RACINE, Wis., July 25, 2008 (PRIME NEWSWIRE) -- Johnson Outdoors Inc. (Nasdaq:JOUT), a leading global outdoor recreation company, today announced net sales from continuing operations of $141.2 million for the third quarter ended June 27, 2008 compared to net sales of $149.9 million for the prior year third quarter. Earnings from continuing operations of $7.9 million, or $0.85 per diluted share for the third quarter of 2008, compared unfavorably to earnings from continuing operations of $8.3 million, or $0.90 per diluted share, in the prior year quarter.
THIRD QUARTER RESULTS
Third quarter sales are historically the highest of the year reflecting consumer demand during the primary retail selling period for the Company's seasonal outdoor recreational products. Total Company net sales in the quarter declined 5.8 percent due to a weak U.S. economy and the effects of a soft domestic boat market on the Company's Marine Electronic brands. Key changes included:
* Marine Electronics revenues were 12.1 percent behind last year
due to a soft domestic boat market. Growth in Humminbird(r) and
the addition of $4.9 million in revenue from GEONAV(r), which
was acquired in November 2007, could not offset declines in Minn
Kota(r) and Cannon(r).
* Diving revenues were 7.1 percent above last year's third quarter
due to favorable currency translation which added $2.6 million.
* Watercraft sales dipped 4.9 percent below the prior year quarter
due to the effect of economic uncertainty on the retail
marketplace.
* Outdoor Equipment revenues were essentially flat with the prior
year quarter, as revenue gains in Consumer almost entirely
offset lower Commercial and military sales.
Total Company operating profit for the third quarter was $14.6 million compared to an operating profit of $14.8 million in the prior year quarter which was negatively impacted by a one-time $4.4 million legal settlement. Due to business performance, the Company reversed accruals of $3.2 million dollars related to its discretionary bonus and compensation plans this quarter. Other key factors impacting the current quarter were:
* Lower margins in Marine Electronics driven by lower domestic
sales, unfavorable product and geographic mix, and start-up
investments in GEONAV(r).
* Restructuring charges of $1.0 million in Outdoor Equipment and
Diving.
* Lower military and commercial tent sales.
The Company reported income from continuing operations of $7.9 million, or $0.85 per diluted share, compared to income from continuing operations of $8.3 million, or $0.90 per diluted share, in the same quarter last year. Loss from discontinued operations of $0.1 million, or ($0.01) per diluted share, was consistent with the prior year quarter. Net income for the quarter was $7.8 million, or $0.84 per diluted share, compared to net income of $8.3 million, or $0.89 per diluted share, in the prior year.
"Growing economic uncertainty in the U.S. hit a peak just as the warm-weather season for our businesses was getting underway, and it has now impacted distribution channels in every business this quarter, with retailers being cautious and keeping their inventories to a minimum. As a result, we have ramped down production, restructured operations and moved aggressively on all identified cost-reduction initiatives. On the positive side, despite a soft summer retail market, retail reports indicate that, in general, our brands are outperforming the competition as meaningful new-product innovation accounted for more than a third of year-to-date revenues," said Helen Johnson-Leipold, Chairman and Chief Executive Officer. "Looking ahead, we will continue to invest in growth and innovation to help ensure we maintain our market-leadership positions when the economy rebounds. At the same time, we are moving forward on supply chain optimization initiatives in every business to drive improved efficiency across operations. Our strong commitment to the future for Johnson Outdoors and to enhanced shareholder value remains constant and unchanged regardless of the economic climate."
YEAR TO DATE RESULTS
Net sales in the first nine months of fiscal 2008 were $339.0 million versus $343.3 million in the same nine-month period last year. Key factors in the year-to-date period were:
* Lower domestic sales in Marine Electronics due to a soft boat
market.
* Successful new products, international growth and favorable
currency translation in Diving.
* Growth in Watercraft accessories.
* A $7.0 million year-over-year decline in military sales.
Total Company operating profit was $13.6 million during the first nine months of fiscal 2008 compared to an operating profit of $17.2 million during the prior year-to-date period. Income from continuing operations for the first nine months of the year was $5.0 million, or $0.55 per diluted share, versus income from continuing operations of $9.0 million, or $0.97 per diluted share, in the first nine months of the prior year. Primary factors behind the year-to-date comparison were:
* Reduced margins in Marine Electronics due to lower sales,
product and geographic mix, and start-up investments in
GEONAV(r)
* Restructuring charges in Outdoor Equipment and Global Diving.
* Significant decline in military sales.
* Reversal of accruals related to the Company's discretionary
bonus and compensation plans.
* Negative impact of foreign currency holdings during the second
fiscal quarter.
* Favorable year-over-year comparison in Watercraft due to a
one-time $4.4 million legal settlement in the third quarter of
the prior year.
OTHER FINANCIAL INFORMATION
The Company's debt to total capitalization stood at 25 percent at the end of the current quarter versus 27 percent at this time last year. Debt, net of cash, was $46.7 million compared to $36.4 million at the end of the prior year quarter due to higher working capital and acquisitions. Depreciation and amortization was $7.4 million year-to-date compared with $7.1 million in the prior year nine-month period. Capital spending totaled $8.4 million year to date compared with $8.3 million in the same period last year.
"Working capital continues to be a challenge, and we have shortened work weeks, eliminated production shifts, reduced our labor force, developed sku reduction plans and close-out programs to help bring finished goods inventory levels down over the next three months," said David W. Johnson Vice President and Chief Financial Officer. "In addition, we are closely monitoring global markets for signs of further softness or improvement in anticipation of 2009 planning. We have a strong line-up of new products in every business and we will be fact-based in our forecasts and production plans."
AWARDS UPDATE
The American Sportfishing Association (ASA) recognized Minn Kota(r) with an Anglers' Legacy Innovation Award as one of the Top 10 innovations that changed the way people fish. The new Humminbird(r) ICE 55 Flasher, which marks the Company's first entry into the ice-fishing segment, was named the "Best New Product - Electronics" at the 2008 ICAST show, the world's largest sportfishing convention and conference.
WEBCAST
The Company will host a conference call and audio web cast at 11:00 a.m. Eastern Time on Friday, July 25, 2008. A live listen-only web cast of the conference call may be accessed at Johnson Outdoors' web site -- www.johnsonoutdoors.com -- on the Investor section homepage. A replay 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 Equipment. Johnson Outdoors' familiar brands include, among others: Old Town(r) canoes and kayaks; Ocean Kayak(tm) and Necky(r) kayaks; Lendal(r) paddles; Carlisle(r) and Extrasport(r) paddling accessories; Minn Kota(r) motors; Cannon(r) downriggers; Humminbird(r) fishfinders; GEONAV(r) marine electronics; SCUBAPRO(r) UWATEC(r) and Seemann(r) dive equipment; Silva(r) compasses; Tech4O(r) digital instruments; and Eureka!(r) 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. 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 consumer spending patterns; the Company's success in implementing its strategic plan, including its focus on innovation; actions of and disputes with companies that compete with the Company; the Company's success in managing inventory; movements in foreign currencies or interest rates; the Company's success in restructuring of its European Diving operations; unanticipated issues related to the Company's military sales; 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)
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Operating Results THREE MONTHS ENDED NINE MONTHS ENDED
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June 27 June 29 June 27 June 29
2008 2007 2008 2007
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Net sales $ 141,243 $ 149,868 $ 339,023 $ 343,267
Cost of sales 85,492 86,130 207,177 203,851
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Gross profit 55,751 63,738 131,846 139,416
Operating expenses 41,182 48,955 118,211 122,257
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Operating profit 14,569 14,783 13,635 17,159
Interest expense, net 1,533 1,466 3,603 3,663
Other (income)
expense, net (304) (527) 1,056 (657)
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Income before income
taxes 13,340 13,844 8,976 14,153
Income tax expense 5,453 5,509 3,931 5,199
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Income from continuing
operations 7,887 8,335 5,045 8,954
Loss from discontinued
operations, net of
income tax benefit (104) (67) (1,490) (662)
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Net income $ 7,783 $ 8,268 $ 3,555 $ 8,292
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Income from continuing
operations per common
share - Basic:
Class A $ 0.88 $ 0.93 $ 0.56 $ 1.01
Class B $ 0.79 $ 0.84 $ 0.50 $ 0.90
Loss from discontinued
operations per common
share - Basic:
Class A $ (0.01) $ (0.00) $ (0.16) $ (0.08)
Class B $ (0.01) $ (0.01) $ (0.15) $ (0.07)
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Net income per common
share - Basic:
Class A $ 0.87 $ 0.93 $ 0.40 $ 0.93
Class B $ 0.78 $ 0.83 $ 0.35 $ 0.83
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Income from continuing
operations per common
Class A and B share -
Dilutive $ 0.85 $ 0.90 $ 0.55 $ 0.97
Loss from discontinued
operations per common
Class A and B share -
Dilutive $ (0.01) $ (0.01) $ (0.17) $ (0.07)
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Net income per common
Class A and B share -
Dilutive $ 0.84 $ 0.89 $ 0.38 $ 0.90
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Weighted average common -
Basic:
Class A 7,876 7,836 7,862 7,811
Class B 1,217 1,218 1,217 1,218
Dilutive stock options
and restricted stock 150 208 176 209
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Weighted average common -
Dilutive 9,243 9,262 9,255 9,238
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(thousands, except per share amounts)
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Segment Results THREE MONTHS ENDED NINE MONTHS ENDED
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June 27 June 29 June 27 June 29
2008 2007 2008 2007
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Net sales:
Marine electronics $ 62,379 $ 71,006 $ 157,186 $ 165,010
Outdoor equipment 17,115 17,220 38,343 46,494
Watercraft 34,649 36,444 71,833 70,489
Diving 27,246 25,461 72,268 61,910
Other/eliminations (146) (263) (607) (636)
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Total $ 141,243 $ 149,868 $ 339,023 $ 343,267
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Operating profit:
Marine electronics $ 7,696 $ 12,551 $ 13,442 $ 21,559
Outdoor equipment 2,412 2,806 2,784 5,681
Watercraft 3,583 (1,094) 1,240 (3,043)
Diving 2,443 3,014 3,579 3,769
Other/eliminations (1,565) (2,494) (7,410) (10,807)
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Total $ 14,569 $ 14,783 $ 13,635 $ 17,159
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Balance Sheet
Information (End of
Period)
Cash and short-term
investments $ 23,292 $ 35,426
Accounts receivable,
net 103,780 107,248
Inventories, net 96,964 84,203
Total current assets 244,758 246,524
Total assets 368,499 356,746
Short-term debt 10,001 61,843
Total current
liabilities 80,766 143,339
Long-term debt 60,003 10,006
Shareholders' equity 214,026 194,320
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