Johnson Outdoors Inc. saw increased net sales and earnings for the 2007 fiscal fourth quarter. Net sales for the seasonally slow fourth quarter ended September 28, 2007 were $87.7 million, an increase of 9% compared to $80.3 million for the prior year quarter. Net income for the quarter was $1.5 million versus a net loss of $900,000. EPS was 16 cents per diluted share compared to a loss per share of 10 cents last year.

While fourth quarter results historically reflect a loss due to the slowing of sales and production of the Company’s seasonal outdoor recreation products, innovation and growth in key markets continued to drive growth in the Company’s core consumer brands during the quarter. Key changes for the quarter included:

  • Marine Electronics Group revenues surged 30.4% ahead of last year’s fourth quarter on the strength of Humminbird and Minn Kota which saw the Company’s most successful trolling motor launch in its history.
  • Diving revenues were 15% ahead of last year driven by strong market response to UWATEC; the addition of Seemann Sub, acquired in April 2007, which added $2.3 million to Diving net sales during the quarter; and favorable currency translation of $700,000.
  • Watercraft revenues compared unfavorably to last year’s record fourth quarter due largely to a shift in customer order pacing versus the prior year.
  • Outdoor Equipment revenues decreased 25% due to anticipated declines in military tent sales and $3.1 million of non-repeatable specialty market sales in the prior year quarter.

Total Company operating profit of $1.8 million in the fourth quarter compared favorably to an operating loss of $0.7 million in the same period last year. Operating profit improvement was due to increased sales volume and the recovery of $2.9 million related to a prior year flood.

The Company reported net earnings during the seasonally slow fourth quarter of $1.5 million, or 16 cents per diluted share, a $2.4 million improvement over the net loss of $0.9 million, or 10 cents per diluted share, in the prior year quarter.

FULL YEAR RESULTS

For the full year, the Company reported record annual net sales of
$432.1 million compared to $395.8 million for fiscal 2006, representing
9% growth year-over-year. Net income for the year was $9.2
million ($1.00 per diluted share), a 6% increase compared to
$8.7 million in the prior year. Key factors impacting the year-over-year sales results included:

  • Strong new product introductions and marketing programs in Marine Electronics which drove a 20% increase in group net sales over the previous year.
  • Stabilization and growth in Europe, a successful new diving computer launch, the addition of Seemann SUB and favorable currency translation together contributed to a 13% increase in Diving net sales year-over-year.
  • Favorable response to new paddle sport innovations and double-digit growth in key international markets led to a 3 percent increase in Watercraft sales for the year.
  • Outdoor Equipment revenues compared unfavorably to last year due to the expected slow-down in military tent sales, and to non-repeatable specialty market sales of $6.8 million in the prior year.

Operating profit for the year was $17.9 million compared to $20.6 million in 2006. Key factors driving the year-over-year changes in operating profit included:

  • A one-time $4.4 million settlement payment in Watercraft partially offset by increased paddle sport brand sales.
  • The recovery of $2.9 million in flood-related costs.
  • The anticipated 21% decline in military sales.
  • Sales growth in Marine Electronics which was partially off-set by lower margins due to increased labor costs to continue to meet high new product demand.
  • Corporate investments of $2.0 million in strategic profitable growth initiatives.

Net income was $9.2 million, or $1.00 per diluted share, versus net income of $8.7 million, or 95 cents per diluted share, in the prior year.

“Our strategic growth plan is generating outstanding topline momentum through continuous innovation, targeted acquisitions and geographic expansion as new products, new brands and European growth were key drivers of increased fiscal 2007 revenues,” observed Helen Johnson-Leipold, Chairman and Chief Executive Officer, Johnson Outdoors Inc. “Importantly, this year we invested in building capability to deliver sustained profitable growth in the future. An in-depth look at the outdoor recreational universe helped focus and prioritize opportunities to expand our footprint in the marketplace. Innovative new media and marketing efforts cultivated enhanced customer and consumer relationships. And, supply chain optimization analyses revealed how to better leverage assets and significantly improve profitability going forward.”

Further commenting, Ms. Johnson-Leipold said: “Our decision to return profits to our shareholders thru quarterly dividends is a strong indication of the confidence we have in the future performance of this Company, and demonstrates our commitment to enhanced shareholder value. I am more excited than ever by the future of Johnson Outdoors.”

OTHER FINANCIAL INFORMATION

The Company’s debt to total capitalization stood at 18% at the end of the year versus 17% at September 29, 2006. Debt, net of cash, was $3.6 million at year-end. Depreciation and amortization was $9.4 million year-to-date compared with $9.2 million in the prior year. Capital spending totaled $13.4 million in 2007 compared with last year’s $8.9 million.

“Our businesses are on an accelerated growth curve, and our focus is on strengthening operations and streamlining business processes to manage growth more efficiently. Acquisitions have not added complexity; however, they have contributed to higher inventory and working capital levels, along with record-level market demand for our products. Going forward, we look to further leverage assets to grow profits faster than sales in the future.” said David Johnson, Vice-President and Chief Financial Officer “Our focus on enhanced tax planning and management helped net a twelve point reduction in our effective tax rate, from 44.7% last year to 32.6% in 2007, with the expectation for this to return to a normalized level in the high thirty percent range next year. Importantly, we end the year with a strong cash position and a debt level that gives us the ability and flexibility needed to successfully execute our strategic growth plans.”