UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d) of the
Securities Exchange Act of 1934
| July 29, 2004 |
| Date of Report (Date of earliest event reported) |
| JOHNSON OUTDOORS INC. |
| (Exact name of Registrant as specified in its charter) |
| Wisconsin | 0-16255 | 39-1536083 |
| (State or other jurisdiction of | (Commission | (I.R.S. Employer |
| incorporation or organization) | file number) | Identification No.) |
| 555 Main Street, Racine, Wisconsin 53403 |
| (Address of principal executive offices, including zip code) |
| (262) 631-6600 |
| (Registrant's telephone number, including area code) |
| Item 7. | Financial Statements and Exhibits |
| a) | Not applicable |
| b) | Not applicable |
| c) | Exhibits. The following exhibit is being furnished with this Current Report on Form 8-K (this “Report”) |
| 99 | Press Release dated July 29, 2004. |
| Item 12. | Results of Operations and Financial Condition |
On July 29, 2004, Johnson Outdoors Inc. (the “Company”) issued a press release announcing the Company’s third quarter 2004 results (the “Press Release”). A copy of the Press Release is being furnished as Exhibit 99 to this Report.
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.
Date: July 29, 2004
| JOHNSON OUTDOORS INC. | |
| /s/ Paul A. Lehmann | |
| Paul A. Lehmann | |
| Vice President and Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
JOHNSON OUTDOORS INC.
EXHIBIT INDEX TO
CURRENT REPORT ON FORM 8-K
DATED July 29, 2004
| Exhibit |
Description |
| 99 | Press Release dated July 29, 2004 |
Exhibit 99
[GRAPHIC OMITTED][JOHNSON OUTDOORS LOGO]
FOR IMMEDIATE RELEASE
| AT JOHNSON OUTDOORS | ||
| PAUL LEHMANN | CYNTHIA GEORGESON | LESLIE LOYET |
| CHIEF FINANCIAL OFFICER | CORPORATE COMMUNICATION | FINANCIAL RELATIONS BOARD |
| 262-631-6600 | 262-631-6600 | 312-640-6672 |
JOHNSON OUTDOORS ANNOUNCES THIRD QUARTER RESULTS
Racine, Wisconsin, July 29, 2004 - Johnson Outdoors (Nasdaq: JOUT) today announced increased net sales, operating profit and earnings for the fiscal quarter ended July 2, 2004. Improved results reflected the continued strong performances by the Company’s Marine Electronics (formerly Motors) and Outdoor Equipment business units. Diving benefited top-line from favorable currency translation, and on the bottom-line from one-time items discussed below. As previously announced this week, the Company continues to take action to improve the efficiency and profitability of its Watercraft business.
Increases in total Company net sales (+11.6%) and operating profit (+53.5%) this quarter were driven by the Marine Electronics and Outdoor Equipment business units. Growth in Minn Kota® and military sales was slower than reported in the previous two quarters. Marine Electronics sales and profits were bolstered by the Company’s acquisition of the Humminbird® brand, announced on May 6, 2004. Humminbird® added $7.8 million in net sales, $0.5 million in operating profit, and $0.04 in earnings per diluted share this quarter.
“The Humminbird® brand is the perfect complement to our fishing motors business, providing us yet another technology base for future expansion and growth. This was the right acquisition at the right time for a business clearly on the upswing,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer, Johnson Outdoors.
Improvements in Outdoor Equipment over the prior year were due to military tent sales which are expected to return to lower historical levels in 2005. Net sales in Diving benefited once again from favorable currency translation this quarter. Operating profit in Diving for the quarter reflected proceeds of $2.0 million from the settlement of a lawsuit with a former employee and final accounting resolution of costs related to a dive computer recall.
Net income for the third quarter was $7.5 million or $0.85 per diluted share, which reflected a 48.0 % improvement in net income over $5.1 million or $0.59 per diluted share earned in the comparable quarter last year. A number of items unrelated to the Company’s operations had a net favorable impact of $0.09 on earnings per diluted share in the 2004 third quarter. These items included: settlement of litigation with a former employee (+$0.14); final accounting resolution of costs related to a dive computer recall (+$0.05); charges associated with the on-going review of a proposal to take the Company private (-$0.07); and, obsolete product warranty and discontinued acquisition costs (-$0.03.)
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“While we are benefiting from the diversity of our portfolio, we need a better balance of performance within it,” observed Ms. Johnson-Leipold. “We must continue to drive innovation to minimize the impact of soft consumer markets. We must reduce cost and complexity, while investing appropriately to strengthen operations. We are seeing progress in Watercraft, but we are not there yet, and our work in Diving is just beginning. We continue to manage our businesses for the long-term, and to do what’s right to ensure sustainable, profitable growth.”
Year-to-Date
Increased net sales (+13.4%) over the
same period last year were due to exceptional growth in Minn Kota® brand (+18.0%) and
military tent (+38.0%) net sales. Although both product lines have produced strong sales
growth year-to-date, the Company does not believe this growth rate is sustainable in the
future. In total, Marine Electronics sales grew 28.9% over the prior year due to above
average growth in Minn Kota® and the addition of the Humminbird® brand. Diving
sales increased 4.7% over the same period last year due to favorable currency translation.
Increased operating profit over the same period last year (+55.9%) was attributed to
significant improvement in Marine Electronics and Outdoor Equipment which offset sizeable
losses in the Company’s Watercraft business. Charges related to a dive computer
recall in the prior year third quarter and favorable one-time items in the current year
third quarter account for the year-on-year favorable comparison in operating profit for
Diving. Earnings of $12.4 million year-to-date or $1.42 per diluted share increased 37.1%
from $9.1 million or $1.06 earnings per diluted share for the prior year period.
Financial Highlights
Changes in cash, accounts receivable
and inventory balances largely reflect the impact of higher net sales for the quarter, the
acquisition of Humminbird® during the quarter and the impact of foreign currency
appreciation. Within inventories, the largest increase was in raw material stocks
which are up approximately $8.6 million from the prior year. As in previous
years, cash balances should rise during the fourth quarter corresponding with the seasonal
decline in the Company’s receivable and inventory positions. At the end of the
third quarter, the Company’s reported debt-to-total-capital was reduced to 29.1%,
down from 35.0% in June of 2003.
“We have absorbed the acquisition of Humminbird® and finished the quarter with a solid balance sheet,” commented Paul Lehmann, Vice President and Chief Financial Officer. “With the expected reduction of working capital balances during the fourth quarter, this acquisition should provide us positive cash flows during the period from acquisition until the end of our fiscal year.”
Webcast
The webcast may be accessed
in listen-only mode at Johnson Outdoors' home page at www.johnsonoutdoors.com as well as
through www.fulldisclosure.com. A replay will be available on the above web sites, or by
dialing 877-519-4471 or 973-341-3080 and providing confirmation code 4969448. The replay
will be available through August 5th by phone and for 30 days on the internet.
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About Johnson Outdoors
Inc.
Johnson Outdoors is a leading
global outdoor recreation company that turns ideas into adventure with innovative,
top-quality products. The company designs, manufactures and markets a portfolio of
winning, consumer-preferred brands across four categories: Watercraft, Marine Electronics,
Diving and Outdoor Equipment. Johnson Outdoors’ familiar brands include, among
others: Old Town® canoes and kayaks; Ocean Kayak™,
Necky® and Dimension® kayaks; Minn Kota®
motors; Humminbird® fishfinders; SCUBAPRO® and SnorkelPro;
UWATEC® dive equipment; and, Eureka! ® tents. The company
has 26 locations around the world, employs 1,500 people and reported annual sales of
$315.9 million in 2003.
Visit Johnson Outdoors online at 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. 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 changes in consumer spending patterns; the Company’s success in implementing
its strategic plan, including its focus on innovation; actions of companies that compete
with the Company; the Company’s success in managing inventory; movements in foreign
currencies or interest rates; unanticipated issues related to the Company’s military
tent business; the success of suppliers and customers; the ability of the Company to
deploy its capital successfully; unanticipated outcomes related to outstanding litigation
matters; and adverse weather conditions. 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 press
release and the Company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.
Financial Tables Follow
JOHNSON OUTDOORS INC. AND SUBSIDIARIES
| (thousands, except per share amounts) | ||||||||||||||
| Operating Results | THREE MONTHS ENDED | NINE MONTHS ENDED | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 2 2004 | June 27 2003 | July 2 2004 | June 27 2003 | |||||||||||
| Net sales | $ | 121,166 | $ | 108,546 | $ | 279,702 | $ | 246,706 | ||||||
| Cost of sales | 70,964 | 65,038 | 160,251 | 143,322 | ||||||||||
| Gross profit | 50,202 | 43,508 | 119,451 | 103,384 | ||||||||||
| Operating expenses | 36,515 | 34,589 | 95,733 | 88,175 | ||||||||||
| Operating profit | 13,687 | 8,919 | 23,718 | 15,209 | ||||||||||
| Interest expense, net | 1,237 | 1,191 | 3,421 | 3,323 | ||||||||||
| Other (income) expense, net | 149 | (644 | ) | 94 | (3,115 | ) | ||||||||
| Income before income taxes | 12,301 | 8,372 | 20,203 | 15,001 | ||||||||||
| Income tax expense | 4,810 | 3,312 | 7,755 | 5,924 | ||||||||||
| Net income | $ | 7,491 | $ | 5,060 | $ | 12,448 | $ | 9,077 | ||||||
| Basic earnings per common share | $ | 0.87 | $ | 0.60 | $ | 1.46 | $ | 1.08 | ||||||
| Diluted earnings per common share | $ | 0.85 | $ | 0.59 | $ | 1.42 | $ | 1.06 | ||||||
| Diluted average common shares outstanding | 8,795 | 8,579 | 8,766 | 8,545 | ||||||||||
| Segment Results | ||||||||||||||
| Net sales: | ||||||||||||||
| Marine electronics | $ | 43,112 | $ | 29,821 | $ | 93,003 | $ | 72,158 | ||||||
| Outdoor equipment | 27,202 | 25,148 | 67,174 | 55,859 | ||||||||||
| Watercraft | 29,029 | 31,557 | 61,162 | 63,415 | ||||||||||
| Diving | 22,227 | 22,425 | 59,217 | 56,585 | ||||||||||
| Other/eliminations | (404 | ) | (405 | ) | (854 | ) | (1,311 | ) | ||||||
| Total | $ | 121,166 | $ | 108,546 | $ | 279,702 | $ | 246,706 | ||||||
| Operating profit (loss): | ||||||||||||||
| Marine electronics | $ | 8,445 | $ | 5,454 | $ | 19,001 | $ | 11,327 | ||||||
| Outdoor equipment | 4,760 | 4,416 | 11,692 | 8,855 | ||||||||||
| Watercraft | 639 | 1,759 | (4,934 | ) | (1,281 | ) | ||||||||
| Diving | 4,936 | 1,123 | 9,686 | 6,306 | ||||||||||
| Other/eliminations | (5,093 | ) | (3,833 | ) | (11,727 | ) | (9,998 | ) | ||||||
| Total | $ | 13,687 | $ | 8,919 | $ | 23,718 | $ | 15,209 | ||||||
| Balance Sheet Information (End of Period) | ||||||||||||||
| Cash and short-term investments | $ | 40,258 | $ | 62,696 | ||||||||||
| Accounts receivable, net | 82,630 | 75,888 | ||||||||||||
| Inventories, net | 62,373 | 51,606 | ||||||||||||
| Total current assets | 197,273 | 200,589 | ||||||||||||
| Total assets | 297,660 | 283,006 | ||||||||||||
| Short-term debt | 15,755 | 9,591 | ||||||||||||
| Total current liabilities | 76,047 | 64,290 | ||||||||||||
| Long-term debt | 51,318 | 68,444 | ||||||||||||
| Shareholders' equity | 163,687 | 144,621 | ||||||||||||