Johnson Outdoors reported a 14 percent jump in sales for the fourth quarter ended and 3 percent in the fiscal year ended September 27.
Continued favorable response to new products in Fishing extended into the industry’s seasonally slow fourth quarter driving significantly higher sales and operating profit year-over-year during the quarter.
Fiscal 2019 Highlights
- Sustained momentum in Fishing
- Improved performance in Camping
- Enhanced digital and ecommerce capacity
- Effective tariff mitigation
- Stable gross margins
- Strong cash flow
- Increased quarterly dividend to shareholders
“Performance this year reflects the value of our sustained focus and investment in delivering the best outdoor recreation experiences possible. Ensuring we are targeting the right consumer with the right product, at the right time, in the right way and at the right price are all critical factors behind continued success. As a result, Fishing has continued on its profitable growth trajectory. Ongoing investment in innovation and digital acceleration across all of our businesses will provide long-term sustainable growth in an increasingly competitive marketplace,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer.
Fiscal 2019 Results
Total company revenue grew 3 percent to $562.4 million versus fiscal 2018 revenue of $544.3 million. Key factors in the year-over-year comparison were:
- Demand for new products and legacy technologies in Minn Kota® and Humminbird® powered a 5 percent increase in Fishing sales.
- Positive momentum in the North American diving market was not enough to offset declines in Asian markets and the negative impact of foreign currency.
- Camping benefitted from continued growth in Jetboil® and improved performance in military tent sales.
- Overall kayak market weakness masked growth of Old Town® fishing kayak performance.
- Total company operating profit was $63.8 million for fiscal 2019, which compared favorably to operating profit of $63.0 million in the prior fiscal year. Exclusions granted during the fourth quarter for certain product components subject to
- Section 301 tariffs reduced the total impact of tariffs to $2.9 million for fiscal 2019. Gross margins remained steady despite the impact from tariffs. Higher sales-volume related costs and increased bad debt expense largely accounted for the uptick in operating expense dollars. Additionally, investment in marketing increased over the prior year.
Net income for the fiscal year improved to $51.4 million, or $5.11 per diluted share, a 26.4 percent improvement versus $40.7 million, or $4.05 per diluted share, in the last fiscal year. The effective tax rate of 22.7 percent compared favorably to the previous fiscal year’s rate of 40.3 percent, which reflected charges associated with the initial implementation of the new U.S. Tax Reform Act.
Fourth Quarter Results
During the company’s fourth quarter, the outdoor recreation industry is in ramp-down mode and sales are historically lower. Total net sales in the quarter increased 14 percent year over year to $104.0 million, due primarily to continued momentum of Fishing new products.
Operating profit was $1.9 million in the current year fourth quarter versus an operating loss of ($2.0 million) in the prior year fourth quarter. Operating profit in the fourth quarter compared favorably to the prior year due largely to increased sales and the timing of tariff exclusions granted in the current year quarter which positively impacted the quarter by $1.2 million. Net earnings for the fourth quarter were $3.9 million compared to a net loss of ($5.0 million) in fiscal 2018.
“We’re pleased by the strong finish to the year, particularly with the performance of Fishing and Camping brands. Looking ahead, we continue to believe the power of our innovation, the enduring strength of our brand equities and the diversity of our outdoor recreation portfolio combine to well-position Johnson Outdoors for the future,” said Johnson-Leipold.
Other Financial Information
The company reported cash and short-term investments of $172.4 million as of September 27, 2019, a $21.8 million increase above the prior year, with no debt on its balance sheet. Depreciation and amortization were $14.0 million compared to $13.1 million in fiscal 2018. Capital spending totaled $16.8 million in fiscal 2019 compared with $19.2 million in fiscal 2018.
“Heading into fiscal 2020, we expect continued moderate sales growth. Tariffs are estimated to have a negative impact of $5.0 – $6.0 million on fiscal 2020 operating profit, which includes foreseeable mitigation efforts at this time. The balance sheet remains strong, and our healthy cash position enables us to continue to invest in future growth strategies and strategic plan priorities while continuing to enhance long-term value for shareholders,” said David W. Johnson, chief financial officer.
JOHNSON OUTDOORS designs, manufactures and markets a portfolio of winning, consumer-preferred brands across four categories: Watercraft Recreation, Fishing, Diving and Camping. Johnson Outdoors’ iconic brands include: Old Town canoes and kayaks; Ocean Kayak; Carlisle paddles; Minn Kota fishing motors, batteries and anchors; Cannon downriggers; Humminbird marine electronics and charts; SCUBAPRO dive equipment; Jetboil outdoor cooking systems; and, Eureka! camping and hiking equipment