Johnson Outdoors Inc., a global outdoor recreation equipment company, reported lower sales and earnings for the fiscal third quarter ending July 1, 2016.
Double-digit growth in profitability for the company's fishing and watercraft recreation businesses during the quarter did not offset one-time non-cash goodwill impairment charges in Diving. During the current fiscal nine-month period, Johnson Outdoors' sales increased four percent and earnings surged 67 percent ahead of the same prior year fiscal nine months.
"We are very pleased by the performance of our fishing and watercraft recreation businesses where our brands are gaining share in highly competitive marketplace environments on the strength of new product success,' says Johnson Outdoors' CEO, Helen Johnson-Leipold.
Third Quarter Results
Fiscal third quarter results historically reflect in-season replenishment orders for the Johnson Outdoors' warm-weather outdoor recreation products. Total Company net sales were US $139.3 million during the quarter compared with net sales of US $140.9 million in the previous year third quarter.
Foreign currency translation had a 0.3 percent unfavorable impact on sales versus the prior year quarter.
Key factors behind the year-over-year comparison in each business unit were:
• Strong new product response powered growth in Minn Kota and Humminbird brands, driving a 2.2 percent increase in Marine Electronics revenue and a record-high US $88.1 million in third quarter sales.
• Watercraft revenue dipped slightly versus the prior year quarter despite a 4.2 percent growth in Old Town sales quarter-over-quarter.
• Significantly higher Jetboil revenue and growth in specialty camping retailers could not overcome tent sales declines in large outdoor retailers.
• Diving revenue slipped 4.8 percent due largely to continued declines in sales to Middle East dive markets.
Total Company operating profit during the quarter was US $13.6 million compared to US $16.4 million in the prior fiscal year third quarter.
According to Johnson Outdoors, strong marketplace momentum around new products across the company's consumer fishing, outdoor cooking and watercraft recreation brands drove year-to-date sales for the nine-month period to US $358.8 million, four percent ahead of sales in the same prior year period. Unfavorable currency translation had a one percent or US $3 million unfavorable impact on year-to-date revenue. Total company operating profit was US $27.8 million versus operating profit of US $16.7 million in the same nine-month period last year. Higher volume and improved margins in Marine Electronics and improved performance in Watercraft more than offset profit shortfalls in Diving and Outdoor Gear.
Net income was US $15.6 million, or US $1.56 per diluted share, in the current nine-month period compared to $9.4 million, or $0.95 per diluted share, in the same period last year. The company's effective tax rate during the nine-month period was 44.2 percent versus 40.9 percent for the previous year-to-date period due to the same factors outlined for the quarter.
Other Financial Information
Johnson Outdoors reported cash, net of debt, of US $68.2 million as of July 1, 2016, versus cash, net of debt, of US $46.4 million as of July 3, 2015.
Depreciation and amortization was US $8.9 million year-to-date, compared to US $8.8 million during the first nine months of the prior year. Capital spending totaled US $8.6 million during the first nine months of fiscal 2016 compared with US $6.6 million in the same period in 2015.
"This quarter's non-cash goodwill impairment charges do not affect our confidence in the strength of the SCUBAPRO brand,' said David W. Johnson, Vice President and Chief Financial Officer. "The balance sheet is strong and our healthy cash position enables us to continue to invest in future growth strategies and platforms while continuing to pay cash dividends to our investors.'
On July 18, the Johnson Outdoors shared positive news coming out of the fishing industry's largest tradeshow, ICAST 2016, held July 13 to 15 in Orlando, Florida. Its Minn Kota, Humminbird and Old Town brands were each voted ‘Best of' in their respective product categories by industry media, buyers and consumers.
The revolutionary Minn Kota Ultrex trolling motor was awarded ‘Best of Boating Accessories' as well as the ‘Best of Show'. The new Old Town Predator PDL pedal-drive received ‘Best Boat' honours and Humminbird grabbed its sixth consecutive ‘Best of Electronics' award for the ultra-bright and easy-to-use Helix 10.
Johnson Outdoors' brands include: Old Town canoes and kayaks; Ocean Kayak and Necky kayaks; Carlisle paddles; Extrasport personal flotation devices; Minn Kota motors; Cannon downriggers; Humminbird marine electronics and charts; SCUBAPRO dive equipment; Silva compasses; Jetboil outdoor cooking systems; and Eureka! camping and hiking equipment.