RACINE, Wis. – While Johnson Outdoors Inc. (Nasdaq: JOUT), a global outdoor recreation company, announced a 3-percent decrease in overall net sales in the first quarter, the company’s marine electronics and watercraft divisions showed an 8- and 2-percent increase, respectively, over last year’s first quarter.
Johnson Outdoors’ net sales for the first quarter ended December 30, 2005, totaled $72.6 million compared to $75.0 million for the prior year quarter. Net income was slightly down year-over-year with a net loss of $1.1 million during this quarter versus a net loss of $1.0 million in the prior year period. Net earnings were flat at $0.12 per diluted share in both this and the prior year quarter.
The company says, however, that quarterly sales are historically lowest during the first fiscal quarter when it is ramping up for the primary selling period of its seasonal outdoor recreation products. Excluding the anticipated $4.6 million decline in military tent revenue, total company sales would have been up $2.2 million.
"While first quarter results are not indicative of the year's overall performance, we are very pleased with the favorable reception to-date for our 2006 new product line-up,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer. “Overall, about a third of total company net sales this quarter came from new products in our core consumer brands, which is helping to offset the anticipated decline in the non-core military segment.
“We have built capability and capacity to strengthen operations, and a healthy new product pipeline to help drive profitable growth and enhance long-term shareholder value. I remain excited about the future of Johnson Outdoors. Importantly, our strong cash position continues to enable us to capitalize on strategic growth opportunities when they arise, such as the acquisition of Cannon and Bottomline brands this quarter. We added brands and sales without adding complexity or infrastructure ensuring a rapid and efficient integration to better capture and maximize existing synergies."
Johnson Outdoors’ watercraft, made up of canoes, kayaks and electric boats, continued its positive momentum with sales 2-percent ahead of last year's first quarter due, according to the company, to the favorable reception of new products. The marine electronics showed an 8-percent increase in quarterly sales due, according to the company, primarily to the continued growth of Humminbird and the acquisition of the Cannon and Bottomline brands, which added $1.2 million in sales to the division during the period. Diving revenues declined 3 percent; outdoor equipment revenues decreased 23 percent due entirely to a 29-percent decline in military sales from the prior year quarter.
Total operating loss of $0.8 million in the first quarter compared unfavorably to an operating loss of $0.1 million in the prior year quarter. The additional loss was attributed to the significant drop in military sales compared with the prior year quarter, which resulted in a $1.8 million decline in outdoor equipment operating profits; and increased spending in R&D and marketing in marine electronics, which has now fully integrated the Cannon and Bottomline brands.
Johnson Outdoors reported a net loss during the seasonally slow first quarter of $1.1 million or $0.12 per diluted share. This compares to a net loss of $1.0 million, or $0.12 per diluted share, in the same quarter last year. The company's tax rate was 38.7 percent versus 1.4 percent in the prior year quarter due to the non-deductibility of expenses associated with the terminated buy-out proposal in the prior year quarter.
"A healthy balance sheet and solid cash position give us a strong financial foundation on which to build as we enter our main selling season,” said David W. Johnson, Vice President and Chief Financial Officer. “Strict inventory management is a key focus across all divisions, which, aided in part by favorable currency translation, resulted in a $2.8 million reduction in total company inventory this quarter despite the addition of the Cannon and Bottomline brand assets.”
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