Johnson Outdoors Inc. management reported that an initial inspection indicates that damage and losses related to the flooding and temporary closure of its Binghamton, New York plant and administrative offices will exceed $1.2 million, the loss level at which the Company expects insurance coverage to begin. Heavy rains caused massive flooding which crippled the Binghamton area and other parts of the Northeastern United States in the days before the July 4th holiday week-end. The Company’s finished goods warehouse in the area was not affected by the flooding. Binghamton is home to Johnson Outdoors Outdoor Equipment Group business, which makes and markets consumer, commercial and military tents and camping equipment.
An initial inspection did not reveal structural damage to the closed facility; however, a final, comprehensive damage assessment of the plant and equipment cannot be made until all mud and debris are removed. Extensive clean-up efforts are now underway, with crews on-site, working around-the-clock so operations at the facility can resume as quickly as possible.
At this time, preliminary plans reflect a start-up of limited production is possible by mid-August 2006, with employees beginning to return to work on a staggered, as needed basis, that month. The Company cautions this is a best-case scenario estimate and limited production start-up timing could change based on the results of the on-going damage assessment.
Shipments from the Company’s finished goods warehouse to consumer and commercial customer accounts resumed late last week when roads in the flooded region reopened. The Company does not maintain finished goods inventory for its Military tent business. The customer service center is back on-line, and administrative offices will reopen at a temporary location on Monday, July 10.
Employee safety and well-being remain a top concern. The Company is very pleased to report that all employees are safe, and coordination of efforts to assist those who have lost or been displaced from their homes by the flood has begun. The Company will continue to pay employee salaries through July 2006.
On June 27, 2006 the Company was awarded a $2.0 million order for the Modular General Purpose Tent System (MGPTS) with anticipated delivery in the fourth quarter of calendar 2006. As a result of this order, the Company has now received eleven (11) separate orders totaling $19.5 million awarded under the multi-vendor, multi-product contract announced on September 7, 2005. The Company now expects fiscal 2006 military sales will be in the $30-$35 million range.
