SECOND QUARTER RESULTS
Second quarter sales reflect initial shipments to customers in anticipation of the primary consumer retail selling period for the Company’s seasonal outdoor products. Gains in Marine Electronics, Watercraft and Diving business units more than offset the anticipated continued slowing of military sales. Excluding the $2.4 million military sales decline, total Company net sales would have increased $17.1 million or 16 percent. Key drivers during the quarter included:
Total Company operating profit was $4.1 million compared to operating profit of $8.3 million in the prior year quarter. Net income was $1.6 million, or $0.17 per diluted share, compared to net earnings of $4.2 million, or $0.46 per diluted share, in the same quarter last year. Key drivers behind the comparisons were:
“Corporate spending during the quarter was critical to help generate long-term value for shareholders and sustainable, profitable growth. We have been testing new go-to-market strategies to drive sales and enhance brand equity. We have also completed a comprehensive analysis of the outdoor recreational landscape to identify new growth platforms and targeted acquisition opportunities,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer. “All in all, we feel very good about the topline growth, the success of our investments in innovation, the consumer demand for our products, and we are working to address the supply chain challenges which led to operational inefficiencies in Diving and Marine Electronics. We continue to be very excited for the future of Johnson Outdoors.”
Net sales in the first six months of fiscal 2007 were $193.8 million versus $179.9 million in the same six-month period last year, an increase of 8 percent. Excluding the anticipated $4.8 million decline in military sales, total Company net sales would have increased 10 percent. Consistent with second quarter, key drivers in the year-to-date period were:
Total Company operating profit was $1.4 million during the first six months compared to $7.5 million during the prior year-to-date period. Net loss for the first six months of the year was $0.5 million, or ($0.06) per diluted share, versus net income of $3.1 million, or $0.34 per diluted share, in the first six months of the prior year. Consistent with the second quarter, primary drivers behind the year-to-date comparison were:
OTHER FINANCIAL INFORMATION
The Company’s debt to total capitalization stood at 33 percent at the end of the second quarter versus 31 percent at March 30, 2006 as a result of increased working capital levels. Debt, net of cash and short-term investments, was $56.1 million at the end of this quarter versus $45.1 million at the end of the prior year quarter. Depreciation and amortization is $4.5 million year-to-date compared to $4.7 million last year. Capital spending totaled $5.7 million year-to-date, compared with $4.0 million in the prior year first six months.
“We continue to expect revenue growth in 2007 equal to last year, and improvement in core consumer brand operating margins. Strong growth in the quarter and continued high product demand has resulted in higher working capital. Orders are pacing well-ahead of last year at this time, and working capital levels should decline significantly by the end of the year,” said David W. Johnson, Vice President and Chief Financial Officer.
Johnson Outdoors delivers meaningful innovation to the outdoor recreation marketplace driven by unique consumer insights, with new products representing one-third of total Company net sales for the past three years. Strong new product growth continues to bolster the Company’s already robust existing brands and differentiate the Company in the industry. Among the 2007 innovations from Marine Electronics are:
The Company will host a conference call and audio webcast on Friday, April 27, 2007 at 11:00 a.m. Eastern Time. A live listen-only webcast of the conference call may be accessed at Johnson Outdoors' home page. A replay will also be available on Johnson Outdoors' home page, or by dialing (888) 286-8010 or (617) 801-6888 and providing confirmation code 29803437. The replay will be available through May 4, 2007 by phone and 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® canoes and kayaks; Ocean Kayak™ and Necky® kayaks; Lendal™ paddles; Escape® electric boats; Minn Kota® motors; Cannon® downriggers; Humminbird® and Fishin’ Buddy® fishfinders; SCUBAPRO®, UWATEC® and Seemann Sub™ dive equipment; Silva® compasses and digital instruments; and Eureka!® tents. The Company has 23 locations around the world and employs 1,300 people.
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.
- - - FINANCIAL TABLES FOLLOW - - -
JOHNSON OUTDOORS INC.
|(thousands, except per share amounts)|
|Operating Results||THREE MONTHS ENDED||SIX MONTHS ENDED|
|Net sales||$ 122,124||$ 107,374||$ 193,824||$ 179,937|
|Cost of sales||75,039||63,033||118,258||106,167|
|Interest expense, net||1,344||1,218||2,197||2,120|
|Other (income) expense, net||(131)||222||(130)||293|
|Income (loss) before income taxes||2,858||6,831||(636)||5,047|
|Income tax expense (benefit)||1,265||2,657||(117)||1,968|
|Net income (loss)||$ 1,593||$ 4,174||$ (519)||$ 3,079|
|Basic earnings (loss) per common share||$ 0.18||$ 0.46||$ (0.06)||$ 0.34|
|Diluted earnings (loss) per common share||$ 0.17||$ 0.46||$ (0.06)||$ 0.34|
|Diluted average common shares outstanding||9,181||9,127||9,017||9,135|
|Marine electronics||$ 64,538||$ 51,572||$ 94,004||$ 81,546|
|Total||$ 122,124||$ 107,374||$ 193,824||$ 179,937|
|Operating profit (loss):|
|Marine electronics||$ 8,804||$ 8,445||$ 9,008||$ 10,861|
|Total||$ 4,071||$ 8,271||$ 1,431||$ 7,460|
|Balance Sheet Information (End of Period)|
|Cash and short-term investments||$ 36,738||$ 31,710|
|Accounts receivable, net||111,861||99,367|
|Total current assets||261,925||219,858|
|Total current liabilities||161,704||123,350|
At Johnson Outdoors Inc.
VP & Chief Financial Officer
VP - Worldwide Communication