JOHNSON OUTDOORS (NASDAQ:JOUT), a leading global
innovator in outdoor recreation equipment and technology, reported
double-digit growth in revenue and profits for the fiscal third
quarter ended June 29, 2018. Strong new product demand drove
expanded margins leading to a robust increase in net income versus
the prior year third quarter results.
“Unprecedented growth in our flagship Fishing brands throughout
the year underscores the importance of our ongoing emphasis on
consumer insight driven innovation. Delivering this same
level of continuous new product success across our entire brand
portfolio is a key priority, and we are working to further
strengthen organizational capacity and capability to do so,” said
Helen Johnson-Leipold, Chairman and Chief Executive Officer.
“Future plans will focus on strategies targeted on fully
leveraging our company-wide digital transformation and data
analytics to enhance accelerated profitable growth for all channels
long-term.”
THIRD QUARTER RESULTSFiscal third quarter
results reflect in-season replenishment orders for the Company’s
warm-weather outdoor recreation products. Favorable
marketplace momentum for new products, particularly in Fishing and
Camping, fueled a 10 percent increase in total Company net sales of
$170.8 million compared to $155.7 million in the previous year
quarter. Foreign currency translation had a favorable 1 percent
impact on net sales. Key factors behind the year-over-year
comparison in each business unit were:
- Continued high demand for new products introduced over the past
18 months powered growth in Minn Kota®, Humminbird® and Cannon®
brands across all key channels, generating sales of $121.9 million
for a 17.3 percent increase in unit revenue.
- Camping sales outpaced prior year by 14.7 percent, driven
largely by growth in Jetboil® and Eureka!® brands in key consumer
channels, bolstered by additional gains in military and commercial
segments.
- Transition to a new distribution model in Japan over the past
year led to the unfavorable year-over-year revenue comparison in
Diving.
- Kayak market weakness affecting all segments and channels
continued to negatively impact Watercraft Recreation sales.
Total Company operating profit during the quarter was $32.0
million, a 29 percent increase compared to $24.7 million in the
prior year quarter. Gross margin improved to 46.5 percent
versus 45.5 percent in last year’s same quarter. Net income
in the fiscal third quarter rose to $23.8 million, or $2.37 per
diluted share, a 44 percent increase compared to $16.6 million, or
$1.65 per diluted share, in the previous year third
quarter.
YEAR-TO-DATE RESULTSFiscal 2018 year-to-date
net sales grew 13.6 percent to $453.1 million versus net sales of
$398.8 million in the same fiscal nine-month period last
year. Total Company operating profits rose to $65.0 million
compared with $45.7 million during the prior fiscal year’s first
nine-months. Exceptionally strong new product demand in Fishing and
gross margin expansion were key drivers behind improved operating
results.
Net income in the fiscal nine-month period surged 32 percent to
$45.6 million, or $4.54 per diluted share, compared with $34.6
million, or $3.45 per diluted share, in the same nine-month period
last year. The year-to-date effective tax rate of 34.4
percent reflects $6.8 million in charges during the year resulting
from changes in accounting for taxes prompted by new U.S. tax
reform legislation.
OTHER FINANCIAL INFORMATIONThe Company reported
cash and short-term investments of $129.3 million as of June 29,
2018, versus $93.7 million on June 30, 2017. Depreciation and
amortization was $9.6 million, compared to $9.7 million during the
first nine months of the prior fiscal year. Capital spending
totaled $14.7 million during the first nine months of fiscal 2018
compared with $8.1 million in the same fiscal 2017 period.
Investment in systems upgrades and digital transformation accounted
for the year-to-date increase.
“At this time, we are working hard to sustain positive momentum
through the end of the fiscal and ensure our brands are
well-positioned for a strong start next year. Looking ahead
to 2019, we are in the process of determining the impact, and
our mitigation plans, of recently announced U.S. tariffs and
retributive sanctions in other countries,” said David W. Johnson,
Chief Financial Officer.
“The balance sheet remains very strong and our growing cash
position enables us to invest in strategic priorities and other
opportunities to strengthen our brands and grow our businesses,
while continuing to create value and consistently pay dividends to
shareholders.”
PRODUCT NEWSThe new pioneering Minn Kota®
Ultrex™ with Built-In Mega Down Imaging grabbed Best Boating
Accessory honors at the 2018 ICAST, the world’s most prestigious
fishing show. Beginning next year, select models of Minn Kota
bow-mounted trolling motors will be available with the Humminbird®
MEGA Down Imaging transducer and wiring fully integrated providing
clean rigging protected from wear and tear, and providing anglers
crystal clear viewing directly below the boat.
WEBCAST The Company will host
a conference call and audio web cast at 10:00 a.m. Eastern Time on
Tuesday August 7, 2018. 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.
About Johnson Outdoors Inc.
JOHNSON
OUTDOORS is a leading global
innovator of outdoor recreation equipment and technologies that
inspire more people to experience the awe of the great outdoors.
The company designs, manufactures and markets a portfolio of
winning, consumer-preferred brands across four categories:
Watercraft Recreation, Fishing, Diving and Camping. Johnson
Outdoors' iconic brands include: Old Town® canoes and kayaks; Ocean
Kayak™; Carlisle® paddles; Minn Kota® fishing motors, batteries and
anchors; Cannon® downriggers; Humminbird® marine electronics and
charts; SCUBAPRO® dive equipment; Jetboil® outdoor cooking systems;
and, Eureka!®camping and hiking equipment.
Visit Johnson Outdoors at
http://www.johnsonoutdoors.com
Safe Harbor Statement
Certain matters discussed in this press release are
“forward-looking statements,” intended to qualify for the safe
harbors from liability established by the Private Securities
Litigation Reform Act of 1995. Statements other than
statements of historical fact are considered forward-looking
statements. These statements may be identified by the use of
forward-looking words or phrases such as "anticipate,'' "believe,''
"confident," "could,'' "expect,'' "intend,'' "may,'' "planned,''
"potential,'' "should,'' "will,'' "would'' or the negative of those
terms or other words of similar meaning. Such forward-looking
statements are subject to certain risks and uncertainties, which
could cause actual results or outcomes to differ materially from
those currently anticipated. Factors that could affect actual
results or outcomes include the matters described under the caption
“Risk Factors” in Item 1A of the Company’s Form 10-K which will be
filed with the Securities and Exchange Commission on December 8,
2017 and the following: changes in economic conditions, consumer
confidence levels and discretionary spending patterns in key
markets; uncertainties stemming from changes in U.S. trade
policies, tariffs, and the reaction of other countries to such
changes; the Company’s success in implementing its strategic plan,
including its targeted sales growth platforms, innovation focus and
its increasing digital presence; litigation costs related to
actions of and disputes with third parties, including competitors;
the Company’s continued success in its working capital management
and cost-structure reductions; the Company’s success in integrating
strategic acquisitions; the risk of future write-downs of goodwill
or other long-lived assets; the ability of the Company’s customers
to meet payment obligations; movements in foreign currencies,
interest rates or commodity costs; fluctuations in the prices of
raw materials or the availability of raw materials used by the
Company; any disruptions in the Company's supply chain as a result
of material fluctuations in the Company's order volumes and
requirements for raw materials and other components necessary to
manufacture and produce the Company's products; the success of the
Company’s suppliers and customers and the impact of any
consolidation in the industries of the Company’s suppliers and
customers; the ability of the Company to deploy its capital
successfully; unanticipated outcomes related to outsourcing certain
manufacturing processes; unanticipated outcomes related to
litigation matters; and adverse weather conditions. Shareholders,
potential investors and other readers are urged to consider these
factors in evaluating the forward-looking statements and are
cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements included herein
are only made as of the date of this filing. The Company assumes no
obligation, and disclaims any obligation, to update such
forward-looking statements to reflect subsequent events or
circumstances.
FINANCIAL TABLES FOLLOW
(thousands, except per
share amounts) |
|
|
|
|
|
THREE MONTHS ENDED |
NINE MONTHS ENDED |
Operating Results |
June 29 2018 |
June 30 2017 |
June 29 2018 |
June 30 2017 |
Net sales |
$ |
170,779 |
|
$ |
155,274 |
|
$ |
453,136 |
|
$ |
398,810 |
|
Cost of
sales |
|
91,446 |
|
|
84,644 |
|
|
250,797 |
|
|
226,702 |
|
Gross profit |
|
79,333 |
|
|
70,630 |
|
|
202,339 |
|
|
172,108 |
|
Operating
expenses |
|
47,378 |
|
|
45,893 |
|
|
137,345 |
|
|
126,441 |
|
Operating profit: |
|
31,955 |
|
|
24,737 |
|
|
64,994 |
|
|
45,667 |
|
Interest (income)
expense, net |
|
(117 |
) |
|
25 |
|
|
(323 |
) |
|
603 |
|
Other
expense (income), net |
|
293 |
|
|
(848 |
) |
|
(4,231 |
) |
|
(2,288 |
) |
Income before income
taxes |
|
31,779 |
|
|
25,560 |
|
|
69,548 |
|
|
47,352 |
|
Income
tax expense |
|
8,009 |
|
|
9,007 |
|
|
23,923 |
|
|
12,784 |
|
Net income |
$ |
23,770 |
|
$ |
16,553 |
|
$ |
45,625 |
|
$ |
34,568 |
|
Weighted average common shares outstanding - Dilutive |
|
10,001 |
|
|
9,928 |
|
|
9,988 |
|
|
9,908 |
|
Net income per common
share - Diluted |
$ |
2.37 |
|
$ |
1.65 |
|
$ |
4.54 |
|
$ |
3.45 |
|
Segment Results |
|
|
|
|
Net sales: |
|
|
|
|
Fishing |
$ |
121,920 |
|
$ |
103,974 |
|
$ |
336,333 |
|
$ |
276,469 |
|
Camping |
|
13,915 |
|
|
12,129 |
|
|
29,843 |
|
|
29,239 |
|
Watercraft
Recreation |
|
14,115 |
|
|
17,290 |
|
|
29,280 |
|
|
38,594 |
|
Diving |
|
20,774 |
|
|
21,984 |
|
|
57,582 |
|
|
54,903 |
|
Other/eliminations |
|
55 |
|
|
(103 |
) |
|
98 |
|
|
(395 |
) |
Total |
$ |
170,779 |
|
$ |
155,274 |
|
$ |
453,136 |
|
$ |
398,810 |
|
Operating profit
(loss): |
|
|
|
|
Fishing |
$ |
33,044 |
|
$ |
24,293 |
|
$ |
77,871 |
|
$ |
54,324 |
|
Camping |
|
2,154 |
|
|
1,452 |
|
|
1,732 |
|
|
1,691 |
|
Watercraft
Recreation |
|
661 |
|
|
2,417 |
|
|
(653 |
) |
|
2,466 |
|
Diving |
|
1,503 |
|
|
1,218 |
|
|
1,132 |
|
|
468 |
|
Other/eliminations |
|
(5,407 |
) |
|
(4,643 |
) |
|
(15,088 |
) |
|
(13,282 |
) |
Total |
$ |
31,955 |
|
$ |
24,737 |
|
$ |
64,994 |
|
$ |
45,667 |
|
Balance Sheet Information (End of Period) |
|
|
|
|
Cash, cash equivalents
and short term investments |
|
|
$ |
129,277 |
|
$ |
93,741 |
|
Accounts receivable,
net |
|
|
|
80,877 |
|
|
79,292 |
|
Inventories, net |
|
|
|
77,299 |
|
|
68,239 |
|
Total current
assets |
|
|
|
288,465 |
|
|
243,767 |
|
Total assets |
|
|
|
397,551 |
|
|
354,957 |
|
Total current
liabilities |
|
|
|
92,246 |
|
|
86,889 |
|
Shareholders’ equity |
|
|
|
282,060 |
|
|
239,924 |
|
At
Johnson
Outdoors
Inc.
David Johnson
VP & CHIEF FINANCIAL
OFFICER
262-631-6600
Patricia PenmanVP – GLOBAL MARKETING SERVICES
& COMMUNICATIONS262-631-6600
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