Briggs and Stratton to Adjust Snapper Residential Product Offerings and Consolidate Manufacturing Facilities

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.

Fiscal 2014 net sales results included in this release are preliminary and are subject to completion of fiscal year end closing and auditing procedures.  The Company is planning to release its fourth quarter and fiscal 2014 financial results after the close of the markets on Wednesday August 13, 2014.  

Briggs and Stratton to Launch 40 Lawnmower Models in 2013

March 13 -- Todd Teske would’ve preferred Briggs and Stratton Corp. launch new products in a steady stream over the past couple years, not the flood it’s planning this year.

Nevertheless, the president and CEO is excited about what’s in store for the Wauwatosa-based maker of small engines and outdoor power equipment, which this year expects to introduce 40 lawnmower models and related products across its dealer network — the most product launches in the past five years combined, according to the company and Robert W. Baird and Co. Inc. financial analysts.

Part of the reason for the rush of new products into the dealer channel is Briggs and Stratton had been putting resources into its lawn and garden products for mass retailers, Teske said.

But the company decided a year ago that it would no longer place its walking lawn mowers and riding tractor mowers in national retailers, primarily Walmart, Lowe’s, Home Depot and Sears.

That meant a loss of about $100 million in annual revenue this fiscal year, but also frees up between $80 million and $100 million in free cash flow from reduced working capital, Baird analysts wrote this week.

“We realized last year that we just weren’t giving enough attention to the dealer channel,” Teske told me this week. “We were focused on a lot of different things. What you’re seeing is now our focus is on a few things and doing those very well, one of those being new and different products to the dealer channel.”

Briggs and Stratton’s three primary dealer brands in the United States are Snapper, Ferris and Simplicity.

Meanwhile, the company is focused on international expansion and is launching plenty of new products in markets like Australia and Brazil as well, Teske told me.

“When you look at how our strategy is starting to play out at Briggs, it is one of innovation and new product introductions,” Teske told me.

Innovation is a common theme with Teske, who is also co-chair of the group Innovation in Milwaukee, or MiKE, a Greater Milwaukee Committee initiative working to boost entrepreneurship and make the area a design and technology hub.

Teske told me this flurry of product launches shows his company isn’t just talking about innovation.

“Now what you’re seeing is us talking about it and doing it,” Teske said.

Jeff Engel       www.bizjournals.com      

Briggs and Stratton Reports on 1st Quarter of Fiscal 2012

MILWAUKEE -- Oct. 20 -- Briggs and Stratton Corporation today announced financial results for its first fiscal quarter ended October 2, 2011.

Highlights:

•               First quarter fiscal 2012 consolidated net sales were $397.3 million, an increase of $63.2 million or 18.9% from the first quarter of fiscal 2011.

•               First quarter fiscal 2012 consolidated net loss of $5.2 million improved by $2.9 million from a consolidated net loss of $8.1 million one year ago.

•               Net debt outstanding as of October 2, 2011 is down $66.6 million, or 42.6%, from September 26, 2010.

"We continued to make progress against our strategic initiatives in the first quarter which enabled us to improve profitability in what remains a challenging global economy," commented Todd J. Teske, Chairman, President and Chief Executive Officer of Briggs and Stratton.

"In addition, I am very pleased how our team was able to quickly respond and provide help to the areas impacted by Hurricane Irene. Their efforts demonstrate our company's ability to respond when severe weather conditions leave people without power."

Consolidated Results:

Consolidated net sales for the first quarter of fiscal 2012 were $397.3 million, an increase of $63.2 million or 18.9% when compared to the same period a year ago. The fiscal 2012 first quarter consolidated net loss was $5.2 million or $0.10 per diluted share. The first quarter of fiscal 2011 consolidated net loss was $8.1 million or $0.16 per diluted share. Given the seasonal nature of the business, it is typical for the company to incur a loss in the first quarter of each fiscal year.

Engines Segment:

Engines Segment fiscal 2012 first quarter net sales were $203.4 million, which was $1.7 million or 0.8% lower than the same period a year ago. This decrease in net sales was driven by lower shipment volumes of engines due to reduced consumer demand for lawn and garden products in North America, offset by slightly improved engine pricing and a favorable mix of product shipped that reflected proportionally larger volumes of units used on snow throwers and riding lawn and garden equipment.

The Engines Segment gross profit was $36.9 million in the first quarter of fiscal 2012, a decrease of $5.6 million from the first quarter of fiscal 2011. Gross profit decreased primarily due to lower net sales and higher manufacturing spending associated with rising commodity costs, partially offset by slightly improved engine pricing and a favorable mix of product shipped that reflected proportionally larger volumes of units used on riding lawn and garden equipment.

The Engines Segment engineering, selling, general and administrative expenses were $42.4 million in the first quarter of fiscal 2012, a decrease of $5.6 million from the first quarter of fiscal 2011 due to lower spending on stock based compensation.

Power Products Segment:

Power Products Segment fiscal 2012 first quarter net sales were $235.3 million, an increase of $67.1 million or 39.9% from the same period a year ago. The increase in net sales was primarily due to increased sales of portable and standby generators due to widespread power outages in the U.S. as a result of a landed hurricane on the East Coast, as well as increased shipments of snow equipment after channel inventories were depleted from the prior selling season. There were no landed hurricanes in the first quarter of fiscal 2011.

The Power Products Segment gross profit was $27.6 million for the first quarter of fiscal 2012, an increase of $10.1 million from the first quarter of fiscal 2011. The increase over the prior year was primarily attributable to the increase in net sales, slightly improved pricing, production efficiencies, and favorable absorption on improved plant utilization, partially offset by increased commodity costs.

The Power Products Segment fiscal 2012 first quarter engineering, selling, general and administrative expenses of $25.3 million increased by $2.9 million from the fiscal 2011 first quarter primarily due to higher sales and marketing and professional services expenses associated with new product launches.

Corporate Items:

Interest expense was $0.8 million lower for the first quarter of fiscal 2012 compared to the same period one year ago due to the reduction in interest rate associated with the refinancing of the Senior Notes in the second quarter of fiscal 2011, partially offset by higher average borrowings outstanding.

Subsequent to the end of the first quarter of fiscal 2012, as previously announced, the company closed on a new 5-year $500 million Senior Unsecured Revolving Credit Facility. This credit facility replaced the company's $500 million credit facility that was scheduled to expire in July 2012. There were no borrowings under the existing revolving credit facility as of the end of the first quarter of fiscal 2012 and fiscal 2011.

The effective tax rate for the first quarter of fiscal 2012 was negative 25.3% or $1.1 million of tax expense compared to 33.4% or a $4.1 million tax benefit for the fiscal 2011 first quarter. Beginning with the first quarter of fiscal 2012, we excluded from our effective tax rate calculation net losses incurred by certain of our foreign subsidiaries which cannot be benefited. Excluding these foreign subsidiary net losses resulted in taxable income for purposes of calculating the company's interim income tax expense for the first quarter of fiscal 2012. The net loss of these subsidiaries is typically higher in the first quarter before they enter into the lawn and garden season.

Financial Position:

Net debt at October 3, 2011 was $89.8 million (total debt of $228.0 million less $138.2 million of cash), an improvement of $66.6 million from the $156.4 million (total debt of $204.1 million less $47.7 million of cash) at September 26, 2010. Cash flows used by operating activities for the fiscal 2012 first quarter were $56.3 million compared to $55.5 million in the fiscal 2011 first quarter. Cash used in operating activities for the first quarter of fiscal 2012 was primarily related to seasonal build of inventory levels and reduction of accounts payable in the quarter.

Outlook:

For fiscal 2012, the company has increased the projection of consolidated net income to be in the range of $58 million to $68 million or $1.15 to $1.35 per diluted share prior to the potential impact of any share repurchases under the company's previously announced share repurchase program.

Consolidated net sales for fiscal 2012 are projected to be higher than fiscal 2011 by approximately 4% to 6% depending on the level of recovery of consumer spending within the outdoor power equipment category.

Engines Segment sales are forecasted to be comparable to fiscal 2011 on lower volume and improved pricing while the Power Products Segment sales are forecasted higher primarily due to higher volumes of lawn and garden equipment, pressure washers, and portable and standby generators.

Operating income margins are now projected to be in the range of 4.5% to 5.0%, and interest expense and other income are forecasted to be in the range of $18 million to $19 million and $5 million to $6 million, respectively.

The operating earnings forecast includes additional investments of approximately $12 million for continued international growth. The effective tax rate for the full year is projected to be in a range of 32% to 34%.

Capital expenditures for the year are projected to be approximately $60 million to $65 million.

About Briggs and Stratton Corporation:

Briggs and Stratton Corporation, headquartered in Milwaukee, Wisconsin, is the world's largest producer of gasoline engines for outdoor power equipment. Its wholly owned subsidiary Briggs and Stratton Power Products Group, LLC is North America's number one manufacturer of portable generators and pressure washers, and is a leading designer, manufacturer and marketer of lawn and garden and turf care through its Simplicity®, Snapper®, Ferris®, Murray® and Victa® brands. Briggs and Stratton products are designed, manufactured, marketed and serviced in over 100 countries on six continents.

Briggs and Stratton Merges Generator and Power Equipment Business Units

Briggs and Stratton Corp.’s recent decision to merge two of its business units has led to job cuts in the company’s management ranks.

The Wauwatosa-based manufacturer of small engines and outdoor power equipment is merging its Home Power and Yard Power groups into a single unit, company spokeswoman Laura Timm said.

“We made some staffing changes to streamline the group’s functions as part of this strategic move,” she said. “This included eliminating a limited number of management positions.”

Timm declined to reveal the exact number of jobs that were cut or the names of the executives whose positions were eliminated, citing privacy issues.

Briggs and Stratton’s Home Power Group included generators and pressure washers, while the Yard Power Group had been made up of the Simplicity, Snapper and Ferris brands of products and assets that the company bought from Murray Inc.

The consolidated Products Group will be led by Harold Redman Sr., a senior vice president at Briggs and Stratton who had been president of the Home Power Products Group. Vincent Shiely had served as president of the Yard Power Products Group. The company wouldn’t comment on whether Shiely was one of the executives who lost their jobs.

“We are confident that this new structure creates a solid business model that will allow our team to better serve our customers and consumers with products, programs and services,” Timm said.

News of the reorganization came shortly after Briggs and Stratton reported a fiscal first-quarter loss of $8.1 million, or 16 cents per share, as consumer spending remained weak.

The performance, which exceeded analysts’ expectations, represented a slight improvement from the same period last year, when the company reported a net loss of $8.7 million.

Sales for the three-month period rose 2.9 percent to $334.1 million.

Exmark Files Patent Infringement Lawsuit

Lincoln, NE -- May 13 -- Beatrice lawn mower maker Exmark Manufacturing sued Briggs & Stratton Power Products Group and Schiller Grounds Care Inc. Wednesday alleging their mowers infringe on its patents.

The lawsuit filed in U.S. District Court in Omaha sought an injunction against Briggs, a Wisconsin company, and Schiller, a Pennsylvania company, both alleged to be making and selling mowers covered by an Exmark patent.

Exmark's attorney, Jill Robb Ackerman of Omaha, said in the suit that the infringing mowers include those sold under the names: Snapper Pro S200X, Ferris Comfort Control DD, mowers with the Briggs' iCD Cutting Systems, all made by Briggs; and Bob-Cat FastCat Pro and Hydro Walk-Behind, made by Schiller.

Exmark has been damaged by the infringement and will continue to be until it is stopped, she said.

John Wright, a spokesman for Exmark’s parent company, Toro, said the company does not coment on pending litigation. However, he said that the company will “vigorously defend” its intellectual property.

Exmark, which has been in business in Gage County since 1982, manufactures professional turf care equipment including lawn mowers and lawn mower parts. It is a unit of the Toro Co.