Johnson Outdoors Inc. (Nasdaq:JOUT), a leading
global outdoor recreation equipment company, reported double digit
growth in sales and operating profit for the fiscal third quarter
ending June 30, 2017. Strong demand for new products drove
significantly higher volume leading to a nearly three-fold increase
in net income quarter-over-quarter. During the current fiscal
nine-month period, total Company net income more than doubled as
revenues surged 11 percent above the same prior year fiscal nine
months.
“This quarter’s outstanding results emphasize the importance of
our continued focus and investment on delivering market-winning
innovation driven by a deeper understanding of, and unique insights
into outdoor recreation consumers. Exceptional new products and
technologies are powering tremendous growth in Fishing. Likewise,
innovation in core life-support categories has created positive
marketplace momentum and improved performance in Diving,” said
Helen Johnson-Leipold, Chairman and Chief Executive Officer. “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. Overall, 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.”
THIRD
QUARTER
RESULTSFiscal third quarter
results reflect in-season replenishment orders for the Company’s
warm-weather outdoor recreation products. Favorable marketplace
response to new products energized an 11 percent increase in total
Company net sales of $155.3 million compared to $139.3 million in
the previous year third quarter. Foreign currency translation had a
negligible impact on sales versus the prior year quarter. Key
factors behind the year-over-year comparison in each business unit
were:
- Successful new products propelled double-digit growth in all
Fishing brands, driving sales to $104 million for an 18 percent
increase in segment revenue.
- Diving sales increased 17 percent driven by strong positive
momentum behind new buoyancy compensator and dive computer
innovations.
- Growth in Jetboil® could not offset declines in tent sales
resulting from retailer restructuring across the camping
market.
- A sluggish kayak market led to lower sales quarter-over-quarter
in Watercraft Recreation, masking share growth in its core
brands.
Total Company operating profit during the quarter was $24.7
million compared to $13.6 million in the prior fiscal-year third
quarter. Gross margin increased by 290 basis points driven by a
favorable product mix and sales volume related operating
efficiencies. 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. Third quarter net income was $16.6 million,
or $1.65 per diluted share, compared to net income of $6.8 million,
or $0.68 per diluted share, in the previous third quarter.
YEAR-TO-DATE
RESULTS
Strong marketplace performance of new products across the
Company’s Minn Kota®, Humminbird®, Cannon®, SCUBAPRO® and Jetboil®
brands generated higher year-to-date sales for the nine-month
period of $398.8 million, an 11 percent increase compared with the
same prior year period. Total Company operating profit was $45.7
million versus operating profit of $27.8 million in the same
nine-month period last year. Higher volumes in Fishing, stronger
performance in Diving and improved margins in all units are key
drivers in the improvement in operating profit.
The Company’s effective tax rate during the nine-month period
was 27 percent versus 44 percent for the previous year-to-date
period. Tax expense for the nine-month period benefitted from
foreign tax credits of $4.2 million recognized in the current year
first quarter due to the repatriation of approximately $21.9
million of cash from overseas. Net income was $34.6 million, or
$3.45 per diluted share, in the current nine-month period compared
to $15.6 million, or $1.56 per diluted share, in the same
nine-month period last year.
OTHER
FINANCIAL
INFORMATION
The Company reported cash and short-term investments of $93.7
million as of June 30, 2017, versus $75.6 million as of July 1,
2016. Depreciation and amortization was $9.9 million year-to-date,
compared to $8.9 million during the first nine months of the prior
year. Capital spending totaled $7.9 million during the first nine
months of fiscal 2017 compared with $8.6 million in the same period
in 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.”
PRODUCT NEWS
For the seventh consecutive year, Humminbird® grabbed
“Best of Electronics” honors at the 2017 ICAST, the world’s most
prestigious fishing show, with the brand’s new, big screen display
SOLIX® fishfinder. With two display-size options - 12.1- and
15.4-inch screen models - the SOLIX® boasts Humminbird’s unique
technologies designed to make locating fish easier – including MEGA
Imaging™, CHIRP Digital Sonar, and AUTOCHART® Live. Both models
also come standard with Humminbird’s innovative Cross Touch®
Interface, letting anglers operate the unit via touchscreen or
keypad depending on water conditions, all while customizing the
screen with up to four independent viewing panes which can be
individually zoomed or moved to different screen locations based on
angler preference or fishing situation.
WEBCAST
The Company will host a conference call and audio web cast at
11:00 a.m. Eastern Time on Friday, August 4, 2017. A live
listen-only web cast of the conference call may be accessed at
Johnson Outdoors' home page. A replay of the call will be available
on the website for the subsequent 30 days.
ABOUT JOHNSON OUTDOORS INC.
JOHNSON
OUTDOORS is a leading global
outdoor recreation company that inspires more people to experience
the awe of the great outdoors with innovative, top-quality
products. The company designs, manufactures and markets a portfolio
of winning, consumer-preferred brands across four categories:
Watercraft Recreation, Fishing, Diving and Camping. Johnson
Outdoors' iconic 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.
Visit Johnson Outdoors at
http://www.johnsonoutdoors.com
SAFE
HARBOR
STATEMENT
Certain matters discussed in this press release are
“forward-looking statements,” intended to qualify for the safe
harbors from liability established by the Private Securities
Litigation Reform Act of 1995. Statements other than statements of
historical fact are considered forward-looking statements. These
statements may be identified by the use of forward-looking words or
phrases such as "anticipate,'' "believe,'' “confident,” "could,''
"expect,'' "intend,'' "may,'' "planned,'' "potential,'' "should,''
"will,'' "would'' or the negative of those terms or other words of
similar meaning. Such forward-looking statements are subject to
certain risks and uncertainties, which could cause actual results
or outcomes to differ materially from those currently anticipated.
Factors that could affect actual results or outcomes include the
matters described under the caption “Risk Factors” in Item 1A of
the Company’s Form 10-K which was filed with the Securities and
Exchange Commission on December 13, 2016 and the following: changes
in economic conditions, consumer confidence levels and
discretionary spending patterns in key markets; the Company’s
success in implementing its strategic plan, including its targeted
sales growth platforms, innovation focus and its increasing digital
presence; litigation costs related to actions of and disputes with
third parties, including competitors, and matters related to the
Company’s intellectual property rights; the Company’s continued
success in its working capital management and cost-structure
reductions; the Company’s success in integrating strategic
acquisitions; the risk of future writedowns of goodwill or other
long-lived assets; the ability of the Company’s customers to meet
payment obligations; movements in foreign currencies, interest
rates or commodity costs; fluctuations in the prices of raw
materials or the availability of raw materials used by the Company;
any disruptions in the Company's supply chain as a result of
material fluctuations in the Company's order volumes and
requirements for raw materials and other components necessary to
manufacture and produce the Company's products; the success of the
Company’s suppliers and customers; the ability of the Company to
deploy its capital successfully; unanticipated outcomes related to
outsourcing certain manufacturing processes; unanticipated outcomes
related to litigation matters; and adverse weather conditions.
Shareholders, potential investors and other readers are urged to
consider these factors in evaluating the forward-looking statements
and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included
herein are only made as of the date of this filing. The Company
assumes no obligation, and disclaims any obligation, to update such
forward-looking statements to reflect subsequent events or
circumstances.
|
JOHNSON OUTDOORS INC. |
|
(thousands, except per
share amounts) |
|
|
|
|
|
THREE MONTHS
ENDED |
NINE MONTHS
ENDED |
Operating Results |
June 30 2017 |
|
July 1 2016 |
|
June 30 2017 |
|
July 1 2016 |
Net sales |
$ |
155,274 |
|
|
$ |
139,300 |
|
|
$ |
398,810 |
|
|
$ |
358,790 |
|
Cost of
sales |
|
84,644 |
|
|
|
80,017 |
|
|
|
226,702 |
|
|
|
211,213 |
|
Gross profit |
|
70,630 |
|
|
|
59,283 |
|
|
|
172,108 |
|
|
|
147,577 |
|
Operating
expenses |
|
45,893 |
|
|
|
45,700 |
|
|
|
126,441 |
|
|
|
119,756 |
|
Operating profit: |
|
24,737 |
|
|
|
13,583 |
|
|
|
45,667 |
|
|
|
27,821 |
|
Interest expense,
net |
|
25 |
|
|
|
89 |
|
|
|
603 |
|
|
|
558 |
|
Other
(income) expense, net |
|
(848 |
) |
|
|
(371 |
) |
|
|
(2,288 |
) |
|
|
(752 |
) |
Income before income
taxes |
|
25,560 |
|
|
|
13,865 |
|
|
|
47,352 |
|
|
|
28,015 |
|
Income
tax expense |
|
9,007 |
|
|
|
7,024 |
|
|
|
12,784 |
|
|
|
12,387 |
|
Net income |
$ |
16,553 |
|
|
$ |
6,841 |
|
|
$ |
34,568 |
|
|
$ |
15,628 |
|
Weighted average common shares outstanding - Dilutive |
|
9,928 |
|
|
|
9,861 |
|
|
|
9,908 |
|
|
|
9,842 |
|
Net
income per common share - Diluted |
$ |
1.65 |
|
|
$ |
0.68 |
|
|
$ |
3.45 |
|
|
$ |
1.56 |
|
Segment Results |
|
|
|
|
Net sales: |
|
|
|
|
Fishing |
$ |
103,974 |
|
|
$ |
88,063 |
|
|
$ |
276,469 |
|
|
$ |
237,656 |
|
Camping |
|
12,129 |
|
|
|
13,217 |
|
|
|
29,239 |
|
|
|
31,147 |
|
Watercraft Recreation |
|
17,290 |
|
|
|
19,264 |
|
|
|
38,594 |
|
|
|
40,393 |
|
Diving |
|
21,984 |
|
|
|
18,845 |
|
|
|
54,903 |
|
|
|
50,197 |
|
Other/eliminations |
|
(103 |
) |
|
|
(89 |
) |
|
|
(395 |
) |
|
|
(603 |
) |
Total |
$ |
155,274 |
|
|
$ |
139,300 |
|
|
$ |
398,810 |
|
|
$ |
358,790 |
|
Operating profit
(loss): |
|
|
|
|
Fishing |
$ |
24,293 |
|
|
$ |
19,970 |
|
|
$ |
54,324 |
|
|
$ |
42,948 |
|
Camping |
|
1,452 |
|
|
|
1,168 |
|
|
|
1,691 |
|
|
|
1,965 |
|
Watercraft Recreation |
|
2,417 |
|
|
|
2,894 |
|
|
|
2,466 |
|
|
|
3,190 |
|
Diving |
|
1,218 |
|
|
|
(6,204 |
) |
|
|
468 |
|
|
|
(8,782 |
) |
Other/eliminations |
|
(4,643 |
) |
|
|
(4,245 |
) |
|
|
(13,282 |
) |
|
|
(11,500 |
) |
Total |
$ |
24,737 |
|
|
$ |
13,583 |
|
|
$ |
45,667 |
|
|
$ |
27,821 |
|
Balance Sheet Information (End of Period) |
|
|
|
|
Cash and
cash equivalents |
|
|
$ |
93,741 |
|
|
$ |
75,602 |
|
Accounts
receivable, net |
|
|
|
79,292 |
|
|
|
70,658 |
|
Inventories, net |
|
|
|
68,239 |
|
|
|
71,127 |
|
Total
current assets |
|
|
|
243,767 |
|
|
|
221,070 |
|
Total
assets |
|
|
|
354,957 |
|
|
|
326,161 |
|
Short-term debt |
|
|
|
- |
|
|
|
378 |
|
Total
current liabilities |
|
|
|
86,889 |
|
|
|
81,167 |
|
Long-term debt, less current maturities |
|
|
|
- |
|
|
|
7,069 |
|
Shareholders’ equity |
|
|
|
239,924 |
|
|
|
213,099 |
|
|
|
|
|
|
|
|
|
|
|
AT JOHNSON OUTDOORS INC.
DAVID JOHNSON
VP & CHIEF FINANCIAL OFFICER
262-631-6600
PATRICIA PENMAN
VP – MARKETING SERVICES & COMMUNICATION
262-631-6600
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