Business news : Johnson Outdoors Logs Fiscal Q1 Profit on Strong Marine Electronics, Jetboil Deal

Johnson Outdoors Inc. announced quarterly revenue increased 9 percent to $87.3 million during the first fiscal period ended Dec. 28, 2012, due to higher sales in Marine Electronics and the addition of the Jetboil brand acquired on Nov. 14, 2012.

First quarter operating profit was $1.5 million, a $5.2 million improvement year-over-year. Net income was $200,000, a $3.2 million improvement versus the prior year first quarter.

"While it is too early to predict how the year will go, we are pleased by such a strong start as we ramp up for the primary selling period for our products over the next two quarters," said Helen Johnson-Leipold, chairman and CEO. "The competition for consumer discretionary dollars is always tough, and we feel good about our position and ability to grow share across every segment."

irst quarter results 

Sales during the first fiscal quarter are typically the lowest of the year as the company ramps up for the primary selling period of its outdoor recreation products during the second and third fiscal quarters. Net sales were $87.3 million in the first fiscal quarter compared with net sales of $80.2 million in the prior year quarter.

Increased sales in Marine Electronics and Outdoor Gear more than offset revenue declines in other units. Key drivers behind the year-over-year comparison in each business unit were: Marine Electronics revenue increased 12.3 percent year-over-year driven in large part by the shift of distributor shipments into the current quarter from the fiscal 2012 fourth quarter.

Outdoor Gear revenue rose 34.2 percent due to the acquisition of the Jetboil brand midway through the fiscal first quarter, which added $1.9 million to sales during the current quarter, and higher sales in commercial and military segments.

Watercraft sales compared unfavorably to the same period last year due to non-recurring year-end close-out sales in the sporting goods channel in the prior year quarter.

Diving sales dipped 1.5 percent as continued growth in SubGear could not offset the impact of unfavorable currency translation.

Total company operating profit during the seasonally slow first fiscal quarter was $1.5 million compared to an operating loss of ($3.7 million) in the prior year period. Primary drivers behind the quarter-to-quarter comparison were:

• Increased volume and favorable product mix.
• Reduced operating expense in the current period due to lower legal costs versus the prior year quarter and the closure of certain European sales offices in Fiscal 2012.
• Improved gross margins in Diving.

The company reported net income of $200,000, or 2 cents per diluted share, during the first fiscal quarter, compared to a net loss of $2.9 million, or 30 cents per diluted share, in the same quarter last year.

Other financial information

At Dec. 28, 2012, cash, net of debt was $8.5 million which compared favorably to debt, net of cash of ($4.9 million) at the end of the prior year quarter. The company utilized $15.5 million of cash and debt in the current year first quarter for the acquisition of Jetboil. Depreciation and amortization was $2.4 million year-to-date, compared to $2.7 million during the prior year-to-date period. Capital spending totaled $3.0 million during the first fiscal quarter compared with $2.0 million in the 2012 first fiscal quarter.

"We head into the primary selling season for our products in a solid, stable financial position," said David W. Johnson, vice president and CFO. "Inventory and working capital are down significantly even with the addition of a new, growing brand to the portfolio, and operating cash-flow is steady with every business contributing. The balance sheet is in excellent shape and we have the capacity to make strategic investments to strengthen and grow the business against the long-term goal of sustained profitable growth."

JOHNSON OUTDOORS INC.
(thousands, except per share amounts)
	THREE MONTHS ENDED
Operating Results	December 28 2012	December 30 2011
Net sales	$ 87,274	$ 80,176
Cost of sales	53,460	49,075
Gross profit	33,814	31,101
Operating expenses	32,288	34,820
Operating profit (loss):	1,526	(3,719)
Interest expense, net	418	575
Other expense (income), net	498	(1,192)
Income (loss) before income taxes	610	(3,102)
Income tax expense (benefit)	363	(158)
Net income (loss)	$ 247	$ (2,944)
Weighted average common shares outstanding - Dilutive	9,439	9,807
Net income (loss) per common share - Diluted	$ 0.02	$ (0.30)
Segment Results
Net sales:
Marine electronics	$ 53,651	$ 47,771
Outdoor equipment	8,440	6,290
Watercraft	6,814	7,485
Diving	18,483	18,758
Other/eliminations	(114)	(128)
Total	$ 87,274	$ 80,176
Operating profit (loss):
Marine electronics	$ 4,746	$ 2,073
Outdoor equipment	224	(252)
Watercraft	(1,682)	(2,458)
Diving	702	(98)
Other/eliminations	(2,464)	(2,984)
Total	$ 1,526	$ (3,719)
Balance Sheet Information (End of Period)
Cash and cash equivalents	$ 47,970	$ 29,096
Accounts receivable, net	62,848	65,561
Inventories, net	77,519	79,015
Total current assets	205,232	188,259
Total assets	300,362	270,725
Short-term debt	31,268	22,759
Total current liabilities	94,870	81,681
Long-term debt	8,196	11,257
Shareholders' equity	174,416	158,300

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