Briggs & Stratton is the world's largest manufacturer of air-cooled gasoline engines for primarily outdoor power equipment. Current production averages 11 million engines per year.
Briggs & Stratton Corporation (Briggs & Stratton) is a producer of air cooled gasoline engines for outdoor power equipment. The Company designs, manufactures, markets and services these products for original equipment manufacturers (OEMs) worldwide. These engines are aluminum alloy gasoline engines with displacements ranging from 141 to 993 cubic centimeters. Additionally, through its wholly owned subsidiary, Briggs & Stratton Power Products Group, LLC, Briggs & Stratton is a designer, manufacturer and marketer of generators (portable and standby), pressure washers, snow throwers, lawn and garden powered equipment (primarily riding and walk behind mowers and tillers) and related service parts and accessories. The Company operates in two segments: Engines and Power Products.
Engines
Briggs & Stratton’s engines are used primarily by the lawn and garden equipment industry, which accounted for 83% of the segment’s engine sales to OEMs during the fiscal year ended June 27, 2010 (fiscal 2010). Major lawn and garden equipment applications include walk-behind lawn mowers, riding lawn mowers, garden tillers and snow throwers. The remaining 17% of engine sales to OEMs in fiscal 2010, were for use on products for industrial, construction, agricultural and other consumer applications, that include generators, pumps and pressure washers. Briggs & Stratton engines are sold primarily by its worldwide sales force through direct calls on customers. Briggs & Stratton also manufactures replacement engines and service parts and sells them to sales and service distributors. Briggs & Stratton owns its principal international distributors. In the United States the distributors are independently owned and operated. These distributors supply service parts and replacement engines directly to independently owned, authorized service dealers throughout the world. Briggs & Stratton’s three largest external engine customers during fiscal 2010, was Husqvarna Outdoor Products Group (HOP), MTD Products Inc. (MTD) and Deere & Company.
The Company competes with Honda Motor Co., Ltd., Kawasaki Heavy Industries, Ltd., Kohler Co.
Power Products
Power Products segment’s (Power Products) principal product lines include portable and standby generators, pressure washers, snow throwers and lawn and garden powered equipment. Power Products sells its products through multiple channels of retail distribution, including consumer home centers, warehouse clubs, mass merchants and independent dealers. Power Products product lines are marketed under various brands including Briggs & Stratton, Brute, Craftsman, Ferris, John Deere, GE, Murray, Simplicity, Snapper, Victa and Troy-Bilt. Power Products has a network of independent dealers worldwide for the sale and service of snow throwers, standby generators and lawn and garden powered equipment. Power Products’ major customers are Lowe’s, The Home Depot and Sears. Sales to these three customers combined were 33% of Power Products segment net sales in fiscal 2010.
The Company competes with Honda Motor Co., Ltd., Generac Power Systems, Inc.. Techtronic Industries, Deere & Company, MTD, The Toro Company and HOP.
Despite its ability to maintain market share in the face of strong competition, the company remained focused on increasing profits and made plans for additional cost cutting measures. The corporation had adopted an Economic Value Added business philosophy in 1990, which emphasized earning a cash return that was higher than the cost of capital. In the early 1980s, Briggs & Stratton had maintained a ratio of operating capital to net income of three to one, but this ratio had slipped to nine to one by 1990. Efforts to reduce this ratio included cutting manufacturing costs, increasing productivity, boosting quality, and ensuring on-time delivery of products.
Having already built two plants in the South which had lower labor costs and a more productive work force, Briggs & Stratton made the decision in mid-1994 to move 2,000 jobs from Wisconsin to three new plants in the South within the next four years. These would be located in Statesboro, Georgia (a $75 million, 800 employee plant); Auburn, Alabama (a $30 million and 500 worker site); and Rolla, Missouri (a $38 million, 600 employee facility). The southern states offered incentives which included tax abatements and worker training programs, in addition to a wage scale, given a lower cost of living, of almost half that found in Wisconsin. The news hit the Milwaukee area hard, and the United Paperworkers International Union, which represented Briggs & Stratton's workers there, became increasingly antagonistic toward the company. Corporate officials expressed sympathy for the workers but maintained that there had been no choice but to take such a step. Fortunately, by 1996, as demand for the company's die-cast products suddenly surged, Briggs & Stratton was able to add 1,000 workers to its Wauwatosa plant, half of which had been idle since the lay-offs.
In early 1997 the company and the U.S. Environmental Protection Agency reached an agreement to comply with new, stricter emissions standards for the small engines the company manufactured, a challenge faced by all such manufacturers. These new engines were to be phased in between the years 2001 and 2005. Briggs & Stratton expected to spend a significant amount of money complying with the standards, though it already had some engines in production which were in compliance.
Divestitures in the mid- and late 1990s helped streamline Briggs & Stratton. In February 1995, the company spun off its Strattec Security Co. subsidiary, leaving the automotive lock and key business for good. In July 1997, it sold its gray iron foundry, and a year later its ductile iron foundry, both of which would continue to produce camshafts, crankshafts, and other products for the company under their new owner, JTC. In July 1998, the company also sold its Powercom-2000 subsidiary.
In late 1998 Briggs & Stratton and the United Paperworkers held talks aimed at reaching common ground, which purported to yield a new spirit of cooperation. As a result, the union gave up a piecework pay system in exchange for receiving increased retirement benefits. As the company's Wisconsin work force was aging, 500 workers had already taken an early retirement package in 1996. An immediate sign of the improved union-management relationship was the announcement that some 71 jobs would be shifted from the South back to Wauwatosa. Some analysts suggested at this time that the company's southern plants had not delivered the cost savings initially anticipated, though the company maintained that it was still in the process of getting the new plants up to capacity.
As Briggs & Stratton reached the end of the 1990s, it remained the world's largest manufacturer of small gasoline engines. Moreover, the streamlining and focusing of energies that had followed the adoption of the Economic Value Added model were showing some signs of strengthening the company's bottom line.
Principal Subsidiaries: Future Parkland Development Corporation.
OVERALL
Beta: 1.03
Market Cap (Mil.): $1,187.40
Shares Outstanding (Mil.): 50.33
Annual Dividend: 0.44
Yield (%): 1.87
FINANCIALS
BGG.N Industry Sector
P/E (TTM): 36.20 18.23 17.05
EPS (TTM): 29.52 -- --
ROI: 2.40 5.48 3.26
ROE: 4.89 6.83 5.84
Statistics:
Public Company
Incorporated: 1909
Employees: 7,265
Sales: $1.33 billion (1998)
Stock Exchanges: New York
Ticker Symbol: BGG
SICs: 3519 Industrial Combustion Engines; 7699 Repair Services
Name Age Since Current Position
Teske, Todd 46 2010 Chairman of the Board, President, Chief Executive Officer
Rodgers, David 39 2010 Chief Financial Officer, Senior Vice President
Reitman, William 54 2007 Senior Vice President - Sales & Customer Support
Brenn, James 62 2010 Senior Vice President
Savage, Thomas 62 2000 Senior Vice President - Administration
Shiely, Vincent 50 2006 President - Yard Power Products Group, Senior Vice President
Wright, Joseph 51 2006 President - Engine Power Products Group, Senior Vice President
Redman, Harold 45 2009 President – Home Power Products Group, Senior Vice President
DeBaets, David 47 2007 Vice President - North American Operations (Engine Power Products Group)
Heath, Robert 62 2010 Vice President, General Counsel, Secretary
Carpenter, Randall 53 2009 Vice President - Marketing
Twinem, Carita 55 2000 Treasurer
O'Toole, Robert 70 1997 Director
Story, Charles 56 1994 Director
Batten, Michael 70 1984 Director
Walker, Brian 48 2002 Director
Achtmeyer, William 55 2003 Director
McLoughlin, Keith 55 2007 Director
Humphrey, James 64 2010 Director
Kampling, Patricia 51 2011 Director
Address:
12301 West Wirth Street
Wauwatosa, Wisconsin 53222
U.S.A.
Briggs & Stratton Corporation (Briggs & Stratton) is a producer of air cooled gasoline engines for outdoor power equipment. The Company designs, manufactures, markets and services these products for original equipment manufacturers (OEMs) worldwide. These engines are aluminum alloy gasoline engines with displacements ranging from 141 to 993 cubic centimeters. Additionally, through its wholly owned subsidiary, Briggs & Stratton Power Products Group, LLC, Briggs & Stratton is a designer, manufacturer and marketer of generators (portable and standby), pressure washers, snow throwers, lawn and garden powered equipment (primarily riding and walk behind mowers and tillers) and related service parts and accessories. The Company operates in two segments: Engines and Power Products.
Engines
Briggs & Stratton’s engines are used primarily by the lawn and garden equipment industry, which accounted for 83% of the segment’s engine sales to OEMs during the fiscal year ended June 27, 2010 (fiscal 2010). Major lawn and garden equipment applications include walk-behind lawn mowers, riding lawn mowers, garden tillers and snow throwers. The remaining 17% of engine sales to OEMs in fiscal 2010, were for use on products for industrial, construction, agricultural and other consumer applications, that include generators, pumps and pressure washers. Briggs & Stratton engines are sold primarily by its worldwide sales force through direct calls on customers. Briggs & Stratton also manufactures replacement engines and service parts and sells them to sales and service distributors. Briggs & Stratton owns its principal international distributors. In the United States the distributors are independently owned and operated. These distributors supply service parts and replacement engines directly to independently owned, authorized service dealers throughout the world. Briggs & Stratton’s three largest external engine customers during fiscal 2010, was Husqvarna Outdoor Products Group (HOP), MTD Products Inc. (MTD) and Deere & Company.
The Company competes with Honda Motor Co., Ltd., Kawasaki Heavy Industries, Ltd., Kohler Co.
Power Products
Power Products segment’s (Power Products) principal product lines include portable and standby generators, pressure washers, snow throwers and lawn and garden powered equipment. Power Products sells its products through multiple channels of retail distribution, including consumer home centers, warehouse clubs, mass merchants and independent dealers. Power Products product lines are marketed under various brands including Briggs & Stratton, Brute, Craftsman, Ferris, John Deere, GE, Murray, Simplicity, Snapper, Victa and Troy-Bilt. Power Products has a network of independent dealers worldwide for the sale and service of snow throwers, standby generators and lawn and garden powered equipment. Power Products’ major customers are Lowe’s, The Home Depot and Sears. Sales to these three customers combined were 33% of Power Products segment net sales in fiscal 2010.
The Company competes with Honda Motor Co., Ltd., Generac Power Systems, Inc.. Techtronic Industries, Deere & Company, MTD, The Toro Company and HOP.
Despite its ability to maintain market share in the face of strong competition, the company remained focused on increasing profits and made plans for additional cost cutting measures. The corporation had adopted an Economic Value Added business philosophy in 1990, which emphasized earning a cash return that was higher than the cost of capital. In the early 1980s, Briggs & Stratton had maintained a ratio of operating capital to net income of three to one, but this ratio had slipped to nine to one by 1990. Efforts to reduce this ratio included cutting manufacturing costs, increasing productivity, boosting quality, and ensuring on-time delivery of products.
Having already built two plants in the South which had lower labor costs and a more productive work force, Briggs & Stratton made the decision in mid-1994 to move 2,000 jobs from Wisconsin to three new plants in the South within the next four years. These would be located in Statesboro, Georgia (a $75 million, 800 employee plant); Auburn, Alabama (a $30 million and 500 worker site); and Rolla, Missouri (a $38 million, 600 employee facility). The southern states offered incentives which included tax abatements and worker training programs, in addition to a wage scale, given a lower cost of living, of almost half that found in Wisconsin. The news hit the Milwaukee area hard, and the United Paperworkers International Union, which represented Briggs & Stratton's workers there, became increasingly antagonistic toward the company. Corporate officials expressed sympathy for the workers but maintained that there had been no choice but to take such a step. Fortunately, by 1996, as demand for the company's die-cast products suddenly surged, Briggs & Stratton was able to add 1,000 workers to its Wauwatosa plant, half of which had been idle since the lay-offs.
In early 1997 the company and the U.S. Environmental Protection Agency reached an agreement to comply with new, stricter emissions standards for the small engines the company manufactured, a challenge faced by all such manufacturers. These new engines were to be phased in between the years 2001 and 2005. Briggs & Stratton expected to spend a significant amount of money complying with the standards, though it already had some engines in production which were in compliance.
Divestitures in the mid- and late 1990s helped streamline Briggs & Stratton. In February 1995, the company spun off its Strattec Security Co. subsidiary, leaving the automotive lock and key business for good. In July 1997, it sold its gray iron foundry, and a year later its ductile iron foundry, both of which would continue to produce camshafts, crankshafts, and other products for the company under their new owner, JTC. In July 1998, the company also sold its Powercom-2000 subsidiary.
In late 1998 Briggs & Stratton and the United Paperworkers held talks aimed at reaching common ground, which purported to yield a new spirit of cooperation. As a result, the union gave up a piecework pay system in exchange for receiving increased retirement benefits. As the company's Wisconsin work force was aging, 500 workers had already taken an early retirement package in 1996. An immediate sign of the improved union-management relationship was the announcement that some 71 jobs would be shifted from the South back to Wauwatosa. Some analysts suggested at this time that the company's southern plants had not delivered the cost savings initially anticipated, though the company maintained that it was still in the process of getting the new plants up to capacity.
As Briggs & Stratton reached the end of the 1990s, it remained the world's largest manufacturer of small gasoline engines. Moreover, the streamlining and focusing of energies that had followed the adoption of the Economic Value Added model were showing some signs of strengthening the company's bottom line.
Principal Subsidiaries: Future Parkland Development Corporation.
OVERALL
Beta: 1.03
Market Cap (Mil.): $1,187.40
Shares Outstanding (Mil.): 50.33
Annual Dividend: 0.44
Yield (%): 1.87
FINANCIALS
BGG.N Industry Sector
P/E (TTM): 36.20 18.23 17.05
EPS (TTM): 29.52 -- --
ROI: 2.40 5.48 3.26
ROE: 4.89 6.83 5.84
Statistics:
Public Company
Incorporated: 1909
Employees: 7,265
Sales: $1.33 billion (1998)
Stock Exchanges: New York
Ticker Symbol: BGG
SICs: 3519 Industrial Combustion Engines; 7699 Repair Services
Name Age Since Current Position
Teske, Todd 46 2010 Chairman of the Board, President, Chief Executive Officer
Rodgers, David 39 2010 Chief Financial Officer, Senior Vice President
Reitman, William 54 2007 Senior Vice President - Sales & Customer Support
Brenn, James 62 2010 Senior Vice President
Savage, Thomas 62 2000 Senior Vice President - Administration
Shiely, Vincent 50 2006 President - Yard Power Products Group, Senior Vice President
Wright, Joseph 51 2006 President - Engine Power Products Group, Senior Vice President
Redman, Harold 45 2009 President – Home Power Products Group, Senior Vice President
DeBaets, David 47 2007 Vice President - North American Operations (Engine Power Products Group)
Heath, Robert 62 2010 Vice President, General Counsel, Secretary
Carpenter, Randall 53 2009 Vice President - Marketing
Twinem, Carita 55 2000 Treasurer
O'Toole, Robert 70 1997 Director
Story, Charles 56 1994 Director
Batten, Michael 70 1984 Director
Walker, Brian 48 2002 Director
Achtmeyer, William 55 2003 Director
McLoughlin, Keith 55 2007 Director
Humphrey, James 64 2010 Director
Kampling, Patricia 51 2011 Director
Address:
12301 West Wirth Street
Wauwatosa, Wisconsin 53222
U.S.A.