Johnson Outdoors Inc. reported sales rose 10 percent during the company’s seasonally slow first fiscal quarter ended December 30, to $93.7 million, compared to net sales of $85.3 million in the prior-year quarter.
Sales during the first fiscal quarter are often low during the period while the company is ramping up for the key selling period of its warm-weather outdoor recreation products during the second and third fiscal quarters.
“We continue to benefit from our strategic focus and investments to enhance innovation as our new product line-up delivered a very strong start to the year. Cutting-edge technology advancements powered significant growth in Fishing, and unique designs and improved functionality created positive momentum behind our entire new product line-up. We head into the all-important retail selling period for our products over the next six months well-positioned for continued marketplace success,” said Helen Johnson-Leipold, chairman and CEO.
Key contributing factors to the results were:
- New products in the Minn Kota and Humminbird brands generated strong pre-season sales across key fishing channels driving a 14 percent jump in Fishing revenue.
- Diving revenue increased 4 percent, driven by improved performance in key dive markets in North America and Europe.
- Growth in Old Town was offset by a slowdown in sales in other Watercraft Recreation brands caused by a shift in pacing of customer orders.
- Higher-than-normal retail inventory following last year’s shortened camping season resulted in a shift in order patterns, accounting for the decline in Camping.
Total company operating profit during the seasonally slow first fiscal quarter was $0.5 million vs. an operating loss of ($0.9 million) in the prior-year period. Significantly higher volume drove the favorable quarter-to-quarter comparison.
The company reported net income of $4.1 million, or 40 cents per diluted share, during the first fiscal quarter compared to a net loss of $534,000, or 5 cents per diluted share, in the same quarter last year. Net income for the three-month period benefitted from foreign tax credits of $4.2 million recognized in the current year quarter due to the repatriation of approximately $21.9 million of cash from overseas. Favorable currency exchange and the opportunity to utilize foreign tax credits prompted the decision to repatriate these funds.
Other Financial Information
At December 30, 2016, cash, net of debt, was $38.9 million compared to cash, net of debt, of $17.8 million at the end of the first fiscal quarter last year. Depreciation and amortization was $3.3 million year-to-date compared with $2.9 million in the prior year. Capital spending totaled $2.7 million in the current quarter vs. $2.5 million in the previous year first quarter. In December 2016, the company’s Board of Directors approved a quarterly cash dividend to shareholders of record as of January 16, 2017 which was payable on January 26, 2017.
“Ongoing efforts to improve operational efficiency are enabling us to keep working capital in check against the backdrop of the seasonal ebb and flow of demand in our outdoor recreational markets. Our top priority is to maintain the positive marketplace momentum and deliver another year of sustained profitable growth. Additionally, we expect the repatriation of cash from overseas to result in a lower effective tax rate for the full year. The balance sheet is very strong providing us the financial capacity and flexibility to invest strategically in growing our businesses while also paying a dividend to shareholders,” said Dave Johnson, vice president and chief financial officer.
The company designs, manufactures and markets a portfolio of winning, consumer-preferred brands across four categories: Watercraft Recreation (f/k/a Watercraft), Fishing (f/k/a Marine Electronics), Diving and Camping (f/k/a Outdoor Gear). Johnson Outdoors’ familiar brands include, among others: Old Town canoes and kayaks; Ocean Kayak and Necky kayaks; Carlisle paddles; Extrasport personal flotation devices; Minn Kota® fishing motors, batteries and anchors; Cannon downriggers; Humminbird marine electronics and digital charts; SCUBAPRO dive equipment; Silva compasses; Jetboil outdoor cooking systems; and Eureka! camping and hiking equipment.
Photo courtesy Jetboil
