Johnson Outdoors Inc. announced higher sales and double-digit growth in net income during the company’s seasonally slow first fiscal quarter ending December 27, 2019.

“We’re pleased with such a positive start to the year. Ongoing investments in richer consumer insights, targeted innovation and accelerated digital sophistication are essential to continue the positive momentum and position our market-leading brands for success in 2020,” said Helen Johnson-Leipold, chairman and chief executive officer.

First Quarter Results

During the first fiscal quarter, the company is ramping up for the primary selling period of its warm-weather outdoor recreation products across the second and third fiscal quarters. Total net sales in the first fiscal quarter increased 23 percent year-over-year to $128.1 million, versus $104.4 million in the prior year fiscal quarter. Key contributing factors were:

  • A delay in Fishing’s new product availability in the prior-year quarter accounted for much of the 26 percent increase in year-over-year sales in the unit.
  • In Diving, sales increased 6 percent due primarily to growth in Europe. On a constant currency basis, ScubaPro sales were up 8 percent versus the prior year.
  • Camping revenue advanced 29 percent due to the growth in Jetboil and Eureka! brands.
  • Solid performance of new products led to an 11 percent uptick in Watercraft Recreation sales.

Total company operating profit was $6.8 million for the first fiscal quarter versus $6.0 million in the prior-year first quarter. The impact of favorable market conditions on the company’s deferred compensation plan assets resulted in approximately $3.4 million of higher deferred compensation expense, which was entirely offset by a gain in Other Income. Profit before income taxes increased to $8.6 million, up $4.3 million from the previous year’s first quarter.

Net income increased to $6.4 million, or $0.64 per diluted share, versus $3.5 million, or $0.35 per diluted share, in the previous year’s first quarter. The company’s effective tax rate was 25.1 percent compared to an effective rate of 18.7 percent in the prior-year first quarter.

Other Financial Information

The company reported cash and short-term investments of $138.3 million as of December 27, 2019. Depreciation and amortization were $3.4 million compared to $3.3 million in the previous year’s quarter. Capital spending totaled $3.3 million in the current quarter compared with $4.1 million in the prior-year quarter. In December 2019, the company’s Board of Directors approved a quarterly cash dividend to shareholders of record as of January 9, 2020, which was payable on January 23, 2020.

“First quarter results are not predictive of the full year, and we continue to expect moderate sales growth for the full fiscal year. As a result of recent developments in trade negotiations between the United States and China, as well as our own mitigation efforts, we now expect the impact of tariffs on Chinese goods and components to be approximately $4 to $5 million on fiscal 2020 profits,” said David W. Johnson, chief financial officer. “Importantly, our strong balance sheet provides us the financial capacity and flexibility to strategically invest in growing our business while continuing to enhance long-term value for shareholders.”

Johnson Outdoors’ 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.

Photo courtesy Old Town