Johnson Outdoors Inc. announced net sales of $70.5 million for the first fiscal quarter ended Jan. 1, 2010, up 1.0% from net sales of $69.8 million for the prior year quarter. Favorable currency translation had a positive 3.3 percent impact on revenues during the quarter. Loss from continuing operations of $4.2 million, or 45 cents per diluted share for the first quarter of 2010, compared favorably to a loss from continuing operations of $6.9 million or 75 cents per diluted share in the prior year quarter.
“We have worked hard over the past 18 months to position Johnson Outdoors to compete effectively in today’s new marketplace by reducing infrastructure, focusing strategies, strengthening the balance sheet and investing appropriately in meaningful innovation,” said Helen Johnson-Leipold, chairman and CEO. “Early indications are that outdoor recreational markets will begin a slow, yet steady recovery in 2010, and we feel good about our ability to grow share, improve profitability and enhance shareholder value going forward.”
- Restructuring efforts delivered savings in-line with expectations.
- Inventory levels were 25% below prior year.
- Net debt was reduced $20 million versus the prior year quarter.
FIRST QUARTER RESULTS
Due to the seasonality of the warm-weather outdoor recreational products industry, the company’s first fiscal quarter results historically reflect a loss and are not indicative of the year’s overall performance. First fiscal quarter sales are typically at their lowest as the Company ramps up for the primary selling period of its outdoor recreation products during the second and third fiscal quarters. During the current year first quarter, outdoor recreational markets appeared to be stabilizing with consumer brands in three of the Company’s four business units posting revenue gains during the first quarter.
- Marine Electronics revenues were 3.5% above last year primarily due to growth in all brands in key channels.
- Watercraft sales were 7.0% below the prior year primarily due to a change in pre-season sales programs which adjust shipment dates to coincide more closely with the customer’s retail selling season.
- Diving revenues jumped 18.9% driven by a resurgence in key international markets and favorable currency translation of 8.8 percent.
- Outdoor Gear sales were 22.0% below last year despite solid growth in Consumer camping, which could not overcome a decline in Military sales.
Total company operating loss during the seasonally slow first fiscal quarter was $3.6 million compared to an operating loss of $5.2 million in the prior year quarter. Key drivers behind the favorable comparison were:
- Stabilization in outdoor recreational markets.
- Higher sales in Marine Electronics and Diving units.
- Improved operating efficiency in all businesses.
- An increase in gross profit margin to 37.4 percent from 36.0 percent in the prior year.
- Charges of $0.8 million related to Watercraft consolidation.
The company reported a net loss of $4.2 million, or ($0.45) per diluted share, during the first fiscal quarter, compared to a net loss of $6.9 million, or ($0.75) per diluted share, in the same quarter last year.
OTHER FINANCIAL INFORMATION
The company’s debt to total capitalization stood at 29% at the end of the first quarter versus 39 percent at Jan. 2, 2009. At Jan. 1, 2010, debt, net of cash, was $21.1 million compared to $41.1 million at the end of the prior year quarter. Depreciation and amortization was $2.6 million year-to-date, compared to $2.4 million during the prior year-to-date period. Capital spending totaled $1.5 million during the first fiscal quarter compared with $2.0 million in the 2009 first fiscal quarter.
“We are already benefitting from our new debt agreement as borrowing costs in the quarter dropped $0.4 million below the prior year period,” said David W. Johnson, VP and CFO. “Our cash and debt levels are on target with expectations, due in large part to improved working capital management which brought inventory levels down significantly over the past 12 months. Going forward, on an annual basis our goal is to keep inventory within 5 percent of 2009 levels.”
|JOHNSON OUTDOORS INC.|
|(thousands, except per share amounts)|
|Operating Results||THREE MONTHS
|Cost of sales||44,104||44,650|
|Operating (loss) profit||(3,555)||(5,223)|
|Interest expense, net||1,157||1,494|
|Other (income) expense, net||(680)||1,120|
|Loss before income taxes||(4,032)||(7,837)|
|Income tax expense (benefit)||204||(896)|
|Loss from continuing operations||(4,236)||(6,941)|
|(Loss) income from discontinued operations, net of income tax
benefit of $0 and $0 respectively
|Net loss per common share – Diluted:|
|Diluted average common shares outstanding||9,383||9,285|
|Operating (loss) profit:|