Johnson Outdoors Inc. reported net sales increased 7 percent to $133.1 million in the fiscal second quarter ended April 3 compared to a year earlier, driven by growth at it Marine Electronics, Watercraft and Outdoor Gear units. Foreign currency translation had a 2 percent negative impact on revenue.
Key drivers behind the year-over-year comparison in each business unit were:
- Marine Electronics sales jumped 9 percent driven by strong growth in the Minn Kota brand.
- Watercraft sales rose 5 percent due to favorable response to new products.
- Outdoor Gear revenue advanced 11 percent on the improved performance of consumer camping, particularly the Jetboil brand.
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Diving revenue slipped 3 percent due to unfavorable currency translation.
"Topline performance is clearly benefitting from the diversity of our portfolio, with Minn Kota proving once again to be a formidable engine of growth," said Helen Johnson-Leipold, Chairman and Chief Executive Officer. "Likewise, continued efforts to strengthen performance in watercraft and consumer camping brands are having a positive impact. At the same time, we are working hard to address the complexity of challenges facing Diving, our most global business, and expect progress to occur over time. Our ongoing focus on innovative new products provides our brands a distinct advantage heading into the warm-weather season. While patent-protection litigation costs haves significantly impacted profits, our core business is solid and well-positioned for growth through the season."
Year-to-date results
Fiscal 2015 year-to-date net sales were $203.9 million, slightly ahead of net sales of $203.4 million in the same year-to-date period last year. Foreign currency translation had a negative impact of 2 percent versus the prior year period. Total Company operating profit was $0.3 million versus operating profit of $8.6 million during the first six months of the prior fiscal year-to-date period.
As noted for the second quarter's results, significantly higher operating expenses in the current year-to-date period resulted in the unfavorable comparison. The results for the current fiscal year's first six months reflected increased legal expense of $5.2 million primarily related to litigation brought by the company asserting infringement of patents by a competitor. Also contributing to the $8.8 million increase in operating expense year-over-year were $1.8 million of higher promotional spending, $0.9 million of increased warranty costs and $1.1 million of higher compensation accruals.
Net loss was $0.5 million, or ($0.06) per diluted share in the first fiscal six-month period compared to net income of $5.2 million or $0.30 per diluted share in the first six months of the prior fiscal year.
Total operating profit was $7.6 million versus $11.5 million in the previous fiscal year quarter. Gross margin was negatively impacted by $1.4 million due to the stronger U.S. dollar impact on the company's foreign subsidiaries. A $7.0 million increase in operating expenses also significantly impacted the quarter's profits and included the following: $1.0 million of higher sales volume related costs; increased legal expense of $2.6 million; $1.4 million of additional promotional spending; and $0.8 million of higher warranty expense.
Also contributing to the year-over-year unfavorable comparison was a $0.9 million reversal in compensation accruals in last fiscal year's second quarter. Net income in the fiscal second quarter was $3.6 million, or $0.36 per diluted share, versus $7.4 million, or $0.67 per diluted share, reported in the previous fiscal year's second quarter.
Johnson Outdoors' brands includeOld Town canoes and kayaks; Ocean Kayak and Necky kayaks; Carlisle paddles; Extrasport personal flotation devices; Minn Kota motors; Cannon downriggers; Humminbird marine electronics and charts; SCUBAPro dive equipment; Silva compasses; Jetboil outdoor cooking systems; and Eureka! camping and hiking equipment.
