Watercraft, electronics revenues fall for Johnson Outdoors

RACINE, Wis. – Marine electronics and watercraft product lines both contributed to Johnson Outdoors Inc.’s net sales decrease of 1 percent for the first quarter ended Dec. 29, from $72.6 million for the prior year quarter to $71.1 million this year, the company reported in a release today.

Marine electronics revenues dipped 1.7 percent below last year due to delays in shipments to customers which resulted from a temporary gap in product component availability, as well as the transition to a new distribution center and ERP system upgrade, Johnson Outdoors said.

Watercraft sales were 4.4 percent behind last year due largely to a shift in the pacing of orders from large national retailers.

Company-wide results down too

Total company operating loss during the first quarter of $2.6 million compared to an operating loss of $0.8 million in the prior year quarter. Key drivers behind the unfavorable comparison were:

  • Lower volume and higher commodity costs in the current quarter, together with the aforementioned ERP upgrade and distribution center move in marine electronics, which had a significant impact on labor efficiency and accounted for the year-over-year decline in total company gross margins.
  • Lower sales in watercraft due to a shift in customer order pacing.
  • Increased spending in marketing and sales to support innovative new product launches.
  • The company reported a net loss of $2.1 million, or ($0.23) per diluted share, during the first quarter. This compares to a net loss of $1.1 million, or ($0.12) per diluted share, in the same quarter last year.

    “We have set our sights on growing to a half billion dollars in revenue over the next few years, and on growing profits faster than sales,” said Helen Johnson-Leipold, chairman and chief executive officer. “Winning innovation to keep our market-leading brands strong is key to our future success. Importantly, we are dedicating more resources to creative marketing strategies to drive retail store traffic.

    “It is far too early to predict the season, let alone the year, but we feel good about the potential to grow sales and capture share from the competition in the months ahead. We are also working to enhance internal processes and systems to ensure our operations are continuously ‘simpler, better, faster.’ Our focus remains on driving sustainable, profitable growth behind our commitment to enhanced shareholder value.”

    Johnson Outdoors said that, historically, its first quarter results are not indicative of the year’s overall performance due to the warm-weather seasonality of its business. Quarterly sales are typically at their lowest levels during the first fiscal quarter when the company is ramping up for the primary selling period of its outdoor recreation products which occurs during the second and third quarters.

    “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 CFO. “Working capital is a challenge due primarily to lower volume in Marine Electronics during the quarter. Orders are strong and ahead of the prior year at this time, and we feel confident in our ability to bring working capital back in line when the season kicks into full gear.”

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