Johnson Outdoors Inc. reported double-digit growth in operating profit and net income as new products at its Marine Electronics segment continued to drive sales gains in the fiscal third quarter ending June 29. Total revenue during the quarter was $128.6 million, a 5 percent increase over net sales of $122.5 million in the prior fiscal year quarter.
Strong performance in North America and Asia more than offset declines in Southern Europe. Currency translation had a negative 2 percent, or $2.5 million, impact on sales. Drought slowed U.S. sales in June, while markets in northern central Europe held steady. Asia continued to grow.
Total company operating profit during the quarter was $14.2 million, a 20 percent increase over the prior fiscal year quarter, due to higher volume, strong margins and improved efficiency. Third quarter net income of $9.0 million, or 91 cents per diluted share, marked an 11 percent increase over the prior year.
During a conference call from Salt Lake City, where she was attending the Outdoor Retailer Show, Chairman and CEO Helen Johnson-Leipold called it a “great quarter and a very good year.”
“Margins held firm as demand in Marine Electronics and Diving brands and innovation outpaced price discounting by competitors,” said David W. Johnson, VP &CFO. “Rigorous balance sheet management remains a top priority. Working capital declined $12 million and every business was in a cash generating position for the quarter.”
He said operating profit margin was the highest in eight years due to improved efficiency and controlled spending and that YTD operating expense percentage was the lowest in 11 years. Sales per employee were up 6 percent from the prior quarter. Inventory declined by $7 million, or nearly 10 percent and the company has seen no indications that inventory is clogging up any of its retail channels.
Double-digit growth in Minn Kota and Cannon brands propelled a 9 percent increase in Marine Electronics revenue, which is on track to exceed $200 million in sales again this year. The company’s innovations in remote control and imaging continue to garner awards and spur demand. The Humminbird 360 fish finder, for instance, won Best in Show at last month’s ICAST show for electronics category.
Growth in the Old Town brand led to a 1 percent uptick in Watercraft revenue, where sit-on-top kayaks performed particularly well. The company combined its watercraft and camping gear businesses in the fourth quarter of 2011 in a bid to restore it to profitability by focusing on specialty distribution.
“To do that we have to strengthen watercraft margins and deliver innovative specialty-only new products and services, including enhanced retail sales programs and support,” Johnson-Leipold said. “The importance of specialty dealers cannot be overstated. Reclaiming a leadership position in specialty will happen over time and not over night and we are committed to making it happen.”
In the fourth quarter, products introduced within the last two years drove 40 percent of revenue growth at JOUT.
At the company’s Outdoor Gear segment, a sharp rise in military tent sales drove an 8 percent increase in sales. The segment owns the Silva and Tech40 instrument brands and makes Eureka tents.
Diving revenue declined 5 percent due to unfavorable currency translation which had a negative 7 percent, or $1.7 million, impact on sales. The ScubaPro Meridian Dive watch provided a good bump in sales. Leipold-Johnson said growth was even in both the premium ScubaPro and the lower-tier SubGear brands.
Johnson Outdoors Segment Results
Net sales: | ||||
Marine electronics | $ 70,223 | $ 64,172 | $ 198,250 | $ 186,016 |
Outdoor equipment | 12,222 | 11,322 | 27,949 | 32,059 |
Watercraft | 22,165 | 21,855 | 46,710 | 46,106 |
Diving | 24,051 | 25,400 | 64,907 | 66,511 |
Other/eliminations | (66) | (268) | (319) | (647) |
Total | $ 128,595 | $ 122,481 | $ 337,497 | $ 330,045 |
Operating profit (loss): | ||||
Marine electronics | $ 12,165 | $ 8,994 | $ 26,555 | $ 22,194 |
