Johnson Outdoors Inc. reported a loss off $2.1 million, or 21 cents a share, in its fiscal fourth quarter ended September 30 against earnings of $1.2 million, or 12 cents, in the same period a year ago. Sales slumped 12.5 percent to $74.9 million from $85.7 million.

The company said that due to the seasonality of the warm-weather outdoor recreational equipment industry, the company’s fourth quarter results historically reflect an industry-wide slowing of sales and production. A shift in orders due to a planned product-line technology restage in Marine Electronics, and a $4 million plus decline in non-core military tent sales in Outdoor Gear led to the unfavorable quarter-over-quarter comparison. Operating loss was $4.9 million this quarter versus operating profit of $1.1 million in the prior year fourth quarter due primarily to the lower sales volume.

For the full year, the company saw double-digit growth in net income on slightly higher sales for fiscal 2016. Award-winning innovation spurred momentum of new products in the company’s core fishing, camp cooking and watercraft recreation brands. Strong performance through the first nine months more than offset the lower fourth quarter results.

Fiscal 2016 Highlights

  • Record sales for Minn Kota and Jetboil
  • 2017 new products command top industry awards
  • Watercraft sustains profitable growth trajectory
  • Net cash at all-time high, debt at record low
  • Maintained strong balance sheet and quarterly dividend

“Performance this year reflects how important innovation is in our ability and capacity to deliver sustained long-term profitable growth. New products like the Minn Kota Riptide Ulterra, Humminbird Helix series of fishfinders, Old Town Predator fishing kayaks and Jetboil Genesis™ cooking system drove strong consumer demand during the year. Anticipation is high and positive momentum growing for our equally exciting and award-winning 2017 new product line-up unveiled during the third quarter, which includes the revolutionary Minn Kota Ultrex trolling motor and Old Town Predator PDL pedal-drive boat. Continued strong performance of our fishing and watercraft recreation businesses is key as we work aggressively to reposition our Eureka! brand for success with new camp consumer targets and advance innovation in diving for SCUBAPRO,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer.

“Looking forward, our long-term plan focuses on elevating our businesses to the next level of success through enhanced consumer intimacy, transformative digital sophistication and world-class innovation processes. Targeted, strategic investments against these priorities will continue over the next two years, with the goal of delivering accelerated profitable growth in the future,” concluded Johnson-Leipold.

FISCAL YEAR RESULTS

Total company net sales increased 1 percent to $433.7 million versus $430.5 million in the previous fiscal year. New products across the company’s Minn Kota, Humminbird, Jetboil and Old Town brands more than offset lower sales in dive equipment and military tents. Key contributing factors in the year-over-year comparison were:

  • Outstanding new product performance across key channels by Minn Kota and Humminbird powered 5 percent growth in Marine Electronics.
  • Strong marketplace momentum behind Old Town and Ocean Kayak propelled a 3 percent increase in Watercraft sales.
    Growth in Jetboil did not offset sagging sales in non-core military tents resulting in an unfavorable year-over-year comparison in Outdoor Gear.
  • Diving revenue declined 4 percent, or $3 million, largely due to continued weakness in Middle East markets and currency translation.

Operating profit grew 28 percent to $22.9 million versus $17.9 million in the prior fiscal year due primarily to higher volume and improved gross margins. Non-cash goodwill impairment charges of $6.2 million in the current year were more than offset by a $9.9 million improvement in legal expense year over year.

Net income for the fiscal year rose 27 percent to $13.5 million, or $1.34 per diluted share, versus $10.6 million, or $1.06 per diluted share in fiscal 2015. The company’s effective tax rate was 43 percent versus 33 percent in the prior year. The unfavorable variance in tax rate is primarily due to no tax benefit on non-cash goodwill impairment charges in the current year.

Other Financial Information

The company’s debt to total capitalization stood at 3 percent at the end of the current year, a 25 percent improvement compared with debt to total capitalization of 4 percent at the end of 2015. Cash, net of debt, reached an all-time high of $79.9 million at year-end versus cash, net of debt, of $61.7 million at the prior year-end.

Depreciation and amortization was $12 million year-to-date compared with $11.8 million in the prior year. Capital spending totaled $11.7 million in fiscal 2016 compared with last year’s $10.4 million.

“New product innovation drove higher volume and improved margins through the first nine months of the year, more than offsetting the anticipated slow-down of sales during the fourth quarter. We ended the year with the balance sheet in great shape, maintaining the strong cash position needed to provide us the flexibility and resources necessary to invest strategically in growing our businesses, ” said Dave Johnson, vice president and chief financial officer. “Heading into fiscal 2017, positive momentum for new products is building and order positions are steadily growing.”

Photo courtesy Johnson Outdoors