Johnson Outdoors Inc. saw modest sales growth during its seasonally slow first quarter aided by acquisitions as well as by sales increases in each of its divisions, except for Outdoor Equipment. However, exports outpaced domestic sales in Marine Electronics and Diving, which impacted the company’s profitability, while operating losses were higher this quarter than last year due largely to a decline in military sales.

The increase in total company net sales was driven by double-digit revenue growth in all segments except for Outdoor Equipment. The acquisition of Seeman Sub added approximately $2.0 million to revenues, while the GeoNav acquisition added $0.8 million. The resulting organic basis saw revenues grow only 2.5% to $73.2 million.


On a conference call with analysts, management said that new products represented more than one-third of all sales in the quarter and that JOUT was seeing “growth in key channels although at varying levels.” Overall, revenues were said to be ahead of plan for the period and the highest for any first quarter in the past five years. Unfortunately, only the Marine Electronics segment saw operating income increase for the quarter.


Outdoor Equipment revenues declined on a slowdown of military sales as well as comping against one-time special market sales of $1.4 million in the prior-year quarter. Excluding those orders, Outdoor Equipment revenues were said to have increased 22.7%. On the conference call, management said that the decrease in military sales is expected to be mostly a timing issue as the Fed's supplemental bill has been delayed getting through the system.


Management was comfortable with a range of $20 million to $25 million in annual sales from the military. With the military business typically being a higher margin enterprise, that lack of sales also impacted operating earnings. The segment posted an operating loss of $0.4 million for the fiscal first quarter after operating earnings of $1.6 million in the year-ago period.


Watercraft sales increased 17.3% over the prior year quarter due to a “positive response” to new products in the paddle sports segment. However, the segment saw its operating loss expand 6.5% to a loss of $2.1 million from a loss of $2.0 million in the year-ago quarter.


Diving revenues grew 27.3% above last year’s first quarter due to the continued successful rollout of a new dive computer and favorable currency translation, which added 6.4% to sales. The company saw relatively flat operating income of $0.6 million, though the year-ago quarter saw slightly larger earnings.


Marine Electronics revenues were 12.9% ahead of last year due to growth in Humminbird and export sales. Operating income grew 28.9% for the quarter to $0.3 million from $0.2 million last year.


The company incurred $1.3 million in impairment charges related to inventory and fixed assets during the quarter as a result of its decision to explore strategic alternatives for its Escape brand of products. The company anticipates incurring an additional $0.2 million in charges related to Escape. 


JOUT saw its net loss from continuing operations for the period widen almost three-fold to $3.6 million, or a loss of 40 cents per diluted share, compared to a net loss from continuing operations of $1.3 million, or 14 cents per diluted share, in the year-ago quarter. The net loss from discontinued operations totaled $1.1 million versus a $0.3 million loss in the same quarter last year.