Johnson Outdoors Inc. reported double-digit increases in sales and earnings for the 2017 second fiscal quarter and first fiscal six months ending March 31, 2017.

“Excitement in the market for Johnson Outdoors’ innovative new product line-up is giving us a great start to the year and positioning our brands for continued growth and success. Importantly, we are leveraging the unique combination of pioneering technologies in our Minn Kota® and Humminbird® brands to maximize the growth potential of our Fishing business. Watercraft Recreation sales are outpacing the competition to sustain a profitable growth trajectory, and we are beginning to see the benefit of our efforts to reinvigorate innovation in Diving,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer. “Ongoing focus and investment against our three key strategic plan priorities – richer consumer insights, enhanced innovation processes and digital sophistication – are essential to ensure continued progress toward our goal of delivering accelerated sustained profitable growth.”

Second Quarter Results
Sales in the second fiscal quarter reflect shipments to customers in anticipation of the primary retail-selling period for the outdoor recreation industry’s warm-weather products. 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 were:

  • Strong demand for new products in Minn Kota® and Humminbird® brands powered a 16 percent increase in Fishing revenue year-over-year.
  • Continued growth in Old Town®, driven in large part 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. On a currency neutral basis, Diving sales rose 7 percent.
  • Retailer restructuring across the market and higher than normal pre-season customer inventory resulted in a 2 percent decrease in Camping sales.

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 the previous fiscal year’s second quarter.

Year-To-Date Results
Fiscal 2017 year-to-date net sales advanced 11 percent to $243.5 million versus net sales of $219.5 million in the same fiscal 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 fiscal year-to-date period. 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 million, or $1.80 per diluted share, compared with $8.8 million, or 88 cents per diluted share in the same six-month period in the prior fiscal year.

Other Financial Information
At March 31, 2017, cash, net of debt was $24.4 million compared with the company’s cash, net of debt position of $13.4 million at April 1, 2016. Depreciation and amortization was $6.6 million in the current year-to-date period versus $5.7 million in the prior fiscal first six-months. Capital spending totaled $5.2 million during the first six-month period compared with $5.6 million in the previous year-to-date period.

“The balance sheet is very strong and our cash position is growing enabling us to continue to invest in strategic priorities and opportunities to expand our business and growth potential. We remain confident in our ability and plans to create long-term value and consistently pay dividends to shareholders,” said David W. Johnson, Vice President and Chief Financial Officer.

Photo courtesy Johnson Outdoors