JOHNSON OUTDOORS REPORTS FISCAL SECOND QUARTER RESULTS
May 14, 2019
On May 03, 2019 Johnson Outdoors Inc., reported increased sales and earnings during the Company’s 2019 second fiscal quarter ending March 29, 2019, and double-digit growth in net income during the first fiscal six-month period.
SECOND QUARTER RESULTS
Sales in the second fiscal quarter reflect shipments to customers in anticipation of the primary retail-selling period for the outdoor recreation industry’s warm-weather products. Net sales rose 7 percent to $177.7 million in the current fiscal second quarter compared to $165.8 million in the prior year quarter, driven by positive momentum in the Company’s Fishing and Diving groups. Key contributing factors in year-over-year quarterly comparisons in each group were:
• Favorable response to new products propelled a 10.1 percent increase in Fishing revenue.
• Strong performance in North America drove a 3.7 percent increase in Diving sales. On a currency neutral basis, sales were 7.4 percent higher than the prior year quarter.
• Watercraft Recreation sales declined due to continued kayak market weakness.
• Lower sales across tent categories primarily accounted for the unfavorable year-over-year comparison in Camping.
Total Company operating profit in the fiscal second quarter was $27.8 million compared with operating profit of $26.0 million in the previous year quarter. Gross margin of 44.5 percent was slightly below the prior year quarter due in part to the unfavorable impact of $1.4 million in Section 301 tariffs on Chinese goods and components. Operating expense during the quarter increased 6.4 percent year-over-year due primarily to higher deferred compensation expense resulting from a $2.0 million upward adjustment in the valuation of the plan’s assets; however, an offsetting gain was reflected in other income/expenses. Net income of $21.9 million, or $2.18 per diluted share, in the fiscal second quarter improved slightly versus the previous fiscal year’s second quarter.
YEAR-TO-DATE RESULTS
Fiscal 2019 year-to-date net sales of $282.1 million were on par with the record-high fiscal six-month period last year. Total Company operating profit increased 2.4 percent to $33.8 million compared with the prior fiscal year-to-date period. Year-to-date gross margin improved to 43.8 percent versus 43.6 percent for the previous fiscal year first six months, despite the negative impact of $2.1 million in Section 301 tariffs.
“Looking ahead, we continue to expect moderate sales growth this fiscal year and will pursue a range of additional Section 301 tariff mitigation efforts with respect to other affected product components with the goal of further reducing their impact on profitability,” said David W. Johnson, Vice President and Chief Financial Officer. “Nonetheless, we continue to benefit from our ongoing focus on improved operational efficiency, enabling us to protect margins and effectively manage working capital. The balance sheet remains strong, and our growing cash position enables us to continue investment against strategic priorities and opportunities to expand our business and growth potential. We remain confident in our ability and plans to create long-term value and consistently pay dividends to shareholders.”
JOHNSON OUTDOORS is a leading global innovator of outdoor recreation equipment and technologies that inspire more people to experience the awe of the great outdoors. 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.
