Driven by double-digit growth in its Fishing and Diving segments, Johnson Outdoors Inc. reported earnings nearly tripled in its third quarter ended June 30.
Earnings reached $16.6 million, or $1.65 per share, compared to net income of $6.8 million, or 68 cents, in the same period a year ago.
Revenues rose 11.5 percent to $155.3 million.
In the Fishing segment, sales rose 18.1 percent to $104 million. Operating income rose 21.6 percent to $24.3 million. The segment was aided by successful new products launches. Brands in the segment include Minn Kota fishing motors, batteries and anchors, Cannon downriggers and Humminbird marine electronics and charts. Among the product highlights, Humminbird for the seventh consecutive year grabbed “Best of Electronics” honors at the 2017 ICAST.
In the Camping segment, sales declined 8.2 percent to $12.1 million. The segment improved its operating profit slightly, to $1.45 million, up from $1.17 million. Growth in Jetboil could not offset declines in tent sales resulting from retailer restructuring across the camping market. Besides Jetboil, the segment includes Eureka! camping and hiking equipment.
Watercraft Recreation sales dipped 10.2 percent to $17.3 million from $19.3 million. Operating profits in the segment declined 16.5 percent to $2.42 million. A sluggish kayak market led to lower sales quarter-over-quarter, masking share growth in its core brands. The segment includes Old Town canoes and kayaks, Ocean Kayak and Carlisle paddles.
In the Diving segment, sales improved 16.7 percent to $22 million. Diving recorded operating income of $1.2 million in the period, rebounding from an operating loss of $6.2 million. The segment saw strong positive momentum behind SCUBAPRO’s new buoyancy compensator and dive computer innovations.
Helen Johnson-Leipold, chairman and CEO, said the quarter’s performance reflected the company’s commitment to innovation.
“Exceptional new products and technologies are powering tremendous growth in Fishing,” said Johnson-Leipold. “Likewise, innovation in core life-support categories has created positive marketplace momentum and improved performance in Diving. At the same time, our unique flux-ring technology in Jetboil and innovative Predator series of fishing boats from Old Town have helped us grow share in very challenging Camping and Watercraft Recreation markets.”
The bottom line was boosted by an improvement in gross margin by 290 basis points, to 45.5. The gains were driven by a favorable product mix and sales volume related operating efficiencies.
Operating expenses grew slightly to $45.9 million from $45.7 million a year ago but decreased as a percent of sales to 29.6 percent from 32.8 percent. Higher volume-related expenses, higher incentive compensation expense and higher administrative and legal expenses in the current year quarter were nearly offset by the impact of a $6.2 million goodwill impairment charge recognized during the third quarter of fiscal 2016.
“Across the board, price-to-value innovation and increased efficiencies have expanded gross margins and driven enhanced bottom-line performance,” said David W. Johnson, vice president and chief financial officer. “The balance sheet is strong and our healthy cash position enables us to continue to invest in future growth strategies and platforms while continuing to pay cash dividends to our investors.”
“Overall” added Johnson-Leipold, “we are well-positioned to end the year strong with solid momentum heading into the next fiscal year. Looking ahead, we expect to see Fishing grow at a more normalized rate. We will continue to advance progress against our three key strategic plan priorities – richer consumer insights, enhanced innovation processes and digital sophistication – the cornerstones of a foundation for success in delivering accelerated, sustained profitable growth long-term.”
Photo courtesy Hummingbird
