Briggs & Stratton Lowers Q1 Sales, Also Lowers Loss

Oct. 17, 2014
Briggs & Stratton’s fiscal first quarter consolidated net sales dropped to $292.6 million, compared to $317.3 million in last year’s first quarter, a 7.8-percent decline.

Briggs & Stratton’s fiscal first quarter consolidated net sales dropped to $292.6 million, compared to $317.3 million in last year’s first quarter, a 7.8-percent decline. However, the quarter’s adjusted net loss was $9.3 million, a 43-percent improvement compared to the adjusted net loss of $16.5 million in the first quarter of fiscal 2014.

Also during the quarter, Briggs & Stratton completed its acquisition of Allmand Bros for $62 million in cash for all outstanding shares.

“As we expected, the first quarter results reflect improved profitability in both the engines and products businesses despite lower engine sales,” said Todd Teske, chairman, president and CEO. “Coming into the fiscal year, we anticipated that higher channel inventories of lawn-and-garden equipment would impact our first quarter engine sales compared with last year, which benefitted from lower channel inventories and strong late-season retail sales of equipment. Our OEM customers and retailers have taken actions to reduce inventories, which impacted our engine sales.

“Despite the sales decrease, we are pleased with the improved margins in both the engines and products businesses, reflecting the cost-cutting actions and our focus on higher margin products, including the acquisition of Allmand.”

The company said the sales drop primarily relates to lower sales of engines, resulting from higher channel inventories in North America and lower sales of engines for snow-thrower OEM customers in Europe because of adequate inventories following last season. The drop in net sales was partially offset by higher sales of pressure washers, snow throwers, lawn-and-garden equipment and the Allmand acquisition.

During the first quarter of fiscal 2015, Briggs & Stratton began implementing the restructuring actions to narrow its assortment of lower-priced Snapper consumer lawn-and-garden equipment and consolidate its Products segment manufacturing facilities in order to reduce costs. The company will close its McDonough, Ga., plant in the second half of fiscal 2015 and consolidate production into existing facilities in Wisconsin and New York.

Looking forward, Briggs & Stratton is increasing its fiscal 2015 projections to include the Allmand Bros. acquisition. Previously, the company expected net income to be in a range of $50 million to $60 million, and is now expecting net income in the range of $53 million to $63 million.

Briggs & Stratton, the world’s largest producer of gasoline engines for outdoor power equipment, is based in Milwaukee.