Johnson Outdoors reported sales for the second quarter rose 7.9% to $124.0 million compared to $114.9 million in the prior year period. Net income increased 15.6% to $10.4 million, or $1.09 per diluted share, from $9.0 million, or 97 cents, a year ago. The sales gains were led by double-digit growth at both its Marine Electronics and Outdoor Equipment segments. Its Watercraft and Diving segments showed declines.

“Outdoor recreational markets are recovering, and we have leveraged our leading brand equities to grow share in a highly competitive marketplace. Improved operational efficiency and aggressive working capital management efforts have enabled us to grow profits faster than sales, a key objective of our three year transformation plan for sustained profitable growth,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer.

THIRD QUARTER RESULTS

Third quarter sales historically reflect customer inventory replenishment due to consumer demand during the primary retail selling period for the industry's warm-weather seasonal outdoor products. Total net sales increased 7.9% compared to the prior year quarter, due to the success of targeted new product investments and initial industry recovery. Key factors behind the results were:

    * Marine Electronics revenues surged 17.9% ahead of last year due to growth in Minn Kota(R), Humminbird(R) and Cannon(R) brands across all distribution channels in both international and domestic boat markets.
    * Outdoor Equipment sales jumped 21.3% above last year driven by double-digit growth in all segments.
    * Watercraft revenues decreased 3.5% below the prior year on declines in Europe and the U.S. specialty channel.
    * Diving revenues were 9.0% behind last year due to a negative 3.5% impact from currency translation, product availability and a late-quarter slow-down of sales in key international markets.

Total Company operating profit grew 26% to $13.4 million for the third fiscal quarter compared to operating profit of $10.6 million in the prior year quarter. Key factors contributing to the comparison were:

    * Higher sales in Marine Electronics and Outdoor Equipment.
    * Gross margin improvement in all businesses yielding a 1.4 point gain in total Company margins.
    * Sustainable cost reductions implemented in 2009 which included company-wide restructuring and manufacturing consolidation in Watercraft.
    * Discretionary bonus and retirement contributions added $2.8 million to operating expenses versus no related expenses in the prior year quarter.

Third quarter net income increased 16% over the previous year third quarter. Key factors in the quarter-over-quarter comparison were:

    * Reduced interest expense of $1.3 million resulting from lower debt levels, lower swap amortization and lower borrowing costs.
    * Tax benefits of $1.4 million in the prior year quarter.

TRANSFORMATION UPDATE

On November 20, 2009, the Company outlined plans to further transform Johnson Outdoors to achieve sustained profitable growth focusing on continued cost-structure reductions, enhanced product price/value, targeted revenue gains and strong balance sheet management. At the end of the third fiscal quarter:

    * Restructuring efforts delivered cost-savings in line with expectations.
    * Working capital declined as inventories remained at targeted levels.
    * Interest expense for the quarter declined 47% below the prior year quarter.

YEAR-TO-DATE RESULTS

Net sales in the first nine months of fiscal 2010 were $307.3 million versus $291.2 million in the same nine-month period last year, a 5.5% increase. Key drivers in the year-to-date period were:

    * Continued recovery of key outdoor recreation markets.
    * Increased total Company sales bolstered by successful new products in Marine Electronics, Outdoor Equipment and Diving.
    * Favorable currency translation of 1.3%.

Total Company operating profit rose substantially to $17.9 million during the first nine months of fiscal 2010 compared to operating profit of $11.2 million during the prior year-to-date period. Discretionary bonus and employee retirement contribution accruals added $4.9 million to operating expense year-to-date compared to no related expense in the prior year-to-date period. Net income more than doubled during the first nine months of the year to $12.4 million, or $1.30 per diluted share, versus net income of $4.6 million, or $0.49 per diluted share, in the first nine months of the prior year. Primary drivers behind the year-to-date comparison were consistent with those during the third quarter in addition to a 46% decline in interest expense versus the same period last year attributable to the Company's improved debt restructuring announced in September 2009.

OTHER FINANCIAL INFORMATION

The Company's debt level was $31.9 million at the end of the third quarter versus $60.8 million at the end of the prior year quarter, and debt, net of cash, was $6.4 million at the end of the current quarter versus $26.9 million at the end of the previous year quarter. Depreciation and amortization was $7.4 million year-to-date, compared to $8.0 million during the first nine months of the prior year. Capital spending totaled $5.7 million during the first nine months of fiscal 2010 compared with $5.2 million in same period in 2009.

“Outdoor recreational markets remain sensitive to fluctuations in both domestic and international economic conditions. Process and systems improvements have given us the flexibility needed to react quickly to changing marketplace demand and maintain strong margins,” said David W. Johnson, Vice President and Chief Financial Officer.

New accounting rules concerning treatment of participating securities, including non-vested stock, in earnings per share calculations reduced previously reported 2009 third quarter earnings per share by ($0.01) and had no impact on earnings per share in the 2009 year-to-date period.

Johnson Outdoors' brands include, among others: Old Town(R) canoes and kayaks; Ocean Kayak(TM) and Necky(R) kayaks; Carlisle paddles; Extrasport(R) personal flotation devices; Minn Kota(R) motors; Cannon(R) downriggers; Humminbird(R) fishfinders; Geonav(R)marine electronics; SCUBAPRO(R) and SUBGEAR(R) dive equipment; Silva(R) compasses; Tech4O(R) digital instruments; and Eureka!(R) tents.

                                       JOHNSON OUTDOORS INC.
(thousands, except per
share amounts)
THREE MONTHS NINE MONTHS
ENDED ENDED

July 2 July 3 July 2 July 3
Operating Results 2010 2009 2010 2009
———————– —————- —————- —————- —————-
Net sales $ 123,954 $ 114,850 $ 307,311 $ 291,236

Cost of sales 72,467 68,755 184,082 180,067
———————– —————- —————- —————- —————-
Gross profit 51,487 46,095 123,229 111,169

Operating expenses 38,134 35,509 105,377 100,014
———————– —————- —————- —————- —————-
Operating profit 13,353 10,586 17,852 11,155
Interest expense, net 1,367 2,629 3,968 7,203

Other (income) expense,
net 565 (421) 94 243
———————– —————- —————- —————- —————-
Income before income
taxes 11,421 8,378 13,790 3,709

Income tax expense
(benefit) 989 (612) 1,411 (805)
———————– —————- —————- —————- —————-
Income from continuing
operations 10,432 8,990 12,379 4,514

Income from
discontinued
operations — — — 41
———————– —————- —————- —————- —————-

Net income $ 10,432 $ 8,990 $ 12,379 $ 4,555
———————– —————- —————- —————- —————-
Net income as reported $ 10,432 $ 8,990 $ 12,379 $ 4,555

Less: undistributed
earnings reallocated
to non-vested stock (352) (102) (367) (41)
———————– —————- —————- —————- —————-

Diluted earnings $ 10,080 $ 8,888 $ 12,012 $ 4,514
———————– —————- —————- —————- —————-
Diluted average common
shares outstanding 9,290 9,185 9,260 9,168
Net income per common
share – Diluted:
Continuing operations $ 1.09 $ 0.97 $ 1.30 $ 0.49

Discontinued
operations — — — —
———————– —————- —————- —————- —————-

Segment Results
———————– —————- —————- —————- —————-
Net sales:
Marine electronics $ 61,966 $ 52,542 $ 157,157 $ 143,252
Outdoor equipment 15,578 12,845 38,078 32,557
Watercraft 24,605 25,502 51,074 58,221
Diving 21,994 24,173 61,683 57,558

Other/eliminations (189) (212) (681) (352)
———————– —————- —————- —————- —————-

Total $ 123,954 $ 114,850 $ 307,311 $ 291,236
———————– —————- —————- —————- —————-
Operating profit
(loss):
Marine electronics $ 8,790 $ 6,757 $ 16,381 $ 12,935
Outdoor equipment 2,490 1,929 5,155 3,259
Watercraft 2,873 1,559 1,862 (285)
Diving 1,805 2,427 2,021 1,524

Other/eliminations (2,605) (2,086) (7,567) (6,278)
———————– —————- —————- —————- —————-

Total $ 13,353 $ 10,586 $ 17,852 $ 11,155
———————– —————- —————- —————- —————-