Johnson Outdoors Reports Increased Sales & Operating Profit for 2012 Fiscal Third Quarter
August 01 2012 - 6:00AM
Johnson Outdoors Inc. (Nasdaq:JOUT), a leading
global outdoor recreation equipment company, reported double-digit
growth in operating profit and net income as successful new
products delivered solid revenue gains in the Company's 2012 fiscal
third quarter ending June 29, 2012.
"Three years ago we set a goal to grow profits faster than sales
amid a gradual recovery of outdoor recreation markets. While
markets remain below pre-recession levels, impressive third quarter
results demonstrate the significant progress we've made in
leveraging our strengths to maximize market opportunities and
address challenges with heightened energy and discipline," said
Helen Johnson-Leipold, Chairman and Chief Executive
Officer. "Going forward, we expect meaningful innovation to
continue to drive growth in technology-driven Marine Electronics
and Diving segments, and play a central role in efforts to
recapture leadership positions in specialty camping and paddling
channels where our targeted outdoor enthusiasts shop. Future
investments will reflect our commitment to delivering enhanced
value for our brands, our customers and shareholders
long-term."
THIRD
QUARTER
RESULTS
Third fiscal quarter results reflect in-season replenishment
orders for the Company's warm-weather outdoor recreation
products. Strong performance in North America and Asia markets
more than offset declines in Southern Europe. Total Company
revenue during the third fiscal quarter was $128.6 million, a 5
percent increase over net sales of $122.5 million in the prior
fiscal year quarter, with new products generating more than 40
percent of total Company net sales. Currency translation had a
negative 2 percent, or $2.5 million, impact on sales. Key
highlights in the quarter were:
- Double-digit growth in Minn Kota® and Cannon® brands propelled
a 9 percent increase in Marine Electronics revenue.
- Growth in the Old Town® brand led to a 1 percent uptick in
Watercraft revenue.
- A sharp rise in military sales due to pacing of orders
accounted for an 8 percent upswing in Outdoor Gear revenue.
- Diving revenue declined 5 percent due to unfavorable currency
translation which had a negative 7 percent, or $1.7 million, impact
on sales.
Total Company operating profit during the quarter was $14.2
million, a 20 percent increase over the prior fiscal year quarter,
due to higher volume, strong margins and improved
efficiency. On July 11, 2012, the Company announced the
restructuring of Watercraft U.S. and European operations to realize
estimated annual savings of $2 million by the end of fiscal
2014. Restructuring and other costs related to the action were
$1.2 million in the current quarter. The Company expects
additional charges between $0.8 and $1.3 million over the next
twelve months. Third quarter net income of $9.0 million, or $0.91
per diluted share, marked an 11 percent increase over the prior
year.
YEAR-TO-DATE
RESULTS
Total Company year-to-date revenue for the fiscal nine-month
period was $337.5 million, a 2 percent increase over the prior
year. Growth in Marine Electronics' brands more than offset
declines in the Company's Outdoor Gear and Diving segments.
Successful new products across all units delivered nearly
half of total Company net sales in the current nine-month
period. Key factors impacting year-to-date revenue comparisons
were:
- Growth in Minn Kota®, Humminbird® and Cannon® brands in all
channels.
- Old Town® and Carlisle® sales drove a modest 1 percent
increase in Watercraft revenue.
- A 27 percent decline in military sales year-over-year drove a
13 percent decline in Outdoor Gear revenue.
- Solid growth in North America and Asia markets could not offset
the impact of unfavorable currency translation and depressed
Southern European markets in Diving.
Total Company operating profit was $24.5 million in the
nine-month period, a 12 percent increase compared to the same prior
year period. A favorable settlement in the second quarter of
a long-standing insurance coverage dispute added $3.5 million to
operating profit during the year-to-date period. While net
income benefitted from a 29 percent reduction in interest expense
year-over-year, net earnings declined 13 percent during the period
due primarily to accounting for applicable domestic and
international taxes. As previously reported, the Company's
recent history of income generation and future profit expectations
led to a reversal of its U.S. tax valuation allowance in the 2011
fiscal fourth quarter. In the current year-to-date period,
valuation allowances in those countries where losses occurred
preclude the Company from realizing any tax benefit on the
loss. The combination of these two factors resulted in a
significant year-over-year increase in the Company's effective tax
rate which reduced year-to-date net income by $8.3 million.
OTHER
FINANCIAL
INFORMATION
The Company's debt level was $12.5 million at the end of the
fiscal third quarter versus $22.7 million at the end of the prior
year quarter. Cash, net of debt, was $26.3 million as of June 29,
2012 compared to $7.7 million as of July 1, 2011. Depreciation and
amortization was $9.2 million year-to-date, compared to $7.7
million during the first nine months of the prior year. Capital
spending totaled $8.9 million during the first nine months of
fiscal 2012 compared with $6.0 million in same period in 2011 due
to increased investment in Marine Electronics. The Company has
experienced continuing declines in interest expense for eleven
straight quarters for a favorable impact on net income each fiscal
period.
"Margins held firm as demand in Marine Electronics and Diving
brands and innovation outpaced price discounting by competitors,"
said David W. Johnson, Vice President and Chief Financial
Officer. " Rigorous balance sheet management remains a top
priority. Working capital declined $12 million and every business
was in a cash generating position for the quarter,"
WEBCAST
The Company will host a conference call and audio web cast at
11:00 a.m. Eastern Time on Wednesday August 1, 2012. 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
for 30 days on the Internet.
ABOUT
JOHNSON
OUTDOORS
INC.
JOHNSON OUTDOORS is a leading global outdoor
recreation company that turns ideas into adventure with innovative,
top-quality products. The company designs, manufactures and
markets a portfolio of winning, consumer-preferred brands across
four categories: Watercraft, Marine Electronics, Diving and Outdoor
Gear. Johnson Outdoors' familiar brands include, among
others: Old Town® canoes and kayaks; Ocean Kayak™ and
Necky® kayaks; Carlisle® paddles; Extrasport® personal
flotation devices; Minn Kota® motors; Cannon® downriggers;
Humminbird® marine melectronics; LakeMaster® electronic charts;
SCUBAPRO® and SUBGEAR® dive equipment; Silva® compasses;
Tech4O® digital instruments; and Eureka!®
tents.
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,''
"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 changes in economic conditions,
consumer confidence levels and discretionary spending patterns in
key markets; the Company's continued success in implementing its
strategic plan, including its targeted sales growth platforms and
focus on innovation; litigation costs related to actions of and
disputes with third parties, including competitors; the Company's
continued success in working capital management and cost-structure
reductions; the Company's ongoing success in meeting financial
covenants in its credit agreements with lenders; risk of future
write-downs of goodwill or other intangible assets; ability of the
Company's customers to meet payment obligations; movements in
foreign currencies, interest rates and commodity costs; the success
of suppliers and customers; the ability of the Company to deploy
its capital successfully; adverse weather conditions; and other
risks and uncertainties identified in the Company's filings with
the Securities and Exchange Commission. 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 press release and the Company
undertakes no obligation to publicly 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
29 2012 |
July 1 2011 |
June 29 2012 |
July 1 2011 |
Net sales |
$ 128,595 |
$ 122,481 |
$ 337,497 |
$ 330,045 |
Cost of sales |
74,348 |
71,953 |
201,622 |
195,904 |
Gross profit |
54,247 |
50,528 |
135,875 |
134,141 |
Operating expenses |
40,025 |
38,718 |
111,391 |
112,242 |
Operating profit |
14,222 |
11,810 |
24,484 |
21,899 |
Interest expense, net |
581 |
963 |
1,963 |
2,779 |
Other (income) expense, net |
(403) |
1,741 |
(1,699) |
2,078 |
Income before income taxes |
14,044 |
9,106 |
24,220 |
17,042 |
Income tax expense |
5,049 |
988 |
10,886 |
1,675 |
Net income |
$ 8,995 |
$ 8,118 |
$ 13,334 |
$ 15,367 |
Diluted average common shares
outstanding |
9,394 |
9,291 |
9,373 |
9,293 |
Net income per common share - Basic and
Diluted |
$ 0.91 |
$ 0.83 |
$ 1.35 |
$ 1.58 |
Segment
Results |
Net sales: |
|
|
|
|
Marine electronics |
$ 70,223 |
$ 64,172 |
$ 198,250 |
$ 186,016 |
Outdoor equipment |
12,222 |
11,322 |
27,949 |
32,059 |
Watercraft |
22,165 |
21,855 |
46,710 |
46,106 |
Diving |
24,051 |
25,400 |
64,907 |
66,511 |
Other/eliminations |
(66) |
(268) |
(319) |
(647) |
Total |
$ 128,595 |
$ 122,481 |
$ 337,497 |
$ 330,045 |
Operating profit (loss): |
|
|
|
|
Marine electronics |
$ 12,165 |
$ 8,994 |
$ 26,555 |
$ 22,194 |
Outdoor equipment |
1,522 |
1,597 |
2,101 |
3,750 |
Watercraft |
506 |
1,061 |
1,109 |
(14) |
Diving |
2,630 |
2,179 |
4,239 |
3,323 |
Other/eliminations |
(2,601) |
(2,021) |
(9,520) |
(7,354) |
Total |
$ 14,222 |
$ 11,810 |
$ 24,484 |
$ 21,899 |
Balance Sheet
Information (End of Period) |
Cash and cash equivalents |
|
$ 38,745 |
$ 30,325 |
Accounts receivable, net |
|
|
77,012 |
80,921 |
Inventories, net |
|
|
67,018 |
73,690 |
Total current assets |
|
|
196,732 |
192,660 |
Total assets |
|
|
274,908 |
257,997 |
Short-term debt |
|
|
3,490 |
10,151 |
Total current liabilities |
|
|
73,296 |
74,791 |
Long-term debt |
|
|
8,470 |
12,520 |
Shareholders' equity |
|
173,669 |
152,178 |
CONTACT: AT JOHNSON OUTDOORS INC.
DAVID JOHNSON
VP & CHIEF FINANCIAL OFFICER
262-631-6600
CYNTHIA GEORGESON
VP - WORLDWIDE COMMUNICATION
262-631-6600
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