FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-16255
JOHNSON WORLDWIDE ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1536083
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1326 Willow Road, Sturtevant, Wisconsin 53177
(Address of principal executive offices)
(414) 884-1500
(Registrant's telephone number, including area code)
_____________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Outstanding at
Class January 28, 1995
Class A Common Stock
($.05 par value) 6,841,946
Class B Common Stock
($.05 par value) 1,230,199
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
Index Page
No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of
Operations -
Three Months Ended December 30, 1994
and December 31, 1993 3
Consolidated Balance Sheets -
December 30, 1994, September 30,
1994 and December 31, 1993 4
Consolidated Statements of Cash
Flows -
Three Months Ended December 30, 1994
and December 31, 1993 6
Notes to Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
(thousands of dollars, except per December 30, December 31,
share data) 1994 1993
Net sales $53,462 $44,009
Cost of sales 33,278 26,058
------ ------
Gross profit 20,184 17,951
Operating expenses:
Marketing and selling 14,339 12,040
Financial and administrative
management 5,951 5,776
Research and development 1,434 1,106
Profit sharing 58 158
Amortization of acquisition costs 384 388
------ ------
Total operating expenses 22,166 19,468
------ ------
Operating loss (1,982) (1,517)
Interest income (170) (85)
Interest expense 1,229 1,795
Other expenses, net 4 15
----- ------
Loss before income taxes (3,045) (3,242)
Income tax benefit (1,104) (1,218)
------- -------
Net loss $ (1,941) $ (2,024)
======== ========
Loss per common share $ ( .24) $ ( .25)
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
ASSETS
(thousands of dollars) December 30, September 30, December 31,
1994 1994 1993
Current assets:
Cash and temporary cash
investments $ 5,665 $15,588 $ 4,582
Accounts receivable, less
allowance for doubtful
accounts of $2,429, $2,317
and $1,647 respectively 58,894 54,942 48,223
Inventories 81,012 70,389 77,536
Other current assets 17,044 14,449 19,129
Net assets of discontinued
operations -- -- 43,691
------ ------ ------
Total current assets 162,615 155,368 193,161
Property, plant and equipment 27,781 26,579 18,777
Intangible assets 34,563 35,009 33,841
Other assets 2,529 2,725 2,666
------- -------- --------
$227,488 $219,681 $248,445
======== ======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
(thousands of dollars)
Current liabilities:
Notes payable and current
maturities of long-term
obligations $ 32,820 $ 16,097 $ 58,178
Accounts payable 13,361 13,467 12,560
Accrued income taxes 2,203 5,145 940
Accrued restructuring
expenses 393 1,077 7,000
Other accrued liabilities 16,944 18,248 13,630
------ ------ ------
Total current liabilities 65,721 54,034 92,308
Long-term obligations, less
current maturities 31,168 31,190 44,013
Other liabilities 5,605 6,260 5,111
----- ----- -----
Total liabilities 102,494 91,484 141,432
------- ------ -------
Shareholders' equity:
Preferred stock: none
issued -- -- --
Common stock:
Class A shares issued:
December 30, 1994,
6,866,196; September 30,
1994, 6,859,558;
December 31, 1993,
6,760,146 343 343 338
Class B shares issued
(convertible into Class A):
December 30, 1994,
1,230,199; September 30,
1994, 1,230,599; December
31, 1993, 1,230,883 62 62 62
Capital in excess of
par value 43,378 43,330 41,717
Retained earnings 77,597 79,538 65,316
Contingent compensation (201) (242) (314)
Cumulative translation
adjustment 4,379 5,166 (106)
Treasury stock:
December 30, 1994,
25,000 shares (564) -- --
---- ----- -----
Total shareholders'
equity 124,994 128,197 107,013
------- ------- -------
Total liabilities and
shareholders' equity $227,488 $219,681 $248,445
======== ======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(thousands of dollars) Three Months Ended
December 30, December 31,
1994 1993
Cash used for operations:
Net loss $ (1,941) $ (2,024)
Noncash items:
Depreciation and amortization 1,908 1,713
Deferred income taxes 249 557
Change in:
Accounts receivable, net (4,355) (4,268)
Inventories (10,928) (11,482)
Accrued restructuring expenses (684) (1,905)
Accounts payable and accrued (6,074) (4,037)
Net assets of discontinued -- 2,813
Other, net (1,525) (930)
------ ----
(23,350) (19,563)
------- -------
Cash used for investment activities:
Additions to property, plant and
equipment (2,755) (1,364)
Cash provided from financing activities:
Changes in notes payable and
long-term obligations 16,811 21,321
Issuance of common stock 48 22
Purchase of treasury stock (564) --
----- -----
16,295 21,343
Effect of foreign currency
fluctuations on cash (113) (249)
------ ------
Increase (decrease) in cash and
temporary cash investments (9,923) 167
Cash and temporary cash investments:
Beginning of period 15,588 4,415
------ -----
End of period $ 5,665 $ 4,582
======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1) Basis of Presentation
The consolidated financial statements included herein are unaudited.
In the opinion of management, these statements contain all
adjustments (consisting of only normal recurring items) necessary to
present fairly the financial position of Johnson Worldwide
Associates, Inc. (the Company) as of December 30, 1994 and the
results of operations and cash flows for the three months ended
December 30, 1994. These consolidated financial statements should be
read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report for the year
ended September 30, 1994.
Because of seasonal and other factors, the results of operations for
the three months ended December 30, 1994 are not necessarily
indicative of the results to be expected for the full year.
2) Income Taxes
The provision for income taxes includes deferred taxes and is based
upon estimated annual effective tax rates in the tax jurisdictions in
which the Company operates.
3) Inventories
December 30, September 30, December 31,
1994 1994 1993
(thousands of dollars)
Raw materials $ 21,713 $ 19,058 $ 17,773
Work in process 5,352 4,625 4,878
Finished goods 60,674 54,260 56,402
------ ------ ------
87,739 77,943 79,053
Less: reserves (6,727) (7,554) (1,517)
------ ------ ------
$ 81,012 $ 70,389 $ 77,536
======== ======== ========
4) Shareholders' Equity
In December 1994 the Company granted options to purchase 114,000
shares of Class A Common Stock at $ 18.625 per share.
5) Reclassification
Certain amounts as previously reported have been reclassified to
conform with the current period presentation.
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Net sales for the quarter ended December 30, 1994 were $53.5 million, an
increase of approximately 21% from net sales of $44.0 million for the
corresponding period in 1993. Because of the seasonality of recreational
products sales, the Company's first quarter sales have historically
accounted for 15 - 17% of annual sales, and the first quarter results are
not necessarily indicative of results to be expected for the full year.
Sales of the North American group for the quarter ended December 30, 1994
increased 13% as compared to the corresponding period in 1993. European
and Asian sales for the quarter ended December 30, 1994 increased 35% as
compared to the corresponding period in 1993. The European and Asian
sales increase was magnified by the change in relationship between the
U.S. dollar and the currencies of the European and Asian countries in
which the Company has operations. Excluding the impact of this change in
the relative value of these European and Asian currencies, European and
Asian sales for the quarter ended December 30, 1994 increased
approximately 26% as compared to the corresponding period in 1993.
The gross profit percentage declined in the current year due primarily
to changes in product mix and new early season selling programs in the
Company's North American fishing business.
The Company incurred an operating loss of $2.0 million for the quarter
ended December 31, 1994 as compared to an operating loss of $1.5 million
for the corresponding period in 1993. The increased operating loss was
caused primarily by increased marketing and selling expenses, particularly
those associated with the Company's North American fishing products.
Interest expense for the quarter ended December 30, 1994 decreased
approximately $566,000 or 32% from the corresponding period in 1993,
primarily as a result of lower debt levels partially offset by rising
interest rates on short-term debt. During the quarter ended July 1,
1994 the Company completed the divestiture of its Marking Systems group
and used a significant portion of the $46.5 million of proceeds from the
divestiture to reduce debt.
The Company incurred a net loss of $1.9 million for the quarter ended
December 30, 1994 as compared to a loss of $2.0 million for the
corresponding period in 1993.
Financial Condition
Inventory and accounts receivable were $139.9 million on December 30, 1994
or $14.6 million higher than inventory and accounts receivable levels on
September 30, 1994 and $14.1 million higher than inventory and accounts
receivable levels on December 31, 1993. The $14.6 million increase from
September 30, 1994 primarily reflects normal seasonal increases in
inventory as the Company enters its peak selling season in the second and
third quarters. The increase in accounts receivable from the December 31,
1993 levels is primarily due to the increased sales for the quarter ended
December 30, 1994 as compared to the corresponding period in 1993. The
increase in inventory and accounts receivable levels was magnified by
the changing relationship between the U.S. dollar and the currencies of
European and Asian countries in which the Company has operations. Values
of the currencies in most European and Asian countries in which the
Company has operations have increased relative to the U.S. dollar as of
December 30, 1994 in comparison to their values as of December 31, 1993.
The change in the foreign currencies' values, caused approximately $5.8
million of the increase in the December 30, 1994 inventory and accounts
receivable levels as compared to the December 31, 1993 levels. Current
notes payable as of December 30, 1994 were approximately $16.8 million
higher than September 30, 1994, due primarily to the need to finance the
Company's normal seasonal increase in inventories and accounts receivable.
Current notes payable as of December 30, 1994 were approximately $26.3
million lower than December 31, 1993, primarily because a significant
portion of the proceeds from the divestiture of the Company's Marking
Systems group where used to reduce debt. The Company's Marking Systems
group has been classified as discontinued operations for all periods
prior to July 1, 1994.
Cash flow from operations and borrowings under existing credit facilities
are sufficient to meet the Company's seasonal working capital and capital
expenditure needs.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11: Computation of Earnings
Per Share
Exhibit 27: Financial Data Schedule
(b) There were no reports on Form 8-K filed
for the three months ended December 30,
1994.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JOHNSON WORLDWIDE ASSOCIATES, INC.
Date: February 9, 1995
/s/ Carl G. Schmidt
Carl G. Schmidt
Vice President, Chief Financial
Officer, Secretary and Treasurer
(Principal Financial and Accounting
Officer)
EXHIBIT INDEX
Page
Exhibit Description Number
11. Computation of Earnings Per Share --
27. Financial Data Schedule --
Exhibit 11
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
Computation of Earnings Per Share
(thousands of dollars, except share Three Months Ended
and per share data) December 30, December 31,
1994 1993
Primary:
Weighted average common shares
outstanding 8,081,005 7,990,831
Common equivalent shares -- --
---------- ----------
Weighted average common and common
equivalent shares outstanding 8,081,005 7,990,831
========== ==========
Net loss $ (1,941) $ (2,024)
========= ========
Primary earnings per share $ ( .24) $ ( .25)
========= =========
Fully diluted:
Weighted average common shares
outstanding 8,081,005 7,990,831
Common equivalent shares -- --
--------- ---------
Weighted average common and common
equivalent shares outstanding 8,081,005 7,990,831
========== =========
Net loss $ (1,941) $ (2,024)
========== ==========
Fully diluted earnings per share $ ( .24) $ ( .25)
========= ==========
5
1,000
3-MOS
SEP-29-1995
OCT-01-1994
DEC-30-1994
5,665
0
61,323
2,429
81,012
162,615
67,591
39,810
227,488
65,721
31,168
405
0
0
124,589
227,488
53,462
53,462
33,278
33,278
20,784
153
1,229
(1,982)
(1,104)
(1,941)
0
0
0
(1,941)
.24
.24
