RACINE, Wis. – Johnson Outdoors Inc. (Nasdaq: JOUT) experienced increased net sales for the fiscal third quarter ended July 1, 2005, driven primarily by the Humminbird brand, the company reported in a recent statement.
Favorable one-time items in the prior year contributed largely to the unfavorable comparison in net income for the quarter, Johnson Outdoors stated.
"Humminbird is exceeding our expectations with our flagship Marine Electronics business continuing to deliver outstanding results. As anticipated, the benefits of our strategic investments to revitalize innovation, enhance systems and improve efficiency throughout Watercraft are now beginning to materialize at the bottom line," said Helen Johnson-Leipold, chairman and chief executive officer, Johnson Outdoors Inc.
Total company net sales in the third quarter were $122.4 million, the highest reported since 1999, and 1.1 percent above the comparable 2004 period. Humminbird, acquired in May 2004, reported three months' sales in the third quarter this year compared with two months in the prior year quarter. As a result, Humminbird sales are up $6.6 million over the previous third quarter, and are reflected in total Marine Electronics' results.
Watercraft posted a strong gain in revenue (7.8 percent) resulting in its highest sales quarter in two years. Diving sales benefited from favorable currency translation ($0.5 million), and double-digit growth in North American markets.
Total Company operating profit declined $1.9 million in the third quarter versus the same period last year. Humminbird added $1.6 million to operating profit for the three-month quarter versus $0.5 million in the prior year period, which reflected only two months of activity. Growth in revenues and improved manufacturing efficiency contributed to the significant increase ($1.1 million) in operating profit in Watercraft. In Diving, profits lagged behind the prior year period by $1.1 million when the business unit benefited from a $2.0 million litigation settlement with a former employee. The company incurred $0.5 million in costs related to the terminated buy-out transaction compared to $1.1 million during the third quarter last year. Net income for the quarter of $6.8 million ($0.77 per diluted share) compared to $7.5 million ($0.85 per diluted share) in the prior year period.
Year-to-date net sales increased 8.5 percent versus the same period in 2004. Humminbird sales, which included nine months of reported results in 2005 compared with only two months during the same period last year, more than offset reductions in military tent sales. The year-on-year increase in operating expense (12.4 percent) was also due primarily to the addition of Humminbird. Operating profit fell $3.6 million below the comparable 2004 period primarily driven by weak performance in Diving during the first six months of the year. Operating losses improved by $2.9 million in the company's Watercraft business unit year-to-date. Net income for the nine-month period was $10.5 million, or $1.20 per diluted share, down from $12.4 million or $1.42 per diluted share in the year ago period.
"The future of our company rests in our ability to continuously deliver meaningful innovation that will enable us to further expand our markets, our great brand equities and our technology horizons," observed Johnson-Leipold. "We will do this by leveraging the collective strength of our portfolio of brands and expertise, like we did this year with Escape electric boats, and through targeted acquisitions, such as Humminbird, which are designed to complement our businesses without adding complexity."
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