Briggs & Stratton Corporation reported consolidated earnings results for the fourth quarter and full year ended July 2, 2017. For the quarter, the company reported net sales of $474.105 million against $502.191 million a year ago. Income from operations was $30.703 million against $5.814 million a year ago. Income before income taxes was $26.495 million against $5.603 million a year ago. Net income was $19.727 million or $0.46 per diluted share against $5.349 million or $0.12 per diluted share a year ago. Fiscal fourth quarter net sales were decrease of $28 million or 5.6% from $502 million for the prior year. Continued high growth in commercial turf and lawn care, commercial job site, and commercial engines was offset by softness in residential sales.


For the year, the company reported net sales of $1,786.103 million against $1,808.778 million a year ago. Income from operations was $97.347 million against $46.361 million a year ago. Income before income taxes was $79.661 million against $35.356 million a year ago. Net income was $56.650 million or $1.31 per diluted share against $26.561 million or $0.60 per diluted share a year ago. Net cash provided by operating activities was $90.344 million against $114.927 million a year ago. Capital expenditures were $83.141 million against $64.161 million a year ago. Net debt at July 2, 2017 was $161.4 million (total debt, excluding debt issuance costs, of $223.1 million less $61.7 million of cash), or $28.1 million higher than net debt of $133.3 million (total debt, excluding debt issuance costs, of $223.1 million less $89.8 million of cash) at July 3, 2016.

For fiscal 2018, the company estimates net sales in a range of $1.87 billion to $1.92 billion, for projected annual growth of 4.5% to 7.5%. This sales range contemplates that the markets for commercial products will grow mid-single digits and that the company will continue to gain market share in the categories of commercial turf and lawn care, commercial job site, and commercial engines. The company anticipates modest market growth for the U.S. residential lawn and garden market in addition to some normalization of channel inventory levels. Projections reflect modest market growth assumptions plus a return to more normalized channel inventories. Fiscal 2018 diluted earnings per share are estimated to be $1.31 to $1.48. Factoring out the absence of hurricanes, higher expected ERP upgrade costs, higher expected interest expense and a change in tax rate, the midpoint of the earnings range shows growth for fiscal 2018 of approximately 25% compared to fiscal 2017. For fiscal 2018, the company estimates mid-point growth in net income of approximately 6%, to be in a range of $56 million to $64 million, or $1.31 to $1.48 per diluted share, prior to the impact of costs related to business optimization program or the benefit of any share repurchases. 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 growth of commercial products, product margin expansion and operational efficiency improvements. The company also anticipates increased interest expense of approximately $2.5 million ($0.04 per diluted share) due to rising interest rates and higher average borrowings. The effective tax rate is projected to return to a more normal rate, in a range of 31% to 33%, from 28.9% for fiscal 2017, for an increased expense of $0.06 per diluted share. Capital expenditures are projected to be $80 million to $90 million, which includes the majority of expenditures associated with the business optimization program. For the year, the company expects interest expense to be approximately $22.5 million, which is an increase of approximately $2.2 million or $0.04 per diluted share. The increase is due to slightly higher anticipated borrowings and the impact of increasing interest rates.