Johnson Outdoors Inc. on Monday announced double-digit growth in net income on slightly higher sales for fiscal 2016.
“Performance this year reflects how important innovation is in our ability and capacity to deliver sustained long-term profitable growth," said Helen Johnson-Leipold, chairman and CEO. New products like the Minn Kota Riptide Ulterra, Humminbird Helix series of fishfinders, Old Town Predator fishing kayaks and Jetboil Genesis cooking system drove strong consumer demand during the year.
“Looking forward, our long-term plan focuses on elevating our businesses to the next level of success through enhanced consumer intimacy, transformative digital sophistication and world-class innovation processes. Targeted, strategic investments against these priorities will continue over the next two years, with the goal of delivering accelerated profitable growth in the future,” concluded Johnson-Leipold.
FISCAL YEAR RESULTS
Total Company net sales increased 1 percent to $433.7 million versus $430.5 million in the previous fiscal year. Key contributing factors in the year-over-year comparison were:
- 5 percent growth in marine electronics
- 3 percent increase in watercraft sales
- Diving revenue declined 4 percent, or $3.0 million, largely due to continued weakness in Middle East markets and currency translation.
Operating profit grew 28 percent to $22.9 million versus $17.9 million in the prior fiscal year due primarily to higher volume and improved gross margins. Non-cash goodwill impairment charges of $6.2 million in the current year were more than offset by a $9.9 million improvement in legal expense year over year.
Net income for the fiscal year rose 27 percent to $13.5 million, or $1.34 per diluted share, versus $10.6 million, or $1.06 per diluted share in fiscal 2015. The Company’s effective tax rate was 43 percent versus 33 percent in the prior year. The unfavorable variance in tax rate is primarily due to no tax benefit on non-cash goodwill impairment charges in the current year.
FOURTH QUARTER RESULTS
Total company sales in the quarter were $74.9 million versus $85.7 million in the prior year fourth quarter. A shift in orders due to a planned product-line technology restage in Marine Electronics, and a $4 million plus decline in non-core military tent sales in Outdoor Gear led to the unfavorable quarter-over-quarter comparison. Operating loss was ($4.9) million this quarter versus operating profit of $1.1 million in the prior year fourth quarter due primarily to the lower sales volume. Net loss in the fourth quarter was ($2.1) million, or ($0.21) per diluted share versus net income of $1.2 million, or $0.12 per diluted share in the prior year fourth quarter.
OTHER FINANCIAL INFORMATION
The company’s debt to total capitalization stood at 3 percent at the end of the current year, a 25 percent improvement compared with debt to total capitalization of 4 percent at the end of 2015. Cash, net of debt, reached an all-time high of $79.9 million at year-end versus cash, net of debt, of $61.7 million at the prior year-end.
Depreciation and amortization was $12.0 million year-to-date compared with $11.8 million in the prior year. Capital spending totaled $11.7 million in fiscal 2016 compared with last year’s $10.4 million.
“New product innovation drove higher volume and improved margins through the first nine months of the year, more than offsetting the anticipated slow-down of sales during the fourth quarter. We ended the year with the balance sheet in great shape, maintaining the strong cash position needed to provide us the flexibility and resources necessary to invest strategically in growing our businesses, ” said Dave Johnson, vice president and CFO. “Heading into fiscal 2017, positive momentum for new products is building and order positions are steadily growing.”
The Company will host a conference call and audio web cast at 11 a.m. Eastern Time on Monday, December 12, 2016. A live listen-only web cast of the conference call may be accessed at Johnson Outdoors' home page. A replay of the call will be available for 30 days on the Internet.