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
Date
of
Report (Date of earliest event reported): November 17,
2005
|
Johnson
Outdoors Inc.
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|
(Exact
name of registrant as specified in its
charter)
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Wisconsin
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0-16255
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39-1536083
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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|
of
incorporation)
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Identification
No.)
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555
Main Street, Racine, Wisconsin 53403
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(Address
of principal executive offices, including zip
code)
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(262)
631-6600
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(Registrant's
telephone number, including area
code)
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Not
Applicable
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(Former
name or former address, if changed since last
report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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|
[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Section
2 - Financial Information
Item
2.02. Results
of Operations and Financial Condition.
On
November 17, 2005, Johnson Outdoors Inc. (the “Company”) issued a press release
announcing results for the fiscal fourth quarter and year ended September 30,
2005 (the “Press Release”). A copy of the Press Release is being furnished as
Exhibit 99.1 to this Report.
The
information in this Form 8-K, including Exhibit 99.1, is being furnished and
shall not be deemed to be “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to
the liability of that Section, nor shall such information be deemed to be
incorporated by reference in any registration statement or other document filed
under the Securities Act of 1933, as amended, or the Exchange Act, except as
otherwise stated in such filing.
Section
9 - Financial Statements and Exhibits
Item
9.01. Financial
Statements and Exhibits.
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(c)
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Exhibits.
The following exhibit is being furnished
herewith:
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99.1
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Press
Release Dated November 17, 2005.
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2
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 hereunto
duly authorized.
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JOHNSON
OUTDOORS INC.
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Date: November
17, 2005
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By: /s/
David W.
Johnson
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David W. Johnson,
Interim Chief Financial Officer and
Treasurer
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3
JOHNSON
OUTDOORS INC.
Exhibit
Index to Current Report on Form 8-K
Exhibit
Number
|
99.1
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Press
Release Dated November 17, 2005.
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4
Exhibit
99.1
FOR
IMMEDIATE RELEASE
At
Johnson Outdoors Inc.
David
Johnson
Cynthia
Georgeson
Interim
Chief Financial
Officer
VP
-
Worldwide Communication
262-631-6600
262-631-6600
JOHNSON
OUTDOORS INC. ANNOUNCES FISCAL 2005
FOURTH
QUARTER AND FULL YEAR RESULTS
RACINE,
WISCONSIN,
November 17, 2005…… Johnson Outdoors Inc. (Nasdaq: JOUT),
a
leading global outdoor recreation company, today announced sales of $77.1
million for the fourth quarter ended September 30, 2005, an increase of 2%
compared to $75.6 million for the prior year quarter. Net earnings for the
quarter improved to a net loss of $3.4 million ($0.39 per diluted share) versus
a net loss of $3.8 million ($0.44 per diluted share) for the prior year quarter.
For the full year, the Company reported sales of $380.7 million compared to
$355.3 million for fiscal 2004, representing a 7% increase year-over-year.
Net
earnings for the year were $7.1 million ($0.81 per diluted share), an 18%
decrease versus prior year.
FOURTH
QUARTER
RESULTS
Fourth
quarter results historically reflect a loss due to the slowing of sales and
production of the Company’s seasonal outdoor recreation products. Sales growth
in the Company’s core brands more than offset the expected decrease in military
revenues for the quarter. Key changes included:
|
§
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Watercraft
continued on the upswing with sales 25% ahead of last year’s fourth
quarter due to favorable reception of new
products.
|
|
§
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Marine
Electronics saw a 34% jump in quarterly sales due to double-digit
growth
of both Minn Kota® and Humminbird® brands across key distribution
channels.
|
|
§
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Diving
revenues increased slightly due to solid growth in North America
and
favorable currency translation, as weakness in key international
markets
continued.
|
|
§
|
Outdoor
Equipment revenues decreased 35% due to the 46% decline in military
tent
sales.
|
Total
Company operating loss of $4.6 million in the fourth quarter was flat compared
to the same period last year. Operating losses resulted due to a number of
factors, including among others:
|
§
|
The
significant drop in military sales compared with the prior year quarter
resulting in a $2.9 million decline in Outdoor Equipment profits.
|
|
§
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Increased
commodity costs, particularly metal and resin costs affecting the
Company’s Marine Electronics and Watercraft divisions, along with higher
freight charges.
|
|
§
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Restructuring
costs of $1.6 million compared with $2.5 million in the prior year
quarter
as the Company continues efforts to improve efficiency and profitability
long-term in the Watercraft and Diving divisions.
|
|
§
|
Sarbanes-Oxley
Section 404 compliance costs of $0.9 million compared to none in
the prior
year quarter.
|
The
Company reported a net loss during the seasonally slow fourth quarter of $3.4
million or $0.39 per diluted share, an improvement over the net loss of $3.8
million or $0.44 per diluted share in the prior year quarter. An improved tax
effect on losses in the current year quarter was the primary driver of the
lower
net loss.
FULL
YEAR
RESULTS
For
the
year, the Company achieved net sales of $380.7 million compared to $355.3
million for the full year 2004, an increase of 7%. Sales growth in the Company’s
core brands more than offset the decrease in military revenues for the year.
Key
factors impacting the solid year-over-year sales results included:
|
§
|
The
successful integration of the Humminbird® brand into the Company’s Marine
Electronics division. As a result, Marine Electronics saw sales increase
32% year-over-year driven primarily by a full year of Humminbird® results
versus only five months in the prior fiscal year. Humminbird® performance
was driven primarily by product innovations, particularly the new
Matrix™
900 fishfinder series which utilizes side-imaging technology never
before
available in the consumer marketplace.
|
|
§
|
The
Watercraft division grew 6% year-over-year as a result of a strong
line-up
of new canoe, kayak and paddle sport accessory products which drove
double-digit growth in international markets and among the division’s top
30 domestic customers. The Old Town® Dirigo™ kayak introduced this year
was a major contributor to new product sales for the year.
|
|
§
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Diving
sales were down slightly despite a strong performance in North American
markets and favorable currency translation which did not fully offset
weakness in international markets. The UWATEC® Smart Tec™ computer is on
track to become the Company’s most successful dive computer introduction
in its history.
|
|
§
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Outdoor
Equipment reported a year-over-year 16% decline in division sales
driven
primarily by the 21% decline in military sales.
|
Operating
profit for the year was $15.5 million compared to $19.1 million in 2004 during
which Diving profits benefited from a $2.0 million litigation settlement with
a
former employee. Other key factors driving the year-over-year changes in
operating profit included:
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§
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The
conclusion of contracts for higher margin military tents and the
overall
decrease in military sales.
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§
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Restructuring
and severance costs of $4.1 million in 2005 versus $2.9 million in
fiscal
2004.
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§
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$2.7
million in costs related to the terminated buy-out transaction which
compared unfavorably to $1.5 million in related costs reported during
fiscal 2004.
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§
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Sarbanes-Oxley
Section 404 compliance costs in 2005 of $1.2 million.
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2
“We
are
committed to enhancing profitability and shareholder value long-term by
expanding our markets, our great brand equities and our leading technology
portfolio. We believe we have created good momentum in our core businesses
around these key strategic growth areas, despite difficult year-over-year
comparisons due to record high military sales last year and unusual one-time
items in both years. Importantly, excluding unusual one-time items in this
and
the previous fiscal year, profitability would have improved,” said Helen
Johnson-Leipold, Chairman and Chief Executive Officer.
Further
commenting, Ms. Johnson-Leipold said: “Cost reduction programs across all
businesses were also critical, particularly in the face of dramatically higher
commodity and compliance costs, enabling us to invest appropriately in
strengthening our operations and competitive position in the future. Throughout
the year we continued to benefit from the acquisition of Humminbird®, and from
investments made to simplify, streamline and increase efficiency in Watercraft.
Similar restructuring efforts are well underway to strengthen European Diving,
bolstered by a new management team in that region. As a result of our progress
across all divisions this year, we are better-positioned to capitalize on growth
opportunities for the future.”
OTHER
FINANCIAL
INFORMATION
The
Company’s debt to total capitalization stood at 23% at the end of the year
versus 29% at October 1, 2004. Cash, net of debt, increased $18.8 million to
$21.3 million by year end. Depreciation and amortization was $9.5 million
year-to-date, slightly higher than last year’s $8.7 million due to the impact
from the acquisition of Humminbird®. Capital spending totaled $6.8 million in
2005 compared with last year’s $7.8 million.
“Our
continued focus on inventory management and other cost-control measures enabled
us to reduce working capital and deliver over $25 million in operating cash
flow
despite much higher commodity costs this year. Our strong cash position and
lower debt level should give us the financial strength and flexibility to
execute our strategic growth plans,” said David Johnson, Interim Chief Financial
Officer
MILITARY
OUTLOOK
The
quarterly and year-over-year decline in military tent sales is consistent with
the Company’s stated projections throughout fiscal 2004 and 2005. During the
fourth quarter of the current year, the Company reported it was one of four
vendors awarded a multi-product military contract. As announced on October
6,
2005, orders to-date against the new contract totaled $12.5 million. The Company
plans to bid on other future contracts, and at this time, expects fiscal 2006
military sales to be in the $30 - 40 million range.
CONSUMER
MARKET
DYNAMICS
Johnson
Outdoors’ unique market research capability is used to identify and track
relevant consumer market dynamics to enable development of meaningful and
successful new product innovations. A number of these dynamics highlight a
positive outlook for growth in outdoor recreation markets. These include:
|
§
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A
marked increase in participation in outdoor activities and purchases
among
females and aging, affluent baby
boomers.
|
|
§
|
Advancements
in technology allowing for the development of more comfortable products
that incorporate additional features and benefits.
|
|
§
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The
desire by retailers and consumers for products and activities which
are
instantly gratifying, including activities that can be ‘learned in an
hour, done in a day.’
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|
§
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The
move among outdoor enthusiasts to consistently ‘trade up’ equipment to
have the ‘newest and best’ available.
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3
The
Company’s market research expertise represents a competitive advantage in
developing winning new products, as demonstrated by many of this year’s
successful introductions, including, among others: the Ocean Kayak® Venus™ II
sit-on-top kayak for women; the Ocean Kayak® Prowler™ fishing kayak; the Old
Town® Dirigo™ for beginner and intermediate kayakers; the Minn Kota® Maxxum Pro™
easy-to-lift fishing motor; the Extrasport® comfort seating systems for kayaks;
and the new-to-world Escape® line of electric boats.
WEBCAST
The
Company will host a conference call and audio web cast on Thursday, November
17,
2005 at 10:00 a.m. Central Time. A live listen-only web cast of the conference
call may be accessed at Johnson Outdoors' home page. A replay will also be
available on Johnson Outdoors' home page, or by dialing (888) 286-8010 or (617)
801-6888 and providing confirmation code 42480047. The replay will be available
through November 24, 2005 by phone and for 30 days on the Internet.
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® and Necky® kayaks; Escape® electric boats;
Minn Kota® motors; Cannon® downriggers; Humminbird®, Bottomline® and Fishin’
Buddy® fishfinders; Scubapro® and UWATEC® dive equipment; Silva® compasses and
digital instruments; and Eureka!® tents.
Visit
us on line at http:// www.johnsonoutdoors.com
4
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; the Company’s success in restructuring
of its European Diving operations; 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; adverse weather conditions;
unanticipated events related to the terminated Buy-Out transaction; and other
risks and uncertainties identified in the Company’s filings with the Securities
and Exchange Commission. 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 - - -
5
JOHNSON
OUTDOORS INC. AND SUBSIDIARIES
(thousands,
except per share amounts)
|
Operating
Results
|
THREE
MONTHS ENDED
|
YEAR
ENDED
|
|||||||||||
|
Sept
30
2005
|
Oct
1
2004
|
Sept
30
2005
|
Oct
1
2004
|
||||||||||
|
Net
sales
|
$
|
77,095
|
$
|
75,572
|
$
|
380,690
|
$
|
355,274
|
|||||
|
Cost
of sales
|
48,505
|
47,405
|
224,336
|
207,656
|
|||||||||
|
Gross
profit
|
28,590
|
28,167
|
156,354
|
147,618
|
|||||||||
|
Operating
expenses
|
33,201
|
32,756
|
140,823
|
128,490
|
|||||||||
|
Operating
profit (loss)
|
(4,611
|
)
|
(4,589
|
)
|
15,531
|
19,128
|
|||||||
|
Interest
expense, net
|
1,111
|
1,176
|
4,225
|
4,598
|
|||||||||
|
Other
expense (income), net
|
116
|
(299
|
)
|
(796
|
)
|
(206
|
)
|
||||||
|
Income
(loss) before income taxes
|
(5,838
|
)
|
(5,466
|
)
|
12,102
|
14,736
|
|||||||
|
Income
tax expense (benefit)
|
(2,439
|
)
|
(1,708
|
)
|
5,001
|
6,047
|
|||||||
|
Net
income (loss)
|
$
|
(3,399
|
)
|
$
|
(3,758
|
)
|
$
|
7,101
|
$
|
8,689
|
|||
|
Basic
earnings (loss) per common share:
|
$
|
(0.39
|
)
|
$
|
(0.44
|
)
|
$
|
0.82
|
$
|
1.01
|
|||
|
Diluted
earnings (loss) per common share:
|
$
|
(0.39
|
)
|
$
|
(0.44
|
)
|
$
|
0.81
|
$
|
0.99
|
|||
|
Diluted
average common shares outstanding
|
8,629
|
8,591
|
8,795
|
8,774
|
|||||||||
|
Segment
Results
|
|||||||||||||
|
Net
sales:
|
|||||||||||||
|
Marine
electronics
|
$
|
22,481
|
$
|
16,774
|
$
|
145,231
|
$
|
109,778
|
|||||
|
Outdoor
equipment
|
14,906
|
23,019
|
75,340
|
90,193
|
|||||||||
|
Watercraft
|
18,485
|
14,802
|
80,849
|
75,964
|
|||||||||
|
Diving
|
21,054
|
20,857
|
79,404
|
80,074
|
|||||||||
|
Other/eliminations
|
169
|
120
|
(134
|
)
|
(735
|
)
|
|||||||
|
Total
|
$
|
77,095
|
$
|
75,572
|
$
|
380,690
|
$
|
355,274
|
|||||
|
Operating
profit (loss):
|
|||||||||||||
|
Marine
electronics
|
$
|
756
|
$
|
(1,239
|
)
|
$
|
21,572
|
$
|
17,762
|
||||
|
Outdoor
equipment
|
1,740
|
4,673
|
11,208
|
16,365
|
|||||||||
|
Watercraft
|
(2,323
|
)
|
(4,853
|
)
|
(4,353
|
)
|
(9,787
|
)
|
|||||
|
Diving
|
(203
|
)
|
263
|
4,901
|
9,949
|
||||||||
|
Other/eliminations
|
(4,581
|
)
|
(3,433
|
)
|
(17,797
|
)
|
(15,161
|
)
|
|||||
|
Total
|
$
|
(4,611
|
)
|
$
|
(4,589
|
)
|
$
|
15,531
|
$
|
19,128
|
|||
|
Balance
Sheet Information (End
of Period)
|
|||||||||||||
|
Cash
and short-term investments
|
$
|
72,111
|
$
|
69,572
|
|||||||||
|
Accounts
receivable, net
|
48,274
|
49,727
|
|||||||||||
|
Inventories,
net
|
51,885
|
60,426
|
|||||||||||
|
Total
current assets
|
186,035
|
194,641
|
|||||||||||
|
Total
assets
|
283,318
|
293,714
|
|||||||||||
|
Short-term
debt
|
13,000
|
16,222
|
|||||||||||
|
Total
current liabilities
|
69,196
|
75,332
|
|||||||||||
|
Long-term
debt
|
37,800
|
50,797
|
|||||||||||
|
Shareholders’
equity
|
166,434
|
160,644
|
6