Johnson Outdoors Posts Fiscal Q1 Loss Despite Solid Sales Gains

Johnson Outdoors Inc. announced declines in operating profit and earnings on increased net sales for the fiscal quarter ended December 31, 2004 compared with the prior year period. First quarter operating profits in the Company’s Marine Electronics and Outdoor Equipment businesses were offset by losses in its Watercraft and Diving businesses. The Company noted that, due to the seasonality of its markets, quarterly net sales are historically slower during the first and fourth fiscal quarters.

Total company net sales increased by 19.1% for the quarter, driven by the Marine Electronics and Outdoor Equipment business units. While net sales in Marine Electronics increased by 54.7% over the same period last year, driven primarily by the Humminbird brand acquired in May 2004, operating profit for the unit declined due to unfavorable volume variances in the Minn Kota product line.

Outdoor Equipment generated a 19.3% increase in net sales and a 37.4% improvement in operating profit over the same period in the prior year due solely to military tent sales. The Company expects military tent sales to decline up to 40% from the prior year as current contracts and orders come to an end, and the timing for decisions on future government contracts remains unpredictable.

Despite favorable currency rate trends, Diving net sales and operating profit continued to decline amid weak market conditions while the Company continued to invest in the Diving business to deliver enhanced innovation.

Watercraft posted a slight decline in net sales and reduced operating losses versus the first fiscal quarter of 2004.

The Company realized a net loss for the first quarter of $1.0 million or $.12 per diluted share compared with net income of $0.2 million or $.02 per diluted share in the comparable period last year. Charges related to the previously announced going private transaction added $0.9 million to operating expenses for the quarter bringing the total charges related to this transaction to $2.4 million since February 20, 2004. Operating expenses for the quarter were also impacted by currency ($0.7 million), Watercraft restructuring ($0.5 million) and the addition of the Humminbird business ($2.5 million.)

“Taking action to ensure the long-term health and profitability of our businesses is job one at Johnson Outdoors,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer. “For us, that means continually investing in innovation to grow our markets, while at the same time building the capacity and capability for growth within our businesses. With the integration of Humminbird completed, our Marine Electronics Group is now focused on maximizing synergies and leveraging the marketing strength of the Minn Kota brand to grow Humminbird sales. We continue to make good progress in Watercraft, but more work and more time is needed for improvements to be reflected on the bottom-line. Clearly, our two biggest challenges are Global Diving, where markets are the weakest and restructuring efforts are just beginning, and Outdoor Equipment, where progress against rebalancing the focus of that business is slow and the future of military tent sales is uncertain.”

As of the end of the first fiscal quarter of 2005, debt-to-total capitalization stood at 25%, a further improvement demonstrating Johnson Outdoors commitment to paying down debt and maintaining a strong balance sheet. Consistent with the pre-selling season period, working capital excluding cash and debt grew to $94.6 million, a $14 million increase over the prior year due primarily to the addition of Humminbird(R). Compared to year ago levels, the increases in Accounts Receivables and Inventories primarily reflect the addition of the Humminbird business during the Company’s third fiscal quarter of 2004 and the impact of currency fluctuations in the Company’s foreign operations.

                  JOHNSON OUTDOORS INC. AND SUBSIDIARIES

  (thousands, except per share amounts)
  Operating Results                                  THREE MONTHS ENDED
                                                    Dec 31         Jan 2
                                                     2004           2004

  Net sales                                        $74,982        $62,941
  Cost of sales                                     44,710         35,971

  Gross profit                                      30,272         26,970
  Operating expenses                                30,347         25,624

  Operating profit (loss)                              (75)         1,346
  Interest expense, net                              1,090          1,204
  Other expenses (income), net                        (119)          (120)

  Income (loss) before income taxes                 (1,046)           262
  Income tax expense (benefit)                         (15)           102

  Net income (loss)                                $(1,031)          $160
  Net income (loss) basic and diluted
   per common share                                 $(0.12)         $0.02


  Segment Results
  Net sales:
     Marine electronics                            $27,851        $18,009
     Outdoor equipment                              18,851         15,803
     Watercraft                                     12,066         12,440
     Diving                                         16,324         16,942
     Other/eliminations                               (108)          (253)
  Total                                            $74,982        $62,941

  Operating profit (loss):
      Marine electronics                            $2,887         $3,038
      Outdoor equipment                              3,408          2,481
      Watercraft                                    (2,819)        (3,511)
      Diving                                          (136)         1,685
      Other/eliminations                            (3,415)        (2,347)
  Total                                               $(75)        $1,346