Research Desk Line-up: Taylor Devices Post Earnings Coverage
LONDON, UK / ACCESSWIRE / September 7, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Briggs & Stratton Corp. (NYSE: BGG), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=BGG, following the Company's reporting of its fourth quarter fiscal 2017 financial results on August 16, 2017. The engine maker announced a business optimization program and also provided outlook for FY18. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
Get more of our free earnings reports coverage from other constituents of the Diversified Machinery industry. Pro-TD has currently selected Taylor Devices, Inc. (NASDAQ: TAYD) for due-diligence and potential coverage as the Company announced on August 29, 2017, its financial results for Q4 FY17 and full year FY17. Register for a free membership today, and be among the early birds that get access to our report on Taylor Devices when we publish it.
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For its fourth fiscal quarter and year ended July 02, 2017, Briggs & Stratton reported net sales were $474 million, down 5.6% from $502 million for Q4 FY16. The Company noted that continued high growth in commercial turf and lawn care, commercial job site, and commercial engines was offset by softness in residential sales. Briggs & Stratton's revenue numbers fell short of analysts' forecasts of $538 million.
Briggs & Stratton recorded fiscal 2017 net sales of $1.79 billion, down 1.3% from $1.81 billion for fiscal 2016. The Company stated that FY17 was a record year for net sales of commercial type products, amounting to $434 million, a 7% increase on a y-o-y basis.
Briggs & Stratton's quarterly gross profit totaled $101.13 million compared to $93.95 million in Q4 FY16.
For Q4 FY17, Briggs & Stratton's net income was $19.73 million, or $0.46 per share, compared to GAAP net income of $5.35 million, or $0.12 per share, and adjusted net income of $20.1 million, or $0.46 per share, for Q4 FY16. The Company's results came in below Wall Street's estimates of $0.52 per share.
For FY17, Briggs & Stratton's net income was $56.65 million, or $1.31 per share, compared to GAAP net income of $26.56 million, or $0.60 per diluted share, and adjusted net income of $55.0 million and $1.25 per share for FY16. The Company achieved earnings growth of over 20% in FY17 after factoring out higher ERP upgrade costs, the negative impact of foreign exchange, higher pension costs, and a higher tax rate.
Briggs & Stratton ended FY17 with total cash on hand of $62 million and net debt of $161 million. The Company's net debt grew by approximately $28 million on a y-o-y basis. The increase was driven by a $38 million increase in accounts receivable, offset by lower inventory and higher accounts payable. Briggs & Stratton reduced inventories by $11 million during FY17, despite the lower-than-anticipated sales of residential offerings in the reported quarter.
Briggs & Stratton's cash flows from operations were $90 million in FY17, a decrease of $25 million from FY16, which was largely driven by changes in working capital. The total average leverage and last 12-month EBITDA as defined by the Company's credit agreements was $284 million and $163 million, resulting in a leverage ratio of 1.74x.
During FY17, Briggs & Stratton paid $24.1 million in cash dividends to shareholders and also repurchased $19.7 million of common stock under the Company's share repurchase program. Briggs & Stratton currently has approximately $30.5 million remaining under the current authorization, which expires on June 29, 2018.
Business Optimization Program
Briggs & Stratton also announced the launch of a business optimization program that is designed to drive efficiencies and expand capacity in commercial engines and cutting equipment. The program entails expanding production of Vanguard commercial engines into the Company's existing large engine plants, which are located in Georgia and Alabama, and expanding Ferris commercial mower production capacity in a new, modern facility which is located close to the current manufacturing location in New York.
Production of Vanguard engines in the Company's US plants is expected to be phased in beginning in late fiscal 2018 through the middle of fiscal 2019. Production of Ferris commercial mowers is expected to begin in the new facility in the latter half of fiscal 2018, and the exit from the existing plant and remote warehouse is planned for fiscal 2019.
Briggs & Stratton projects that its business optimization program will generate $30 million to $35 million of annual pre-tax savings, in addition to supporting profitable commercial growth. The Company estimates savings will be achieved over a three-year period beginning in fiscal 2019. Total pre-tax expenses related to the business optimization program are expected to be approximately $50 million to $55 million, of which $24 million to $28 million is expected be recognized in fiscal 2018.
For fiscal 2018, Briggs & Stratton is forecasting net sales in a range of $1.87 billion to $1.92 billion for projected annual growth of 4.5% to 7.5%. The Company's FY18 diluted earnings per share are estimated to be $1.31 to $1.48.
Briggs & Stratton's operating margins before business optimization costs are expected to be approximately 5.6% to 5.8%. Compared to fiscal 2017, operating margins are expected to improve due to favorable sales mix from the growth of commercial products, product margin expansion, and operational efficiency improvements. Capital expenditures are projected to be $80 million to $90 million, which includes the majority of expenditures associated with the business optimization program.
On Wednesday, September 06, 2017, the stock closed the trading session at $20.80, advancing 0.78% from its previous closing price of $20.64. A total volume of 350.87 thousand shares have exchanged hands, which was higher than the 3-month average volume of 187.16 thousand shares. Briggs & Stratton's stock price advanced 6.67% in the previous twelve months. The stock is trading at a PE ratio of 15.85 and has a dividend yield of 2.69%. The stock currently has a market cap of $883.79 million.
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