MILWAUKEE -- Briggs & Stratton Corp. (NYSE: BGG), a recognized global leader in providing power to get work done, today announced financial results for its third quarter of fiscal 2020, ended March 29, 2020.
Fiscal Third Quarter 2020 Highlights:
- Net sales of $474 million declined $107 million, or 18%, from the prior year, as pandemic-related actions customers took late in the quarter compounded anticipated short-term impacts in certain business areas.
- Gross profit margin of 13.4% (GAAP) and adjusted gross profit margin of 15.2% decreased from gross profit margin of 16.7% (GAAP) and adjusted gross profit margin of 17.4%, respectively, last year.
- GAAP net loss was $145 million, or $3.47 per share, compared with net income of $8.0 million, or $0.19 per diluted share, for the third quarter of fiscal 2019. Net loss for the third quarter of fiscal 2020 included non-cash goodwill impairment charges of $67 million related to a recent review of end markets inclusive of effects related to COVID-19. The company also recorded a $70 million non-cash valuation allowance against deferred tax assets.
- Adjusted net loss was $10.8 million, or $0.26 per share, compared to net income of $14.6 million, or $0.34 per diluted share, for the prior year.
- The company withdrew its full-year fiscal 2020 guidance on March 31, 2020, due to the uncertainly caused by the COVID-19 pandemic.
"As we work through these uncertain times, I want to acknowledge the exemplary efforts of our entire team to ensure the health and safety of our communities, customers, business partners and ourselves," said Briggs & Stratton chairman, president and chief executive officer Todd J. Teske. "I could not be prouder of our employees' dedication and responsiveness to our customers' needs as we face these challenging times head on."
Teske continued, "Our third quarter performance reflects the unexpected and rapid impact this pandemic has had across the global economy. Our OEM customers and channel partners quickly decreased business activity in the latter half of March to protect workers and public health and safety, which impacted our anticipated shipments. Combined with actions we are taking as part of our repositioning plan, we are aggressively working to reduce costs, better manage working capital, and prioritize cash generation. These actions resulted in the reduction of inventories by $85 million during the quarter. Lastly, we recently amended our credit agreement to enhance our liquidity to better navigate the economic impact of the pandemic as we continue our work to secure long-term capital for the business."
Teske concluded, "We remain focused on our strategic priorities, including the consolidation of our residential engine production from two facilities to one which will generate up to $14 million in savings, and the commercialization of our Vanguard commercial battery system. We recognized $5 million in cost savings during the quarter from our Business Optimization Program and improved operating efficiencies. We are also focused on the strategic repositioning plan we announced in early March, which builds on our foundation as a clear leader in power application. We also must continue to address our financial position and liquidity. We will continue to assess business conditions and move forward with these strategic goals in mind."