Johnson Outdoors Inc. reported strong second quarter earnings as consumers prepare for fishing season and spring-time activities. Net sales surged 12 percent to $149.8 million in the current fiscal second quarter compared to $134.2 million in the prior year quarter, driven by strong new product momentum in the company’s fishing and watercraft recreation businesses.
Key contributing factors in year-over-year comparisons in each business unit included strong demand for new products in Minn Kota and Humminbird brands, which powered a 16 percent increase in fishing revenue year-over-year; continued growth in Old Town, driven by new product success, resulted in a 2 percent increase in watercraft recreation sales; favorable response to new core life support products led to a 6 percent jump in diving revenue; and retailer restructuring across the market and higher than normal pre-season customer inventory resulted in a 2 percent decrease in camping sales.
“Fishing remains the primary engine of growth for us, with sales 15 percent above last year’s quarter and first six months,” said Helen Johnson-Leipold, chairman and CEO, during a conference call. “New product innovation is driving revenue and share gains from Minn Kota and the Hummingbird brands. Importantly, we are leveraging the pioneering technologies of both brand and our ability to uncover unique fishing consumer insights to maximize the growth potential in this business.”
Total company operating profit in the fiscal second quarter was $20.5 million, a 35 percent increase over operating profit of $15.1 million in the previous fiscal year quarter.
Gross margin improved to 43.3 percent due to favorable mix and improved operating efficiency in all units. Operating expense during the quarter increased 12 percent year-over-year due primarily to higher volume-related costs.
Net income in the fiscal second quarter was $14 million, or $1.39 per diluted share, increasing 50 percent compared with net income of $9.3 million, or 93 cents per diluted share in last year’s second quarter.
Fiscal 2017 year-to-date net sales advanced 11 percent to $243.5 million versus net sales of $219.5 million in the same six-month period last year. Total company operating profit increased 47 percent to $20.9 million compared with $14.2 million during the first six months of the prior year.
Gross margin during the first six months improved to 41.7 percent versus 40.2 percent in the same fiscal period in the prior year. Operating expense increased during the first half of the fiscal year due primarily to higher volume, yet declined as a percentage of sales.
Net income for the six-month period benefitted from foreign tax credits of $4.2 million recognized in the current year first quarter due to the repatriation of approximately $21.9 million of cash from overseas. Favorable currency exchange and the opportunity to utilize foreign tax credits prompted the decision to repatriate these funds.
Net income during the first fiscal six-month period more than doubled to $18.0 million, or $1.80 per diluted share, compared with $8.8 million, or 88 cents per diluted share in the same six-month period last year.
“As we head into the season, the number one priority is flawless execution behind our plans to finish the year strong,” Johnson-Leipold said. “Performance through the first six months has positioned our fishing, diving and watercraft rec brands for continued growth. We believe consumer demand is the truest measure of new product success, and we’ll see that in the next quarter.”
“The balance sheet is strong, and our cash position is growing, enabling us to continue to invest in strategic priorities and in opportunities to expand our business and growth potential,” said David Johnson, vice president and CFO. “We remain confident in our abilities and plans to create long-term value and consistently pay dividend to our shareholders.”
Photo courtesy Johnson Outdoors
