Term Assets, Net	21,149		18,676
Right of Use Asset	103,924		—
Total Other Assets	355,415		377,909
PLANT AND EQUIPMENT:
Cost	1,238,822		1,220,339
Less - Accumulated Depreciation	848,488		809,294
Total Plant and Equipment, Net	390,334		411,045
TOTAL ASSETS	$	1,589,398	$	1,551,431

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(In thousands, except per share data)

(Unaudited)

LIABILITIES & SHAREHOLDERS’ INVESTMENT



	March 29, 2020		June 30, 2019
CURRENT LIABILITIES:
Accounts Payable	$	192,114	$	287,620
Short-Term Debt	597,473		160,540
Accrued Liabilities	128,987		129,585
Short-Term Lease Obligations	11,710		—
Total Current Liabilities	930,284		577,745
OTHER LIABILITIES:
Accrued Pension Cost	209,318		221,033
Accrued Employee Benefits	21,110		21,311
Accrued Postretirement Health Care Obligation	22,035		25,929

Accrued Warranty	19,406		19,572
Other Long-Term Liabilities	57,838		44,152
Long-Term Lease Obligations	90,067		—
Long-Term Debt	—		194,969
Total Other Liabilities	419,774		526,966
SHAREHOLDERS’ INVESTMENT:
Common Stock - Authorized 120,000 shares, $.01 par value, issued 57,854 shares	579		579
Additional Paid-In Capital	72,341		78,902
Retained Earnings	796,426		993,873
Accumulated Other Comprehensive Loss	(305,891)		(292,550)
Treasury Stock at cost, 15,399 and 15,796 shares, respectively	(324,115)		(334,084)
Total Shareholders’ Investment	239,340		446,720
TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT	$	1,589,398	$	1,551,431

The accompanying notes are an integral part of these statements.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 29, 2020		March 31, 2019		March 29, 2020		March 31, 2019
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 (LOSS) OF UNCONSOLIDATED AFFILIATES	(2,746)		(205)		(537)		5,786
Income (Loss) from Operations	(81,659)		17,261		(126,040)		(28,534)
INTEREST EXPENSE	(9,521)		(9,088)		(25,390)		(21,731)
OTHER INCOME (EXPENSE), Net	(1,773)		953		(2,904)		391
Income (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 INCOME (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

DIVIDENDS PER SHARE	$	—	$	0.14	$	0.10	$	0.42

The accompanying notes are an integral part of these statements.

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 29, 2020		March 31, 2019		March 29, 2020		March 31, 2019
Net Income (Loss)	$	(144,606)	$	8,005	$	(193,587)	$	(35,543)
Other Comprehensive Income (Loss):
Cumulative Translation Adjustments	(12,332)		1,196		(14,589)		(2,230)
Unrealized Loss on Derivative Instruments, Net of Tax	(8,183)		(4,157)		(9,571)		(8,635)
Unrecognized Pension & Postretirement Obligation, Net of Tax	3,607		2,708		10,819		8,116

Other Comprehensive Loss	(16,908)		(253)		(13,341)		(2,749)
Total Comprehensive Income (Loss)	$	(161,514)	$	7,752	$	(206,928)	$	(38,292)

The accompanying notes are an integral part of these statements.

Table of Contents

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT

(In thousands)

(Unaudited)


FOR THE THREE MONTHS ENDED MARCH 29, 2020	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders' Investment
BALANCES, DECEMBER 29, 2019	$	579	$	70,901	$	940,616	$	(288,983)	$	(323,583)	399,530
Net Loss	—		—		(144,606)		—		—		(144,606)
Total Other Comprehensive Loss, Net of Tax	—		—		—		(16,908)		—		(16,908)

Stock Option Activity, Net of Tax	—		345		—		—		—		345
Restricted Stock	—		474		—		—		(532)		(58)
Amortization of Unearned Compensation	—		599		—		—		—		599

Deferred Stock - Directors	—		22		416		—		—		438

BALANCES, MARCH 29, 2020	$	579	$	72,341	$	796,426	$	(305,891)	$	(324,115)	$	239,340


FOR THE THREE MONTHS ENDED MARCH 31, 2019	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders' Investment
BALANCES, DECEMBER 30, 2018	$	579	$	77,310	$	1,016,205	$	(254,768)	$	(333,907)	505,419
Net Income	—		—		8,005		—		—		8,005
Total Other Comprehensive Loss, Net of Tax	—		—		—		(253)		—		(253)
Cash Dividends Declared ($0.14 per share)	—		—		(5,895)		—		—		(5,895)

Restricted Stock	—		—		—		—		(241)		(241)
Amortization of Unearned Compensation	—		490		—		—		—		490

Deferred Stock - Directors	—		(277)		(50)		—		853		526
Treasury Stock Purchases	—		—		—		—		(508)		(508)
BALANCES, MARCH 31, 2019	$	579	$	77,523	$	1,018,265	$	(255,021)	$	(333,803)	$	507,543

The accompanying notes are an integral part of these statements.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT

(In thousands)

(Unaudited)


FOR THE NINE MONTHS ENDED MARCH 29, 2020	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders' Investment
BALANCES, JUNE 30, 2019	$	579	$	78,902	$	993,873	$	(292,550)	$	(334,084)	446,720
Net Loss	—		—		(193,587)		—		—		(193,587)
Total Other Comprehensive Loss, Net of Tax	—		—		—		(13,341)		—		(13,341)
Cash Dividends Declared ($0.10 per share)	—		—		(4,248)		—		—		(4,248)
Stock Option Activity, Net of Tax	—		1,103		—		—		—		1,103
Restricted Stock	—		(9,561)		—		—		9,079		(482)
Amortization of Unearned Compensation	—		1,880		—		—		—		1,880
Deferred Stock	—		(597)		—		—		542		(55)
Deferred Stock - Directors	—		614		388		—		348		1,350

BALANCES, MARCH 29, 2020	$	579	$	72,341	$	796,426	$	(305,891)	$	(324,115)	$	239,340


FOR THE NINE MONTHS ENDED MARCH 31, 2019	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders' Investment
BALANCES, JULY 1, 2018	$	579	$	76,408	$	1,071,480	$	(252,272)	$	(325,771)	570,424
Net Loss	—		—		(35,543)		—		—		(35,543)
Total Other Comprehensive Loss, Net of Tax	—		—		—		(2,749)		—		(2,749)
Cash Dividends Declared ($0.28 per share)	—		—		(17,492)		—		—		(17,492)
Stock Option Activity, Net of Tax	—		(43)		—		—		1,862		1,819
Restricted Stock	—		(72)		—		—		670		598
Amortization of Unearned Compensation	—		1,886		—		—		—		1,886
Deferred Stock	—		(879)		—		—		520		(359)
Deferred Stock - Directors	—		223		(180)		—		853		896
Treasury Stock Purchases	—		—		—		—		(11,937)		(11,937)
BALANCES, MARCH 31, 2019	$	579	$	77,523	$	1,018,265	$	(255,021)	$	(333,803)	$	507,543

The accompanying notes are an integral part of these statements.

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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended
	March 29, 2020		March 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
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 Impairment	67,480		—
Loss on Disposition of Plant and Equipment	1,412		66
Provision (Credit) 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		—

Change 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 (3)	(43,066)		(46,379)
Proceeds Received on Disposition of Plant and Equipment	2,680		31
Cash Paid for Acquisition, Net of Cash Acquired	—		(8,865)




Net Cash Used in Investing Activities	(40,386)		(55,213)
CASH FLOWS FROM FINANCING ACTIVITIES:

Net Borrowings on Credit Facilities	241,684		163,509
Repayments on Long-Term Debt	—		(5,424)

Debt Issuance Costs	(6,161)		—
Treasury Stock Purchases

Price	6.03	EPS	-1
Shares	42	P/E	-5
MCap	251	P/FCF	13
Net Debt	517	EBIT	-20
TEV	768	TEV/EBIT	-38
TTM 2019-09-29, in MM, except price, ratios

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10-Q	2019-12-29	Filed 2020-02-04
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10-K	2015-06-28	Filed 2015-08-21
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10-K	2014-06-29	Filed 2014-08-26
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10-Q	2012-04-01	Filed 2012-05-09
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10-K	2011-07-03	Filed 2011-09-01
10-Q	2011-03-27	Filed 2011-05-04
10-Q	2010-12-26	Filed 2011-02-02
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10-K	2010-06-27	Filed 2010-08-26
10-Q	2010-03-28	Filed 2010-05-05
10-Q	2009-12-27	Filed 2010-02-03

8-K	2020-11-20
8-K	2020-11-06
8-K	2020-10-20
8-K	2020-10-06
8-K	2020-09-18
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8-K	2020-04-27
8-K	2020-03-31
8-K	2020-03-27
8-K	2020-03-17
8-K	2020-03-06
8-K	2020-01-30
8-K	2020-01-29
8-K	2019-11-05
8-K	2019-11-01
8-K	2019-10-02
8-K	2019-08-15
8-K	2019-04-25
8-K	2019-01-24
8-K	2019-01-23
8-K	2018-12-18
8-K	2018-10-29
8-K	2018-10-25
8-K	2018-08-15
8-K	2018-08-15
8-K	2018-04-25
8-K	2018-01-24
8-K	2018-01-12
8-K	2015-09-18
8-K	2015-09-08
8-K	2015-09-03
8-K	2015-08-12
8-K	2015-08-12
8-K	2015-08-12
8-K	2015-05-20
8-K	2015-04-23
8-K	2015-02-26
8-K	2015-01-21

EX-10.5	a2020salaryreductioncons.htm
EX-31.1	ex311-bggx3292020.htm
EX-31.2	ex312-bggx3292020.htm
EX-32.1	ex321-bggx3292020.htm
EX-32.2	ex322-bggx3292020.htm

BGG 10Q Quarterly Report

Briggs & Stratton Earnings 2020-03-29