Briggs & Stratton Corporation Reports Results For The Second Quarter And First Six Months Of Fiscal 2014

Briggs & Stratton Corporation Reports Results For The Second Quarter And First
                          Six Months Of Fiscal 2014

PR Newswire

MILWAUKEE, Jan. 23, 2014

MILWAUKEE, Jan. 23, 2014 /PRNewswire/ -- Briggs & Stratton Corporation
(NYSE:BGG) today announced financial results for its second fiscal quarter
ended December 29, 2013.

(Logo: http://photos.prnewswire.com/prnh/20120529/CG15020LOGO)

Highlights:

  oSecond quarter fiscal 2014 consolidated net sales were $416.6 million, a
    decrease of $22.5 million or 5.1% from the prior year.
  oIncreased sales of lawn and garden equipment were offset by lower sales of
    standby and portable generators compared to last year when Hurricane Sandy
    occurred.
  oThe reduced storm activity reduced net sales and diluted earnings per
    share by an estimated $55 million and $0.12 in the fiscal quarter compared
    with last year.
  oSecond quarter 2014 consolidated net income excluding restructuring
    charges was $2.3 million, or $1.4 million lower than the adjusted net
    income of $3.7 million in the second quarter of fiscal 2013.
  oThe Company recorded pre-tax restructuring charges of $2.3 million ($1.6
    million after tax or $0.04 per diluted share) during the three months
    ended December 29, 2013.

"During the quarter we continued to see year over year sales of lawn and
garden equipment and related parts sales improving both in North America and
in Australia," commented Todd J. Teske, Chairman, President and Chief
Executive Officer of Briggs & Stratton Corporation. "While these positive
trends were not enough to offset the sales we saw last year related to storms
Isaac and Sandy, we remain optimistic for an improved lawn and garden market
this spring," continued Teske. "Adjusted margins expanded in the quarter in
both the engines and products businesses as we continue to focus on reducing
costs, streamlining our operations and delivering margin expanding innovations
to consumers. This spring we are excited to launch several new engine and
product solutions including Quiet Power Technology™ that reduces the sound of
a walk mower as much as 80%, Ready Start® push button starting for riding
mowers, and the new Powerflow + Technology™ pressure washer that has both
variable flow and pressure capabilities, to name just a few."

Consolidated Results:

Consolidated net sales for the second quarter of fiscal 2014 were $416.6
million, a decrease of $22.5 million or 5.1% from the second quarter of fiscal
2013, due to lower sales of standby and portable generators, partially offset
by higher sales of engines and lawn and garden products. The quarterly impact
of fewer weather related events creating demand for generators and the related
engines was an estimated sales decrease of $55 million. The fiscal 2014 second
quarter consolidated net income, which includes restructuring charges, was
$0.7 million or $0.01 per diluted share. The second quarter of fiscal 2013
consolidated net loss, which includes restructuring charges, was $0.6 million
or $0.02 per diluted share. The impact of the reduced engines and generator
sales in the quarter was an estimated $0.12 per diluted share compared with
last year's second fiscal quarter.

Included in the consolidated net income for the second quarter of fiscal 2014
were pre-tax charges of $2.3 million related to restructuring actions.
Included in consolidated net loss for the second quarter of fiscal 2013 were
pre-tax charges of $6.6 million related to restructuring actions. After
removing the impact of these items, the adjusted consolidated net income for
the second quarter of fiscal 2014 was $2.3 million or $0.05 per diluted share,
which was $1.4 million lower compared to the second quarter fiscal 2013
adjusted consolidated net income of $3.7 million or $0.07 per diluted share.

For the first six months of fiscal 2014, consolidated net sales were $733.9
million, a decrease of $14.2 million or 1.9% when compared to the same period
a year ago. The consolidated net loss for the first six months of fiscal 2014
was $18.6 million or $0.41 per diluted share. The consolidated net loss for
the first six months of fiscal 2013 was $17.2 million or $0.37 per diluted
share.

Included in the consolidated net loss for the first six months of fiscal 2014
were pre-tax charges of $5.9 million ($4.4 million after tax or $0.10 per
diluted share) related to the restructuring actions. Included in the
consolidated net loss for the first six months of fiscal 2013 were pre-tax
charges of $11.8 million ($7.6 million after tax or $0.16 per diluted share)
related to the restructuring actions. After considering the impact of the
restructuring charges, the adjusted consolidated net loss for the first six
months of fiscal 2014 was $14.2 million or $0.31 per diluted share, which was
an increase of $4.7 million or $0.10 per diluted share compared to the first
six months of fiscal 2013 consolidated net loss of $9.5 million or $0.21 per
diluted share.

Engines Segment:

                          Three Months Ended Fiscal  Six Months Ended Fiscal
                          December                   December
(In Thousands)            2013           2012         2013         2012
Engines Net Sales         $265,712       $274,195     $449,499     $438,710
Engines Gross Profit as   $  54,257     $  56,287   $  79,493   $  80,999
Reported
Restructuring Charges     1,631          847          3,396        1,938
Adjusted Engines Gross    $  55,888     $  57,134   $  82,889   $  82,937
Profit
Engines Gross Profit %    20.4%          20.5%        17.7%        18.5%
as Reported
Adjusted Engines Gross    21.0%          20.8%        18.4%        18.9%
Profit %
Engines Income (Loss)
from Operations as        $   8,270    $   9,020  $  (9,817)  $  (8,484)
Reported
Restructuring Charges     2,056          4,281        3,821        5,372
Adjusted Engines Income   $  10,326     $  13,301   $  (5,996)  $  (3,112)
(Loss) from Operations
Engines Income (Loss)
from Operations % as      3.1%           3.3%         -2.2%        -1.9%
Reported
Adjusted Engines Income   3.9%           4.9%         -1.3%        -0.7%
(Loss) from Operations %



Engines Segment fiscal 2014 second quarter net sales were $265.7 million,
which was $8.5 million or 3.1% lower than the second quarter of fiscal 2013.
This decrease in net sales was due to lower sales of engines used in
generators due to the lack of storm activity during the quarter. Fiscal 2013
second quarter net sales benefited from the impact of Hurricane Sandy. The
decrease was partially offset by higher North American sales of engines used
on lawn and garden equipment and related service parts due to OEM's building
lawn and garden inventory for the upcoming lawn and garden season. 

The Engines Segment adjusted gross profit percentage for the second quarter of
2014 was 21.0%, which was slightly higher compared to the second quarter of
fiscal 2013. The increase was related to a favorable impact of 0.6% from sales
mix of higher margin service parts and margin contributed from the Branco
acquisition which closed late in the second quarter of fiscal 2013. Partially
offsetting the increase was a 0.5% unfavorable impact from foreign exchange
primarily related to the Australian Dollar. Manufacturing throughput decreased
in the second quarter of 2014 by 9%; however, production mix was favorable as
proportionately more large engines were built.

The Engines Segment engineering, selling, general and administrative expenses
were $45.6 million in the second quarter of fiscal 2014, an increase of $1.7
million from the second quarter of fiscal 2013. The increase was primarily due
to increased compensation costs and the added expenses related to Branco,
partially offset by lower retirement plan expenses of $0.8 million. 

Engines Segment net sales for the first six months of fiscal 2014 were $449.5
million, which was $10.8 million or 2.5% higher than the same period a year
ago. The increase was primarily driven by higher North American sales of
engines used on lawn and garden equipment and related service parts due to
strong demand stemming from late season growing conditions as well as the
anticipated increased retail demand for the upcoming lawn and garden season.
The increase was partially offset by lower sales of engines used in generators
due to the lack of storm activity during the first six months of fiscal 2014.
Hurricanes Isaac and Sandy occurred during the first six months of fiscal
2013.

The Engines Segment adjusted gross profit percentage for the first six months
of 2014 was 18.4%, which was 0.5% lower compared to the first six months of
fiscal 2013. The decrease was due to the unfavorable impact of 1.1% due to a
12% reduction in manufacturing throughput and 0.4% attributable to unfavorable
foreign exchange. The decrease was partially offset by 1.0% from favorable
sales mix of higher margin service parts and the margin contributed by Branco.

The Engines Segment engineering, selling, general and administrative expenses
were $88.9 million in the first six months of fiscal 2014, an increase of $2.8
million. The increase is primarily due to increased compensation costs and the
added expenses related to Branco partially offset by lower retirement plan
expenses of $2.4 million.

Products Segment:

                          Three Months Ended Fiscal  Six Months Ended Fiscal
                          December                   December
(In Thousands)            2013           2012         2013         2012
Products Net Sales        $171,528       $197,494     $324,564     $370,791
Products Gross Profit as  $  21,959     $  18,536   $  39,784   $  37,252
Reported
Restructuring Charges     262            2,353        2,082        6,388
Adjusted Products Gross   $  22,221     $  20,889   $  41,866   $  43,640
Profit
Products Gross Profit %   12.8%          9.4%         12.3%        10.0%
as Reported
Adjusted Products Gross   13.0%          10.6%        12.9%        11.8%
Profit %
Products Income (Loss)
from Operations as        $  (4,256)    $  (6,832)  $ (11,870)   $ (11,588)
Reported
Restructuring Charges     262            2,353        2,082        6,388
Adjusted Products Income  $  (3,994)    $  (4,479)  $  (9,788)  $  (5,200)
(Loss) from Operations
Products Income (Loss)
from Operations % as      -2.5%          -3.5%        -3.7%        -3.1%
Reported
Adjusted Products Income  -2.3%          -2.3%        -3.0%        -1.4%
(Loss) from Operations %



Products Segment fiscal 2014 second quarter net sales were $171.5 million, a
decrease of $26.0 million or 13.2% from the second quarter of fiscal 2013. The
decrease in net sales was driven by lower net sales of standby and portable
generators due to no landed hurricanes in the second quarter of fiscal 2014
and unfavorable foreign exchange predominantly related to the Australian
Dollar and the Brazilian Real. Hurricane Sandy occurred in the second quarter
of fiscal 2013 and no significant storms occurred in fiscal 2014. This
decrease was partially offset by favorable late season growing conditions
during the second quarter of fiscal 2014 that led to higher net sales of lawn
and garden equipment through our North American dealer channel as well as
higher sales of pressure washers and service parts. Net sales also benefited
from the Branco acquisition.

The Products Segment adjusted gross profit percentage for the second quarter
of 2014 was 13.0%, which was 2.4% higher than the adjusted gross profit
percentage for the second quarter of fiscal 2013. The increase was primarily
related to a favorable mix of products sold in the second quarter of fiscal
2014 with the additional margin from Branco and an increase in net sales of
lawn and garden equipment through the North America dealer channel. The
adjusted gross profit percentage also benefited by 0.7% due to improved
manufacturing efficiencies and incremental footprint restructuring savings of
$0.3 million. Partially offsetting the increase was a 1.0% unfavorable impact
from foreign exchange.

The Products Segment fiscal 2014 second quarter engineering, selling, general
and administrative expenses were $26.2 million, an increase of $0.8 million
from the second quarter of fiscal 2013. The increase was mainly attributable
to the additional expenses from Branco and higher compensation costs partially
offset by lower marketing spend and favorable foreign exchange.

Products Segment net sales for the first six months of fiscal 2014 were $324.6
million, a decrease of $46.2 million or 12.5% from the same period a year ago.
The decrease in net sales was driven by lower sales of standby and portable
generators due to no landed hurricanes during the first six months of fiscal
2014 and unfavorable foreign exchange predominantly due to the Australian
Dollar and the Brazilian Real. Hurricanes Isaac and Sandy occurred during the
first six months of fiscal 2013. This decrease was partially offset by
favorable late season growing conditions during the first six months of fiscal
2014 that led to higher sales of lawn and garden equipment through our North
American dealer channel as well as higher sales of pressure washers and
service parts. Net sales also benefited from the Branco acquisition.

The Products Segment adjusted gross profit percentage for the first six months
of 2014 was 12.9%, which was 1.1% higher compared to the first six months of
fiscal 2013. The increase was primarily related to a 0.8% benefit from
improved manufacturing efficiencies and incremental footprint restructuring
savings of $0.8 million. The adjusted gross profit percentage also benefited
from a favorable mix of products sold in the first six months of fiscal 2014
with the additional margin from Branco and an increase in net sales through
the North America dealer channel. Partially offsetting the increase was a 0.4%
unfavorable impact from foreign exchange.

The Products Segment engineering, selling, general and administrative expenses
were $51.7 million in the first six months of fiscal 2014, an increase of $2.9
million from the first six months of fiscal 2013. The increase was mainly
attributable to the additional expenses from Branco and higher compensation
costs, partially offset by lower marketing spend and favorable foreign
exchange.

Corporate Items:

Interest expense for the second quarter and first six months of fiscal 2014
was comparable to the same periods a year ago.

The effective tax rate for the second quarter and first six months of fiscal
2014 were 69.8% and 25.5%, respectively, compared to 156.5% and 27.8% for the
same respective periods of fiscal 2013. The tax rate for the second quarter
and first six months of fiscal 2014 was primarily driven by net operating
losses of certain foreign subsidiaries without a realizable tax benefit. The
second quarter and first six months of fiscal 2013 included a tax expense of
$1.0 million primarily driven by nondeductible acquisition costs and net
operating losses of certain foreign subsidiaries without a realizable tax
benefit.

Financial Position:

Net debt at December 29, 2013 was $126.8 million (total debt of $225.0 million
less $98.2 million of cash), or $101.8 million lower from the $228.7 million
(total debt of $246.9 million less $18.2 million of cash) at December 30,
2012. Cash flows used in operating activities for the first six months of
fiscal 2014 were $45.2 million compared to $75.4 million in fiscal 2013. The
improvement in operating cash flows was primarily related to changes in
working capital needs in fiscal 2014 associated with lower seasonal growth in
accounts receivable and inventory due to lower production levels and planned
inventory reductions. In addition, no contributions to the pension plan were
made in fiscal 2014 compared to $16.2 million in the first half of fiscal
2013.

Restructuring:

The previously announced restructuring actions remain on schedule. Production
of horizontal shaft engines was concluded at the Auburn, Alabama plant during
the second quarter of 2014. As noted previously, pre-tax restructuring costs
for the second quarter and first six months of fiscal 2014 were $2.3 million
and $5.9 million, respectively. Pre-tax restructuring cost estimates for
fiscal 2014 remain unchanged at $6 million to $8 million. Incremental
restructuring savings for fiscal 2014 are expected to be $2 million to $4
million. 

Share Repurchase Program:

On August 8, 2012, the Board of Directors of the Company authorized up to $50
million in funds associated with the common share repurchase program with an
expiration date of June 30, 2014. On January 22, 2014, the Board of Directors
of the Company authorized up to an additional $50 million in funds for use in
the Company's common share repurchase program with an extension of the
expiration date to June 30, 2016. The common share repurchase program
authorizes the purchase of shares of the Company's common stock on the open
market or in private transactions from time to time, depending on market
conditions and certain governing loan covenants. During the first six months
of fiscal 2014, the Company repurchased 1,066,447 shares on the open market at
an average price of $19.77 per share.

Outlook:

For fiscal 2014, the Company has revised its full year guidance to exclude the
potential positive benefit of landed hurricanes from the upper end of the
revenue and earnings guidance. In addition, the lower end of the guidance has
been reduced to give effect to approximately $3.0 million of negative foreign
currency fluctuations and the lack of European snow sales that are not likely
to be recovered in the second half of the fiscal year. The Company now expects
net income to be in a range of $48 million to $57 million or $1.00 to $1.18
per diluted share prior to the impact of any additional share repurchases and
costs related to our announced restructuring actions. Our fiscal 2014
consolidated net sales are projected to be in a range of $1.88 billion to $2.0
billion. We continue to estimate that the retail market for lawn and garden
products will increase 4-6% in the U.S. next season. The estimated incremental
impact of exiting the sale of lawn and garden equipment through national mass
retailers is approximately $10 million to $15 million of reduced sales in
fiscal 2014. In addition, sales in fiscal 2013 were favorably impacted by
sales of portable and standby generators in response to power outages during
Hurricanes Isaac and Sandy. The upper end of our earnings projections
contemplates a higher market recovery in excess of 10% for the U.S. lawn and
garden market. Operating income margins are expected to improve over fiscal
2013 and be in a range of 4.5% to 4.8% and reflect the positive impacts of the
restructuring actions. Interest expense and other income are estimated to be
approximately $18 million and $5 million, respectively. The effective tax rate
is projected to be in a range of 30% to 33% and capital expenditures are
projected to be approximately $50 million to $55 million. 

Conference Call Information:

The Company will host a conference call today at 10:00 AM (ET) to review this
information. A live webcast of the conference call will be available on our
corporate website: http://www.briggsandstratton.com/shareholders. Also
available is a dial-in number to access the call real-time at (866) 804-3545.
A replay will be offered beginning approximately two hours after the call ends
and will be available for one week. Dial (703) 925-2533 to access the replay.
The pass code will be 1623905.

Safe Harbor Statement:

This release 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", "plan", "project", 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; changes
in interest rates and foreign exchange 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; changes in laws
and regulations; changes in customer and OEM demand; changes in prices of raw
materials and parts that we purchase; changes in domestic and foreign economic
conditions; the ability to bring new productive capacity on line efficiently
and with good quality; outcomes of legal proceedings and claims; and other
factors disclosed from time to time in our SEC filings or otherwise, including
the factors discussed in Item1A, Risk Factors, of the Company's Annual Report
on Form 10-K and in its periodic reports on Form 10-Q.

About Briggs & Stratton Corporation:

Briggs & Stratton Corporation, headquartered in Milwaukee, Wisconsin, is the
world's largest producer of gasoline engines for outdoor power equipment. Its
wholly owned subsidiaries include North America's number one marketer of
portable generators and pressure washers, and it is a leading designer,
manufacturer and marketer of lawn and garden and turf care through its
Simplicity®, Snapper®, SnapperPro® Ferris®, Murray®, Branco® and Victa®
brands. Briggs & Stratton products are designed, manufactured, marketed and
serviced in over 100 countries on six continents. For additional information,
please visit www.basco.com and www.briggsandstratton.com.



BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations for the Fiscal Periods Ended December

(In Thousands, except per share data)

(Unaudited)
                          Three Months Ended Fiscal  Six Months Ended Fiscal
                          December                   December
                          2013             2012       2013          2012
NET SALES                 $416,592         $439,066   $733,896      $748,086
COST OF GOODS SOLD        337,333          358,953    607,221       618,978
RESTRUCTURING CHARGES     1,893            3,200      5,478         8,325
Gross Profit             77,366           76,913     121,197       120,783
ENGINEERING, SELLING,
GENERAL AND               71,777           69,200     140,539       134,888
ADMINISTRATIVE EXPENSES
RESTRUCTURING CHARGES     425              3,435      425           3,435
Income (Loss) from        5,164            4,278      (19,767)      (17,540)
Operations
INTEREST EXPENSE          (4,594)          (4,599)    (9,103)       (9,085)
OTHER INCOME              1,751            1,450      3,843         2,854
Income (Loss) before      2,321            1,129      (25,027)      (23,771)
Income Taxes
PROVISION (CREDIT) FOR    1,619            1,764      (6,380)       (6,609)
INCOME TAXES
Net Income (Loss)         $    702     $       $ (18,647)    $ (17,162)
                                           (635)
Weighted Average Shares   46,825           46,909     46,760        47,021
Outstanding
BASIC EARNINGS (LOSS)     $    0.01     $        $           $  
PER SHARE                                  (0.02)    (0.41)       (0.37)
Diluted Average Shares    47,987           46,909     46,760        47,021
Outstanding
DILUTED EARNINGS (LOSS)   $    0.01     $        $           $  
PER SHARE                                  (0.02)    (0.41)       (0.37)



Segment Information

(In Thousands)

(Unaudited)
                          Three Months Ended Fiscal  Six Months Ended Fiscal
                          December                   December
                          2013           2012         2013         2012
NET SALES:
Engines                   $ 265,712      $ 274,195    $ 449,499    $ 438,710
Products                  171,528        197,494      324,564      370,791
Inter-Segment             (20,648)       (32,623)     (40,167)     (61,415)
Eliminations
Total *                   $ 416,592      $ 439,066    $ 733,896    $ 748,086
* International sales
based on product          $ 173,180      $ 160,116    $ 291,996    $ 286,613
shipment destination
included in net sales
GROSS PROFIT:
Engines                   $  54,257     $  56,287   $  79,493   $  80,999
Products                  21,959         18,536       39,784       37,252
Inter-Segment             1,150          2,090        1,920        2,532
Eliminations
Total                     $  77,366     $  76,913   $ 121,197    $ 120,783
INCOME (LOSS) FROM
OPERATIONS:
Engines                   $   8,270   $          $           $ 
                                         9,020       (9,817)     (8,484)
Products                  (4,256)        (6,832)      (11,870)     (11,588)
Inter-Segment             1,150          2,090        1,920        2,532
Eliminations
Total                     $   5,164   $          $ (19,767)  $ (17,540)
                                         4,278



Non-GAAP Financial Measures

Briggs& Stratton prepares its financial statements using Generally Accepted
Accounting Principles (GAAP). When a company discloses material information
containing non-GAAP financial measures, SEC regulations require that the
disclosure include a presentation of the most directly comparable GAAP measure
and a reconciliation of the GAAP and non-GAAP financial measure. Management's
inclusion of non-GAAP financial measures in this release is intended to
supplement, not replace, the presentation of the financial results in
accordance with GAAP. Briggs & Stratton Corporation management believes that
these non-GAAP financial measures, when considered together with the GAAP
financial measures, provide information that is useful to investors in
understanding period-over-period operating results separate and apart from
items that may, or could, have a disproportionately positive or negative
impact on results in any particular period. Management also believes that
these non-GAAP financial measures enhance the ability of investors to analyze
our business trends and to understand our performance. In addition, we may
utilize non-GAAP financial measures as a guide in our forecasting, budgeting
and long-term planning process. Non-GAAP financial measures should be
considered in addition to, and not as a substitute for, or superior to,
financial measures presented in accordance with GAAP. The following table is a
reconciliation of the non-GAAP financial measures:

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Adjusted Net Loss & Diluted Earnings (Loss) Per Share for the Fiscal Periods
Ended December

(In Thousands, except per share data)

(Unaudited)
                                 Three Months Ended  Six Months Ended Fiscal
                                 Fiscal December     December
                                 2013      2012       2013         2012
Net Income (Loss)                $  702  $  (635)  $ (18,647)   $ (17,162)
  Tax effected charges to
  reported net income (loss):
          Restructuring          1,596     4,313      4,447        7,644
          Charges^1
Adjusted Net Income (Loss)       $ 2,298   $ 3,678    $ (14,200)   $  (9,518)
Diluted Earnings (Loss) Per      $  0.01  $ (0.02)  $          $  
Share                                                 (0.41)       (0.37)
  Tax effected charges to
  reported diluted earnings
  (loss) per share:
          Restructuring          0.04      0.09       0.10         0.16
          Charges^1
Adjusted Diluted Earnings        $  0.05  $  0.07   $          $  
(Loss) Per Share                                      (0.31)       (0.21)

    For the second quarter of fiscal 2014, represents charges of $2,318 net of
    $722 of taxes. For the second quarter of fiscal 2013, represents charges
 ^1 of $6,635 net of $2,322 of taxes. For the first six months of fiscal 2014,
    represents charges of $5,903 net of $1,456 of taxes. For the first six
    months of fiscal 2013, represents charges of $11,760 net of $4,116 of
    taxes.



BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Adjusted Segment Gross Profit for the Fiscal Periods Ended December

(In Thousands)

(Unaudited)


                          Three Months Ended Fiscal  Six Months Ended Fiscal
                          December                   December
                          2013            2012        2013          2012
GROSS PROFIT:
Engines
Gross Profit              $ 54,257        $ 56,287    $  79,493    $  80,999
Restructuring Charges     1,631           847         3,396         1,938
Adjusted Engines Gross    $ 55,888        $ 57,134    $  82,889    $  82,937
Profit
Products
Gross Profit              21,959          18,536      39,784        37,252
Restructuring Charges     262             2,353       2,082         6,388
Adjusted Products Gross   $ 22,221        $ 20,889    $  41,866    $  43,640
Profit
Inter-Segment             1,150           2,090       1,920         2,532
Eliminations
Adjusted Gross Profit     $ 79,259        $ 80,113    $126,675      $129,109



BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Adjusted Segment Income (Loss) from Operations for the Fiscal Periods Ended
December

(In Thousands)

(Unaudited)
                          Three Months Ended Fiscal  Six Months Ended Fiscal
                          December                   December
                          2013           2012         2013           2012
INCOME (LOSS) FROM
OPERATIONS:
  Engines
   Income (Loss)      $  8,270      $  9,020    $  (9,817)    $ (8,484)
  from Operations
  Restructuring Charges   2,056          4,281        3,821          5,372
   Adjusted Engines
  Income (Loss) from      $ 10,326       $ 13,301     $  (5,996)    $ (3,112)
  Operations
  Products
   Income (Loss)      (4,256)        (6,832)      (11,870)       (11,588)
  from Operations
  Restructuring Charges   262            2,353        2,082          6,388
   Adjusted Products
  Income (Loss) from      $ (3,994)     $ (4,479)   $  (9,788)    $ (5,200)
  Operations
  Inter-Segment           1,150          2,090        1,920          2,532
  Eliminations
  Adjusted Income (Loss)  $  7,482      $ 10,912     $(13,864)      $ (5,780)
  from Operations



BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets as of the End of Fiscal December
(In Thousands)
(Unaudited)
CURRENT ASSETS:                               2013         2012
Cash and Cash Equivalents                     $ 98,162     $ 18,242
Accounts Receivable, Net                      192,543      258,559
Inventories                                   474,897      536,690
Deferred Income Tax Asset                     48,310       44,813
Assets Held For Sale                          -            5,539
Prepaid Expenses and Other Current Assets     25,124       38,986
Total Current Assets                          839,036      902,829
OTHER ASSETS:
Goodwill                                      146,323      218,635
Investments                                   17,583       20,303
Debt Issuance Costs                           5,164        5,208
Other Intangible Assets, Net                  85,329       110,297
Deferred Income Tax Asset                     26,255       57,863
Other Long-Term Assets, Net                   14,188       8,973
Total Other Assets                            294,842      421,279
PLANT AND EQUIPMENT:
At Cost                                       1,027,391    1,013,603
Less - Accumulated Depreciation               747,685      726,263
Plant and Equipment, Net                      279,706      287,340
                                              $ 1,413,584  $ 1,611,448
CURRENT LIABILITIES:
Accounts Payable                              $ 162,850    $ 183,278
Short-Term Debt                               -            3,000
Accrued Liabilities                           133,025      151,403
Total Current Liabilities                     295,875      337,681
OTHER LIABILITIES:
Accrued Pension Cost                          142,076      250,523
Accrued Employee Benefits                     23,568       23,607
Accrued Postretirement Health Care Obligation 66,570       87,478
Other Long-Term Liabilities                   32,607       35,920
Long-Term Debt                                225,000      243,900
Total Other Liabilities                       489,821      641,428
SHAREHOLDERS' INVESTMENT:
Common Stock                                  579          579
Additional Paid-In Capital                    76,650       78,635
Retained Earnings                             1,012,833    1,071,142
Accumulated Other Comprehensive Loss          (218,326)    (289,681)
Treasury Stock, at Cost                       (243,848)    (228,336)
Total Shareholders' Investment                627,888      632,339
                                              $ 1,413,584  $ 1,611,448



BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)
                                              Six Months Ended Fiscal December
CASH FLOWS FROM OPERATING ACTIVITIES:         2013               2012
Net Loss                                      $ (18,647)         $ (17,162)
Adjustments to Reconcile Net Loss to Net Cash
Used in Operating Activities:
Depreciation and Amortization                 27,757             27,866
Stock Compensation Expense                    4,537              3,879
Loss on Disposition of Plant and Equipment    92                 220
Credit for Deferred Income Taxes              (5,200)            (7,982)
Earnings of Unconsolidated Affiliates         (2,551)            (1,782)
Dividends Received from Unconsolidated        4,069              4,636
Affiliates
Pension Cash Contributions                    -                  (16,229)
Non-Cash Restructuring Charges                2,208              6,746
Change in Operating Assets and Liabilities:
Accounts Receivable                           (1,839)            (22,713)
Inventories                                   (68,101)           (92,615)
Other Current Assets                          (3,031)            3,247
Accounts Payable, Accrued Liabilities, and    21,194             40,591
Income Tax
Other, Net                                    (5,736)            (4,114)
 Net Cash Used in Operating Activities      (45,248)           (75,412)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Plant and Equipment              (18,063)           (16,744)
Cash Paid for Acquisitions, Net of Cash       -                  (57,807)
Acquired
Proceeds Received on Disposition of Plant and 61                 6,267
Equipment
 Net Cash Used in Investing Activities      (18,002)           (68,284)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings on Revolver                    -                  18,900
Repayments on Short-Term Debt                 (300)              -
Debt Issuance Costs                           (942)              -
Stock Option Exercise Proceeds and Tax        994                11,336
Benefits
Cash Dividends Paid                           (5,730)            (5,807)
Treasury Stock Purchases                      (21,086)           (19,235)
 Net Cash Provided by (Used in) Financing   (27,064)           5,194
Activities
EFFECT OF EXCHANGE RATE CHANGES               31                 669
NET DECREASE IN CASH AND CASH EQUIVALENTS     (90,283)           (137,833)
CASH AND CASH EQUIVALENTS, Beginning          188,445            156,075
CASH AND CASH EQUIVALENTS, Ending             $ 98,162          $ 18,242

SOURCE Briggs & Stratton Corporation

Website: http://www.briggsandstratton.com
Contact: Investor Relations, David J. Rodgers, Senior VP and Chief Financial
Officer, (414) 259-5333
 
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