Johnson Outdoors Reports Fiscal First Quarter Results
February 04 2019 - 6:00AM
JOHNSON OUTDOORS INC.,
(NASDAQ: JOUT), a leading global
innovator of outdoor recreation equipment and technology, today
announced lower sales and higher net income year-over-year for the
Company’s first fiscal quarter ended December 28, 2018.
“We are building momentum behind an exciting new product
line-up, particularly in Fishing, as we head into the primary
selling period for our warm-weather outdoor products. At this time,
we continue to anticipate year-over-year revenue growth in fiscal
2019. We believe our brands are well-positioned for marketplace
success and confident in Johnson Outdoors’ sustained industry
leadership long-term,” said Helen Johnson-Leipold, Chairman and
Chief Executive Officer.
First Quarter Results
During the first fiscal quarter, the Company is ramping up for
the primary selling period of its warm-weather outdoor recreation
products across the second and third fiscal quarters. Total
Company net sales in the quarter declined 10 percent to $104.4
million compared to net sales of $116.6 million in the prior year
quarter. Key contributing factors to the results were:
- A shift in pacing of new product releases this fiscal led to an
unfavorable year-over-year comparison in Fishing sales.
- Diving sales declined 11 percent due primarily to weakness in
Asian dive markets and a two percent negative impact of foreign
currency translation.
- Positive momentum in Jetboil® kept Camping revenue on par with
the prior year quarter.
- Watercraft Recreation sales were flat to last year’s first
quarter despite challenging market conditions.
Total Company operating profit for the first fiscal quarter was
$6.0 million vs. $7.0 million in the prior year first
quarter. Gross margin improved quarter-to-quarter, despite a
$0.7 million unfavorable impact from recently enacted tariffs in
the first three months of the fiscal year. Operating expenses
benefitted from a decline in deferred compensation expense due to a
$2.3 million downward adjustment in the valuation of the plan’s
assets, however, an offsetting loss was reflected in other
expenses.
The Company reported net income of $3.5 million, or $0.35 per
diluted share, versus $0.2 million, or $0.02 per diluted share, in
the previous year’s quarter. The Company’s effective tax rate for
the quarter was 18.7 percent compared to an effective rate of 97.2
percent in the prior year first quarter. The prior year’s
rate was significantly impacted by a one-time transition tax
related to new U.S. tax legislation in that period.
Other Financial Information
Cash and short-term investments improved $25.9 million to $104.2
million in the current quarter versus $78.3 million in the prior
year period. Depreciation and amortization was $3.3 million
compared to $3.2 million in the previous year’s quarter.
Capital spending declined to $4.1 million in the current quarter
versus $6.5 million in the prior year quarter. In December
2018, the Company’s Board of Directors approved a quarterly cash
dividend to shareholders of record as of January 10, 2019 which was
payable on January 24, 2019.
“While pacing of new product releases affected first quarter
year-over-year comparisons, we expect moderate sales growth for the
full year. Further, while we continue working on various
tariff mitigation efforts, at this time we are still projecting
these to have a potential $6-9 million impact on fiscal 2019
profits,” said David W. Johnson, Vice President and Chief Financial
Officer. “Nonetheless, we continue to benefit from our
ongoing efforts to improve operational efficiency, enabling us to
strengthen margins and keep working capital in check. The balance
sheet remains strong, providing us the financial capacity and
flexibility to strategically invest in growing our business while
also paying a cash dividend to our shareholders.”
Webcast
The Company will host a conference call and audio web cast at
11:00 a.m. Eastern Time on Monday, February 4, 2019. 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 will be
filed with the Securities and Exchange Commission on December 7,
2018 and the following: changes in economic conditions,
consumer confidence levels and discretionary spending patterns in
key markets; uncertainties stemming from changes in US trade
policies, tariffs, and the reaction of other countries to such
changes; 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;
the Company’s continued success in working capital management and
cost-structure reductions; the Company’s success in integrating
strategic acquisitions; the risk of future write-downs 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 or components
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 and the impact of any
consolidation in the industries 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.
At
Johnson
Outdoors
Inc. |
|
David
Johnson |
Patricia Penman |
VP &
Chief Financial Officer |
VP –
Marketing Services & Communication |
262-631-6600 |
262-631-6600 |
FINANCIAL TABLES FOLLOW
JOHNSON
OUTDOORS
INC.
(thousands, except per
share amounts) |
|
|
|
THREE MONTHS
ENDED |
|
Operating Results |
December 282018 |
|
December 292017 |
|
Net sales |
$ |
104,440 |
|
$ |
116,579 |
|
Cost of
sales |
|
60,121 |
|
|
67,768 |
|
Gross profit |
|
44,319 |
|
|
48,811 |
|
Operating
expenses |
|
38,341 |
|
|
41,774 |
|
Operating profit |
|
5,978 |
|
|
7,037 |
|
Interest income,
net |
|
(503 |
) |
|
(130 |
) |
Other
expense (income), net |
|
2,150 |
|
|
(1,157 |
) |
Income before income
taxes |
|
4,331 |
|
|
8,324 |
|
Income
tax expense |
|
810 |
|
|
8,089 |
|
Net income |
$ |
3,521 |
|
$ |
235 |
|
Weighted average common shares outstanding - Dilutive |
|
10,008 |
|
|
9,962 |
|
Net
income per common share - Diluted |
$ |
0.35 |
|
$ |
0.02 |
|
Segment Results |
|
|
Net sales: |
|
|
Fishing |
$ |
78,797 |
|
$ |
88,907 |
|
Camping |
|
5,820 |
|
|
5,846 |
|
Watercraft Recreation |
|
4,325 |
|
|
4,357 |
|
Diving |
|
15,538 |
|
|
17,438 |
|
Other/eliminations |
|
(40 |
) |
|
31 |
|
Total |
$ |
104,440 |
|
$ |
116,579 |
|
Operating profit
(loss): |
|
|
Fishing |
$ |
11,422 |
|
$ |
14,065 |
|
Camping |
|
(686 |
) |
|
(724 |
) |
Watercraft Recreation |
|
(1,492 |
) |
|
(1,144 |
) |
Diving |
|
(707 |
) |
|
(385 |
) |
Other/eliminations |
|
(2,559 |
) |
|
(4,775 |
) |
Total |
$ |
5,978 |
|
$ |
7,037 |
|
Balance Sheet Information (End of Period) |
|
|
Cash,
cash equivalents and short-term investments |
$ |
104,214 |
|
$ |
78,319 |
|
Accounts
receivable, net |
|
55,558 |
|
|
71,895 |
|
Inventories, net |
|
116,278 |
|
|
90,861 |
|
Total
current assets |
|
282,058 |
|
|
244,558 |
|
Total
assets |
|
391,114 |
|
|
355,133 |
|
Short-term debt |
|
|
- |
|
Total
current liabilities |
|
89,094 |
|
|
85,589 |
|
Debt |
|
- |
|
|
- |
|
Shareholders’ equity |
|
279,567 |
|
|
241,944 |
|
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