Briggs & Stratton Corp. engages in the design, manufacture, and distribution of gasoline engines and outdoor powered equipment. It operates through Engines and Products segments. The Engines segment produces four-cycle aluminum alloy gasoline engines which are used in the production of walk-behind and riding lawn mowers, garden tillers, and snow throwers. The Products segment comprises lawn and garden power equipment, turf care products, portable and standby generators, pressure washers, snow throwers, and job site products. The company was founded in 1908 and is headquartered in Wauwatosa, WI.
Demand for products fluctuates significantly due to seasonality. In addition, changes in the weather and consumer confidence impact demand.
We have only a limited ability to pass through cost increases in our raw materials to our customers during the year.
A significant portion of our net sales comes from major customers and the loss of any of these customers would negatively impact our financial results.
A significant change or disruption in the U.S. retail market for lawn and garden products could have an adverse impact on our business.
Changes in environmental, tax, health care or other laws and regulations could require extensive changes in our operations or to our products.
Our international operations are subject to risks and uncertainties, which could adversely affect our business or financial results.
Actions of our competitors could reduce our sales or profits.
We are restricted by the terms of the outstanding Senior Notes and our other debt, which could adversely affect us.
Our level of debt and our ability to obtain debt financing could adversely affect our operating flexibility and put us at a competitive disadvantage.
Disruptions caused by labor disputes or organized labor activities or an inability to acquire and retain skill sets needed could harm our business and reputation.
Worldwide economic conditions may adversely affect our industry, business and results of operations.
We have goodwill and intangible assets, which were written down in fiscal 2016 and in prior years. If we determine that goodwill and other intangible assets have become further impaired in the future, net income in such years would be adversely affected.
We are subject to litigation, including product liability, patent infringement, and warranty claims, that may adversely affect our business and results of operations.
Our pension and postretirement benefit plan obligations are currently underfunded, and we may have to make significant cash payments to some or all of these plans, which would reduce the cash available for our businesses.
Our dependence on, and the price of, raw materials may adversely affect our profits.
We may be adversely affected by health and safety laws and regulations.
The operations and success of our Company can be impacted by natural disasters, terrorism, acts of war, international conflict and political and governmental actions, which could harm our business.
We are subject to tax laws and regulations in many jurisdictions, and the inability to successfully defend claims from taxing authorities could adversely affect our operating results and financial position.
If we fail to remain current with changes in gasoline engine technology or if the technology becomes less important to customers in our markets due to the impact of alternative fuels or power sources, our results may be negatively affected. In addition, if we are unable to continue to enhance existing products, as well as develop and market new products, that respond to customer needs and preferences and achieve market acceptance, our results may be negatively impacted.
Through our Products segment, we compete with certain customers of our Engines segment, thereby creating inherent channel conflict that may impact the actions of engine manufacturers and OEMs with whom we compete.
The financial stability of our suppliers and the ability of our suppliers to produce quality materials could adversely affect our ability to obtain timely and cost-effective raw materials.
An inability to successfully manage information systems, or to adequately maintain these systems and their security, as well as to protect data and other confidential information, could adversely affect our business and reputation.
We have implemented, and Wisconsin law contains, anti-takeover provisions that may adversely affect the rights of holders of our common stock.
Our common stock is subject to substantial price and volume fluctuations.
(1) For the first quarter of fiscal 2020, engine manufacturing consolidation charges include $2,039 ($1,987 after tax) of cash charges and $2,788 ($2,717 after tax) of non-cash charges related to the closure of the engine plant in Murray, Kentucky. Business optimization expenses include $1,079 ($896 after tax) of cash charges and $519 ($431 million after tax) of non-cash charges related to the business optimization program.
(2) For the first quarter of fiscal 2019, business optimization expenses include $763 ($598 after tax) of non-cash charges related to accelerated depreciation, and $19,168 ($14,598 after tax) of cash charges related primarily to activities associated with the Company's Q1 FY19 ERP go-live, professional services, employee termination benefits, and plant rearrangement activities. The Company recognized bad debt expense of $4,132 ($3,199 after tax) after a major retailer announced that it had filed for bankruptcy protection. The Company recognized $2,000 ($1,529 after tax) for amounts accrued related to a litigation settlement charge and $65 ($50 after tax) related to acquisition integration activities.
(3) Adjusted financial results are non-GAAP financial measures. The Company believes this information is meaningful to investors as it isolates the impact that business optimization charges and certain other items have on reported financial results and facilitates comparisons between peer companies. The Company may utilize non-GAAP financial measures as a guide in the forecasting, budgeting, and long-term planning process. While the Company believes that adjusted financial results are useful supplemental information, such adjusted financial results are not intended to replace its GAAP financial results and should be read in conjunction with those GAAP results.