Johnson Outdoors Inc. saw first quarter sales decline primarily due to a considerable decline in military sales in the outdoor equipment division. Excluding the $4.6 million decline in military tent revenues, total company sales would have been up $2.2 million. JOUT is also experiencing some difficulties with the EU diving division and is undergoing a restructuring and laying the groundwork for ERP systems enhancement. Management said it was encouraged by the success of their new product introductions for the quarter, which accounted for roughly one-third of all sales.
During a conference call with analysts and the media, Helen Johnson-Leipold, chairman and CEO, said that the companys core businesses were off to a good start for the year. The first quarter is the slowest season of the year for the company and the results also reflect JOUTs efforts to gear up for the coming selling season.
Johnson Outdoors Watercraft division saw a slight up-tick in sales for the quarter, but is still operating at a considerable loss. Management feels that they are still “in the midst” of a multi-year turn-around for the division and believe that they have made rapid positive steps forward. While expenses are still outpacing sales, margins increased by over 100 basis points and the company feels that the division will be a “significant” part of their growth going forward.
Marine Electronics had an 8% increase in quarterly sales due primarily to the continued growth of Humminbird, and the acquisition of Cannon and Bottomline brands, which added $1.2 million in sales to the division during the period.
The Outdoor Equipment division saw a considerable decline in top-line sales due entirely to lost military contracts. Both the consumer and commercial outdoor equipment categories reported positive sales growth. The quarterly decline in military sales is consistent with the company's stated projections throughout fiscal 2004 and 2005. No military tent orders or contracts were received during the first quarter of fiscal 2006. JOUT continues to expect fiscal 2006 military sales to be in the $30 million to $40 million range.
Diving revenues were down on unfavorable FX rates, while operating income pushed back into the black for the quarter after posting considerable losses last year.
| Johnson Outdoors | |||
| Fiscal First Quarter Results | |||
| (in $ millions) | 2005 | 2004 | Change |
| Net Sales | $72.6 | $75.0 | -3.2% |
| Outdoor | $14.5 | $18.9 | -23.0% |
| Watercraft | $12.3 | $12.1 | +1.8% |
| Diving | $15.8 | $16.3 | -3.1% |
| Marine Elec. | $30.0 | $27.9 | +7.6% |
| Gross Margin | 40.6% | 40.4% | +20 bps |
| Net Income | ($1.1) | ($1.0) | +6.1% |
| Diluted EPS | (12¢) | (12¢) | flat |
| Inventory* | $62.7 | $65.5 | -4.3% |
