Johnson Outdoors’ marine electronics sales up, profits down

RACINE, Wis. – Outdoor recreation company Johnson Outdoors Inc. (NASDAQ: JOUT) saw its marine electronics and watercraft sales increase for the second quarter ended March 31, it reported in a statement Wednesday.

Marine electronics sales grew more than 9 percent driven by Humminbird and the acquisition of the Cannon and Bottomline brands in October 2005, which added a combined $3.3 million in net sales to the unit during the quarter, the company explained.
Watercraft sales were more than 6 percent ahead of the last year’s second quarter results due to continued strength of Old Town and Ocean Kayak brands, reported Johnson Outdoors.

But the company experienced lower profits in its marine electronics segment due to pacing of current year orders resulting in a short-term unfavorable product mix; continued weakness in Northern Tier boat markets; rising commodity costs; and increased investment in marketing, sales and R&D initiatives, it stated.

Total company net sales increased only 1 percent to $107.4 million for the second quarter, however. Johnson Outdoors said significant gains in the marine electronics and watercraft business units were offset by anticipated declines in military sales and lower European Diving sales. Excluding the anticipated $3.7 million decline in military sales, total company net sales would have increased $4.9 million.

Total company net income was $4.2 million, or $0.46 per diluted share, for the quarter versus $4.7 million, or $0.54 per diluted share, in the prior year quarter.

“Marine Electronics continues to be a growth engine, with our Watercraft business picking up steam as we move into the critical consumer retail season. Importantly, we are benefiting from our investments in new product innovation, with revenue growth in our core brands out-pacing the projected decline in military sales,” observed Helen Johnson-Leipold, chairman and chief executive officer. “An ongoing emphasis on disciplined cost-control measures and improved operational efficiency has helped to reduce the impact of rising commodity prices and freight charges on profitability. Our portfolio is stronger and better positioned for growth than ever, and we feel good about the future.”

New products driving sales increases

The company suggested in its statement that new products are a significant driver of the sales increases it is experiencing. New products this quarter represent about one-third of total company net sales, led by the performance of new products from marine electronics and watercraft business units.

That includes the new Minn Kota 15 amp series of battery charger, which the company said features a new industrial design housing for easy drop-in mounting to enhance the appeal among boat builders. The new MK 230, MK 345 and MK 460 chargers are driving double-digit growth in charger sales this year, Johnson Outdoors added.

The Ocean Kayak Prowler series continues to grow in size and popularity, with the Prowler Big Game featuring a unique, flat foot-well area for standing or kneeling, and covered cockpit storage, according to the company. The Ocean Kayak Venus 11 and the Necky Eliza are the newest “designed for women” kayaks targeting the fast-growing female paddler segment, it added. New products represent more than half of Ocean Kayak sales this year and more than two-thirds of Necky sales.

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