Wisconsin
(State
or other jurisdiction of
incorporation
or organization)
|
39-1536083
(I.R.S.
Employer Identification No.)
|
Index
|
Page
No.
|
|||
PART
I
|
FINANCIAL
INFORMATION
|
|||
Item
1.
|
Financial
Statements
|
|||
Condensed
Consolidated Statements of Operations – Three and six months ended April
3, 2009 and March 28, 2008
|
1
|
|||
Condensed
Consolidated Balance Sheets - April 3, 2009, October 3, 2008 and
March 28,
2008
|
2
|
|||
Condensed
Consolidated Statements of Cash Flows - Six months ended April 3,
2009 and
March 28, 2008
|
3
|
|||
Notes
to Condensed Consolidated Financial Statements
|
4
|
|||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
21
|
||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
33
|
||
Item
4.
|
Controls
and Procedures
|
33
|
||
PART
II
|
OTHER
INFORMATION
|
|||
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
34
|
||
Item
6.
|
Exhibits
|
34
|
||
Signatures
|
35
|
|||
Exhibit
Index
|
36
|
Three
Months Ended
|
Six Months Ended
|
|||||||||||||||
April
3
|
March
28
|
April
3
|
March
28
|
|||||||||||||
(thousands,
except per share
data)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Net
sales
|
$ | 106,630 | $ | 121,813 | $ | 176,386 | $ | 197,780 | ||||||||
Cost
of
sales
|
66,662 | 75,007 | 111,312 | 121,685 | ||||||||||||
Gross
profit
|
39,968 | 46,806 | 65,074 | 76,095 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Marketing
and
selling
|
22,857 | 27,853 | 42,042 | 48,020 | ||||||||||||
Administrative
management, finance and information systems
|
8,679 | 12,067 | 17,021 | 22,745 | ||||||||||||
Research
and
development
|
2,640 | 3,239 | 5,442 | 6,264 | ||||||||||||
Total
operating
expenses
|
34,176 | 43,159 | 64,505 | 77,029 | ||||||||||||
Operating
profit
(loss)
|
5,792 | 3,647 | 569 | (934 | ) | |||||||||||
Interest
income
|
(41 | ) | (197 | ) | (145 | ) | (485 | ) | ||||||||
Interest
expense
|
3,121 | 1,475 | 4,719 | 2,555 | ||||||||||||
Other
(income) expense,
net
|
(456 | ) | 1,306 | 664 | 1,360 | |||||||||||
Income
(loss) before income
taxes
|
3,168 | 1,063 | (4,669 | ) | (4,364 | ) | ||||||||||
Income
tax expense
(benefit)
|
703 | 281 | (193 | ) | (1,522 | ) | ||||||||||
Income
(loss) from continuing
operations
|
2,465 | 782 | (4,476 | ) | (2,842 | ) | ||||||||||
Income
(loss) from discontinued
operations, net of income
|
||||||||||||||||
tax
benefit of $0,
$188, $0, and $814 respectively
|
- | (320 | ) | 41 | (1,386 | ) | ||||||||||
Net
income
(loss)
|
$ | 2,465 | $ | 462 | $ | (4,435 | ) | $ | (4,228 | ) | ||||||
Weighted
average common shares -
Basic:
|
||||||||||||||||
Class
A
|
7,946 | 7,857 | 7,927 | 7,855 | ||||||||||||
Class
B
|
1,216 | 1,217 | 1,216 | 1,217 | ||||||||||||
Dilutive
stock options and
restricted stock
|
4 | 180 | 9 | 183 | ||||||||||||
Weighted
average common shares -
Dilutive
|
9,166 | 9,254 | 9,152 | 9,255 | ||||||||||||
Income
(loss) from continuing
operations per common share - Basic:
|
||||||||||||||||
Class
A and B
share
|
$ | 0.27 | $ | 0.09 | $ | (0.49 | ) | $ | (0.31 | ) | ||||||
Loss
from discontinued operations
per common share - Basic:
|
||||||||||||||||
Class
A and B
share
|
$ | - | $ | (0.04 | ) | $ | - | $ | (0.15 | ) | ||||||
Income
(loss) per common share -
Basic:
|
||||||||||||||||
Class
A and B
share
|
$ | 0.27 | $ | 0.05 | $ | (0.49 | ) | $ | (0.46 | ) | ||||||
Income
(loss) from continuing
operations per common Class A and B
share
-
Dilutive
|
$ | 0.27 | $ | 0.09 | $ | (0.49 | ) | $ | (0.31 | ) | ||||||
Loss
from discontinued operations
per common Class A and B share
-
Dilutive
|
$ | - | $ | (0.04 | ) | $ | - | $ | (0.15 | ) | ||||||
Income
(loss) per common Class A
and B share - Dilutive
|
$ | 0.27 | $ | 0.05 | $ | (0.49 | ) | $ | (0.46 | ) | ||||||
Dividends
per
share:
|
||||||||||||||||
Class
A common
stock
|
$ | - | $ | 0.055 | $ | - | $ | 0.055 | ||||||||
Class
B common
stock
|
$ | - | $ | 0.050 | $ | - | $ | 0.050 |
April
3
|
October
3
|
March
28
|
||||||||||
2009
|
2008
|
2008
|
||||||||||
(thousands,
except share
data)
|
(unaudited)
|
(audited)
|
(unaudited)
|
|||||||||
ASSETS
|
||||||||||||
Current
assets:
|
||||||||||||
Cash
and
cash equivalents
|
$ | 13,919 | $ | 41,791 | $ | 27,662 | ||||||
Accounts
receivable, less allowance for doubtful
accounts of $2,772, $2,577, and $2,580 respectively
|
100,466 | 52,710 | 120,168 | |||||||||
Inventories, net
|
75,405 | 85,999 | 115,126 | |||||||||
Deferred
income taxes
|
2,935 | 2,963 | 14,501 | |||||||||
Other
current assets
|
5,081 | 6,204 | 9,151 | |||||||||
Assets
held for sale
|
- | 47 | 358 | |||||||||
Total
current
assets
|
197,806 | 189,714 | 286,966 | |||||||||
Property,
plant and equipment,
net
|
37,754 | 39,077 | 37,781 | |||||||||
Deferred
income
taxes
|
1,277 | 594 | 14,632 | |||||||||
Goodwill
|
14,524 | 14,085 | 58,245 | |||||||||
Other
intangible assets,
net
|
6,170 | 6,442 | 6,634 | |||||||||
Other
assets
|
5,460 | 5,157 | 7,896 | |||||||||
Total
assets
|
$ | 262,991 | $ | 255,069 | $ | 412,154 | ||||||
LIABILITIES
AND SHAREHOLDERS'
EQUITY
|
||||||||||||
Current
liabilities:
|
||||||||||||
Short-term notes payable
|
$ | 4,647 | $ | - | $ | 45,000 | ||||||
Current
maturities of long-term debt
|
1 | 3 | 10,001 | |||||||||
Accounts
payable
|
34,422 | 24,674 | 33,612 | |||||||||
Accrued
liabilities:
|
||||||||||||
Salaries,
wages and benefits
|
8,252 | 8,671 | 12,958 | |||||||||
Accrued discounts and returns
|
7,165 | 5,776 | 7,245 | |||||||||
Accrued interest payable
|
901 | 234 | 181 | |||||||||
Income taxes payable
|
1,765 | 1,318 | 936 | |||||||||
Other
|
19,019 | 14,637 | 17,712 | |||||||||
Liabilities held for sale
|
- | 76 | 226 | |||||||||
Total
current
liabilities
|
76,172 | 55,389 | 127,871 | |||||||||
Long-term
debt, less current
maturities
|
60,690 | 60,000 | 60,004 | |||||||||
Deferred
income
taxes
|
969 | 1,111 | - | |||||||||
Retirement
benefits
|
6,527 | 6,774 | 4,579 | |||||||||
Other
liabilities
|
6,247 | 9,511 | 12,952 | |||||||||
Total
liabilities
|
150,605 | 132,785 | 205,406 | |||||||||
Shareholders'
equity:
|
||||||||||||
Preferred
stock: none issued
|
||||||||||||
Common
stock:
|
||||||||||||
Class
A
shares issued:
|
||||||||||||
April
3, 2009, 8,066,965
|
||||||||||||
October 3, 2008, 8,006,569
|
||||||||||||
March 28, 2008, 7,995,689
|
404 | 400 | 400 | |||||||||
Class
B
shares issued:
|
||||||||||||
April 3, 2009, 1,216,464
|
||||||||||||
October 3, 2008, 1,216,464
|
||||||||||||
March 28, 2008, 1,217,309
|
61 | 61 | 61 | |||||||||
Capital
in excess of par value
|
58,191 | 57,873 | 57,585 | |||||||||
Retained
earnings
|
48,736 | 53,171 | 120,894 | |||||||||
Accumulated other comprehensive income
|
5,037 | 10,779 | 27,808 | |||||||||
Treasury
stock at cost, 8,071 shares of Class A common stock
|
(43 | ) | - | - | ||||||||
Total
shareholders'
equity
|
112,386 | 122,284 | 206,748 | |||||||||
Total
liabilities and
shareholders' equity
|
$ | 262,991 | $ | 255,069 | $ | 412,154 |
|
||||||||
Six Months Ended | ||||||||
(thousands)
|
April
3
2009
|
March
28
2008
|
||||||
CASH
USED FOR OPERATING
ACTIVITIES
|
||||||||
Net
loss
|
$ | (4,435 | ) | $ | (4,228 | ) | ||
Adjustments to reconcile net loss to net cash used for operating
activities:
|
||||||||
Depreciation
|
4,744 | 4,645 | ||||||
Amortization of intangible assets
|
191 | 236 | ||||||
Amortization of deferred financing costs
|
267 | 63 | ||||||
Stock
based compensation
|
279 | 306 | ||||||
Deferred
income taxes
|
(835 | ) | (4,931 | ) | ||||
Change
in
operating assets and liabilities, net of effect of businesses acquired
or
sold:
|
||||||||
Accounts receivable, net
|
(48,564 | ) | (57,270 | ) | ||||
Inventories, net
|
9,673 | (18,582 | ) | |||||
Accounts payable and accrued liabilities
|
12,877 | 1,912 | ||||||
Other current assets
|
1,048 | 368 | ||||||
Other non-current assets
|
(333 | ) | (1,191 | ) | ||||
Other long-term liabilities
|
(953 | ) | 773 | |||||
Other, net
|
1,106 | 518 | ||||||
(24,935 | ) | (77,381 | ) | |||||
CASH
USED FOR INVESTING
ACTIVITIES
|
||||||||
Payments
for purchase of business,
net of cash acquired
|
(913 | ) | (5,663 | ) | ||||
Additions
to property, plant and
equipment
|
(3,012 | ) | (5,255 | ) | ||||
Payments
under interest rate swap
contracts
|
(1,751 | ) | - | |||||
(5,676 | ) | (10,918 | ) | |||||
CASH
PROVIDED BY FINANCING
ACTIVITIES
|
||||||||
Net
borrowings from short-term
notes payable
|
4,687 | 22,997 | ||||||
Net
borrowings from long-term
debt
|
- | 60,000 | ||||||
Principal
payments on senior notes
and other long-term debt
|
(2 | ) | (10,800 | ) | ||||
Deferred
financing costs paid to
lenders
|
(1,280 | ) | - | |||||
Excess
tax benefits from stock
based compensation
|
- | 15 | ||||||
Dividends
paid
|
(501 | ) | (999 | ) | ||||
Common
stock
transactions
|
43 | 432 | ||||||
2,947 | 71,645 | |||||||
Effect
of foreign currency
fluctuations on cash
|
(208 | ) | 5,084 | |||||
Decrease
in cash and cash
equivalents
|
(27,872 | ) | (11,570 | ) | ||||
CASH
AND CASH
EQUIVALENTS
|
||||||||
Beginning
of
period
|
41,791 | 39,232 | ||||||
End
of
period
|
$ | 13,919 | $ | 27,662 |
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding
and exercisable at
October 3, 2008
|
271,043 | $ | 8.36 | 2.1 | $ | 1,217 | ||||||||||
Granted
|
- | - | - | - | ||||||||||||
Exercised
|
(500 | ) | 7.42 | 1 | ||||||||||||
Cancelled
|
(90,255 | ) | 8.62 | - | ||||||||||||
Outstanding
and exercisable at
April 3, 2009
|
180,288 | $ | 8.23 | 2.2 | - |
Shares
|
Weighted
Average
Grant
Price
|
|||||||
Unvested
restricted stock at
October 3, 2008
|
109,277 | $ | 18.72 | |||||
Restricted
stock
grants
|
76,789 | 5.86 | ||||||
Restricted
stock
cancelled
|
(8,822 | ) | 14.14 | |||||
Restricted
stock
vested
|
(71,417 | ) | 12.32 | |||||
Unvested
restricted stock at April
3, 2009
|
105,827 | 14.08 |
Three
Months
Ended
|
Six
Months
Ended
|
|||||||||||||||
April
3
2009
|
March
28
2008
|
April
3
2009
|
March
28
2008
|
|||||||||||||
Components
of net periodic benefit
cost:
|
||||||||||||||||
Service
cost
|
$ | 170 | $ | 158 | $ | 341 | $ | 315 | ||||||||
Interest
on projected benefit obligation
|
269 | 251 | 537 | 503 | ||||||||||||
Less
estimated return on plan assets
|
244 | 231 | 488 | 461 | ||||||||||||
Amortization of unrecognized:
|
||||||||||||||||
Net income
|
14 | 23 | 29 | 46 | ||||||||||||
Prior Service Cost
|
1 | 2 | 2 | 3 | ||||||||||||
Net
amount
recognized
|
$ | 210 | $ | 203 | $ | 421 | $ | 406 |
April
3
|
October
3
|
March
28
|
||||||||||
2009
|
2008
|
2008
|
||||||||||
Raw
materials
|
$ | 25,766 | $ | 30,581 | $ | 41,839 | ||||||
Work
in
process
|
2,344 | 2,834 | 4,163 | |||||||||
Finished
goods
|
53,686 | 59,897 | 73,914 | |||||||||
81,796 | 93,312 | 119,916 | ||||||||||
Less
inventory
reserves
|
6,391 | 7,313 | 4,790 | |||||||||
$ | 75,405 | $ | 85,999 | $ | 115,126 |
Accounts
receivable
|
$ | 161 | ||
Inventories
|
97 | |||
Property,
plant and
equipment
|
12 | |||
Goodwill
|
860 | |||
Total
assets
acquired
|
1,130 | |||
Total
liabilities
assumed
|
217 | |||
Net
purchase
price
|
$ | 913 |
Accounts
receivable
|
$ | 3,991 | ||
Inventories
|
3,291 | |||
Other
current assets
|
111 | |||
Property,
plant and equipment
|
429 | |||
Trademark
|
855 | |||
Customer
list
|
978 | |||
Goodwill
|
1,738 | |||
Total
assets acquired
|
11,393 | |||
Total
liabilities assumed
|
5,747 | |||
Net
purchase price
|
$ | 5,646 |
April
3
2009
|
March
28
2008
|
|||||||
Balance
at beginning of period
|
$ | 14,085 | $ | 51,454 | ||||
Amount
attributable to Navicontrol acquisition
|
860 | - | ||||||
Amount
attributable to Geonav acquisition
|
- | 2,205 | ||||||
Amount
attributable to Seemann purchase price allocation
|
- | 158 | ||||||
Amount
attributable to movements in foreign currencies
|
(421 | ) | 4,428 | |||||
Balance
at end of period
|
$ | 14,524 | $ | 58,245 |
April
3
2009
|
March
28
2008
|
|||||||
Balance
at beginning of period
|
$ | 4,361 | $ | 4,290 | ||||
Expense
accruals for warranties issued during the period
|
2,242 | 2,078 | ||||||
Less
current period warranty claims paid
|
1,925 | 1,400 | ||||||
Balance
at end of period
|
$ | 4,678 | $ | 4,968 |
●
|
a receive fixed / pay floating interest rate swap with a term commencing on September 14, 2010 and ending on December 14, 2011 (“Swap B”). Under the terms of Swap B, the Company will receive fixed rate interest at 2.170% and will pay floating rate interest at a rate equal to three month LIBOR. The notional amount of Swap B is $60,000. Swap B includes an automatic termination feature, which will cause Swap B to terminate on May 11, 2009 and at the same time, will shorten the maturity date of Swap A from December 14, 2011 to September 14, 2010, unless Swap B is modified prior to termination. The effect of Swap B is to lock in the net undiscounted cash flows required to be paid by the Company under Swap A for the five quarterly swap periods ending on December 14, 2011. If Swap B does terminate as expected on May 11, 2009, it will require an immediate payment of approximately $2,200 including related fees to the Counterparty. See Note 20 - Subsequent Event for additional information regarding the termination of Swap B. | |
●
|
a receive fixed / pay floating interest rate swap with a term commencing on December 15, 2008 and ending on September 14, 2010 (“Swap C”). Under the terms of Swap C, the Company will receive fixed rate interest at 1.310% and will pay floating rate interest at a rate equal to three month LIBOR. The notional amount of Swap C is $60,000. Swap C includes an automatic termination feature which will cause Swap C to terminate on September 14, 2009 and at the same time, will shorten the maturity date of Swap A from September 14, 2010 to September 14, 2009, unless Swap C is modified prior to termination. The effect of Swap C is to lock in the net undiscounted cash flows required to be paid by the Company under Swap A for the seven quarterly swap periods ending on September 14, 2010 at approximately $4,000 including related fees. If Swap C does terminate on September 14, 2009, it would require an immediate payment of approximately $2,400 including related fees to the Counterparty. |
Balance
Sheet
|
Fair
Values
of
|
||||
Location
|
Derivative
Instruments
|
||||
April
3,
2009
|
|||||
Liability
derivatives not
designated as hedging instruments under Statement
133:
|
|||||
Interest
rate swap
contracts
|
Accrued
liabilities
other
|
$
|
4,890 | ||
Foreign
exchange forward
contracts
|
Accrued
liabilities
other
|
348 | |||
Total
liability
derivatives
|
$
|
5,238 |
Three
Months
Ended
|
||||
April
3,
2009
|
||||
Loss
reclassified from AOCI
into:
|
Amount
Reclassified
|
|||
Interest
expense
|
$ | 502 |
Three
Months
Ended
|
|||||
April
3,
2009
|
|||||
Derivatives
not designated as
Hedging
Instruments
under Statement
133
|
Location
of Loss Recognized
in
Statement of
Operations
|
Amount
of Loss
Recognized
|
|||
Interest
rate swap
contracts
|
Interest
expense
|
$ | (704 | ) | |
Foreign
exchange forward
contracts
|
Other
income
(expense)
|
$ | (348 | ) |
Three
Months
Ended
|
Six
Months
Ended
|
|||||||||||||||
April
3
|
March
28
|
April
3
|
March
28
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
income
(loss)
|
$ | 2,465 | $ | 462 | $ | (4,435 | ) | $ | (4,228 | ) | ||||||
Currency
translation
adjustments
|
(4,068 | ) | 9,879 | (3,066 | ) | 12,325 | ||||||||||
Income
(loss) on cash flow hedge,
net of tax
|
||||||||||||||||
of
$0, $0, $1,081, and
$1,621, respectively
|
502 | (1,621 | ) | (2,676 | ) | (2,432 | ) | |||||||||
Comprehensive
income
(loss)
|
$ | (1,101 | ) | $ | 8,720 | $ | (10,177 | ) | $ | 5,665 |
Employee
Termination
Costs
|
Other
Exit
Costs
|
Total
|
||||||||||
Accrued
liabilities as of October 3, 2008
|
$ | 825 | $ | - | $ | 825 | ||||||
Activity
during period ended April 3, 2009:
|
||||||||||||
Charges
to earnings
|
128 | 286 | 414 | |||||||||
Settlement
payments
|
(953 | ) | (286 | ) | (1,239 | ) | ||||||
Accrued
liabilities as of April 3, 2009
|
$ | - | $ | - | $ | - |
Employee
Termination
Costs
|
||||
Accrued
liabilities as of October 3, 2008
|
$ | 92 | ||
Activity
during period ended April 3, 2009:
|
||||
Charges
to earnings
|
6 | |||
Settlement
payments
|
(94 | ) | ||
Accrued
liabilities as of April 3, 2009
|
$ | 4 |
●
|
Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. |
●
|
Level 2 - Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments. |
●
|
Level 3 - Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. |
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Interest
rate swap contracts
|
$ | - | $ | 4,890 | $ | - | $ | 4,890 | ||||||||
Foreign
exchange forward contracts
|
$ | - | $ | 348 | $ | - | $ | 348 |
Three
Months
Ended
|
Six
Months
Ended
|
||||||||
April
3,
2009
|
April
3,
2009
|
||||||||
Location
of Loss Recognized
in
Statement of
Operations
|
Amount
of Loss
Recognized
|
Amount
of Loss
Recognized
|
|||||||
Interest
rate swap
contracts
|
Interest
expense
|
$ | (704 | ) | $ | (704 | ) | ||
Foreign
exchange forward
contracts
|
Other
income
(expense)
|
$ | (348 | ) | $ | (348 | ) |
Three
Months
Ended
|
Six
Months
Ended
|
|||||||||||||||
April
3
2009
|
March
28
2008
|
April
3
2009
|
March
28
2008
|
|||||||||||||
Net
sales:
|
||||||||||||||||
Marine
electronics
|
||||||||||||||||
Unaffiliated customers
|
$ | 58,675 | $ | 61,492 | $ | 90,642 | $ | 94,748 | ||||||||
Interunit
transfers
|
57 | 52 | 68 | 59 | ||||||||||||
Outdoor
equipment
|
||||||||||||||||
Unaffiliated customers
|
8,465 | 13,232 | 19,690 | 21,206 | ||||||||||||
Interunit
transfers
|
10 | 12 | 22 | 22 | ||||||||||||
Watercraft
|
||||||||||||||||
Unaffiliated customers
|
21,631 | 23,702 | 32,671 | 37,141 | ||||||||||||
Interunit
transfers
|
41 | 29 | 48 | 43 | ||||||||||||
Diving
|
||||||||||||||||
Unaffiliated customers
|
17,763 | 23,218 | 33,236 | 44,458 | ||||||||||||
Interunit
transfers
|
72 | 273 | 149 | 564 | ||||||||||||
Other
Corporate
|
96 | 169 | 147 | 227 | ||||||||||||
Eliminations
|
(180 | ) | (366 | ) | (287 | ) | (688 | ) | ||||||||
$ | 106,630 | $ | 121,813 | $ | 176,386 | $ | 197,780 | |||||||||
Operating
profit:
|
||||||||||||||||
Marine
electronics
|
7,147 | 5,483 | 6,178 | 5,746 | ||||||||||||
Outdoor
equipment
|
405 | 754 | 1,330 | 372 | ||||||||||||
Watercraft
|
(245 | ) | (230 | ) | (1,844 | ) | (2,343 | ) | ||||||||
Diving
|
294 | 575 | (903 | ) | 1,135 | |||||||||||
Other/Corporate
|
(1,809 | ) | (2,935 | ) | (4,192 | ) | (5,844 | ) | ||||||||
$ | 5,792 | $ | 3,647 | $ | 569 | $ | (934 | ) | ||||||||
Total
assets (end of
period):
|
||||||||||||||||
Marine
electronics
|
$ | 116,624 | $ | 153,179 | ||||||||||||
Outdoor
equipment
|
20,424 | 28,417 | ||||||||||||||
Watercraft
|
53,715 | 79,646 | ||||||||||||||
Diving
|
59,425 | 123,624 | ||||||||||||||
Other/Corporate
|
12,803 | 26,930 | ||||||||||||||
Assets
held for sale
|
- | 358 | ||||||||||||||
$ | 262,991 | $ | 412,154 |
●
|
Forward Looking Statements |
●
|
Trademarks |
●
|
Overview |
●
|
Results of Operations |
●
|
Liquidity and Financial Condition |
●
|
Obligations and Off Balance Sheet Arrangements |
●
|
Market Risk Management |
●
|
Critical Accounting Policies and Estimates |
●
|
New Accounting Pronouncements |
●
|
Marine Electronics sales decreased 4.6% from the prior year quarter largely due to continued weakness in domestic and international boat markets. |
●
|
Outdoor Equipment sales were down 36.0% from the prior year quarter due primarily to strong customer sell-in during the first quarter and slower than normal commercial tent sales. |
●
|
Watercraft sales were 8.7% below the prior year quarter primarily as a result of unfavorable currency translation of 4.3%, scaling back of distribution to non-core channels and weak international markets. |
●
|
Diving sales were down 24.1% primarily due to slowing economies in key international markets and the impact of unfavorable currency translation, which comprised 8.3% of the revenue decline. |
Year
Ended
|
||||||||||||||||||||||||
October 3, 2008
|
September 28, 2007
|
September 29, 2006
|
||||||||||||||||||||||
Net
|
Operating
|
Net
|
Operating
|
Net
|
Operating
|
|||||||||||||||||||
Quarter
Ended
|
Sales
|
Profit
(Loss)
|
Sales
|
Profit
(Loss)
|
Sales
|
Profit
(Loss)
|
||||||||||||||||||
December
|
18 | % | (12 | )% | 17 | % | (11 | )% | 19 | % | (1 | )% | ||||||||||||
March
|
29 | % | 10 | % | 28 | % | 23 | % | 27 | % | 38 | % | ||||||||||||
June
|
34 | % | 38 | % | 35 | % | 74 | % | 34 | % | 62 | % | ||||||||||||
September
|
19 | % | (136 | )% | 20 | % | 14 | % | 20 | % | 1 | % | ||||||||||||
100 | % | (100 | )% | 100 | % | 100 | % | 100 | % | 100 | % |
(millions)
|
Three
Months
Ended
|
Six
Months
Ended
|
||||||||||||||
April
3
|
March
28
|
April
3
|
March
28
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
sales:
|
||||||||||||||||
Marine
Electronics
|
$ | 58.7 | $ | 61.5 | $ | 90.7 | $ | 94.8 | ||||||||
Outdoor
Equipment
|
8.5 | 13.2 | 19.7 | 21.2 | ||||||||||||
Watercraft
|
21.7 | 23.7 | 32.7 | 37.2 | ||||||||||||
Diving
|
17.8 | 23.5 | 33.4 | 45.0 | ||||||||||||
Other/eliminations
|
(0.1 | ) | (0.1 | ) | (0.1 | ) | (0.4 | ) | ||||||||
Total
|
$ | 106.6 | $ | 121.8 | $ | 176.4 | $ | 197.8 | ||||||||
Operating
profit
(loss):
|
||||||||||||||||
Marine
Electronics
|
$ | 7.1 | $ | 5.4 | $ | 6.2 | $ | 5.7 | ||||||||
Outdoor
Equipment
|
0.4 | 0.8 | 1.3 | 0.4 | ||||||||||||
Watercraft
|
(0.2 | ) | (0.2 | ) | (1.8 | ) | (2.3 | ) | ||||||||
Diving
|
0.3 | 0.6 | (0.9 | ) | 1.1 | |||||||||||
Other/eliminations
|
(1.8 | ) | (3.0 | ) | (4.2 | ) | (5.8 | ) | ||||||||
Total
|
$ | 5.8 | $ | 3.6 | $ | 0.6 | $ | (0.9 | ) |
(millions)
|
Six
Months Ended
|
|||||||
April
3
2009
|
March
28
2008
|
|||||||
Cash
provided by (used for):
|
||||||||
Operating
activities
|
$ | (24.9 | ) | $ | (77.4 | ) | ||
Investing
activities
|
(5.7 | ) | (10.9 | ) | ||||
Financing
activities
|
2.9 | 71.6 | ||||||
Effect
of exchange rate changes
|
(0.2 | ) | 5.1 | |||||
Decrease
in cash and cash equivalents
|
$ | (27.9 | ) | $ | (11.6 | ) |
●
|
a receive fixed / pay floating interest rate swap with a term commencing on September 14, 2010 and ending on December 14, 2011 (“Swap B”). Under the terms of Swap B, the Company will receive fixed rate interest at 2.170% and will pay floating rate interest at a rate equal to three month LIBOR. The notional amount of Swap B is $60.0 million. Swap B includes an automatic termination feature, which will cause Swap B to terminate on May 11, 2009 and at the same time, will shorten the maturity date of Swap A from December 14, 2011 to September 14, 2010, unless Swap B is modified prior to termination. The effect of Swap B is to lock in the net undiscounted cash flows required to be paid by the Company under Swap A for the five quarterly swap periods ending on December 14, 2011. If Swap B were to terminate on May 11, 2009, it would require an immediate payment of approximately $2.2 million including related fees to the Counterparty. |
●
|
a receive fixed / pay floating interest rate swap with a term commencing on December 15, 2008 and ending on September 14, 2010 (“Swap C”). Under the terms of Swap C, the Company will receive fixed rate interest at 1.310% and will pay floating rate interest at a rate equal to three month LIBOR. The notional amount of Swap C is $60.0 million. Swap C includes an automatic termination feature which will cause Swap C to terminate on September 14, 2009 and at the same time, will shorten the maturity date of Swap A from September 14, 2010 to September 14, 2009, unless Swap C is modified prior to termination. The effect of Swap C is to lock in the net undiscounted cash flows required to be paid by the Company under Swap A for the seven quarterly swap periods ending on September 14, 2010 at approximately $4.0 million including related fees. If Swap C were to terminate on September 14, 2009, it would require an immediate payment of approximately $2.4 million, including related fees, to the Counterparty. |
Payment
Due by Period
|
||||||||||||||||||||
(millions)
|
Total
|
Remainder
2009
|
2010/11 | 2012/13 |
2014
& After
|
|||||||||||||||
Long-term
debt
|
$ | 60.0 | $ | - | $ | 60.0 | $ | - | $ | - | ||||||||||
Short-term
debt
|
4.6 | 4.6 | - | - | - | |||||||||||||||
Operating
lease obligations
|
24.3 | 3.2 | 8.6 | 5.1 | 7.4 | |||||||||||||||
Capital
lease obligations
|
0.7 | 0.1 | 0.3 | 0.3 | - | |||||||||||||||
Open
purchase orders
|
45.7 | 45.7 | - | - | - | |||||||||||||||
Contractually
obligated interest payments
|
9.9 | 3.5 | 6.4 | - | - | |||||||||||||||
Total
contractual obligations
|
$ | 145.2 | $ | 57.1 | $ | 75.3 | $ | 5.4 | $ | 7.4 |
(millions)
|
Estimated
Impact on
|
|||||||
Fair
Value
|
Earnings
Before
Income
Taxes
|
|||||||
Interest
rate instruments
|
$ | - | $ | 0.6 |
Votes
Cast
|
Votes
|
Total
|
|
For
|
Withheld
|
Votes
Cast
|
|
Class
A
Directors:
|
|||
Terry
E.
London
|
7,390,136
|
447,129
|
7,837,265
|
John
M. Fahey,
Jr.
|
7,390,136
|
447,129
|
7,837,265
|
Class
B
Directors:
|
|||
Helen
P.
Johnson-Leipold
|
1,203,536
|
-
|
1,203,536
|
Thomas
F. Pyle,
Jr.
|
1,203,536
|
-
|
1,203,536
|
W.
Lee
McCollum
|
1,203,536
|
-
|
1,203,536
|
Edward
F.
Lang
|
1,203,536
|
-
|
1,203,536
|
Votes
Cast
|
Votes
Cast
|
Abstentions
|
Total
|
|||||||||||||
For
(1)
|
Against
(1)
|
and
Broker
|
Votes
Cast
|
|||||||||||||
Non-votes
|
(1) | |||||||||||||||
Proposal
to ratify the appointment
of Ernst & Young LLP, independent registered public accounting firm,
as auditors of the Company for its fiscal year ending October 2,
2009
|
19,741,113 | 2,832 | 128,680 | 19,872,625 | ||||||||||||
(1)Votes
cast for or against and
abstentions with respect to this proposal reflect that holders of
Class B
shares are entitled to 10 votes per share for matters other than
the
election of directors.
|
JOHNSON
OUTDOORS INC.
|
|
Signatures
Dated: May 11, 2009
|
|
/s/ Helen P. Johnson-Leipold | |
Helen
P. Johnson-Leipold
Chairman
and Chief Executive Officer
|
|
/s/ David W. Johnson | |
David
W. Johnson
Vice
President and Chief Financial Officer
(Principal
Financial and Accounting Officer)
|
Exhibit
Number
|
Description
|
31.1
|
Certification
by the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification
by the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
32
(1)
|
Certification
of Periodic Financial Report by the Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
of
2002.
|
1)
|
I have reviewed this Quarterly Report on Form 10-Q of Johnson Outdoors Inc.; | ||
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | ||
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): | ||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1) |
|
I have reviewed this Quarterly Report on Form 10-Q of Johnson Outdoors Inc.; | |
2)
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | ||
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): | ||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |