UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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 28, 2003
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
(Exact name of registrant as specified in its charter)
| Wisconsin | 39-0182330 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 12301 West Wirth Street, Wauwatosa, Wisconsin | 53222 | |
| (Address of Principal Executive Offices) | (Zip Code) |
414/259-5333
(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.
Yesx No¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yesx No¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class | Outstanding at | |
COMMON STOCK, par value $0.01 per share |
BRIGGS & STRATONSTRATTON CORPORATION AND SUBSIDIARIES
| Page No. | ||||||
PART I – FINANCIAL INFORMATION | ||||||
Item 1. | Financial Statements | |||||
Consolidated Condensed Balance Sheets – | 3 | |||||
| 5 | ||||||
| 6 | ||||||
| 7 | ||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
Item 3. | ||||||
Item 4. | ||||||
PART II – OTHER INFORMATION | ||||||
Item 4. |
| |||||
Item 6. | ||||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
| ITEM 1. | FINANCIAL STATEMENTS |
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
ASSETS
| September 28, 2003 | June 29, 2003 | December 28, 2003 | June 29, 2003 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||||
CURRENT ASSETS: | ||||||||||||
Cash and cash equivalents | $ | 238,556 | $ | 324,815 | $ | 119,323 | $ | 324,815 | ||||
Accounts receivable, net | 226,153 | 201,948 | 339,822 | 201,948 | ||||||||
Inventories - | ||||||||||||
Finished products and parts | 173,008 | 128,998 | 230,585 | 128,998 | ||||||||
Work in process | 87,225 | 76,929 | 102,676 | 76,929 | ||||||||
Raw materials | 4,012 | 3,211 | 3,481 | 3,211 | ||||||||
Total inventories | 264,245 | 209,138 | 336,742 | 209,138 | ||||||||
Deferred income tax asset | 51,920 | 48,674 | 52,892 | 48,674 | ||||||||
Prepaid expenses and other current assets | 14,610 | 22,572 | 23,038 | 22,572 | ||||||||
Total current assets | 795,484 | 807,147 | 871,817 | 807,147 | ||||||||
OTHER ASSETS: | ||||||||||||
Goodwill | 154,070 | 159,756 | 154,070 | 159,756 | ||||||||
Investments | 45,204 | 44,175 | 41,693 | 44,175 | ||||||||
Prepaid pension | 75,693 | 74,005 | 77,879 | 74,005 | ||||||||
Deferred loan costs, net | 7,795 | 8,314 | 7,275 | 8,314 | ||||||||
Other long-term assets, net | 8,852 | 11,012 | 9,954 | 11,012 | ||||||||
Total other assets | 291,614 | 297,262 | 290,871 | 297,262 | ||||||||
PLANT AND EQUIPMENT: | ||||||||||||
Cost | 874,307 | 876,664 | 873,683 | 876,664 | ||||||||
Less - accumulated depreciation | 507,369 | 505,880 | 512,770 | 505,880 | ||||||||
Total plant and equipment, net | 366,938 | 370,784 | 360,913 | 370,784 | ||||||||
| $ | 1,454,036 | $ | 1,475,193 | $ | 1,523,601 | $ | 1,475,193 | |||||
The accompanying notes are an integral part of these statements.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (Continued)
(In thousands, except per share data)
LIABILITIES & SHAREHOLDERS’ INVESTMENT
| September 28, 2003 | June 29, 2003 | December 28, 2003 | June 29, 2003 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||
Accounts payable | $ | 105,577 | $ | 134,441 | $ | 119,726 | $ | 134,441 | ||||||||
Domestic notes payable | 2,075 | 2,075 | 1,220 | 2,075 | ||||||||||||
Foreign loans | — | 865 | 49 | 865 | ||||||||||||
Accrued liabilities | 141,241 | 157,463 | 169,165 | 157,463 | ||||||||||||
Dividends payable | 7,294 | — | 7,364 | — | ||||||||||||
Income taxes payable | 9,932 | 6,551 | 16,997 | 6,551 | ||||||||||||
Total current liabilities | 266,119 | 301,395 | 314,521 | 301,395 | ||||||||||||
OTHER LIABILITIES: | ||||||||||||||||
Deferred revenue on sale of plant and equipment | 15,111 | 15,163 | 15,050 | 15,163 | ||||||||||||
Deferred income tax liability | 58,871 | 57,917 | 60,621 | 57,917 | ||||||||||||
Accrued pension cost | 21,002 | 20,368 | 21,401 | 20,368 | ||||||||||||
Accrued employee benefits | 14,022 | 13,901 | 14,143 | 13,901 | ||||||||||||
Accrued postretirement health care obligation | 47,455 | 48,065 | 47,419 | 48,065 | ||||||||||||
Long-term debt | 501,063 | 503,397 | 501,356 | 503,397 | ||||||||||||
Total other liabilities | 657,524 | 658,811 | 659,990 | 658,811 | ||||||||||||
SHAREHOLDERS’ INVESTMENT: | ||||||||||||||||
Common stock - | ||||||||||||||||
Authorized 60,000 shares, $.01 par value, issued 28,927 shares | 289 | 289 | 289 | 289 | ||||||||||||
Additional paid-in capital | 35,839 | 35,074 | 36,902 | 35,074 | ||||||||||||
Retained earnings | 818,791 | 822,060 | 832,062 | 822,060 | ||||||||||||
Accumulated other comprehensive loss | (1,036 | ) | (734 | ) | (5,424 | ) | (734 | ) | ||||||||
Unearned compensation on restricted stock | (1,085 | ) | (287 | ) | (1,018 | ) | (287 | ) | ||||||||
Treasury stock at cost, 6,744 and 7,142 shares, respectively | (322,405 | ) | (341,415 | ) | ||||||||||||
Treasury stock at cost, 6,562 and 7,142 shares, respectively | (313,721 | ) | (341,415 | ) | ||||||||||||
Total shareholders’ investment | 530,393 | 514,987 | 549,090 | 514,987 | ||||||||||||
| $ | 1,454,036 | $ | 1,475,193 | $ | 1,523,601 | $ | 1,475,193 | |||||||||
The accompanying notes are an integral part of these statements.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| September 28, 2003 | September 29, 2002 | December 28, 2003 | December 29, 2002 | December 28, 2003 | December 29, 2002 | |||||||||||||||||||
NET SALES | $ | 331,395 | $ | 236,496 | $ | 415,984 | $ | 352,562 | $ | 747,379 | $ | 589,058 | ||||||||||||
COST OF GOODS SOLD | 271,200 | 200,703 | 325,138 | 284,922 | 596,338 | 485,624 | ||||||||||||||||||
Gross profit on sales | 60,195 | 35,793 | 90,846 | 67,640 | 151,041 | 103,434 | ||||||||||||||||||
ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 45,900 | 38,358 | 52,170 | 41,169 | 98,070 | 79,527 | ||||||||||||||||||
Income (Loss) from operations | 14,295 | (2,565 | ) | |||||||||||||||||||||
Income from operations | 38,676 | 26,471 | 52,971 | 23,907 | ||||||||||||||||||||
INTEREST EXPENSE | (9,832 | ) | (10,089 | ) | (9,596 | ) | (10,171 | ) | (19,428 | ) | (20,260 | ) | ||||||||||||
OTHER INCOME, net | 1,443 | 2,007 | 1,265 | 1,494 | 2,708 | 3,500 | ||||||||||||||||||
Income (Loss) before provison (credit) for income taxes | 5,906 | (10,647 | ) | |||||||||||||||||||||
PROVISION (CREDIT) FOR INCOME TAXES | 1,890 | (3,620 | ) | |||||||||||||||||||||
Income before income taxes | 30,345 | 17,794 | 36,251 | 7,147 | ||||||||||||||||||||
PROVISION FOR INCOME TAXES | 9,710 | 6,050 | 11,600 | 2,430 | ||||||||||||||||||||
NET INCOME (LOSS) | $ | 4,016 | $ | (7,027 | ) | |||||||||||||||||||
NET INCOME | $ | 20,635 | $ | 11,744 | $ | 24,651 | $ | 4,717 | ||||||||||||||||
EARNINGS PER SHARE DATA - | ||||||||||||||||||||||||
Average shares outstanding | 21,971 | 21,643 | 22,088 | 21,647 | 22,121 | 21,645 | ||||||||||||||||||
Basic earnings (loss) per share | $ | 0.18 | $ | (0.32 | ) | |||||||||||||||||||
Basic earnings per share | $ | 0.93 | $ | 0.54 | $ | 1.11 | $ | 0.22 | ||||||||||||||||
Diluted average shares outstanding | 22,105 | 21,643 | 25,104 | 24,482 | 25,096 | 21,654 | ||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.18 | $ | (0.32 | ) | |||||||||||||||||||
Diluted earnings per share | $ | 0.87 | $ | 0.53 | $ | 1.08 | $ | 0.22 | ||||||||||||||||
CASH DIVIDENDS PER SHARE | $ | 0.33 | $ | 0.32 | ||||||||||||||||||||
CASH DIVIDENDS DECLARED PER SHARE | $ | 0.33 | $ | 0.32 | $ | 0.66 | $ | 0.64 | ||||||||||||||||
The accompanying notes are an integral part of these statementsstatements.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| September 28, 2003 | September 29, 2002 | December 28, 2003 | December 29, 2002 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income (loss) | $ | 4,016 | $ | (7,027 | ) | |||||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities - | ||||||||||||||||
Net income | $ | 24,651 | $ | 4,717 | ||||||||||||
Adjustments to reconcile net income to net cash used in operating activities - | ||||||||||||||||
Depreciation and amortization | 15,846 | 16,051 | 32,290 | 31,189 | ||||||||||||
Equity earnings of unconsolidated affiliates | (1,022 | ) | (760 | ) | (1,011 | ) | (2,185 | ) | ||||||||
Loss on disposition of plant and equipment | 651 | 2,174 | 3,066 | 1,912 | ||||||||||||
Provision for deferred income taxes | (2,292 | ) | 4,223 | |||||||||||||
(Credit) provision for deferred income taxes | (1,514 | ) | 5,174 | |||||||||||||
Change in operating assets and liabilities - | ||||||||||||||||
(Increase) decrease in accounts receivable | (24,195 | ) | 42,580 | |||||||||||||
Increase in accounts receivable | (137,862 | ) | (104,158 | ) | ||||||||||||
Increase in inventories | (55,107 | ) | (79,479 | ) | (127,604 | ) | (107,681 | ) | ||||||||
Decrease in prepaid expenses and other current assets | 7,962 | 1,798 | ||||||||||||||
Decrease in accounts payable and accrued liabilities | (40,523 | ) | (42,193 | ) | ||||||||||||
(Increase) decrease in prepaid expenses and other current assets | (466 | ) | 3,450 | |||||||||||||
Increase (decrease) in accounts payable and accrued liabilities | 3,243 | (24,298 | ) | |||||||||||||
Change in pension obligation, net | (1,092 | ) | (3,088 | ) | (2,879 | ) | (6,298 | ) | ||||||||
Other, net | (1,383 | ) | (1,454 | ) | (2,828 | ) | (3,769 | ) | ||||||||
Net cash used in operating activities | (97,139 | ) | (67,175 | ) | (210,914 | ) | (201,947 | ) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Additions to plant and equipment | (11,564 | ) | (8,812 | ) | (23,144 | ) | (19,908 | ) | ||||||||
Proceeds received on disposition of plant and equipment | 113 | 90 | 299 | 3,232 | ||||||||||||
Refund of cash paid for acquisition | 5,686 | — | 5,686 | — | ||||||||||||
Dividends received | 3,500 | 6,330 | ||||||||||||||
Net cash used in investing activities | (5,765 | ) | (8,722 | ) | (13,659 | ) | (10,346 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Net repayments on loans and notes payable | (865 | ) | (2,156 | ) | ||||||||||||
Net (repayments) borrowings on loans and notes payable | (1,671 | ) | 23,923 | |||||||||||||
Dividends paid | (7,285 | ) | (6,927 | ) | ||||||||||||
Proceeds from exercise of stock options | 16,803 | — | 24,701 | — | ||||||||||||
Net cash provided by (used in) financing activities | 15,938 | (2,156 | ) | |||||||||||||
Net cash provided by financing activities | 15,745 | 16,996 | ||||||||||||||
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 707 | (133 | ) | 3,336 | 1,574 | |||||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (86,259 | ) | (78,186 | ) | (205,492 | ) | (193,723 | ) | ||||||||
CASH AND CASH EQUIVALENTS, beginning | 324,815 | 215,945 | 324,815 | 215,945 | ||||||||||||
CASH AND CASH EQUIVALENTS, ending | $ | 238,556 | $ | 137,759 | $ | 119,323 | $ | 22,222 | ||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||||||
Interest paid | $ | 14,977 | $ | 15,985 | $ | 18,840 | $ | 19,312 | ||||||||
Income taxes paid | $ | 681 | $ | 4,188 | $ | 1,540 | $ | 5,460 | ||||||||
The accompanying notes are an integral part of these statements.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
General Information
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 accounting principles generally accepted in the U.S. However, in the opinion of Briggs & Stratton Corporation, 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 consolidated condensed financial statements should be read in conjunction with the financial statements and the notes thereto which were included in our latest Annual Report on Form 10-K.
Earnings Per Share
Basic earnings per share, for each period presented, is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed reflecting the potential dilution that would occur if options or other contracts to issue common stock were exercised or converted into common stock at the beginning of the period.
Information on earnings per share is as follows (in thousands):
| Three Months Ended | |||||||||||||||||||
| September 28, 2003 | September 29, 2002 | Three Months Ended | Six Months Ended | ||||||||||||||||
Net income (loss) | $ | 4,016 | $ | (7,027 | ) | ||||||||||||||
Adjustments to net income (loss) to add after tax interest expense on convertible notes | — | — | |||||||||||||||||
December 28, 2003 | December 29, 2002 | December 28, 2003 | December 29, 2002 | ||||||||||||||||
Adjusted net income (loss) used in diluted earnings per share | $ | 4,016 | $ | (7,027 | ) | ||||||||||||||
Net income | $ | 20,635 | $ | 11,744 | $ | 24,651 | $ | 4,717 | |||||||||||
Adjustments to net income to add after tax interest expense on convertible notes | 1,190 | 1,155 | 2,380 | — | |||||||||||||||
Adjusted net income used in diluted earnings per share | $ | 21,825 | $ | 12,899 | $ | 27,031 | $ | 4,717 | |||||||||||
Average shares of common stock outstanding | 21,971 | 21,643 | 22,088 | 21,647 | 22,121 | 21,645 | |||||||||||||
Incremental common shares applicable to common stock options based on the common stock average market price during the period | 120 | — | 181 | — | 136 | — | |||||||||||||
Incremental common shares applicable to restricted common stock based on the common stock average market price during the period | 14 | — | 9 | 9 | 13 | 9 | |||||||||||||
Incremental common shares applicable to convertible notes based on the conversion provisions of the convertible notes | — | — | 2,826 | 2,826 | 2,826 | — | |||||||||||||
Diluted average common shares outstanding | 22,105 | 21,643 | 25,104 | 24,482 | 25,096 | 21,654 | |||||||||||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Comprehensive Income
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. Comprehensive income is defined as net income and other changes in shareholders’ investment from transactions and events other than with shareholders. Total comprehensive income (loss) is as follows (in thousands):
| Three Months Ended | ||||||||
| September 28, 2003 | September 29, 2002 | |||||||
Net income (loss) | $ | 4,016 | $ | (7,027 | ) | |||
Unrealized loss on marketable securities | — | (42 | ) | |||||
Cumulative translation adjustments | 672 | (49 | ) | |||||
Unrealized (loss) gain on derivative instruments | (974 | ) | 1,553 | |||||
Total comprehensive income (loss) | $ | 3,714 | $ | (5,565 | ) | |||
The components of Accumulated Other Comprehensive Loss are as follows (in thousands):
| ||||||||
| September 28, 2003 | June 29, 2003 | |||||||
Cumulative translation adjustments | $ | 2,488 | $ | 1,816 | ||||
Unrealized (loss) gain on derivative instruments | (961 | ) | 13 | |||||
Minimum pension liability adjustment | (2,563 | ) | (2,563 | ) | ||||
Accumulated other comprehensive loss | $ | (1,036 | ) | $ | (734 | ) | ||
| Three Months Ended | Six Months Ended | |||||||||||||||
December 28, 2003 | December 29, 2002 | December 28, 2003 | December 29, 2002 | |||||||||||||
Net income | $ | 20,635 | $ | 11,744 | $ | 24,651 | $ | 4,717 | ||||||||
Unrealized loss on marketable securities | — | (10 | ) | — | (52 | ) | ||||||||||
Foreign currency translation adjustments | 2,744 | 1,728 | 3,416 | 1,679 | ||||||||||||
Unrealized (loss) gain on derivative instruments | (7,132 | ) | 484 | (8,106 | ) | 2,037 | ||||||||||
Total comprehensive income | $ | 16,247 | $ | 13,946 | $ | 19,961 | $ | 8,381 | ||||||||
The components of Accumulated Other Comprehensive Loss are as follows (in thousands):
December 28, 2003 | June 29, 2003 | |||||||
Cumulative translation adjustments | $ | 5,232 | $ | 1,816 | ||||
Unrealized (loss) gain on derivative instruments | (8,093 | ) | 13 | |||||
Minimum pension liability adjustment | (2,563 | ) | (2,563 | ) | ||||
Accumulated other comprehensive loss | $ | (5,424 | ) | $ | (734 | ) | ||
Derivatives
Derivatives are recorded on the balance sheet as assets or liabilities, measured at fair value. Briggs & Stratton 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 twelve months. Briggs & Stratton uses interest rate swaps designated as fair value hedges to manage its debt portfolio. These instruments generally have maturities and terms consistent with the underlying debt instrument.
Changes in the fair value of cash flow hedges are recorded on the income statement or as a component of accumulated other comprehensive income (loss). The amounts included in accumulated other comprehensive income (loss) will be reclassified into income when the forecasted transactions occur, generally within the next twelve months. These forecasted transactions represent the exporting of products for which Briggs & Stratton will receive foreign currency and the importing of products for which it will be required to pay in a foreign currency. Changes in the fair value of fair value hedges related to interest rate swaps are recorded as an increase/decrease to long-term debt. Changes in the fair value of all derivatives deemed to be ineffective are recorded as either income or expense in the accompanying Consolidated Condensed Statements of Income. During the quarter there were no material ineffective hedges.
On SeptemberDecember 28, 2003, Briggs & Stratton had interest rate swaps relating to the $275 million 8.875% senior notes due in 2011. The swaps convert $50 million in notional amounts from fixed to a floating rate (LIBOR-set-in-arrears) and mature in fiscal 2011. The floating rate on the interest rate swaps at SeptemberDecember 28, 2003 was 5.3%5.4%. The fair market value of these derivatives was approximately $1.1 million.$1.2 million and $3.6 million as of December 28, 2003 and June 29, 2003, respectively.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Segment and Geographic Information
Briggs & Stratton operates in two reportable business segments, Engines and Power Products, that are managed separately based on fundamental differences in their operations. Summarized segment data is as follows (in thousands):
| Three Months Ended | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| September 28, 2003 | September 29, 2002 | December 28, 2003 | December 29, 2002 | December 28, 2003 | December 29, 2002 | |||||||||||||||||||
NET SALES: | ||||||||||||||||||||||||
Engines | $ | 235,687 | $ | 194,891 | $ | 357,848 | $ | 305,198 | $ | 592,196 | $ | 500,089 | ||||||||||||
Power Products | 124,761 | 53,675 | 97,614 | 61,260 | 223,163 | 114,935 | ||||||||||||||||||
Inter-Segment Eliminations | (29,053 | ) | (12,070 | ) | (39,478 | ) | (13,896 | ) | (67,980 | ) | (25,966 | ) | ||||||||||||
Total* | $ | 331,395 | $ | 236,496 | $ | 415,984 | $ | 352,562 | $ | 747,379 | $ | 589,058 | ||||||||||||
* International Sales (included in above) | ||||||||||||||||||||||||
*International Sales (included in the above) | ||||||||||||||||||||||||
Engines | $ | 51,276 | $ | 55,575 | $ | 109,292 | $ | 96,289 | $ | 160,568 | $ | 151,864 | ||||||||||||
Power Products | 3,528 | 3,996 | 3,982 | 3,518 | 7,510 | 7,514 | ||||||||||||||||||
Total | $ | 54,804 | $ | 59,571 | $ | 113,274 | $ | 99,807 | $ | 168,078 | $ | 159,378 | ||||||||||||
GROSS PROFIT ON SALES: | ||||||||||||||||||||||||
Engines | $ | 42,897 | $ | 30,042 | $ | 80,867 | $ | 60,673 | $ | 123,373 | $ | 90,716 | ||||||||||||
Power Products | 15,679 | 6,039 | 11,891 | 6,040 | 27,961 | 12,079 | ||||||||||||||||||
Inter-Segment Eliminations | 1,619 | (288 | ) | (1,912 | ) | 927 | (293 | ) | 639 | |||||||||||||||
Total | $ | 60,195 | $ | 35,793 | $ | 90,846 | $ | 67,640 | $ | 151,041 | $ | 103,434 | ||||||||||||
INCOME (LOSS) FROM OPERATIONS: | ||||||||||||||||||||||||
INCOME FROM OPERATIONS: | ||||||||||||||||||||||||
Engines | $ | 3,999 | $ | (3,797 | ) | $ | 35,432 | $ | 23,776 | $ | 38,712 | $ | 19,979 | |||||||||||
Power Products | 8,677 | 1,520 | 5,156 | 1,768 | 14,552 | 3,289 | ||||||||||||||||||
Inter-Segment Eliminations | 1,619 | (288 | ) | (1,912 | ) | 927 | (293 | ) | 639 | |||||||||||||||
Total | $ | 14,295 | $ | (2,565 | ) | $ | 38,676 | $ | 26,471 | $ | 52,971 | $ | 23,907 | |||||||||||
Warranty
Briggs & Stratton recognizes the cost associated with its standard warranty on enginesEngines and power productsPower Products at the time of sale. The amount recognized is based on historical failure rates and current claim cost experience. The following is a reconciliation of the changes in accrued warranty costs for the reporting period (in thousands):
Beginning Balance, June 29, 2003 | $ | 47,590 | ||||||
| Six Months Ended December 28, 2003 | ||||||||
Balance, Beginning of Period | $ | 47,590 | ||||||
Payments | (11,228 | ) | (20,975 | ) | ||||
Provision for Current Year Warranties | 6,841 | 15,103 | ||||||
Provisions for Prior Years Warranties | — | — | ||||||
Ending Balance, September 28, 2003 | $ | 43,203 | ||||||
Balance, End of Period | $ | 41,718 | ||||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Stock Options
Briggs & Stratton has a Stock Incentive Plan that is accounted for under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. Under the plan, no compensation cost has been recognized. Had compensation cost for these plansthis plan been determined consistent with Statement of Financial Accounting Standard (“SFAS”) No. 123, “Accounting for Stock-Based Compensation”Compensation,” and Statement of Financial Accounting Standard No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure”, the Company’s net income and earnings per share would have been reduced to the following pro forma amounts:amounts (in thousands, except per share data):
| Three Months Ended | |||||||
| September 28, 2003 | September 29, 2002 | ||||||
Net Income (Loss) As Reported: | $ | 4,016 | $ | (7,027 | ) | ||
Deduct employee compensation expense determined under a fair value based method, net of related tax effects | 796 | 767 | |||||
Pro Forma Net Income (Loss) | $ | 3,220 | $ | (7,794 | ) | ||
Earnings (Loss) Per Share: | |||||||
As Reported | $ | 0.18 | $ | (0.32 | ) | ||
Pro Forma | $ | 0.15 | $ | (0.36 | ) | ||
Diluted Earnings (Loss) Per Share: | |||||||
As Reported | $ | 0.18 | $ | (0.32 | ) | ||
Pro Forma | $ | 0.15 | $ | (0.36 | ) | ||
| Three Months Ended | Six Months Ended | |||||||||||
| December 28, 2003 | December 29, 2002 | December 28, 2003 | December 29, 2002 | |||||||||
Net income as reported: | $ | 20,635 | $ | 11,744 | $ | 24,651 | $ | 4,717 | ||||
Deduct employee compensation expense determined under a fair value based method, net of related tax effects | 849 | 713 | 1,645 | 1,480 | ||||||||
Pro forma net income | $ | 19,786 | $ | 11,031 | $ | 23,006 | $ | 3,237 | ||||
Earnings per share: | ||||||||||||
As reported | $ | 0.93 | $ | 0.54 | $ | 1.11 | $ | 0.22 | ||||
Pro forma | $ | 0.90 | $ | 0.51 | $ | 1.04 | $ | 0.15 | ||||
Diluted earnings per share: | ||||||||||||
As reported | $ | 0.87 | $ | 0.53 | $ | 1.08 | $ | 0.22 | ||||
Pro forma | $ | 0.84 | $ | 0.50 | $ | 1.01 | $ | 0.15 | ||||
New Accounting Pronouncements
In JanuaryDecember 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 46 (FIN 46)(Revised December 2003), “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” (FIN 46R). This standard replaces FIN 46, “Consolidation of Variable Interest Entities” that was issued in January 2003. FIN 46R modifies or clarifies various provisions of FIN 46. FIN 46R addresses the consolidation by business enterprises of variable interest entities (VIEs), as defined in theby FIN 46.46R. FIN 46R exempts certain entities from its requirements and provides for special effective dates for entities that have fully or partially applied FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisionsissuance of FIN 46,46R. Otherwise, application of FIN 46R is required in financial statements of public entities that have interest in structures commonly referred to as revised, must be appliedspecial purpose entities for the first interim or annual periodperiods ending after December 15, 2003. The Company has not created or acquired any variable interestApplication by public entities, other than small business issuers, for all other types of VIEs is required in financial statements for periods ending after January 31, 2003, therefore, theMarch 15, 2004. The Company will adopt the provisionprovisions of FIN 4646R during the quarter ended DecemberMarch 28, 2003.2004. The adoption of FIN 4646R is being evaluated to determine what impact, if any, the adoption of the provisions will have on the Company’s financial condition or results of operations.operation.
In December 2003, the FASB revised SFAS No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits”. This statement revises employers’ disclosure about pension plans and other postretirement benefit plans. It does not change the measurement or recognition of those plans required by SFAS No. 87, “Employers’ Accounting for Pensions”, SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits”, and SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”. It requires additional disclosures to those in the original SFAS No. 132. This statement is effective for financial statements with fiscal years ending
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
after December 15, 2003. The interim-period disclosures required by this Statement will be effective for interim periods beginning after December 15, 2003. The provisions of this statement will be disclosed in the Company’s footnotes to the financial statements for the quarter ending March 28, 2004.
Financial Information of Subsidiary Guarantor of Indebtedness
In June 1997, Briggs & Stratton issued $100 million of 7.25% senior notes to finance the purchase of outstanding shares. In May 2001, the Company issued $275 million of 8.875% senior notes to fund the acquisition of Generac Portable Products, LLC (effective January 1, 2003, Generac Portable Products, LLC changed its name to Briggs & Stratton Power Products Group, LLC (“BSPPG”)) and $140 million of 5% convertible senior notes to replace an existing revolving line of credit. In addition, Briggs & Stratton has a $300 million revolving credit facility that expires in September 2004 that is used to finance seasonal working capital needs.
Under the terms of Briggs & Stratton’s 8.875% senior notes, 5.00% convertible senior notes, 7.25% senior notes and the revolving credit agreement (collectively, the “Domestic Indebtedness”), BSPPG became a joint and several guarantor of the Domestic Indebtedness (the “Guarantor”). Additionally, if at any time a domestic subsidiary of Briggs & Stratton constitutes a significant domestic subsidiary, then such domestic subsidiary will also become a guarantor of the Domestic Indebtedness. Currently, all of the Domestic Indebtedness is unsecured. In the event that the ratings of certain of the debt are reduced, the Domestic Indebtedness, excluding the convertible notes, will be entitled to participate in a pledge of substantially all of our assets. The Guarantor, at that time, is obligated to pay the outstanding Domestic Indebtedness if Briggs & Stratton were to fail to make a payment of interest or principal on its due date. Briggs & Stratton had the following outstanding amounts related to the guaranteed debt (in thousands):
| September 28, 2003 Carrying Amount | Maximum Guarantee | December 28, 2003 Carrying Amount | Maximum Guarantee | |||||||
8.875% Senior Notes, due March 15, 2011 | $270,730 | $275,000 | $ | 270,873 | $ | 275,000 | ||||
5.00% Convertible Senior Notes, due May 15, 2006 | $140,000 | $140,000 | $ | 140,000 | $ | 140,000 | ||||
7.25% Senior Notes, due September 15, 2007 | $ 89,263 | $ 90,000 | $ | 89,310 | $ | 90,000 | ||||
Revolving Credit Facility, expiring September 2004 | $ — | $300,000 | $ | — | $ | 300,000 | ||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
BALANCE SHEET
As of SeptemberDecember 28, 2003
(In thousands)
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
Current Assets | $ 624,069 | $154,680 | $110,395 | $ (93,660 | ) | $ 795,484 | |||||
Investment in Subsidiaries | 341,062 | — | — | (341,062 | ) | — | |||||
Non-Current Assets | 479,361 | 175,304 | 3,887 | — | 658,552 | ||||||
| $1,444,492 | $329,984 | $114,282 | $(434,722 | ) | $1,454,036 | ||||||
Current Liabilities | $250,207 | $ 40,193 | $ 63,386 | $ (87,667 | ) | $ 266,119 | |||||
Long-Term Debt | 501,063 | — | — | — | 501,063 | ||||||
Other Long-Term Obligations | 151,042 | 5,192 | 227 | — | 156,461 | ||||||
Shareholders’ Investment | 542,180 | 284,599 | 50,669 | (347,055 | ) | 530,393 | |||||
| $1,444,492 | $329,984 | $114,282 | $(434,722 | ) | $1,454,036 | ||||||
BALANCE SHEET As of June 29, 2003 | |||||||||||
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||
Current Assets | $ 617,409 | $159,067 | $ 99,311 | $ (68,640 | ) | $ 807,147 | |||||
Investment in Subsidiaries | 333,730 | — | — | (333,730 | ) | — | |||||
Non-Current Assets | 483,227 | 180,903 | 3,916 | — | 668,046 | ||||||
| $1,434,366 | $339,970 | $103,227 | $(402,370 | ) | $1,475,193 | ||||||
Current Liabilities | $ 256,358 | $ 51,610 | $ 53,846 | $ (60,419 | ) | $ 301,395 | |||||
Long-Term Debt | 503,397 | — | — | — | 503,397 | ||||||
Other Long-Term Obligations | 151,521 | 3,855 | 38 | — | 155,414 | ||||||
Shareholders’ Investment | 523,090 | 284,505 | 49,343 | (341,951 | ) | 514,987 | |||||
| $1,434,366 | $339,970 | $103,227 | $(402,370 | ) | $1,475,193 | ||||||
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||
Current Assets | $ | 677,161 | $ | 177,230 | $ | 159,647 | $ | (142,221 | ) | $ | 871,817 | |||||
Investment in Subsidiaries | 344,585 | — | — | (344,585 | ) | — | ||||||||||
Non-Current Assets | 469,705 | 177,056 | 5,023 | — | 651,784 | |||||||||||
| $ | 1,491,451 | $ | 354,286 | $ | 164,670 | $ | (486,806 | ) | $ | 1,523,601 | ||||||
Current Liabilities | $ | 280,598 | $ | 60,268 | $ | 107,296 | $ | (133,641 | ) | $ | 314,521 | |||||
Long-Term Debt | 501,356 | — | — | — | 501,356 | |||||||||||
Other Long-Term Obligations | 151,827 | 6,562 | 245 | — | 158,634 | |||||||||||
Shareholders’ Investment | 557,670 | 287,456 | 57,129 | (353,165 | ) | 549,090 | ||||||||||
| $ | 1,491,451 | $ | 354,286 | $ | 164,670 | $ | (486,806 | ) | $ | 1,523,601 | ||||||
BALANCE SHEET
As of June 29, 2003
(In thousands)
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||
Current Assets | $ | 617,409 | $ | 159,067 | $ | 99,311 | $ | (68,640 | ) | $ | 807,147 | |||||
Investment in Subsidiaries | 333,848 | — | — | (333,848 | ) | — | ||||||||||
Non-Current Assets | 483,227 | 180,903 | 3,916 | — | 668,046 | |||||||||||
| $ | 1,434,484 | $ | 339,970 | $ | 103,227 | $ | (402,488 | ) | $ | 1,475,193 | ||||||
Current Liabilities | $ | 256,358 | $ | 51,610 | $ | 53,846 | $ | (60,419 | ) | $ | 301,395 | |||||
Long-Term Debt | 503,397 | — | — | — | 503,397 | |||||||||||
Other Long-Term Obligations | 151,521 | 3,855 | 38 | — | 155,414 | |||||||||||
Shareholders’ Investment | 523,208 | 284,505 | 49,343 | (342,069 | ) | 514,987 | ||||||||||
| $ | 1,434,484 | $ | 339,970 | $ | 103,227 | $ | (402,488 | ) | $ | 1,475,193 | ||||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
STATEMENT OF INCOME
For the Three Months Ended SeptemberDecember 28, 2003
(In thousands)
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net Sales | $ | 223,314 | $ | 117,327 | $ | 30,728 | $ | (39,974 | ) | $ | 331,395 | |||||||||
Cost of Goods Sold | 186,319 | 102,187 | 23,895 | (41,201 | ) | 271,200 | ||||||||||||||
Gross Profit | 36,995 | 15,140 | 6,833 | 1,227 | 60,195 | |||||||||||||||
Engineering, Selling, General and | ||||||||||||||||||||
Administrative Expenses | 34,459 | 5,867 | 5,574 | — | 45,900 | |||||||||||||||
Income from Operations | 2,536 | 9,273 | 1,259 | 1,227 | 14,295 | |||||||||||||||
Interest Expense | (9,775 | ) | — | (19 | ) | (38 | ) | (9,832 | ) | |||||||||||
Other Income (Expense), Net | 9,436 | (15 | ) | 18 | (7,996 | ) | 1,443 | |||||||||||||
Income Before Income Taxes | 2,197 | 9,258 | 1,258 | (6,807 | ) | 5,906 | ||||||||||||||
Provision (Credit) for | ||||||||||||||||||||
Income Taxes | 359 | 3,253 | 456 | (2,178 | ) | 1,890 | ||||||||||||||
Net Income | $ | 1,838 | $ | 6,005 | $ | 802 | $ | (4,629 | ) | $ | 4,016 | |||||||||
STATEMENT OF INCOME For the Three Months Ended September 29, 2002 | ||||||||||||||||||||
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net Sales | $ | 185,838 | $ | 52,656 | $ | 23,676 | $ | (25,674 | ) | $ | 236,496 | |||||||||
Cost of Goods Sold | 161,539 | 46,602 | 17,486 | (24,924 | ) | 200,703 | ||||||||||||||
Gross Profit | 24,299 | 6,054 | 6,190 | (750 | ) | 35,793 | ||||||||||||||
Engineering, Selling, General and | ||||||||||||||||||||
Administrative Expenses | 30,172 | 4,464 | 3,722 | — | 38,358 | |||||||||||||||
Income (Loss) from Operations | (5,873 | ) | 1,590 | 2,468 | (750 | ) | (2,565 | ) | ||||||||||||
Interest Expense | (9,882 | ) | (4 | ) | (203 | ) | — | (10,089 | ) | |||||||||||
Other Income (Expense), Net | 4,142 | (11 | ) | 52 | (2,176 | ) | 2,007 | |||||||||||||
Income (Loss) Before | ||||||||||||||||||||
Income Taxes | (11,613 | ) | 1,575 | 2,317 | (2,926 | ) | (10,647 | ) | ||||||||||||
Provision (Credit) for | ||||||||||||||||||||
Income Taxes | (3,591 | ) | 555 | 411 | (995 | ) | (3,620 | ) | ||||||||||||
Net Income (Loss) | $ | (8,022 | ) | $ | 1,020 | $ | 1,906 | $ | (1,931 | ) | $ | (7,027 | ) | |||||||
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net Sales | $ | 348,754 | $ | 89,512 | $ | 35,504 | $ | (57,786 | ) | $ | 415,984 | |||||||||
Cost of Goods Sold | 273,160 | 78,403 | 28,602 | (55,027 | ) | 325,138 | ||||||||||||||
Gross Profit | 75,594 | 11,109 | 6,902 | (2,759 | ) | 90,846 | ||||||||||||||
Engineering, Selling, General and Administrative Expenses | 41,642 | 5,992 | 4,536 | — | 52,170 | |||||||||||||||
Income from Operations | 33,952 | 5,117 | 2,366 | (2,759 | ) | 38,676 | ||||||||||||||
Interest Expense | (9,464 | ) | (2 | ) | (21 | ) | (109 | ) | (9,596 | ) | ||||||||||
Other Income (Expense), Net | 3,856 | (15 | ) | 42 | (2,618 | ) | 1,265 | |||||||||||||
Income Before Income Taxes | 28,344 | 5,100 | 2,387 | (5,486 | ) | 30,345 | ||||||||||||||
Provision for Income Taxes | 9,414 | 1,793 | 208 | (1,705 | ) | 9,710 | ||||||||||||||
Net Income | $ | 18,930 | $ | 3,307 | $ | 2,179 | $ | (3,781 | ) | $ | 20,635 | |||||||||
STATEMENT OF INCOME
For the Six Months Ended December 28, 2003
(In thousands)
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net Sales | $ | 572,068 | $ | 206,839 | $ | 66,232 | $ | (97,760 | ) | $ | 747,379 | |||||||||
Cost of Goods Sold | 459,479 | 180,590 | 52,497 | (96,228 | ) | 596,338 | ||||||||||||||
Gross Profit | 112,589 | 26,249 | 13,735 | (1,532 | ) | 151,041 | ||||||||||||||
Engineering, Selling, General and Administrative Expenses | 76,101 | 11,859 | 10,110 | — | 98,070 | |||||||||||||||
Income from Operations | 36,488 | 14,390 | 3,625 | (1,532 | ) | 52,971 | ||||||||||||||
Interest Expense | (19,239 | ) | (2 | ) | (40 | ) | (147 | ) | (19,428 | ) | ||||||||||
Other Income (Expense), Net | 13,292 | (30 | ) | 60 | (10,614 | ) | 2,708 | |||||||||||||
Income Before Income Taxes | 30,541 | 14,358 | 3,645 | (12,293 | ) | 36,251 | ||||||||||||||
Provision for Income Taxes | 9,773 | 5,046 | 664 | (3,883 | ) | 11,600 | ||||||||||||||
Net Income | $ | 20,768 | $ | 9,312 | $ | 2,981 | $ | (8,410 | ) | $ | 24,651 | |||||||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
STATEMENT OF INCOME
For the Three Months Ended December 29, 2002
(In thousands)
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net Sales | $ | 295,114 | $ | 59,514 | $ | 24,718 | $ | (26,784 | ) | $ | 352,562 | |||||||||
Cost of Goods Sold | 239,858 | 53,113 | 18,410 | (26,459 | ) | 284,922 | ||||||||||||||
Gross Profit | 55,256 | 6,401 | 6,308 | (325 | ) | 67,640 | ||||||||||||||
Engineering, Selling, General and Administrative Expenses | 33,446 | 4,231 | 3,492 | — | 41,169 | |||||||||||||||
Income from Operations | 21,810 | 2,170 | 2,816 | (325 | ) | 26,471 | ||||||||||||||
Interest Expense | (10,032 | ) | (2 | ) | (137 | ) | — | (10,171 | ) | |||||||||||
Other Income (Expense), Net | 4,939 | (32 | ) | 83 | (3,496 | ) | 1,494 | |||||||||||||
Income Before Income Taxes | 16,717 | 2,136 | 2,762 | (3,821 | ) | 17,794 | ||||||||||||||
Provision for Income Taxes | 5,326 | 765 | 312 | (353 | ) | 6,050 | ||||||||||||||
Net Income | $ | 11,391 | $ | 1,371 | $ | 2,450 | $ | (3,468 | ) | $ | 11,744 | |||||||||
STATEMENT OF INCOME
For the Six Months Ended December 29, 2002
(In thousands)
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net Sales | $ | 480,952 | $ | 112,170 | $ | 48,394 | $ | (52,458 | ) | $ | 589,058 | |||||||||
Cost of Goods Sold | 401,396 | 99,715 | 35,896 | (51,383 | ) | 485,624 | ||||||||||||||
Gross Profit | 79,556 | 12,455 | 12,498 | (1,075 | ) | 103,434 | ||||||||||||||
Engineering, Selling, General and Administrative Expenses | 63,618 | 8,695 | 7,214 | — | 79,527 | |||||||||||||||
Income from Operations | 15,938 | 3,760 | 5,284 | (1,075 | ) | 23,907 | ||||||||||||||
Interest Expense | (19,914 | ) | (6 | ) | (340 | ) | — | (20,260 | ) | |||||||||||
Other Income (Expense), Net | 9,080 | (43 | ) | 135 | (5,672 | ) | 3,500 | |||||||||||||
Income Before Income Taxes | 5,104 | 3,711 | 5,079 | (6,747 | ) | 7,147 | ||||||||||||||
Provision for Income Taxes | 1,735 | 1,320 | 723 | (1,348 | ) | 2,430 | ||||||||||||||
Net Income | $ | 3,369 | $ | 2,391 | $ | 4,356 | $ | (5,399 | ) | $ | 4,717 | |||||||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
For the ThreeSix Months Ended SeptemberDecember 28, 2003
(In thousands)
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net Cash (Used in) Provided by Operating Activities | $ | (96,901 | ) | $ | 7,346 | $ | (17,513 | ) | $ | 9,929 | $ | (97,139 | ) | |||||||
Cash Flows from Investing Activities: | ||||||||||||||||||||
Additions to Plant and Equipment | (10,609 | ) | (790 | ) | (165 | ) | — | (11,564 | ) | |||||||||||
Proceeds Received on Disposition of Plant and Equipment | 107 | 6 | — | — | 113 | |||||||||||||||
Refund of Cash Paid for Acquisition | 5,686 | — | — | — | 5,686 | |||||||||||||||
Net Cash Used in Investing Activities | (4,816 | ) | (784 | ) | (165 | ) | — | (5,765 | ) | |||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||||||
Net Borrowings (Repayments) on Loans and Notes Payable | 9,401 | (8,037 | ) | 7,700 | (9,929 | ) | (865 | ) | ||||||||||||
Proceeds from Exercise of Stock Options | 16,803 | — | — | — | 16,803 | |||||||||||||||
Net Cash Provided by (Used in) Financing Activities | 26,204 | (8,037 | ) | 7,700 | (9,929 | ) | 15,938 | |||||||||||||
Effect of Exchange Rate Changes | — | (225 | ) | 932 | — | 707 | ||||||||||||||
Net Decrease in Cash and Cash Equivalents | (75,513 | ) | (1,700 | ) | (9,046 | ) | — | (86,259 | ) | |||||||||||
Cash and Cash Equivalents, Beginning | 304,103 | 1,575 | 19,137 | — | 324,815 | |||||||||||||||
Cash and Cash Equivalents, Ending | $ | 228,590 | $ | (125 | ) | $ | 10,091 | $ | — | $ | 238,556 | |||||||||
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net Cash (Used in) Provided by Operating Activities | $ | (214,536 | ) | $ | 9,397 | $ | (23,982 | ) | $ | 18,207 | $ | (210,914 | ) | |||||||
Cash Flows from Investing Activities: | ||||||||||||||||||||
Additions to Plant and Equipment | (19,307 | ) | (3,268 | ) | (569 | ) | — | (23,144 | ) | |||||||||||
Proceeds Received on Disposition of Plant and Equipment | 293 | 6 | — | — | 299 | |||||||||||||||
Refund of Cash Paid for Acquisition | 5,686 | — | — | — | 5,686 | |||||||||||||||
Other, Net | 3,500 | — | — | — | 3,500 | |||||||||||||||
Net Cash Used in Investing Activities | (9,828 | ) | (3,262 | ) | (569 | ) | — | (13,659 | ) | |||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||||||
Net Borrowings (Repayments) on Loans and Notes Payable | 8,545 | (8,037 | ) | 16,028 | (18,207 | ) | (1,671 | ) | ||||||||||||
Dividends Paid | (7,285 | ) | — | — | — | (7,285 | ) | |||||||||||||
Proceeds from Exercise of Stock Options | 24,701 | — | — | — | 24,701 | |||||||||||||||
Net Cash Provided by (Used in) Financing Activities | 25,961 | (8,037 | ) | 16,028 | (18,207 | ) | 15,745 | |||||||||||||
Effect of Exchange Rate Changes | — | (675 | ) | 4,011 | — | 3,336 | ||||||||||||||
Net Decrease in Cash and Cash Equivalents | (198,403 | ) | (2,577 | ) | (4,512 | ) | — | (205,492 | ) | |||||||||||
Cash and Cash Equivalents, Beginning | 304,103 | 1,575 | 19,137 | — | 324,815 | |||||||||||||||
Cash and Cash Equivalents, Ending | $ | 105,700 | $ | (1,002 | ) | $ | 14,625 | $ | — | $ | 119,323 | |||||||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
For the ThreeSix Months Ended SeptemberDecember 29, 2002
(In thousands)
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net Cash (Used in) Provided by Operating Activities | $ | (81,139 | ) | $ | 6,918 | $ | 7,046 | $ | — | $ | (67,175 | ) | |||||||
Cash Flows from Investing Activities: | |||||||||||||||||||
Additions to Plant and Equipment | (8,154 | ) | (580 | ) | (78 | ) | — | (8,812 | ) | ||||||||||
Proceeds Received on Disposition of Plant and Equipment | 64 | — | 26 | — | 90 | ||||||||||||||
Other, net | (201 | ) | — | 201 | — | — | |||||||||||||
Net Cash (Used in) Provided by Investing Activities | (8,291 | ) | (580 | ) | 149 | — | (8,722 | ) | |||||||||||
Cash Flows from Financing Activities: | |||||||||||||||||||
Net Borrowings (Repayments) on Loans and Notes Payable | 6,093 | (6,093 | ) | (2,156 | ) | — | (2,156 | ) | |||||||||||
Net Cash Provided by (Used in) Financing Activities | 6,093 | (6,093 | ) | (2,156 | ) | — | (2,156 | ) | |||||||||||
Effect of Exchange Rate Changes | — | 315 | (448 | ) | — | (133 | ) | ||||||||||||
Net (Decrease) Increase in Cash and Cash Equivalents | (83,337 | ) | 560 | 4,591 | — | (78,186 | ) | ||||||||||||
Cash and Cash Equivalents, Beginning | 211,611 | 955 | 3,379 | — | 215,945 | ||||||||||||||
Cash and Cash Equivalents, Ending | $ | 128,274 | $ | 1,515 | $ | 7,970 | $ | — | $ | 137,759 | |||||||||
| Briggs & Stratton Corporation | Guarantor Subsidiary | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net Cash (Used in) Provided by Operating Activities | $ | (218,265 | ) | $ | 11,127 | $ | 5,191 | $ | — | $ | (201,947 | ) | |||||||
Cash Flows from Investing Activities: | |||||||||||||||||||
Additions to Plant and Equipment | (18,334 | ) | (1,368 | ) | (206 | ) | — | (19,908 | ) | ||||||||||
Proceeds Received on Disposition of Plant and Equipment | 104 | 3,086 | 42 | — | 3,232 | ||||||||||||||
Other, Net | 5,655 | — | 675 | — | 6,330 | ||||||||||||||
Net Cash (Used in) Provided by Investing Activities | (12,575 | ) | 1,718 | 511 | — | (10,346 | ) | ||||||||||||
Cash Flows from Financing Activities: | |||||||||||||||||||
Net Borrowings (Repayments) on Loans and Notes Payable | 40,339 | (11,529 | ) | (4,887 | ) | — | 23,923 | ||||||||||||
Dividends Paid | (6,927 | ) | — | — | — | (6,927 | ) | ||||||||||||
Net Cash Provided by (Used in) Financing Activities | 33,412 | (11,529 | ) | (4,887 | ) | — | 16,996 | ||||||||||||
Effect of Exchange Rate Changes | — | 430 | 1,144 | — | 1,574 | ||||||||||||||
Net (Decrease) Increase in Cash and Cash Equivalents | (197,428 | ) | 1,746 | 1,959 | — | (193,723 | ) | ||||||||||||
Cash and Cash Equivalents, Beginning | 211,610 | 953 | 3,382 | — | 215,945 | ||||||||||||||
Cash and Cash Equivalents, Ending | $ | 14,182 | $ | 2,699 | $ | 5,341 | $ | — | $ | 22,222 | |||||||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following is management’s discussion and analysis of Briggs & Stratton’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 firstsecond quarter of fiscal 2004 totaled $331$416 million, an increase of $95$63 million or 40%18% when compared to fiscal 2003. The net sales increase was the result of volume increases in both the Engine and Power Products Segments; a mix that favored higher priced product, and a favorable Euro exchange rate.
Second quarter net sales for the Engine Segment were $358 million versus $305 million in fiscal 2003, an increase of $53 million or 17%. This improvement was driven partially by a 13% increase in unit volume. Increased shipments to our Power Products Segment accounts for 9% of the unit volume increase, reflecting the increase in sales volume experienced by our Power Products Segment in both the generator and pressure washer categories and our corresponding inventory build. The remainder of the volume increase reflects early build activity at major domestic original equipment manufacturers (“OEM’s”) of lawn and garden equipment. Major retailers of power equipment are all projecting growth over last year’s performance and expect OEM’s to have adequate inventory available to meet the spring demand. Consequently, certain OEM’s have moved up their production schedules earlier than in the previous year to ensure adequate inventories, thus making their engine purchases earlier than in previous years. The Engine Segment experienced a favorable mix of sales of engines at higher price points. The mix was seen in both large versus small engines, as well as shifts within model categories. This mix benefit was offset by a reduction in die cast sales of $8 million, as we are no longer providing die cast services to third parties. Engine Segment second quarter net sales also benefited $11 million from a favorable exchange rate on Euro denominated sales.
Second quarter Power Product Segment sales were $98 million versus $61 million in the same period a year ago. The 61% improvement was the result of the preceding year. Power Products sales increased $71 million accounting for the majoritya pressure washer volume increase of the increase. Generator sales were significantly impacted180% and generator volume increase of 34%. The pressure washer volume increase was driven by the wide spread power outagessuccessful holiday promotions at certain retailers that occurredpositioned pressure washers as a resultgift idea. Historically, pressure washers have been a spring and summer product, so the holiday promotion created demand not normally experienced in the second quarter. While there were no weather events in the second quarter of fiscal 2004 as opposed to the failuresecond quarter of fiscal 2003, generator demand continues to reflect the eastern electrical grid and theawareness created by last summer’s landfall of a major hurricane. There were nohurricane, the power outages or weather eventsgrid failure in the Eastern United States, and continued promotional efforts.
Net sales for the six months ended December 28, 2003 totaled $747 million, an increase of $158 million or 27% compared to the first quartersix months of the prior year. Pressure washerVolume improvements, primarily in the Power Products Segment, as well as a strengthening Euro, drove this improvement.
Six-month sales continue to reflect demand driven by new product and promotional programs. Thefor the Engine Segment were $592 million in fiscal 2004 versus $500 million in the prior year, an 18% improvement. The increase is primarily attributable to a 17% increase in unit sales increased $41 million, including $17 millionvolume, with 9% of increasedthis increase attributable to sales to the Power Products Segment, eliminated in consolidation. In additionSegment. Factors contributing to increased generator and pressure washer demand, the Engine Segment sales improvement is reflective ofincrease for non-intersegment engine volume were late summer retail demand for lawn and garden equipment caused by favorable weather conditions.conditions, as well as early builds by major OEM’s in anticipation of the Spring 2004 retail season. Consistent with the second quarter, a favorable mix of engine sales was offset by a loss of die cast sales to third parties of $11 million. The six-month Engine Segment sales also benefited approximately $14 million from a strengthening Euro.
Power Products net sales for the first six months were $223 million compared to $115 million in the prior year. As discussed for the second quarter, the increase is driven by unit volume increases on generators and pressure washers. Generator sales benefited from the first quarter hurricane activity and the Eastern United States power grid failure, as well as continued promotional activities. Pressure washers benefited from increased promotional activities and our Spring 2003 introduction of a new product that has been very successful at retail.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
GROSS PROFIT MARGIN
The consolidated gross profit margin increased to 18% in the current first quarter22% from 15%19% in the preceding year.year’s second quarter. Engine Segment margins increased from 15% in fiscal 200320% to 18% in fiscal 2004.23%. The increase in Engine Segment margins of $7 million is attributable to $8 million of better absorption due to a 6%Euro exchange rate that was approximately 17% more favorable than rates experienced in the prior year, a 15% increase in production volume providing better absorption, and $2 million in net manufacturing cost reductions. These improvements werereductions of $5 million. A mix of product with lower margins and increases in employee benefit costs offset a portion of the improvement. While the increase in employee benefit costs is ongoing, we believe the unfavorable mix is attributable to timing and directly reflects the nature of the equipment OEM’s have decided to build early. Power Products Segment margins for the second quarter increased from 10% to 12%. This improvement is driven entirely by a 249% increase in production volume. The volume benefit was offset by an increase in purchased component costs associated with parts purchased in Euros and increased transportation costs incurred in order to meet customer demand levels.
The consolidated gross profit margin for the six-month period increased to 20% from 18% in the preceding year. The Engine Segment margin increased from 18% to 21%. The increase is attributable to a strengthening Euro and an 11% increase in production levels allowing for better absorption. Increases in manufacturing costs, primarily employee benefits, and a mix favoring lower margined product, partially offset by a shift in the mix of sales to lower margined product.production volume gains. Power Products margins increased from 11% to 13% infrom 11%. Consistent with the firstsecond quarter, the key driver of fiscal 2004. This improvementthe margin increase was driven by a 122% increase in production volume increase of 176%, partially offset by increased spending in order to respond to the higher level of demand created by the large power outage activities.purchased component costs.
ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Engineering, selling, general and administrative expenses were $52 million in the second quarter of fiscal 2004 versus $41 million in fiscal 2003. The $11 million, or 27% increase, is primarily attributable to a $4 million increase in variable selling and marketing costs, a $3 million increase in salaries and employee benefit costs, and a $2 million increase in professional services. BSPPG pays commissions and other fees that are variable with the volume of product sold. Engine selling costs have historically been more fixed, but increased $8promotional spending was planned for fiscal 2004 to increase brand awareness. The increase in salaries and employee benefits is attributable to increases in group insurance, lower pension income and increased incentive compensation. The increase in professional services is attributable to several consulting projects related to our distribution channels, emissions regulations, and preparation for additional Sarbanes Oxley certifications.
The category increased $19 million between years.for the six-month comparative periods. Two million dollars of the increase is attributable to an estimate of bad debt expense associated with a prior fiscal year customer bankruptcy. The remainder of the increase is attributable primarily to a $3$6 million increase in variable selling and marketing expenses, a $3 million increase in professional services, and a $2$4 million increase in salaries legal and accounting fees.fringe benefits.
INTEREST EXPENSE
Interest expense was $10decreased $1 million in the firstsecond quarter and six-month comparisons. The decrease reflects reduced borrowings and the impact of fiscal 2004 and 2003. There have been no significant changes in the levela fixed to variable interest rate swap on $50 million of debt between years.our 8.875% senior notes due March 15, 2011.
PROVISION FOR INCOME TAXES
The effective tax rate used in both the first fiscalsecond quarter and six-month periods for the current year was 32%. This is management’s estimate of what the rate will be for the entire 2004 fiscal year. TheLast year’s rate was 34% for the firstsecond quarter ofand six-month periods. The fiscal 2003 rate was 34% and was reduced32% after a third quarter adjustment attributable to 32% for the full 2003 fiscal year.greater than anticipated tax credits on foreign sourced income.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
LIQUIDITY AND CAPITAL RESOURCES
Cash flows used in operating activities for the first quartersix-month period of fiscal 2004 were $97was $211 million, an increase of $30$9 million from the first quarter of fiscal 2003. This resulted from increased earningsreflects an increase in net income of $11$20 million offset by increased working capital requirements. TheIncreases in inventory and receivables, offset by an increase in accounts payable, drove the increased working capital requirements were driven bylevels. Inventory levels are up year over year primarily due to increased receivablepressure washer inventory. The inventory levels offset byreflect anticipated spring demand and earlier production of the product in order to level schedule the manufacturing facility. Receivables reflect the stronger December sales when compared to the prior year. The increase in accounts payable is a reductiondirect reflection of the increase in production levels year over year for both the level of inventory build-up from fiscal year end in the first quarter of fiscal 2004 versus fiscal 2003. Strong sales in the current first quarter resulted in higher receivablesEngine and less inventory build-up.Power Products Segments.
In the first quartersix-month period of fiscal 2004, cashwe used $14 million in investing activities, was $6 million compared to $9$10 million in fiscal 2003. Six million dollars was received in the current year as a refund of a portion of the cash paid for the BSPPG acquisition in fiscal 2001. The amount was to adjust the original purchase price for the actual value received in acquired receivables and inventory. This refund was offset by increased spending of $3 million on plant and equipment, attributable to higher planned spending foron capital projects.projects, a $3 million reduction in dividends received, and $3 million reduction in proceeds from the sale of equipment.
Net cash provided by financing activities was $16 million in fiscal 2004 an $18and $17 million increase from the $2 million net cash used in financing activities in fiscal 2003. The increase is attributable to $17$25 million in proceedsreceived from the exercise of stock options offset a $26 million reduction in fiscal 2004. There were noshort-term borrowings in the current year. The stock options exercisedoption activity is a direct reflection of option stock prices, which encouraged the exercise of stock options. Historically we have had to use our revolver to finance certain working capital needs in the first quartersix months of fiscal 2003.the year. This year we have financed the working capital needs with available cash.
FUTURE LIQUIDITY AND CAPITAL RESOURCES
We have remaining authorization to buy up to 1.8 million shares of our stock in open market or private transactions under the June 2000 Board of Directors’ authorization to repurchase up to 2.0 million shares. We did not purchase any shares in the first quarter of fiscal 2004 and do not anticipate repurchasing any shares during the remainder of fiscal 2004.
Management expects cash outflows for capital expenditures to total approximately $60 million in fiscal 2004. These anticipated expenditures provide for continued investments in equipment and new products. These expenditures will be funded using available cash.
In October 2002, we began managing our debt portfolio using interest rate swaps to achieve a desired mix of fixed and floating rates. We currently have interest rate swaps relating to our 8.875% senior notes ($275(approximately $270 million) due in 2011. The swaps convert $50 million of notional amounts from a fixed rate to a floating rate, (LIBOR-set-in-arrears)(libor-set-in-arrears) and mature in fiscal 2011. The floating rate on the interest rate swap at December 28, 2003 was 5.4%.
It is currently management’sManagement’s plan to use its available cash in fiscal 2004 to reducecall the $140 million of Convertible Senior Notes due in 2006. The notes are callable for the first time on May 15, 2004, with a 60-day notice, which we plan to provide on March 16, 2004. We will use available cash, if necessary, to redeem the notes. It is more likely that the holders of the notes will exercise their conversion rights and will be issued common stock currently held in treasury. While approximately 3 million shares related to the conversion are already included in our consolidated diluted earnings per share today, after the conversion, these shares would become part of the determination of basic earnings per share.
We continue to have authorization to buy up to 1.8 million shares of our stock in open market or private transactions under the June 2000 Board of Directors’ resolution. We did not purchase any shares in the first two quarters of fiscal 2004 and do not anticipate repurchasing any shares during the remaining periods of fiscal 2004.
Management believes that available cash, the credit facility, cash generated from operations, existing lines of credit and access to debt markets will be adequate to fund our capital requirements for the foreseeable future.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
CRITICAL ACCOUNTING POLICIES
There have been no material changes in Briggs & Stratton’s critical accounting policies since the September 11, 2003 filing of its Annual Report on Form 10-K. As discussed in our annual report, the preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.
The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the recovery of accounts receivable and inventory reserves, as well as those used in the determination of liabilities related to customer rebates, pension obligations, post-retirement benefits, warranty, product liability, group health insurance and taxation. Various assumptions and other factors underlie the
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
determination of these significant estimates. The process of determining significant estimates is fact specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and in some instances actuarial techniques. Briggs & Stratton re-evaluates these significant factors as facts and circumstances change.
OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS
Briggs & Stratton has no off-balance sheet arrangements. There have been no material changes in the guarantees to third parties or contractual obligations of Briggs & Stratton since the September 11, 2003 filing of its Annual Report on Form 10-K.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
This report contains certain 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”, “forecast”, “intend”, “may”, “objective”, “plan”, “project”, “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, the ability to successfully forecast demand for our products and appropriately adjust our manufacturing and inventory levels; changes in our operating expenses; changes in interest rates; the effects of weather on the purchasing patterns of consumers and original equipment manufacturers (OEMs); actions of engine manufacturers and OEMs with whom we compete; the seasonal nature of our business; changes in laws and regulations, including environmental, pension funding and accounting standards; work stoppages or other consequences of any deterioration in our employee relations; work stoppages by other unions that affect the ability of suppliers or customers to manufacture; acts of war or terrorism that may disrupt our business operations or those of our customers and suppliers; changes in customer and OEM demand; changes in prices of purchased 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; new facts that come to light in the future course of litigation proceedings which could affect our assessment of those matters; 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.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
There have been no material changes sinceas compared to the September 11, 2003, filing ofinformation reported in the Company’s Annual Report on Form 10-K.10-K for its fiscal year ended June 29, 2003.
ITEM 4. CONTROLS AND PROCEDURES
| ITEM 4. | CONTROLS AND PROCEDURES |
DISCLOSURE CONTROLS AND PROCEDURES
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.
INTERNAL CONTROL OVER FINANCIAL REPORTING
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
PART II —- OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
| ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
At the Annual Meetingannual meeting of Shareholders on October 15, 2003, director nominees named below were elected to a three-year term expiring in 2006 by2006. For further information reference Item 4 of Form 10-Q for the indicated votes cast for and withheld with respect to each nominee.quarterly period ended September 28, 2003.
Name of Nominee | For | Withheld | ||
Robert J. O’Toole | 20,383,147 | 292,904 | ||
John S. Shiely | 20,243,632 | 432,418 | ||
Charles I. Story | 20,478,131 | 197,919 |
Directors whose terms of office continue past the Annual Meeting of Shareholders are:
William F. Achtmeyer; Jay H. Baker; Michael E. Batten; David L. Burner; Eunice M. Filter; and Brian C. Walker.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K
| ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K |
| (a) | Exhibits. |
| Exhibit Number | Description | |
| 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 32.1 | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
| 32.2 | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
| * | Filed herewith |
| ** | Furnished herewith |
| (b) | Reports on Form 8-K. |
The Company filed no current reports on Form 8-K during the quarter.
On October 16, 2003, Briggs & Stratton filedJanuary 22, 2004, the Company furnished a report on Form 8-K, dated October 16, 2003,January 22, 2004, to furnish as an exhibit the press release reporting its fiscal 2004 firstsecond quarter financial results.
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
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: | /s/ | |||
James E. Brenn Senior Vice President and Chief Financial Officer and Duly Authorized Officer | ||||
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
| Exhibit Number | Description | |
| 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 32.1 | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
| 32.2 | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
| * | Filed herewith |
| ** | Furnished herewith |
2124