Briggs & Stratton outlined details about its strategic repositioning plan in a call with investors on March 6, which includes selling off the Ferris, Simplicity, Billy Goat, Snapper and Snapper Pro lines, along with its pressure washer and portable generator business. The proceeds will reduce debt and are expected to be complete by the end of 2020. The company says it will accelerate growth in its standby power and commercial engines, maximize returns in its residential engines and invest and aggressively grow its commercial battery systems. (Read the news release from Briggs & Stratton.)
Regarding the sale of the turf product lines, Todd Teske, Briggs & Stratton's chairman, president and CEO, said, “We expect the sales to be completed by the end of calendar 2020. However, we will not rush the process.”
"There's no doubt we'll be a different company from where we've been over the last two decades. However, in a sense, we'll be embracing our roots as a focused power application company," he said.
These and other initiatives are part of Briggs & Stratton’s efforts to restore financial flexibility, make key investments and optimize its cost structure.
The company also recently announced that it has entered into an agreement with a large manufacturer of light electric vehicles to power a new line of lithium-ion vehicles with Briggs & Stratton's Vanguard Commercial Battery System, beginning in June. A new Advanced Battery Manufacturing facility in Tucker, Ga, will be opened to accommodate the increased demand.
Growing Dealer Network
During the investor call, Teske said, “Several years ago, we made a decision to exit the lawn & garden mass market products business for several reasons, including our desire not to compete with our OEM customers in those markets.
“This decision was the right decision and that has allowed us to work more closely with our customers by eliminating channel conflict. During this period, we turned our growth focus to commercial markets. At that time, we were not a significant participant in commercial mowers. Given our extensive knowledge in turf applications, we devoted significant time and resources to develop these areas. Since then, we have executed very well in both commercial mowers and commercial turf engines where through innovation, the mower business helped place our engines and our engines help sell our mowers."
As part of the company’s plans to accelerate its growth in standby power, it has a goal to add 200 dealers per year to its base of 2,000 dealers and will grow its dealer network in California by 4 times. Rick Carpenter, vice president of corporate marketing and communications, said, "This has been an ongoing process as there is a need for good, installing dealers; dealers in areas beyond the traditional storm-affected areas (the unstable grid is now something that drives demand); and dealers, specifically, in California where there has been an historical dearth of dealers. We have been successful in these endeavors and will continue."
Teske also said the company will be announcing new products in the standby power segment this year.
Financial Goals Announced
During the investor call, the company says it expects commercial battery power to be 10% of its total company sales in 3-4 years. It expects to achieve better than 10% annual growth in sales in the standby power segment and 10% annual growth in sales for commercial engines. In the residential engine power segment, Briggs is expecting market conditions to be flat to down in the mid-single digits.