1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberDecember 27, 1998
OR
[ ] 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
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(Exact name of registrant as specified in its charter)
Wisconsin 39-0182330
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12301 West Wirth Street, Wauwatosa, Wisconsin 53222
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(Address of Principal Executive Offices) (Zip Code)
414/259-5333
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(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at
Class November 2, 1998February 1, 1999
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COMMON STOCK, par value $0.01 per share 23,268,69123,464,015 Shares
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
INDEX
Page No.
--------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets -
SeptemberDecember 27, 1998 and June 28, 1998 3
Consolidated Condensed Statements of Income -
Three Months and Six Months ended
SeptemberDecember 27, 1998 and SeptemberDecember 28, 1997 5
Consolidated Condensed Statements of Cash Flow -
ThreeSix Months ended SeptemberDecember 27, 1998 and
SeptemberDecember 28, 1997 6
Notes to Consolidated Condensed Financial
Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 78
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 1011
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 1011
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 1112
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3
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
ASSETS
Sept.December 27, June 28,
1998 1998
----------- -------------------- ---------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 7,1082,243 $ 84,527
Receivables, net 149,072302,050 136,629
Inventories -
Finished products and parts 91,856105,974 58,975
Work in process 59,48061,644 45,217
Raw materials 5,3474,885 3,684
-------- --------
Total inventories 156,683172,503 107,876
Future income tax benefits 29,40831,854 31,287
Prepaid expenses 25,86324,860 21,727
-------- --------
Total current assets 368,134533,510 382,046
-------- --------
OTHER ASSETS:
Marketable securities 1,7851,680 -
Deferred income tax assets 8,2606,579 9,555
Capitalized software 7,5557,472 9,881
-------- --------
Total other assets 17,60015,731 19,436
-------- --------
PLANT AND EQUIPMENT -
Cost 820,747829,359 812,428
Less - Accumulated depreciation 429,015433,395 420,501
-------- --------
Total plant and equipment, net 391,732395,964 391,927
-------- --------
$777,466$945,205 $793,409
======== ========
The accompanying notes are an integral part of these statements.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (Continued)
(In thousands)
LIABILITIES & SHAREHOLDERS' INVESTMENT
Sept.December 27, June 28,
1998 1998
----------------------- --------
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $ 65,96680,162 $ 76,915
Domestic notes payable 15,653135,020 4,700
Foreign loans 15,86722,254 14,336
Current maturities of long-term debt 15,000 15,000
Accrued liabilities 96,983107,955 101,465
Dividends payable 6,8536,765 -
Federal and state income taxes 9,70823,096 10,529
-------- --------
Total current liabilities 226,030390,252 222,945
-------- --------
OTHER LIABILITIES:
Deferred revenue on sale of plant and equipment 15,87415,848 15,893
Accrued pension cost 24,32221,880 26,477
Accrued employee benefits 12,70012,843 12,571
Accrued postretirement health care obligation 70,24869,992 70,933
Long-term debt 128,154128,205 128,102
-------- --------
Total other liabilities 251,298248,768 253,976
-------- --------
SHAREHOLDERS' INVESTMENT:
Common stock-
Authorized 60,000 shares, $.01 par value,
Issued 28,927 shares 289 289
Additional paid-in capital 37,48537,029 37,776
Retained earnings 531,393549,265 533,805
Unearned compensation on restricted stock (278)(263) -
Unearned loss on marketable securities (64) -
Cumulative translation adjustments (1,584)(1,341) (2,110)
Treasury stock at cost, 5,4765,731 and 5,103 shares,
respectively (267,167)(278,730) (253,272)
-------- --------
Total shareholders' investment 300,138306,185 316,488
-------- --------
$777,466$945,205 $793,409
======== ========
The accompanying notes are an integral part of these statements.
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5
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months Ended ----------------------------
Sept.Six Months Ended
------------------ ----------------
Dec. 27 Sept.Dec. 28 Dec. 27 Dec. 28
1998 1997 -------1998 1997
-------- -------- -------- --------
NET SALES $223,981 $170,557$359,943 $308,481 $583,924 $479,038
COST OF GOODS SOLD 186,369 144,146288,472 257,584 474,841 401,730
-------- -------- -------- --------
Gross profit on sales 37,612 26,41171,471 50,897 109,083 77,308
ENGINEERING, SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 29,248 29,17429,107 30,065 58,355 59,239
-------- -------- Income(loss)-------- --------
Income from operations 8,364 (2,763)42,364 20,832 50,728 18,069
INTEREST EXPENSE (3,410) (3,794)(4,748) (5,248) (8,158) (9,042)
OTHER INCOME, net 2,147 2,3151,801 1,020 3,948 3,335
-------- -------
Income(loss)-------- -------- --------
Income before provision(credit)provision
for income taxes 7,101 (4,242)
PROVISION(CREDIT)39,417 16,604 46,518 12,362
PROVISION FOR INCOME TAXES 2,660 (1,610)14,780 6,310 17,440 4,700
-------- -------- -------- --------
Net income(loss)income $ 4,44124,637 $ (2,632)10,294 $ 29,078 $ 7,662
======== ======== ======== ========
EARNINGS PER SHARE DATA -
Average shares outstanding 23,635 25,16523,308 24,903 23,467 25,034
======== ======== ======== ========
Basic earnings(loss)earnings per share $ .191.06 $ (.10).41 $ 1.24 $ .31
======== ======== ======== ========
Diluted average shares outstanding 23,701 25,31523,481 25,054 23,588 25,189
======== ======== ======== ========
Diluted earnings(loss)earnings per share $ .191.05 $ (.10).41 $ 1.23 $ .30
======== ======== ======== ========
CASH DIVIDENDS PER SHARE $ .29 $ .28 $ .58 $ .56
======== ======== ======== ========
The accompanying notes are an integral part of these statements.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
ThreeSix Months Ended
-------------------------------------------------------------
December 27, December 28,
1998 1997
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Sept. 27, 1998 Sept. 28, 1997
-------------- --------------
Net income(loss)income $ 4,44129,078 $ (2,632)7,662
Adjustments to reconcile net income(loss)income to net
cash provided byused in operating activities -
Depreciation 12,332 10,92823,698 22,567
Amortization of discount on long-term debt 52 51
Provision for deferred income taxes 3,174 381103 103
Amortization of compensation on
restricted stock 1024 -
Loss on disposition of plant and equipment 147 1
(Increase)decrease195 736
Provision for deferred income taxes 2,450 (316)
Change in operating assets and liabilities -
AccountsIncrease in accounts receivable (13,714) 8,343
Inventories (48,805) (78,846)
Other current assets (4,255) 2,503
Other assets 538 (1,217)(166,692) (115,394)
Increase in inventories (64,625) (87,282)
(Increase)Decrease in prepaid expenses (3,252) 1,927
Increase(decrease) in liabilities -
Accountsaccounts payable
and accrued liabilities (8,136) (9,880)30,557 (3,133)
Other, liabilities (2,328) 869net (4,262) (457)
--------- -------------------
Net cash used in operating activities (56,544) (69,499)(152,726) (173,587)
--------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant and equipment (13,609) (12,855)(29,881) (26,124)
Proceeds received on sale of plant and equipment 771 1381,382 336
--------- -------------------
Net cash used in investing activities (12,838) (12,717)(28,499) (25,788)
--------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on domestic and foreign loans 12,960 6,557138,714 142,905
Dividends (6,853) (7,001)(13,618) (13,963)
Purchase of common stock for treasury (14,556) (26,396)(35,614) (43,501)
Proceeds from exercise of stock options 82 1,2098,897 8,045
--------- -------------------
Net cash used inprovided by financing activities (8,367) (25,631)98,379 93,486
--------- -------------------
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH EQUIVALENTS 330 (187)562 (587)
--------- -------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (77,419) (108,034)(82,284) (106,476)
CASH AND CASH EQUIVALENTS, beginning 84,527 112,859
--------- -------------------
CASH AND CASH EQUIVALENTS, ending $ 7,1082,243 $ 4,8256,383
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 5,2147,559 $ 2,0514,807
========= =========
Income taxes paid $ 1,1762,937 $ 8573,713
========= =========
The accompanying notes are an integral part of these statements.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
The accompanying unaudited consolidated condensed financial statements
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission and therefore do not include all information
and footnotes necessary for a fair presentation of financial position, results
of operations and cash flows in conformity with generally accepted accounting
principles. However, in the opinion of the Company, adequate disclosures have
been presented to make the information not misleading, and all adjustments
necessary to present fair statements of the results of operations and financial
position have been included. All of these adjustments are of a normal recurring
nature. These condensed financial statements should be read in conjunction with
the financial statements and the notes thereto which were included in the
Company's latest Annual Report on Form 10-K.
The caption entitled Marketable Securities represents stock received in
the sale of the Company's software business at the end of the first quarter of
fiscal 1999. These securities are being classified as available-for-sale and are
being reported at fair market value. The unrealized gain or loss incurred on
this stock was recorded as Unearned Loss on Marketable Securities in the
Shareholders' Investment section of the balance sheet.
The Company's Board of Directors authorized awards of a total of 8,000
shares of restricted stock to key employees in August 1998 from the Company's
treasury stock. These shares shall be forfeitable until they become vested upon
the first to occur of the following: five years from the award date; a change in
control; or termination of employment by reason of retirement, disability or
death. The market value of these shares was recorded as Unearned Compensation on
Restricted Stock at the award date and is being amortized to compensation
expense over the five years.
The Company adopted Financial Accounting Standard (FAS) No. 130,
Reporting Comprehensive Income, in the quarter ended September 1998. This
statement requires the reporting of comprehensive income in addition to net
income from operations. Comprehensive income is a more inclusive financial
reporting method that includes disclosure of certain financial information that
historically has not been recognized in the calculation of net income. The
Company has foreign currency translation adjustments accounted for under FAS
Statement No. 52 which fall within this definition. Total comprehensive income
is as follows (in thousands):
Three Months Ended September
----------------------------Six Months Ended
------------------ ----------------
Dec. 27 Dec. 28 Dec. 27 Dec. 28
1998 1997 ---- ----1998 1997
------- ------- ------- -------
Net income(loss) $4,441 $(2,632)income $24,637 $10,294 $29,078 $ 7,662
Foreign currency translation adjustments 526 (243)
------243 (422) 769 (665)
Unearned loss on marketable securities,
(net of tax) (64) - (64) -
-------- ------- ------- -------
Total comprehensive income(loss) $4,967 $(2,875)
======income $ 24,816 $ 9,872 $29,783 $ 6,997
======== ======= ======= =======
The Company's Board of Directors authorized awards of a total of 8,000
shares of restricted stock to key employees in August 1998 from the Company's
treasury stock. These shares are subject to forfeiture if employment terminates
or there is a change in control prior to the end of five years from the date of
issue. The market value of these shares was recorded as Unearned Compensation on
Restricted Stock and is being amortized to compensation expense over the five
years.
The caption entitled Marketable Securities represents stock received in
the sale of the Company's software business at the end of the quarter. These
securities are being classified as available-for-sale and are being reported at
fair market value. There was no material amount of unrealized gain or loss
incurred on this stock in the quarter, and thus there was no new component in
the Shareholders' Investment section of the balance sheet for the unrealized
gain or loss.-7-
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is management's discussion and analysis of the Company's
financial condition and results of operations for the periods included in the
accompanying consolidated condensed financial statements.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIESstatements:
RESULTS OF OPERATIONS
SALES
Net sales for the three months ended September 1998 were 31%second fiscal quarter increased $51 million or $53
million higher than in17%
compared to the same period of the precedingprevious year. The principal
reason for this change wasThis increase resulted
primarily from the following factors: a 48%$50 million increase in sales dollars
resulting from a 17% increase in engine unit shipments.shipments, and $6 million from
increased prices, offset by $5 million reduction due to a mix change in engines
sold.
Net sales for the six months ended December 1998 increased $105 million
or 22% when compared to the first half of the prior year. This increase resulted
from the same factors discussed above for the quarter. There was the
resulta $115 million
increase in sales dollars due to a 27% increase in engine unit shipments, and $6
million from increased prices, offset by a mix change in engines sold of both domestic and international lawn and garden equipment
manufacturers building product earlier this year than last year. The unit
shipment increase was greater than the sales dollar increase because shipments
were more heavily weighted towards lower horsepower, lower selling price
engines.$16
million.
GROSS PROFIT
The gross profit ratepercentage increased to 16.8%20% in the current yearquarter from 15.5%16%
in the preceding year.year's second quarter. This increase resulted in additional gross profit totaling $2.9primarily from
the $6 million between years. Significant reasons for this improvement wereof price increases, absorption of fixed expenses over more units
produced of $6 million and lower material costs
of $1.1 million for aluminum of $2 million, the
major raw material used in engines, andengines.
The gross profit margins for the six-month period increased to 19% in
the current year from 16% in the preceding year. The increase resulted primarily
from $6 million of price increases, $6 million attributed to the benefit of
greater production in the second quarter, lower costs onfor aluminum of $3
million, and $1 million of lower costs for purchased engines which totaled $1.4 million and were caused by favorable
exchange rates.
ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
This category increaseddecreased by 3% or $1 million between the second fiscal
quarters of 1999 and 1998. This resulted from a small amount between years. An increase of
$.6$3 million in advertising expenses was almost completely offset by a decrease in consulting costs
related to the software business the Company sold at the end of the first
quarter of the current fiscal year, offset by increased advertising costs of $1
million and a $1 million increase in profit sharing expense due to improved
results.
The 1% or $1 million decrease for the comparative six-month period was
due primarily to the same factors discussed above for the quarter. There was a
$3 million decrease in costs related to the software business and reduced
expenses of $1 million related to the implementation of the Company's new
company-wide
informationcomputer system. These decreases were offset by $1 million increases in both
advertising and profit sharing expenses.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
INTEREST EXPENSE
Interest expense decreased $.4 million. The$1 million in the three-month comparison and
$1 million in the six-month comparison. These decreases were the result of lower
average interest rates on working capital borrowings and the repayment of $15
million of higher interest ratelong-term debt at the end of fiscal year 1998 caused this change.1998.
OTHER INCOME
This category increased $1 million in both the three-month and
six-month periods. In each period, the primary change is due to reductions in
the loss on the disposition of plant and equipment.
PROVISION FOR INCOME TAXES
The effective tax rate used in both the three-month and six-month periods
for the current fiscal quarteryear was 37.5%. This is management's estimate of what the rate
will be for the entire 1999 fiscal year. Last year's first quarter rate was 38.0%;38% in both
periods; however, the final effective rate for the entire 1998 fiscal year was
37.6%.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow used in operating activities for the six-month period was $57$153
million in fiscal 1999 and $69$174 million in 1998. In the six-month period, net
income before depreciation provided cash of $53 million for fiscal 1999 and $30
million for fiscal 1998. Accounts receivable increased $167 million in fiscal
1999 and $115 million in fiscal 1998. The primary use of these funds was the seasonal
increase in inventoriesaccounts receivable was
caused by increased sales near the end of $49the six months ended December 1998.
Inventory increased $65 million and $79 million in the respective years.
The smaller increase in fiscal 1999 compared to $87 million in fiscal
1998. Increased sales account for the decrease in the buildup of inventories.
Accounts payable and accrued liabilities increased $31 million in fiscal 1999
compared to a decrease of $3 million in fiscal 1998. The $31 million increase
was primarily due to a $22 million increase in accounts payable as a result of
the timing of payments and an $11 million increase in federal and state income
taxes payable due to the higher sales in that year.
This also caused an increaselevel of $14 million in accounts receivable in fiscal
1999 versus a decrease of $8 million in fiscal 1998.earnings.
Cash used in investing activities totaled $13$28 million in each yearthe six-month
period and was$26 million the same period of the preceding year. Additions to plant
and equipment primarily made up the cash used in each year.
Financing activities provided $98 million of expenditurescash in 1999 compared to
$93 million in 1998. Net borrowings were $139 million and $143 million,
respectively. The Company used $36 million in the current year and $44 million
in the preceding year for additionsits stock repurchase program.
FUTURE LIQUIDITY AND CAPITAL RESOURCES
The Company completed the share repurchase program authorized by the
Board of Directors in fiscal 1997 for $300 million of its common stock in the
second quarter of fiscal 1999. In January 1999, the Board of Directors approved
a repurchase of up to plant1.3 million additional shares of the Company's common
stock. Purchases will be made from time to time in open market or private
transactions. The share repurchase is intended to minimize dilution from shares
issued for employee benefit plans and equipment.
-8-will be funded from available cash.
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910
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Cash used in financing activities totaled $8 million in fiscal 1999 and
$26 million in fiscal 1998. This change resulted from a reduction of $12 million
in purchases of common stock and $7 million in additional borrowings on domestic
and foreign loans.
FUTURE LIQUIDITY AND CAPITAL RESOURCES
In fiscal 1997, the Company's Board of Directors authorized the
purchase of up to $300 million of shares of its common stock by means of a
tender offer and open market or private transactions. As of the end of September
1998, purchases totaled $279 million. The Company plans to complete this
repurchase program by the end of the second fiscal quarter. The Company intends
to fund the remaining purchases of its common stock through a combination of
available cash, cash generated from operations and additional borrowings.
Management expects capital expenditures for reinvestment in equipment
and new products to total $70 million in fiscal 1999 for reinvestment in equipment and new products.1999.
The Company currently intends to increase future cash dividends per
share at a rate approximating the inflation rate, subject to the discretion of
its Board of Directors and requirements of applicable law.
Management believes that available cash, the credit facility, cash
generated from operations, existing lines of credit and access to public debt
markets will be adequate to fund the Company's capital requirements for the
foreseeable future.
OUTLOOK
Based on customer expectations, orders actually placed and favorable
econometric forecasts, and assuming normal spring weather, the Company expects
higher sales and earnings for the full fiscal year.
Overall, the Company expects that engine unit sales will reflect a
small increase in fiscal 1999 compared to fiscal 1998. As discussed earlier,Historically, the Company
experienced a significant increasehas built inventory in engine unitthe first six months of the fiscal year and shipped much
of this inventory in the second half of the fiscal year, primarily in the third
quarter. The Company expects to ship fewer engines in the second half of this
fiscal year because of lower inventories that were caused by increased shipments
in the first quarter ofsix months.
In fiscal 1999. It appears that this may represent a shift in original
equipment manufacturers' timing of purchases from later in the year to earlier
in the year. The Company continues to believe that the fiscal year will be a
good one if weather conditions are normal.
OTHER MATTERS
In September 1998 the Company announced that it signedexperienced adverse effects on revenue and
gross profit as a letter of
intent to sell its foundry business. The purchasing company will supply Briggs &
Stratton Corporation with crankshafts, camshafts and other products.
Near the endresult of the Septemberstrong U.S. dollar compared to European
currencies. Assuming the exchange rates of the U.S. dollar against the European
currencies remain consistent with December 1998, quarter,management believes that the
adverse effect on revenue and gross profit will be significantly less in fiscal
1999 than in fiscal 1998.
OTHER MATTERS
Emissions
Environmental Protection Agency (EPA) currently expects to finalize the
Phase II regulation for non hand-held small engines in March of 1999. EPA has
informed industry that the final regulation will impose more stringent standards
over the useful life of the engine. The standards will be phased in from 2001 to
2005 for Class II engines and from 2003 to 2008 for Class I engines. It is not
anticipated that this will have a material effect on the financial condition or
results of operations of the Company.
Year 2000 Issues
The Company has completed implementation of its new company-wide
information system. All business transactions are being processed on the new
system, which addressed the great majority of information technology year 2000
computer issues. The Company has initiated a business recovery program at an
off-site location which will be used for complete testing of the new
company-wide information system. This testing is expected to be completed by the
middle of the 1999 calendar year.
Project expenditures to date total $29 million. The Company expects to
incur an additional $6 million of incremental costs, running through the 2002
fiscal year, because of related projects.
The Company is nearing completion of the assessment phase of its
non-information technology systems. Based on the assessment completed to date,
the Company completeddoes not anticipate the sale of its software business. The proceeds on the sale were in the form of
marketable securities, and are shown as such on the end of quarter balance
sheet. This sale didneed to develop an extensive contingency
plan for non-information systems, so it is not result in anyexpecting to incur material
gains or losses, but will result
in the loss of $2 million gross profit and the elimination of $10 million in
selling expenses in the remainder of fiscal 1999.
The Company reported in detail on its comprehensive Year 2000 Programincremental costs to address year 2000 issues in its Annual Report on Form 10-K filed September 8,
1998. There has been no significant change in the information reported in that
filing.
-9-do this.
-10-
1011
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements in Management's Discussion and Analysis of Financial
Condition and Results of Operations may contain 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", "objective", and "think" or
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 effects of weather on the purchasing patterns of the Company's
customers and end use purchasers of the Company's engines; the seasonal nature
of the Company's business; actions of competitors; changes in laws and
regulations, including accounting standards; employee relations; customer
demand; prices of purchased raw materials and parts; domestic economic
conditions, including housing starts and changes in consumer disposable income;
foreign economic conditions, including currency rate fluctuations; the ability
of the Company's customers and suppliers to meet year 2000 compliance; and
unanticipated internal year 2000 issues. Some or all of the factors may be
beyond the Company's control.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes since the September 8, 1998 filing
of the Company's Annual Report on Form 10-K.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
AtThe information required by this item was previously reported in the
Annual Meeting of Shareholders on October 21, 1998,Company's Form 10-Q for the only
item of business was the election of directors. The following schedule indicates
the votes cast for and withheld with respect to each nominee for director.
Name of Nominee* For Withheld
---------------- --- --------
Eunice M. Filter 20,701,684 168,219
Clarence B. Rogers, Jr. 20,677,619 192,283
Frederick P. Stratton, Jr. 20,695,155 174,748
*Nominees were elected to a three-year term expiring in 2001.
Directors whose terms of office continue past the Annual Meeting of
Shareholders are: Michael E. Batten, Robert H. Eldridge, Peter A. Georgescu,
Robert J. O'Toole, John S. Shiely, and Charles I. Story.
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11
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Itemfirst quarter ended September 27, 1998.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits.
Exhibit
Number Description
------------- -----------
10.1 Separation Agreement*
10.2 Agreement with Executive Officer*
11 Computation of Earnings Per Share of Common Stock*
12 Computation of Ratio of Earnings to Fixed Charges*
27 Financial Data Schedule, SeptemberDecember 27, 1998*
*Filed herewith
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12
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
(b) Reports on Form 8-K.
There were no reports on Form 8-K for the firstsecond quarter ended SeptemberDecember
27, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BRIGGS & STRATTON CORPORATION
(Registrant)
Date: November 2, 1998February 8, 1999 /s/ J. E. Brenn
--------------------------------------------------------------------------------
J. E. Brenn
Senior Vice President and Chief
Financial Officer
Date: November 2, 1998February 8, 1999 /s/ T. J. Teske
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T. J. Teske
Controller
-11--12-
1213
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
10.1 Separation Agreement*
10.2 Agreement with Executive Officer*
11 Computation of Earnings Per Share of Common Stock
(Filed herewith)Stock*
12 Computation of Ratio of Earnings to Fixed Charges
(Filed herewith)Charges*
27 Financial Data Schedule
(Filed herewith)
-12-Schedule*
* Filed herewith.
-13-