Johnson Outdoors Inc. reported a 12% increase in sales during the first fiscal quarter ended Dec. 31. Due to the seasonality of the warm-weather outdoor recreational products industry, the company's first fiscal quarter results historically reflect a loss; however, on the strength of higher volume, improved operating efficiency and sustained cost reductions, the company's first quarter net loss was cut by more than half.
“Recovery of outdoor recreational markets is central to continued progress against our three-year plan to ensure sustained profitability,” said Helen Johnson-Leipold, chairman and chief executive officer. “Markets are on the upswing, credit is reportedly easing and our brands are off to a solid start this year. At the same time, cost-reductions, supply chain efficiency and process improvements implemented over the past two years strengthened operations and competitiveness, and as expected, bottom-line benefits from these initiatives are on-going,” said Helen Johnson-Leipold, chairman and chief executive officer. “While it is too early to predict how the year will go, early indicators suggest customer demand is up and our focus now is on sustaining marketplace momentum and gaining additional share.”
FIRST QUARTER RESULTS
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.
Net sales of $78.7 million in the first fiscal quarter were 12% above net sales of $70.5 million in the prior year quarter. Outdoor recreational markets demonstrated resiliency and continued recovery this period with three of the Company's four business units posting solid revenue gains during the first quarter. Key drivers behind the favorable comparison were:
- Marine Electronics revenue surged 30% ahead of last year due to growth in Minn Kota, Humminbird and Cannon brands in all markets and all channels.
- Outdoor Equipment sales climbed 19% above last year driven by gains in consumer camping and military tents.
- Diving revenue grew 5% on the strength of domestic and export sales despite the negative impact of unfavorable currency translation of 3%.
- Watercraft sales dropped 40 percent due to Year I implementation of a new go-to-market strategy which customizes brand and mix for specific channels as opposed to providing a full portfolio offering across every channel.
Total company operating loss during the seasonally slow first fiscal quarter declined 63% to $1.3 million compared to an operating loss of $3.6 million in the prior year quarter. Primary factors behind the favorable comparison were:
- Continued recovery of outdoor recreational markets.
- Higher sales in Marine Electronics, Outdoor Equipment and Diving leading to lower operating expense as a percentage of sales.
- An increase in gross profit margin to 39.0% from 37.4% in the prior year due largely to improved operating efficiency year-over-year in Diving and Marine Electronics.
The company reported a net loss of $1.2 million, or 13 cents per diluted share, during the first fiscal quarter, compared to a net loss of $4.2 million, or 45 cents per diluted share, in the same quarter last year.
OTHER FINANCIAL INFORMATION
At Dec. 31, 2010, debt, net of cash, was $14.1 million compared to $21.1 million at the end of the prior year quarter. Depreciation and amortization was $2.4 million year-to-date, compared to $2.6 million during the prior year-to-date period. Capital spending totaled $1.6 million during the first fiscal quarter compared with $1.5 million in the 2010 first fiscal quarter.
“Higher demand is naturally driving higher working capital and will continue to do so during the year; however, we are being vigilant and disciplined to ensure the critically important measure of days of working capital remains consistent with Fiscal 2010 levels. At this time, we remain focused on driving continued progress against our 2012 financial targets of five percent compound annual growth rate in sales and six percent operating margin,” said David W. Johnson, Vice President and Chief Financial Officer.
Johnson Outdoors' brands include, among others: Old Town canoes and kayaks; Ocean Kayak and Necky kayaks; Carlisle paddles; Extrasport, personal flotation devices; Minn Kota motors; Cannon downriggers; Humminbird fishfinders; Geonav marine electronics; SCUBAPRO and SUBGEAR dive equipment; Silva compasses; Tech4O digital instruments; and Eureka! tents.
|JOHNSON OUTDOORS INC.|
|(thousands, except per share amounts)|
|THREE MONTHS |
|Operating Results||December 31|
|Net sales||$ 78,700||$ 70,460|
|Cost of sales||48,020||44,104|
|Interest expense, net||824||1,157|
|Other income, net||(6)||(680)|
|Loss before income taxes||(2,153)||(4,032)|
|Income tax (benefit) expense||(916)||204|
|Net loss||$ (1,237)||$ (4,236)|
|Diluted average common shares outstanding||9,611||9,383|
|Net loss per common share – Basic and Diluted||$ (0.13)||$ (0.45)|
|Marine electronics||$ 42,945||$ 33,095|
|Total||$ 78,700||$ 70,460|
|Operating profit (loss):|
|Marine electronics||$ 378||$ (493)|
|Total||$ (1,335)||$ (3,555)|