Johnson Outdoors Inc. announced higher revenue, profit and earnings for fiscal 2011.

Strong performance by new products in the company's Marine Electronic and Diving brands more than offset a 45 percent drop in military sales.


Net income advanced to $32.7 million, or $3.37 per diluted share, in the current fiscal year, compared to net income of $6.5 million, or 68 cents per diluted share, in the previous fiscal year, due in part to a $21.9 million reversal of the company's deferred tax asset valuation allowance.


Excluding the benefit of this non-cash item, adjusted net income was $10.8 million, or $1.12 on an adjusted earnings per diluted share basis, a 66 percent improvement over the prior year.

“Meaningful innovation is at the core of who we are, and this year's new products generated more than 40 percent of total company revenue,” said Helen Johnson-Leipold, chairman and CEO. “In Marine Electronics and Diving markets where the pace of recovery is strong, our brands' performance outpaced the market and the competition. Importantly, we adjusted quickly to marketplace fluctuations resulting from economic uncertainty, political upheaval and severe weather, maintained a strong balance sheet and continued to grow profits faster than sales, a key objective of our three year plan. Going forward, we will continue to invest in innovation to keep our brands strong and growing, and to maximize opportunities to enhance the long-term profitability profile of all our businesses.” 

Total net sales increased 7 percent to $407.4 million in fiscal 2011 versus $382.4 million in fiscal 2010, due to double-digit growth in Marine Electronics which more than offset declines in other units. Key contributing factors in the year-over-year comparison were:

  • Double-digit growth in Minn Kota and Humminbird brands in all channels, with both brands exceeding $100 million in sales for the year.
  • Higher revenue in Diving due to growth in North America which more than offset weak Asia/Pacific markets. 
  • Successful new products which generated more than 40% of total company sales.
  • Favorable currency translation which added $6.4 million, or 2 percent, to total company revenue.
  • Significant declines in U.S. military spending resulting in a 20 percent reduction in Outdoor Gear sales.
  • Unfavorable weather conditions weakened demand in the paddling market contributing to a 10 percent decline in Watercraft revenue.

Total company operating profit rose 21 percent to $17.7 million for fiscal 2011 compared to operating profit of $14.6 million in fiscal 2010. Increased volume, improved cost absorption and higher-margin new products, such as the Minn Kota Talon, Minn Kota iPilot, and Humminbird Down Imaging and Side Imaging fishfinders, were primary drivers behind the favorable year-over-year comparison.

Net income for the fiscal year was $32.7 million or $3.37 per diluted share, versus net income of $6.5 million, or 68 cents per diluted share, in the prior year. Net income benefited significantly from a reversal of the company's deferred tax asset valuation allowance which was established in fiscal 2008, due in part to the significant loss and impact of non-cash goodwill impairment that year.


The company's recent history of income generation and future profit expectations were prime considerations in this year's reversal of the valuation allowance in the fiscal fourth quarter. Excluding this non-cash item, adjusted net income was $10.8 million, or $1.12 on an adjusted earnings per diluted share basis. The company's borrowing costs declined 36 percent from the prior year due largely to amended debt agreements announced on Nov. 18, 2010.


Due to the seasonality of the warm-weather outdoor recreational products industry, the company's fourth quarter results historically reflect an industry-wide slowing of sales and production. Higher Marine Electronics sales during the quarter more than offset lower volume in other units. Total company net sales increased 3 percent compared to the prior year quarter. On a constant currency basis, fiscal fourth quarter sales would have been flat with the prior year quarter.

Total company operating loss was ($4.2) million for the fourth fiscal quarter compared to an operating loss of ($3.3) million in the prior year quarter. Increased commodity costs, higher R&D and legal costs and a 75 percent drop in military sales contributed largely to the quarter-to-quarter comparison.


The company reported significant improvement in net income for the fiscal fourth quarter of $17.4 million, or $1.78 per diluted share, due primarily to the reversal of the company's tax valuation allowance. Adjusted net loss for the fiscal 2011 fourth quarter was ($4.5) million, or ($0.47) on an adjusted loss per diluted share basis. Interest expense for the quarter was 64 percent below the prior year period.


The company's debt to total capitalization stood at 8 percent at the end of the year versus 16 percent at October 1, 2010. Cash, net of debt, was $29.5 million at year-end versus cash, net of debt, of $9.5 million at October 1, 2010. Depreciation and amortization was $10.9 million year-to-date compared with $10.0 million in the prior year. Capital spending totaled $9.4 million in 2011 compared with last year's $10.0 million.


“The balance sheet is strong and healthy, as demonstrated by our success in ending Fiscal 2011 with a three-fold improvement in net cash year-over-year. Looking ahead, due to the need for added investment in innovation and the ongoing unpredictability surrounding external factors which could impact recovery of outdoor rec markets, achievement of 2012 financial targets is uncertain at this time,” said David W. Johnson, Vice President and Chief Financial Officer.



(thousands, except per share amounts)

Operating Results September 30
October 1
September 30
October 1
Net sales $77,378 $75,121 $407,422 $382,432
Cost of sales 48,384 44,827 244,287 228,909
Gross profit 28,994 30,294 163,135 153,523
Operating expenses 33,224 33,592 145,465 138,969
Operating (loss) profit (4,230) (3,298) 17,670 14,554
Interest expense, net 351 1,027 3,130 4,995
Other expense, net 212 273 2,290 367
(Loss) income before income taxes (4,793) (4,598) 12,250 9,192
Income tax (benefit) expense (22,145) 1,242 (20,470) 2,653
Net income (loss) $ 17,352 $ (5,840) $ 32,720 $ 6,539
Diluted average common shares outstanding 9,287 9,409 9,287 9,267
Diluted net income (loss) per common share $ 1.78 $ (0.62) $ 3.37 $ 0.68

Segment Results
Net sales:

Marine electronics $ 36,099 $ 28,338 $ 222,115 $ 185,495
Outdoor gear 6,823 10,612 38,882 48,690
Watercraft 11,627 12,927 57,732 64,001
Diving 23,034 23,392 89,545 85,075
Other/eliminations (205) (148) (852) (829)
Total $ 77,378 $ 75,121 $ 407,422 $ 382,432
Operating (loss) profit:

Marine electronics $ (1,119) $ (2,443) $ 21,074 $ 13,938
Outdoor gear (754) 726 2,996 5,881
Watercraft (1,338) (37) (1,351) 1,826
Diving 287 1,009 3,610 3,031
Other/eliminations (1,306) (2,553) (8,659) (10,122)
Total $ (4,230) $ (3,298) $ 17,670 $ 14,554