MILWAUKEE,
July 10, 2014 -- Briggs and Stratton Corporation announced today that beginning
in the 2016 lawn and garden season, it will narrow its assortment of
lower-priced Snapper consumer lawn and garden equipment and consolidate its
products manufacturing facilities in order to further reduce costs.
The
Company will continue to focus on premium residential products to customers
through its Snapper and Simplicity brands and commercial products through its
Snapper Pro and Ferris brands.
The
Company will close its McDonough, Georgia location and consolidate production
into existing facilities in Wisconsin and New York. Production of pressure washers, snow throwers
and lawn tractors will move to its Wauwatosa, Wisconsin manufacturing facility,
and production of zero-turn lawnmowers will be moved to its Munnsville, New
York facility. Production is estimated
to be completed in McDonough and transitioned to the other facilities during
the first quarter of calendar 2015.
The
Company's dealer product offerings under the Snapper Pro, Simplicity and Ferris
brands as well as sales of Snapper and Murray branded lawn and garden products
at Walmart are unaffected by these announcements.
"While
we have seen improved sales of our lawn and garden equipment during our fiscal
2014, in an effort to improve the operating performance of our Products
business, we believe it is necessary to simplify our Snapper product line,
reduce our offerings of certain low volume and lower-priced Snapper lawn and
garden products and reduce the related manufacturing capacity and
expenses," commented Todd J. Teske, Chairman, President and Chief
Executive Officer of Briggs and Stratton Corporation. "We will continue executing our strategy
to focus on those premium products that generate higher margins and returns for
our shareholders," continued Teske.
The
McDonough, Georgia facility currently manufactures pressure washers, snow
throwers, zero-turn lawn mowers and smaller lawn and garden tractors. These changes will affect approximately 475
employees over the course of the next several months. The Company will provide
assistance programs, continued benefits and outplacement services to the
affected employees.
Moving production of
pressure washers, riding lawn tractors and snow throwers to the Wauwatosa,
Wisconsin facility will add approximately 220 new full time positions and
up to approximately 150 temporary
seasonal employees. Employment at the
Munnsville, New York facility is estimated to remain at current levels.
The
Company anticipates total restructuring charges related to these actions of
approximately $30 to $37 million, including non-cash write-downs of
approximately $15 to $20 million, to be recorded during fiscal 2015. Total cash costs related to these actions are
anticipated to be approximately $15 to $17 million, with the majority of the cash
costs being incurred in fiscal 2015.
Total
annual cost savings as a result of these actions are anticipated to be
approximately $15 to $20 million with approximately $5 million to $7 million
expected to be realized in fiscal 2015 and the remainder realized in fiscal
2016 upon completion of the transition in the fourth quarter of fiscal
2015.
Products
segment sales are estimated to be lower by approximately $20 to $25 million in
fiscal 2015 and $35 to $45 million annually beginning in fiscal 2016 as a
result of these actions. The Company
does not expect a material change in the sales or production volumes of engines
as a result of this announcement.
Fiscal
2014 Sales Commentary:
The
Company's fiscal year ended on June 29, 2014.
The Company anticipates reporting fourth quarter fiscal 2014
consolidated net sales of $495 million, a 4% increase over fourth quarter
fiscal 2013 consolidated net sales of $477 million.
The
Company also anticipates reporting fiscal 2014 full year consolidated net sales
of $1.86 billion, consistent with net sales in fiscal 2013, despite
approximately $100 million in storm- related engine and generator sales in
fiscal 2013 that did not recur in fiscal 2014.
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