Johnson Outdoors Inc. is consolidating operations for its paddle sport brands in Old Town, ME by the end of September 2009 as part of a “comprehensive effort to improve profitability” of its Watercraft business unit. The decision will result in the closure of the company's plant in Ferndale, WA and a reduction of about 90 positions located there. Consolidation is anticipated to result in annual cost-savings of more than $4 million dollars beginning in fiscal 2010. Costs and charges associated with the action are estimated to have a negative impact on earnings per diluted share of between 16 cents and 20 cents in the fourth fiscal quarter of 2009.
“Our focus is on transforming Watercraft into a stronger, more competitive and cash-generating business which is better positioned for growth in the future. I am confident we are doing what is right to drive marketplace success for our brands, improve profitability for Watercraft and Johnson Outdoors long-term, and by doing so, enhance shareholder value,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer. “We are grateful for the support of Governor Baldacci and the City of Old Town enabling us to continue our 100-plus year tradition of quality boat production in Maine.”
Watercraft transformation began in March 2009 when the company merged leadership of its Watercraft and Marine Electronics business units under a single Group Vice President. In May 2009, brand sales for the two businesses were combined and Watercraft marketing was restructured to simplify and streamline customer communication. As a result of the action announced today, all Watercraft production and related business support and customer service functions will be fully integrated and operating at Old Town before the end of December 2009. The company will provide severance and other support to employees whose positions have been eliminated as a result of today's announcement.
Old Town was selected as the Watercraft hub of operations due to its depth of manufacturing capability and capacity for efficient expansion. The company currently maintains two sites in Old Town, ME, but will transfer all operations into one location after conversion of its modern distribution and warehouse center is finished later this year. The site has been redesigned for maximum production efficiency, while reducing energy use by 50%. An estimated additional 48 jobs will be created in Old Town once consolidation is completed.
The company's century-old mill site will be vacated and future-use options are under evaluation.
