Johnson Outdoors Narrows Fiscal First Quarter Loss on Cost-Cutting Measures

The Racine, WI-based global outdoor recreation company said its net loss reduced by nearly four-fold from a net loss of $4.3 million, or 45 cents per diluted share in the prior-year period to a loss of $1.2 million, or 13 cents per share, in the 2011 fiscal first quarter. Management said results were driven by the recovery of outdoor recreational markets, the return of discretionary spending and a strong holiday season.

“Markets are on the upswing, credit is reportedly easing and our brands are off to a solid start this year,” said company Chairman and CEO Helen Johnson-Leipold. “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.”
Revenues for Johnson Outdoors surged 11.7% to $78.7 million from $70.5 million in the prior-year first quarter, driven in large part by an outstanding quarter from the Marine Electronics business on strength from its Minn Kota, Humminbird and Cannon brands.

The Marine Electronics division saw revenues increase 29.8% to $42.9 million for the fiscal first quarter. Management said the category saw growth in most channels while “international growth is running parallel to domestic markets.”  The company swung to a profit in the division in fiscal Q1, posting operating income of $378,000 for the quarter versus a nearly $500k loss in the prior-year period.

Revenues for the company’s Outdoor segment also improved, surging 19.3% to $10.5 million from $8.8 million in the prior-year period on gains in consumer camping and military tents.   Profits in the division more than doubled in fiscal Q1, surging more than 105% to $1.5 million for the quarter.

Watercraft sales dropped 40.2% to $6.1 million from $10.5 million a year ago, a decline that management attributed to a “new brand channel strategy” that is expected to target the needs of the paddlesports customer within the specialty channel. Johnson-Leipold said paddlesports is one of the outdoor recreation markets that is recovering at a slower pace than the industry, but she noted that Watercraft orders have picked up during January.  The division saw its operating loss expand a bit in fiscal Q1, posting a loss of $1.7 million for the most recent quarter versus a loss of $1.1 million in the prior-year period.
For the Diving segment, sales improved 4.6% to $19.4 million from $18.5 million a year ago on strength of domestic and export sales, which offset the impact of unfavorable currency translation of 3%.  The division also swung into profit territory for the quarter, posting a profit or $1.2 million in fiscal Q1 versus an $84,000 loss in the prior-year fiscal  first quarter.

The company’s overall operating loss for the first quarter narrowed 63% to 1.3 million compared to an operating loss of $3.6 million in the prior year while margins improved more than 350 basis points to 39.0% of sales due to improved operating efficiencies in the Diving and Marine Electronics segments.