Johnson Outdoors Inc. (Nasdaq:JOUT), a leading
global innovator of outdoor recreation equipment and technology,
today announced higher sales and increased net income versus prior
year for the Company’s second fiscal quarter ending March 31,
2023.
“Supply chain challenges have significantly
improved, and we continue to work hard to fill customer orders in
our Fishing business. Diving continues to benefit from an increase
in travel. Conversely, our Camping and Watercraft Recreation
businesses are experiencing softer markets as they stabilize after
high growth experienced during the pandemic,” said Helen
Johnson-Leipold, Chairman and Chief Executive Officer. “Looking
ahead, while we continue to monitor consumer demand and navigate
uncertainties in the marketplace, we remain focused on sustaining
innovation leadership for the growth and success of our
brands.”
SECOND QUARTER
RESULTSTotal Company net sales in the second quarter
increased 7 percent to $202.1 million compared to $189.6 million in
the prior year second fiscal quarter. Key contributing factors
include:
- Fishing sales increased by 20
percent, driven primarily by price increases and improved supply
and component availability which allowed for fulfillment of orders
driven by solid customer demand
- Increased product availability in
the current year, as well as continued growth in global travel
post-pandemic helped Diving sales increase by 12 percent over the
prior year second quarter
- Camping revenue decreased 28
percent, due to high retail inventories and a decline in consumer
spending
- Watercraft Recreation revenue
declined 44 percent, reflecting significant reductions in the
overall market
Total Company operating profit was $11.4 million
for the second fiscal quarter versus $15.4 million in the prior
year second quarter. Gross margin was 37.3 percent, compared to
36.2 percent in the prior year quarter. The margin improvement was
due primarily to price increases and efficiencies from increased
sales volumes. Operating expenses of $63.9 million rose $10.8
million from the prior year period due primarily to the impact of
higher sales volume-driven expenses, as well as higher warranty,
compensation, professional services and deferred compensation
expenses between quarters.
Profit before income taxes of $19.9 million in
the current year quarter increased $6.7 million from the prior year
second quarter, driven primarily by a $10.1 million increase in
Other (income) expense, net year over year, which more than offset
the decline in operating profit. Included in the current quarter
other income was a $6.6 million gain on the sale of the Military
and Commercial Tents product lines in the Camping segment, which
closed on March 17, 2023. Additionally, net investment gains and
earnings on the asset related to the Company’s non-qualified
deferred compensation plan improved by $3.3 million, fully
offsetting the increase in deferred compensation expense in
operating expenses above.
Net income for the quarter was $14.9 million, or
$1.45 per diluted share, versus $9.9 million, or $0.97 per diluted
share in the previous year’s second quarter. The effective tax rate
was 25.5 percent compared to 25.1 percent in the prior year second
quarter.
YEAR-TO-DATE RESULTSFiscal 2023
year-to-date net sales were $380.5 million, an 11 percent increase
over last year’s first fiscal six-month period. Total Company
operating profit declined to $16.9 million compared to $29.2
million in the prior fiscal year-to-date period. Gross margin
declined to 36.3 percent in the first fiscal six months versus 37.7
percent in the prior fiscal year-to-date period. Operating expenses
were $121.3 million in the six-month period ending March 31,
2023, an increase of $21.2 million from the first half of the prior
year due to the same volume-related and variable costs noted above
for the quarter.
Profit before income taxes for the year-to-date
period was $28.1 million versus $27.8 million in the first six
months of the prior year. Other income increased by $11.3 million
helping to offset the decline in operating profit year over year.
As noted for the quarter, other income in the current year-to-date
period included a $6.6 million gain on the sale of Military and
Commercial Tents product lines as well as $2.8 million of gains on
deferred compensation plan assets compared to losses of $0.7
million in the prior year-to-date period.
Net income during the first fiscal six months
was $20.7 million, or $2.02 per diluted share, versus $20.8
million, or $2.04 per diluted share, in the prior fiscal
year-to-date period. The Company’s effective tax rate increased
slightly to 26.2 percent in the current year versus 25.3 percent in
the prior year six-month period.
OTHER FINANCIAL INFORMATION The
Company reported cash and short-term investments of $107.6 million
as of March 31, 2023. Depreciation and amortization were $7.8
million in the six months ending March 31, 2023, compared to
$6.9 million in the prior six-month period. Capital spending
totaled $14.0 million in the current year-to-date period compared
with $15.7 million in the prior year period. In March 2023, the
Company’s Board of Directors approved a quarterly cash dividend to
shareholders of record as of April 13, 2023, which was payable
April 27, 2023.
“While supply chain conditions have improved,
gross margins continued to be impacted by high costs in inventory
from inflationary pricing conditions. We remain laser-focused on
monitoring demand, evaluating our expense structure, and managing
higher-than-normal inventory levels,” said David W. Johnson, Chief
Financial Officer. “Our debt-free balance sheet and healthy cash
position continue to well-position us to navigate challenging
market conditions and provide us with the flexibility and resources
necessary to invest in strategic opportunities to strengthen the
business and consistently pay dividends to shareholders.”
WEBCAST The Company will host a
conference call and audio web cast at 11:00 a.m. Eastern Time on
Friday, May 5, 2023. A live listen-only web cast of the
conference call may be accessed at Johnson Outdoors’ home page or
here. 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;
Carlisle® paddles; Minn Kota® trolling motors, shallow water
anchors and battery chargers; 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 filed
with the Securities and Exchange Commission on December 9, 2022,
and the following: changes in economic conditions, consumer
confidence levels and discretionary spending patterns in key
markets; uncertainties stemming from political instability (and its
impact on the economies in jurisdictions where the Company has
operations), uncertainties stemming from changes in U.S. trade
policies, tariffs, and the reaction of other countries to such
changes; the global outbreaks of disease, such as the COVID-19
pandemic, which has affected, and may continue to affect, market
and economic conditions, and the timing, pricing and continued
availability of raw materials and components from our supply chain,
along with wide-ranging impacts on employees, customers and various
aspects of our operations; 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; the
impact of actions of the Company’s competitors with respect to
product development or enhancement or the introduction of new
products into the Company’s markets; movements in foreign
currencies, interest rates or commodity costs; fluctuations in the
prices of raw materials or the availability of raw materials or
components 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 including related to shortages in procuring necessary raw
materials and components to manufacture and produce such 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 and other
factors impacting climate change legislation. 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.
JOHNSON
OUTDOORS
INC.
(thousands, except per share
amounts) |
|
|
|
|
|
THREE MONTHS ENDED |
SIX MONTHS ENDED |
Operating results |
March 31, 2023 |
April 1, 2022 |
March 31, 2023 |
April 1, 2022 |
Net sales |
$ |
202,115 |
|
$ |
189,623 |
|
$ |
380,452 |
|
$ |
343,147 |
|
Cost of
sales |
|
126,780 |
|
|
121,038 |
|
|
242,338 |
|
|
213,931 |
|
Gross profit |
|
75,335 |
|
|
68,585 |
|
|
138,114 |
|
|
129,216 |
|
Operating expenses |
|
63,945 |
|
|
53,156 |
|
|
121,252 |
|
|
100,027 |
|
Operating profit: |
|
11,390 |
|
|
15,429 |
|
|
16,862 |
|
|
29,189 |
|
Interest income, net |
|
(697 |
) |
|
(53 |
) |
|
(1,487 |
) |
|
(108 |
) |
Other
(income) expense, net |
|
(7,861 |
) |
|
2,272 |
|
|
(9,765 |
) |
|
1,498 |
|
Profit before income taxes |
|
19,948 |
|
|
13,210 |
|
|
28,114 |
|
|
27,799 |
|
Income
tax expense |
|
5,087 |
|
|
3,310 |
|
|
7,374 |
|
|
7,043 |
|
Net income |
$ |
14,861 |
|
$ |
9,900 |
|
$ |
20,740 |
|
$ |
20,756 |
|
Weighted average common shares
outstanding - Dilutive |
|
10,198 |
|
|
10,150 |
|
|
10,179 |
|
|
10,142 |
|
Net
income per common share - Diluted |
$ |
1.45 |
|
$ |
0.97 |
|
$ |
2.02 |
|
$ |
2.04 |
|
|
|
|
|
|
Segment Results |
|
|
|
|
Net sales: |
|
|
|
|
Fishing |
$ |
155,341 |
|
$ |
129,323 |
|
$ |
293,382 |
|
$ |
237,679 |
|
Camping |
|
13,725 |
|
|
19,167 |
|
|
25,338 |
|
|
33,301 |
|
Watercraft Recreation |
|
12,890 |
|
|
23,009 |
|
|
22,548 |
|
|
37,609 |
|
Diving |
|
20,308 |
|
|
18,194 |
|
|
39,367 |
|
|
34,685 |
|
Other /
Eliminations |
|
(149 |
) |
|
(70 |
) |
|
(183 |
) |
|
(127 |
) |
Total |
$ |
202,115 |
|
$ |
189,623 |
|
$ |
380,452 |
|
$ |
343,147 |
|
Operating profit (loss): |
|
|
|
|
Fishing |
$ |
17,121 |
|
$ |
11,321 |
|
$ |
32,693 |
|
$ |
27,613 |
|
Camping |
|
2,071 |
|
|
5,119 |
|
|
2,824 |
|
|
7,869 |
|
Watercraft Recreation |
|
569 |
|
|
3,164 |
|
|
154 |
|
|
4,695 |
|
Diving |
|
1,444 |
|
|
1,209 |
|
|
1,457 |
|
|
1,662 |
|
Other /
Eliminations |
|
(9,815 |
) |
|
(5,384 |
) |
|
(20,266 |
) |
|
(12,650 |
) |
Total |
$ |
11,390 |
|
$ |
15,429 |
|
$ |
16,862 |
|
$ |
29,189 |
|
|
|
|
|
|
Balance Sheet Information (End of Period) |
|
|
|
|
Cash and cash equivalents |
|
|
$ |
107,648 |
|
$ |
113,186 |
|
Accounts receivable, net |
|
|
|
144,600 |
|
|
119,517 |
|
Inventories, net |
|
|
|
236,671 |
|
|
235,220 |
|
Total current assets |
|
|
|
496,290 |
|
|
479,155 |
|
Total assets |
|
|
|
700,882 |
|
|
668,789 |
|
Total current liabilities |
|
|
|
115,606 |
|
|
119,109 |
|
Total liabilities |
|
|
|
193,475 |
|
|
194,203 |
|
Shareholders’ equity |
|
|
|
507,407 |
|
|
474,586 |
|
Johnson
Outdoors
Inc. |
David Johnson
|
|
Patricia Penman |
VP & Chief Financial Officer |
|
VP – Marketing Services & Global Communications |
262-631-6600 |
|
262-631-6600 |
Johnson Outdoors (NASDAQ:JOUT)
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Johnson Outdoors (NASDAQ:JOUT)
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