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 April 1, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-1370
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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
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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 April 23, 2001
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COMMON STOCK, par value $0.01 per share 21,598,983 Shares
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
INDEX
Page No.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets -
April 1, 2001 and July 2, 2000 3
Consolidated Condensed Statements of Income -
Three Months and Nine Months ended
April 1, 2001 and March 26, 2000 5
Consolidated Condensed Statements of Cash Flow -
Nine Months ended April 1, 2001 and
March 26, 2000 6
Notes to Consolidated Condensed Financial
Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
ASSETS
------
April 1, July 2,
2001 2000
------------ -----------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 30,126 $ 16,989
Accounts receivable, net 386,617 140,097
Inventories -
Finished products and parts 224,379 181,800
Work in process 65,635 70,908
Raw materials 4,887 5,066
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Total inventories 294,901 257,774
Future income tax benefits 41,296 39,138
Prepaid expenses and other current assets 20,026 17,999
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Total current assets 772,966 471,997
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OTHER ASSETS:
Investments 49,631 50,228
Prepaid pension 27,018 5,506
Capitalized software 6,808 6,934
----------- -----------
Total other assets 83,457 62,668
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PLANT AND EQUIPMENT:
Cost 863,549 838,655
Less accumulated depreciation 464,031 443,075
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Total plant and equipment, net 399,518 395,580
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$ 1,255,941 $ 930,245
=========== ===========
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
--------------------------------------
April 1, July 2,
2001 2000
------------ ------------
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $ 106,030 $ 117,556
Domestic notes payable 336,770 48,809
Foreign loans 13,908 13,356
Accrued liabilities 132,242 128,438
Dividends payable 6,696 -
Federal and state income taxes 17,099 4,619
----------- -----------
Total current liabilities 612,745 312,778
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OTHER LIABILITIES:
Deferred revenue on sale of plant and equipment 15,574 15,679
Deferred income tax liability 12,226 4,011
Accrued pension cost 12,557 11,428
Accrued employee benefits 13,180 12,607
Accrued postretirement health care obligation 65,584 65,765
Long-term debt 98,666 98,512
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Total other liabilities 217,787 208,002
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SHAREHOLDERS' INVESTMENT:
Common stock-
Authorized 60,000 shares, $.01 par value,
Issued 28,927 shares 289 289
Additional paid-in capital 36,043 36,478
Retained earnings 745,421 721,980
Accumulated other comprehensive loss (5,690) (3,931)
Unearned compensation on restricted stock (331) (226)
Treasury stock at cost, 7,328 and 7,181 shares,
respectively (350,323) (345,125)
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Total shareholders' investment 425,409 409,465
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$ 1,255,941 $ 930,245
=========== ===========
The accompanying notes are an integral part of these statements.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------- --------------------
Apr. 01 Mar. 26 Apr. 01 Mar. 26
2001 2000 2001 2000
--------- --------- --------- ---------
NET SALES $ 430,221 $ 468,678 $ 978,857 $1,189,849
COST OF GOODS SOLD 343,826 366,838 797,058 932,904
--------- --------- --------- ----------
Gross profit on sales 86,395 101,840 181,799 256,945
ENGINEERING, SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 33,649 33,285 100,017 96,121
--------- --------- --------- ----------
Income from operations 52,746 68,555 81,782 160,824
INTEREST EXPENSE (8,804) (6,816) (21,689) (15,151)
GAIN ON DISPOSITION OF FOUNDRY ASSETS - - - 16,545
OTHER INCOME, net 3,497 5,027 8,970 10,645
--------- --------- --------- ----------
Income before provision
for income taxes 47,439 66,766 69,063 172,863
PROVISION FOR INCOME TAXES 17,550 24,710 25,550 63,960
--------- --------- --------- ----------
NET INCOME $ 29,889 $ 42,056 $ 43,513 $ 108,903
========= ========= ========= ==========
EARNINGS PER SHARE DATA -
Average shares outstanding 21,599 22,842 21,600 23,021
====== ====== ====== ======
Basic earnings per share $ 1.38 $ 1.84 $ 2.01 $ 4.73
====== ====== ====== ======
Diluted average shares outstanding 21,612 22,866 21,614 23,104
====== ====== ====== ======
Diluted earnings per share $ 1.38 $ 1.84 $ 2.01 $ 4.71
====== ====== ====== ======
CASH DIVIDENDS PER SHARE $ 0.31 $ 0.30 $ 0.93 $ 0.90
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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)
Nine Months Ended
----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: Apr. 01, 2001 Mar. 26, 2000
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Net income $ 43,513 $ 108,903
Adjustments to reconcile net income to net
cash used for operating activities -
Depreciation and amortization 41,685 38,158
Equity in earnings of
unconsolidated affiliates (5,092) (8,209)
Loss (gain) on disposition of plant and
equipment 371 (16,271)
Increase in prepaid pension (21,512) (9,223)
Provision (credit) for deferred income taxes 6,611 (4,062)
Change in operating assets and liabilities -
Increase in accounts receivable (249,365) (239,750)
Increase in inventories (37,128) (103,852)
Decrease (increase) in prepaid expenses
and other current assets 2,341 (1,928)
Increase in accounts payable
and accrued liabilities 12,457 57,160
Other, net 1,571 (177)
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Net cash used in operating activities (204,548) (179,251)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant and equipment (48,645) (53,861)
Proceeds received on disposition of plant
and equipment 2,770 23,882
Other, net 2,933 5,141
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Net cash used in investing activities (42,942) (24,838)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on loans and notes payable 288,513 216,957
Dividends (20,072) (20,683)
Purchase of common stock for treasury (6,118) (43,188)
Proceeds from exercise of stock options 275 5,561
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Net cash provided by financing activities 262,598 158,647
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EFFECT OF FOREIGN CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH EQUIVALENTS (1,971) (1,559)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 13,137 (47,001)
CASH AND CASH EQUIVALENTS, beginning 16,989 60,806
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CASH AND CASH EQUIVALENTS, ending $ 30,126 $ 13,805
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 21,362 $ 16,217
=========== ===========
Income taxes paid $ 6,574 $ 58,657
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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.
Financial Accounting Standard No. 130, "Reporting Comprehensive
Income", 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. Total
comprehensive income is as follows (in thousands):
Three Months Ended Nine Months Ended
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Apr. 1, Mar. 26, Apr. 1, Mar. 26,
2001 2000 2001 2000
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Net income $ 29,889 $ 42,056 $ 43,513 $ 108,903
Unrealized (loss)gain on marketable securities (66) 1,602 (866) 2,755
Foreign currency translation adjustments (1,092) (1,024) (2,082) (1,656)
Gain on derivative instruments 2,945 - 1,189 -
---------- ---------- ---------- ------------
Total comprehensive income $ 31,676 $ 42,634 $ 41,754 $ 110,002
========== ========== ========== ============
The components of Accumulated Other Comprehensive Loss are as follows (in
thousands):
Apr. 1, July 2,
2001 2000
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Unrealized (loss)gain on marketable securities $ (672) $ 194
Cumulative translation adjustments (6,207) (4,125)
Gain on derivative instruments 1,189 -
--------- ---------
Accumulated other comprehensive loss $ (5,690) $ (3,931)
========= =========
At the beginning of the fiscal first quarter, the Company adopted
Financial Accounting Standard No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (FAS 133). This statement requires companies to record
derivatives on the balance sheet as assets or liabilities, measured at fair
value. Any changes in fair value of these instruments are recorded in the income
statement or other comprehensive income. The impact of adopting FAS 133 on
Accumulated Other Comprehensive Loss resulted in a loss of $15 thousand. For
both the quarter and the nine months, the Company reclassified derivative gains
of $2.5 million to the income statement. The cumulative effect of adopting FAS
133 on the results of operations was immaterial.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
The Company enters into derivative contracts designated as cash flow
hedges to manage its foreign currency exposures. These instruments generally do
not have a maturity of more than thirteen months. During the nine months, there
were no derivative instruments that were deemed to be ineffective. The amounts
included in Accumulated Other Comprehensive Loss will be reclassified into
income when the forecasted transaction occurs, generally within the next twelve
months. These forecasted transactions represent the exporting of products for
which the Company will receive foreign currency and the importing of products
for which the Company will be required to pay in a foreign currency.
In September 2000, the Emerging Issues Task Force (EITF) issued EITF
Abstract No. 00-10 "Accounting for Shipping and Handling Fees and Costs". EITF
No. 00-10 prescribes guidance regarding the income statement classification of
costs incurred for shipping and handling fees and costs. This guidance requires
shipping fees to be recognized in revenue and shipping costs to be recognized in
cost of sales. This statement is to be effective during the fourth quarter of
fiscal 2001. The Company will reclassify shipping fee revenue out of cost of
sales, where it currently is classified as a reduction of shipping costs, and
into revenue.
In January 2001, EITF Abstract No. 00-22 "Accounting for `Points' and
Certain Other Time-Based or Volume-Based Sales Incentive Offers, and Offers for
Free Products or Services to be Delivered in the Future" was issued. EITF No.
00-22 prescribes guidance requiring certain rebate offers and free products that
are delivered subsequent to a single exchange transaction to be recognized when
incurred, and reported as a reduction of revenue. The adoption of EITF No. 00-22
will not impact the results of operations because the Company's past and current
accounting policy is to report such costs as reductions of revenue.
The effective dates of EITF No. 00-10 and EITF No. 00-22 are June 30,
2001. The Company does not believe that the adoption of EITF No. 00-10 and EITF
No. 00-22 will have a material effect on the results of operations of the
Company.
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:
RESULTS OF OPERATIONS
SALES
Net sales for the third fiscal quarter totaled $430 million, a decrease
of $38 million or 8% compared to the same period of the preceding year. A major
portion of the decrease was the result of an unfavorable mix change in engines
sold of $18 million. Sales of small horsepower engines remained about the same
between comparable periods but fewer larger horsepower engines were sold. Larger
engines are used primarily on riding mower equipment. There appears to be
adequate inventory of riding equipment at original equipment manufacturers and
at retail to handle this season's anticipated demand; therefore, fewer of these
engines have been shipped this quarter. Sales declined $10 million between years
due to lower shipments of service parts and replacement engines as the Company's
distributors have adequate stocks for the upcoming repair season and are
controlling their inventory levels. The impact of a weaker Euro compared to
fiscal 2000 caused revenues to be $6 million lower than last year.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Net sales for the nine months totaled $979 million, a decrease of $211
million or 18% compared to the first nine months of the prior year. This decline
resulted from an unfavorable mix change in engines sold of $93 million, a 7%
decrease in engine unit sales amounting to $80 million, $21 million due to the
weak Euro, and lower service parts and replacement engines sales of $18 million.
The unfavorable mix and volume decrease were caused by the lower sales of larger
horsepower units for riding mowers as described above and lower sales of engines
for generator applications. The entire generator market has been weak due to
excess inventories left over from Y2K buildup.
GROSS PROFIT MARGIN
The gross profit rate decreased to 20% in the current quarter from 22%
in the preceding year's third quarter. The major reasons for the decrease were a
12% decrease in engine unit production resulting in $7 million of lower
absorption and $6 million due to the weak Euro. Production volumes were lowered
to address the decreased unit sales and to control the level of the fiscal
year-end finished goods inventory. Offsetting the reduction in gross profit were
lower costs in labor benefits resulting from higher pension income of $4 million
and lower profit sharing expenses of $3 million.
The gross profit rate for the nine-month period decreased to 19% in the
current year from 22% in the preceding year. This decrease resulted primarily
from the same factors discussed above for the quarter. The impact of the Euro
was $21 million of the decrease and an 8% decrease in production volume created
$15 million of lower spending efficiencies and $12 million of lower absorption.
These decreases were offset by a favorable impact of $10 million of additional
pension income and $6 million of lower profit sharing expenses.
ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The engineering, selling and administrative expenses remained the same
between the third fiscal quarters of 2001 and 2000. Although expenses were
similar in total, there was an increase of about $5 million due to planned
expansions of staff and expenditures for business development and introduction
of new product. Offsetting these increases were lower costs in labor benefits
resulting from lower profit sharing expenses of $4 million and an additional $1
million of pension income.
The $4 million or 4% increase for the comparative nine-month periods
was due primarily to the same factors discussed above for the quarter. This
reflects approximately $13 million for additional manpower and expenditures
relating to new product and business development offset by $7 million of lower
profit sharing costs and an additional $3 million of pension income.
INTEREST EXPENSE
Interest expense increased 29% or $2 million between years for the
third quarter and 43% or $7 million between years for nine months. These
increases were the result of the Company's higher level of short-term borrowings
to fund increased seasonal working capital needs.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
GAIN ON DISPOSITION OF FOUNDRY ASSETS
At the end of August 1999, the Company contributed its two ductile iron
foundries to Metal Technologies Holding Company, Inc.,(MTHC), in exchange for
$24 million in cash and $45 million aggregate par value convertible preferred
stock. The provisions of the preferred stock include a 15% cumulative dividend
and conversion rights into a minimum of 31% of MTHC common stock. Pursuant to
Emerging Issues Task Force Abstract No. 86-29, the Company considered this
contribution to be a monetary transaction, given the significant amount of cash
received, and recorded the consideration received at fair value. The preferred
stock received was determined to have a fair value of $22 million based on
provisions of the stock and the prevailing market returns for similar
investments, estimated to be 30%, as of the date of the transaction.
PROVISION FOR INCOME TAXES
The effective tax rate used in both the third quarter and nine-month
periods for the current year was 37%. This is management's estimate of what the
rate will be for the entire 2001 fiscal year. Last year's rate was also 37% in
both periods.
PROPOSED GENERAC PORTABLE PRODUCTS, INC., ACQUISITION
The Company announced on March 1, 2001, that it had signed a letter of
intent to acquire Generac Portable Products, Inc., (Generac), of Jefferson,
Wisconsin, for $55 million cash and subject to approximately $210 million of
outstanding Generac debt. On March 22, 2001, the Company signed a definitive
agreement to acquire Generac on terms consistent with the letter of intent
previously announced. Generac is a leading designer, manufacturer and marketer
of engine-powered products. Generac's two principal product lines are portable
generators and pressure washers. The acquisition is slated to close in the
fourth quarter of fiscal 2001 and the Company expects to fund it with debt
financing.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows used in operating activities for the nine-month periods of
fiscal 2001 and fiscal 2000 were $205 million and $179 million, respectively, a
$25 million increase in requirements between the years.
The fiscal 2001 cash flow from operating activities reflects decreased
net income of $65 million, including lower gains on the disposition of plant and
equipment of $17 million. The lower gains on disposition of plant and equipment
were because fiscal 2000 contained the disposition of the foundry assets. The
increase in inventories was $67 million less in fiscal 2001 compared to fiscal
2000. This decrease was the result of planned inventory increases in fiscal 2000
to replenish abnormally low inventories to more normal levels. The increase in
accounts payable and accrued liabilities was $45 million less in fiscal 2001
compared to fiscal 2000. The decrease was due to timing of payments in accounts
payable, accrued salaries, and accrued payroll taxes and lack of accruals for
profit sharing due to lower performance. The $12 million increase in prepaid
pension is attributable to the Company's over funded pension plan. Also due to
the timing of payments was the $10 million increase in accounts receivable in
fiscal 2001 compared to fiscal 2000.
Net cash used in investing activities totaled $43 million and $25
million in fiscal 2001 and fiscal 2000, respectively. The $18 million increase
is attributed primarily to $24 million of cash received from the foundry
transaction in fiscal 2000, offset by a $5 million decrease in capital
expenditures in fiscal 2001.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Net cash provided by financing activities amounted to $263 million and
$159 million in fiscal 2001 and 2000, respectively, an increase of $104 million.
These financing activities reflect higher levels of short-term borrowings in
fiscal 2001 to fund seasonal working capital requirements, primarily inventory,
causing a $72 million increase in debt between the periods. Also, the Company
repurchased fewer common shares in fiscal 2001 compared to fiscal 2000.
FUTURE LIQUIDITY AND CAPITAL RESOURCES
The Company has remaining authorization to buy up to 1.8 million shares
of company stock in open market or private transactions under the June 2000
Board of Directors' authorization to repurchase up to 2.0 million shares. The
Company did not purchase any shares in the third quarter of fiscal 2001 and does
not anticipate repurchasing additional shares for the remainder of fiscal 2001
or fiscal 2002.
Due to expected higher working capital requirements and lower available
cash, the Company arranged for an additional line of credit amounting to $140
million during the second fiscal quarter of 2001. This line expires in November
2001. In connection with the proposed acquisition of Generac, the Company
expects to issue long-term debt to make the acquisition, replace the outstanding
Generac debt and replace the credit line expiring in November 2001. The Company
also plans to operate in the first half of fiscal 2002 with working capital
requirements for inventory that are lower than those in the comparable period of
fiscal 2001.
The increased debt that results from the Generac acquisition and the
replacement of the expiring credit line is presently expected to increase
interest expense to approximately $50 million for fiscal 2002.
Management expects cash flows for capital expenditures to total
approximately $65 million in fiscal 2001 and $65 to $70 million for fiscal 2002.
These capital expenditure levels provide for base replacement, new product, and
capacity and cost reduction requirements. They will be funded using available
cash and short-term borrowings.
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, any applicable restrictions on the payment of dividends
and requirements of applicable law.
The Company believes that available cash, cash generated from
operations, existing lines of credit and access to debt markets will be adequate
to fund its capital requirements for the foreseeable future.
OUTLOOK
The Company projects fourth quarter net sales for the engine business
to be down 5-8% between years. Generac sales after the completion of the
acquisition are anticipated to add $50 to $55 million of sales in the fourth
quarter, assuming the acquisition closes as scheduled. The gross profit
percentage is expected to be in the 15.5% to 16.5 % range, lower than last
year's fourth quarter percentage. This is driven by an estimate of 35% to 45%
lower engine production as the Company reflects weaker shipments and brings
inventories to a level lower than they were last fiscal year-end. The Company's
engineering, selling and administrative expenses for the fourth quarter are
projected to decrease around 15% from last year's level because of lower benefit
costs in fiscal 2001. However, Generac will add $9 to $10 million of expenses to
this category. Finally, interest expense is anticipated to be higher than last
year by $5 million. About $4 million of this increase is due to the debt
associated with the Generac acquisition.
These projections for the fourth quarter should result in a range of
net income for the full year that is now expected to be $55 to $60 million.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Fiscal 2002 will be the first full year combining Generac's and the
Company's results. At the current time consolidated net sales are estimated to
approach $1.7 billion. This number reflects the belief that both generator sales
and engine sales for generators will return to a more normal level, and engine
sales for lawn and garden equipment will remain stable between fiscal 2001 and
2002. The projection reflects a continued weak Euro. Gross profits are
anticipated to improve primarily because of higher engine unit sales, and
greater production that will spread fixed costs over more units. Gross profit
margins are expected to be approximately 20%. Engineering, selling and
administrative expenses are estimated at 11% of net sales. This percentage is
higher than the Company's traditional target because of the higher percentage of
sales committed to selling expenses at Generac. Depreciation is expected to be
$58 million and goodwill amortization $8 million.
OTHER MATTERS
On October 5, 2000, it was announced that one of the Company's largest
customers, the Murray Group, was acquired by Summersong Investments, Inc. The
Company does not expect this acquisition to adversely impact its annual supply
arrangement with the Murray Group for the current outdoor power
equipment-selling season.
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", "intend", "may", "objective",
"plan", "seek", "think", "will" 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, our ability to successfully forecast demand for our
products and appropriately adjust our manufacturing levels; changes in our
operating expenses; our ability to complete our proposed acquisition of Generac
Portable Products, Inc. and successfully integrate it into our operations;
changes in interest rates; the effects of weather on the purchasing patterns of
consumers and original equipment manufacturers ("OEMs"); changes in the expected
speed and timing of the reduction of generator inventories of Generac and other
generator manufacturers and retailers which had been built up in anticipation of
Y2K concerns; actions of engine manufacturers and OEMs with whom we compete; the
seasonal nature of our business; changes in laws and regulations, including
accounting standards; work stoppages or other consequences of any deterioration
in our employee relations; changes in consumer and OEM demand; changes in prices
of raw materials and parts that we purchase; changes in domestic economic
conditions, including housing starts and changes in consumer disposable income;
changes in foreign economic conditions, including currency rate fluctuations;
and other factors that may be disclosed from time to time in our SEC filings or
otherwise. Some or all of the factors may be beyond our control. We caution you
that any forward-looking statement reflects only our belief at the time the
statement is made. We undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the
statement is made.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes since the September 7, 2000 filing
of the Company's Annual Report on Form 10-K.
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit
Number Description
2 Agreement and Plan of Merger, dated as of March 21, 2001, by
and among Briggs & Stratton Corporation, GPP Merger
Corporation, Generac Portable Products, Inc. and the Beacon
Group III - Focus Value Fund, L.P. (incorporated herein by
reference to Exhibit 2 to Briggs & Stratton Corporation's
Current Report on Form 8-K dated March 21, 2001).
11 Computation of Earnings Per Share of Common Stock*
12 Computation of Ratio of Earnings to Fixed Charges*
*Filed herewith
(b) Reports on Form 8-K.
On March 1, 2001, the Company filed a report on Form 8-K dated March 1,
2001, to report the signing of a letter of intent to acquire Generac
Portable Products, Inc.
On March 23, 2001, the Company filed a report on Form 8-K dated March
21, 2001, to report that it had signed a definitive agreement to
acquire Generac Portable Products, Inc.
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: April 26, 2001 /s/ James E. Brenn
---------------------------------------------------
James E. Brenn
Senior Vice President and Chief Financial Officer
and Duly Authorized Officer
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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit
Number Description
2 Agreement and Plan of Merger, dated as of March 21,
2001, by and among Briggs & Stratton Corporation, GPP
Merger Corporation, Generac Portable Products, Inc. and
the Beacon Group III - Focus Value Fund, L.P.
(incorporated herein by reference to Exhibit 2 to Briggs
& Stratton Corporation's Current Report on Form 8-K
dated March 21, 2001).
11 Computation of Earnings Per Share of Common Stock*
12 Computation of Ratio of Earnings to Fixed Charges*
*Filed herewith
14