Johnson Outdoors reports 4Q jump in marine sales

RACINE, Wis. – Watercraft and marine electronics sales both jumped significantly in the fourth quarter, ended Sept. 30, for Johnson Outdoors Inc., the company reported in a release yesterday.

Watercraft sales were 25 percent ahead of last year’s fourth quarter which Johnson Outdoors attributed to favorable reception of new products, while marine electronics saw a 34 percent increase in quarterly sales. The company said double-digit growth of both Minn Kota and Humminbird brands across key distribution channels, was responsible for that increase.

Diving revenues increased slightly due to solid growth in North America and favorable currency translation, as weakness in key international markets continued.

Johnson Outdoors said increased commodity costs, particularly metal and resin costs affected its Marine Electronics and Watercraft divisions, along with higher freight charges.

The company’s Outdoor Equipment revenues decreased 35 percent due to a 46 percent decline in military tent sales.

Overall, Johnson Outdoors recorded sales of $77.1 million for the fourth quarter, an increase of 2 percent compared to $75.6 million for the prior year quarter. Net earnings for the quarter improved to a net loss of $3.4 million ($0.39 per diluted share) versus a net loss of $3.8 million ($0.44 per diluted share) for the prior year quarter.

The company said fourth quarter results historically reflect a loss due to the slowing of sales and production of its seasonal outdoor recreation products.

Full-Year Results
For the full year, the company reported sales of $380.7 million compared to $355.3 million for fiscal 2004, representing a 7 percent increase year-over-year. Net earnings for the year were $7.1 million ($0.81 per diluted share), an 18 percent decrease versus prior year.

Johnson Outdoors achieved net sales of $380.7 million compared to $355.3 million for the full year 2004, an increase of 7 percent, and said sales growth in its core brands more than offset the decrease in military revenues for the year. Key factors impacting the solid year-over-year sales results included:

  • The successful integration of the Humminbird brand into the company’s Marine Electronics division. As a result, Marine Electronics saw sales increase 32 percent year-over-year driven primarily by a full year of Humminbird results versus only five months in the prior fiscal year. Humminbird performance was driven primarily by product innovations, particularly the new Matrix(TM) 900 fishfinder series which utilizes side-imaging technology never before available in the consumer marketplace.
  • The Watercraft division grew 6 percent year-over-year as a result of a strong line-up of new canoe, kayak and paddle sport accessory products, which drove double-digit growth in international markets and among the division’s top 30 domestic customers. The Old Town Dirigo(TM) kayak introduced this year was a major contributor to new product sales for the year.
  • Diving sales were down slightly despite a strong performance in North American markets and favorable currency translation which did not fully offset weakness in international markets. The UWATEC Smart Tec(TM) computer is on track to become the Company’s most successful dive computer introduction in its history.
  • Operating profit for the year was $15.5 million compared to $19.1 million in 2004 during which Diving profits benefited from a $2.0 million litigation settlement with a former employee.

    “We believe we have created good momentum in our core businesses around these key strategic growth areas, despite difficult year-over-year comparisons due to record high military sales last year and unusual one-time items in both years,” said Helen Johnson-Leipold, chairman and CEO. “Importantly, excluding unusual one-time items in this and the previous fiscal year, profitability would have improved.

    “Cost reduction programs across all businesses were also critical, particularly in the face of dramatically higher commodity and compliance costs, enabling us to invest appropriately in strengthening our operations and competitive position in the future. Throughout the year we continued to benefit from the acquisition of Humminbird, and from investments made to simplify, streamline and increase efficiency in Watercraft. Similar restructuring efforts are well underway to strengthen European Diving, bolstered by a new management team in that region. As a result of our progress across all divisions this year, we are better-positioned to capitalize on growth opportunities for the future.”

    A replay of the company’s conference call and audio web cast will be available on Johnson Outdoors’ home page, or by dialing (888) 286-8010 or (617) 801-6888 and providing confirmation code 42480047. The replay will be available through Nov. 24, by phone and for 30 days on the Internet.

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