Johnson Outdoors Says Strong Quarter Can’t Offset Long Winter

Johnson Outdoors Inc. reported record sales at its Marine Electronics segment and growth at its Outdoor Gear and Watercraft segments in the fiscal third quarter ended June 27, but said company revenues were still runing behind on a year-to-date basis due to the effects of the prolonged winter on the company's fiscal 2014 first and second quarters.

• A 9 percent increase in Marine Electronics revenue driven primarily by exceptional new product performance and growth in Minn Kota . Third quarter sales of $80.0 million in the current year quarter topped last year's record-high third quarter sales for the unit.
  
• Outdoor Gear sales advanced 6 percent year-over-year reflecting a 46 percent increase in Military tent sales in the current quarter.
  
• Watercraft sales rose 4 percent due to the strength of new products, which accounted for more than a third of the unit's sales during the current period.
  
• Revenue gains in North America and northern European diving markets could not offset declines in other key dive regions around the world, resulting in a 3 percent dip in sales.

Fiscal 2014 year-to-date net sales for the nine-month period were $340.5 million, a 2 percent decline versus the same prior year period. Total company operating profit was $18.0 million versus operating profit of $30.3 million in the same nine-month period last year. The decrease was driven largely by lower volume in the first six months of the fiscal year and non-cash impairment charges to intangible assets in the current year third quarter. Net income was $9.9 million, or $0.70 per diluted share, in the current nine-month period compared to $22.8 million, or $2.30 per diluted share, in the same period last year. A significant increase in the company's effective tax rate during the nine-month period was another key factor in the unfavorable comparison in net income. Net interest expense declined 37 percent year-over-year.

The company reported debt of $7.9 million at the end of the current fiscal third quarter, versus $17.5 million at the end of the prior year quarter. Cash, net of debt, was $44.2 million as of June 27, 2014 versus $24.2 million as of June 28, 2013. Depreciation and amortization was $7.9 million year-to-date, compared to $7.5 million during the first nine months of the prior year. Capital spending totaled $9.8 million during the first nine months of fiscal 2014 compared with $10.9 million in the same period in 2013.

“This year's weather-driven compressed selling season was challenging, but we acted quickly and decisively to keep expenses down, working capital in check and to maintain the flexibility to adjust to the ebb and flow of market demand. We did a great job on all fronts; however, the loss of volume during the first half of the year proved too great to overcome in one quarter. We remain vigilant and disciplined in our efforts to continue to make progress against our 2015 plan targets,” said David W. Johnson, Vice President and Chief Financial Officer.