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): May
3,
2006
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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
May 3,
2006, Johnson Outdoors Inc. (the “Company”) issued a press release announcing
results for the fiscal second quarter ended March 31, 2006 (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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(d)
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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 May 3, 2006.
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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:
May 3, 2006
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By:
/s/ David W.
Johnson
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David W. Johnson,
Vice President and Chief Financial Officer
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3
JOHNSON
OUTDOORS INC.
Exhibit
Index to Current Report on Form 8-K
Exhibit
Number
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99.1
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Press
Release Dated May 3, 2006.
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4
FOR
IMMEDIATE RELEASE
At
Johnson
Outdoors
Inc.
David
Johnson Cynthia
Georgeson
VP &
Chief Financial Officer
VP
-
Worldwide Communication
262-631-6600
262-631-6600
JOHNSON
OUTDOORS INC. ANNOUNCES
FISCAL
2006 SECOND QUARTER RESULTS
RACINE,
WISCONSIN,
May 3, 2006……Johnson Outdoors Inc. (JOUT:NASDAQ),
a
leading global outdoor recreation company, today announced net sales of $107.4
million for the second quarter ended March 31, 2006, an increase of 1% compared
to $106.2 million for the prior year quarter. Net earnings were $0.46 per
diluted share compared to $0.54 per diluted share in
the
prior year quarter.
SECOND
QUARTER RESULTS
Second
quarter sales reflect initial shipments to customers in anticipation of the
primary consumer retail selling period for the Company’s seasonal outdoor
products. Significant gains in the Marine Electronics and Watercraft business
units were offset by anticipated declines in military sales and lower European
Diving sales. Excluding the anticipated $3.7 million decline in military sales,
total Company net sales would have increased $4.9 million. Key changes included:
|
§
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Marine
Electronics sales grew more than 9% driven by Humminbird® and the
acquisition of the Cannon® and Bottomline® brands completed on October 3,
2005, which added a combined $3.3 million in net sales to the unit
during
the quarter.
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§
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Watercraft
sales were more than 6% ahead of the last year’s second quarter results
due to continued strength of Old Town® and Ocean Kayak® brands.
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§
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Diving
revenues declined 11% due in large part to unfavorable currency
translation and lower sales in the European region. Excluding the
currency
impact, Diving revenues would have declined 5.3%.
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§
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Outdoor
Equipment revenues decreased 11% due almost entirely to a 28% decline
in
military sales from the prior year quarter. Consumer camping benefited
significantly this quarter from first-time specialty market sales.
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Total
Company operating profit of $8.3 million in the second quarter was slightly
below operating profit of $8.4 million in the prior year quarter due to the
following factors:
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§
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Lower
profits in Marine Electronics due to pacing of current year orders
resulting in a short-term unfavorable product mix; continued weakness
in
Northern Tier boat markets; rising commodity costs; and increased
investment in marketing, sales and R&D initiatives.
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§
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Significant
increases in commodity costs.
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§
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Lower
sales in European Diving.
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§
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Reduced
overhead costs at corporate and operational levels.
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Net
income was $4.2 million, or $0.46 per diluted share, for the quarter versus
$4.7
million, or $0.54 per diluted share, in the prior year quarter. Net income
and
operating profit were affected by the same previously stated factors. Also,
the
Company incurred pretax currency losses of $0.2 million this quarter compared
to
pretax currency gains of $0.6 million during the same period last year. The
Company’s tax rate for the second quarter is favorable compared to the same
period last year and consistent with expectations for the full year.
“Marine
Electronics continues to be a growth engine, with our Watercraft business
picking up steam as we move into the critical consumer retail season.
Importantly, we are benefiting from our investments in new product innovation,
with revenue growth in our core brands out-pacing the projected decline in
military sales,” observed Helen Johnson-Leipold, Chairman and Chief Executive
Officer. “An ongoing emphasis on disciplined cost-control measures and improved
operational efficiency has helped to reduce the impact of rising commodity
prices and freight charges on profitability. Our portfolio is stronger and
better positioned for growth than ever, and we feel good about the future.”
YEAR-TO-DATE
RESULTS
Net
sales
in the first six months of fiscal 2006 were $179.9 million versus $181.2 million
in the same six-month period last year. Excluding the anticipated $8.3 million
decline in military sales, total Company net sales would have increased $7.1
million. Key drivers in the year-to-date period were:
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§
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The
$8.3 million anticipated decline in military sales during the
period.
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§
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Unfavorable
currency translation which reduced Diving sales by $2.1 million
year-to-date.
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§
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Cannon®
and Bottomline® brands which added $4.4 million in year-to-date
sales.
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Total
Company operating profit was $7.5 million during the first six months compared
to $8.3 million during the prior year-to-date period, which included $2.0
million in costs associated with the terminated buy-out proposal. The primary
drivers behind the unfavorable comparison were:
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§
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The
significant drop in military sales versus the prior year six-month
period
which resulted in the $1.8 million unfavorable comparison in Outdoor
Equipment profits versus the prior year period.
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§
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Lower
profits in Marine Electronics due to pacing of current year orders
resulting in a short-term unfavorable product mix; continued weakness
in
Northern Tier boat markets, rising commodity costs; and increased
investment in marketing, sales and R&D initiatives.
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Net
income for the first six months of the year was $3.1 million, or $0.34 per
diluted share, versus net income of $3.7 million, or $0.42 per diluted share,
in
the prior year six months.
OTHER
FINANCIAL
INFORMATION
The
Company’s debt to total capitalization stood at 31% at the end of the fiscal
second quarter versus 23% at April 1, 2005 as a result of short-term borrowings
to meet higher working capital needs. Debt, net of cash and short-term
investments, increased to $45.1 million at the end of this quarter versus $40.0
million at the end of the prior year quarter due to the acquisition of Cannon®
and Bottomline® brands this fiscal year. Depreciation and amortization is $5.1
million year-to-date compared to $5.0 million last year-to-date. Capital
spending totaled $4.0 million year-to-date, compared with $3.5 million in the
prior year first six months.
2
“Increased
working capital resulted primarily from higher-than-expected receivables from
the U.S. military, along with incremental inventory associated with the
Cannon®/Bottomline® acquisition. We expect to manage down both working capital
and short-term debt balances as the season progresses,” said David W. Johnson,
Vice President and Chief Financial Officer.
MILITARY
UPDATE
The
quarterly decline in military sales is consistent with the Company’s stated
expectations throughout fiscal 2004 and 2005. On April 25, 2006, the Company
announced the receipt of two (2) new orders for its Modular General Purpose
Tent
Systems (MGPTS) totaling $5.5 million. At this time, the Company expects fiscal
2006 military sales to be in the $35-$40 million range.
INNOVATION
UPDATE
Johnson
Outdoors delivers meaningful innovation to the outdoor recreation marketplace
driven by unique consumer insights. The Company’s new product designers utilize
sophisticated, rapid-prototyping technology to ensure continuous consumer
feedback from product concept to commercialization. Smart innovation delivers
meaningful results, with new products this quarter representing about one-third
of total Company net sales, led by the performance of new products from Marine
Electronics and Watercraft business units, such as:
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§
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The
new Minn Kota® 15 amp series of battery chargers offering the highest
output and fastest recharge available, with a new industrial design
housing for easy drop-in mounting to enhance the appeal in the OEM
channel
(boat manufacturers). The new MK 230, MK 345 and MK 460 chargers
are
driving double-digit growth in charger sales this year.
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§
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The
Ocean Kayak™ Prowler™ series continues to grow in size and popularity,
with the Prowler™ Big Game™ featuring a unique, flat foot-well area for
standing or kneeling, and covered cockpit storage. The Ocean Kayak™ Venus™
11 and the Necky® Eliza™ are the newest “designed for women” kayaks
targeting the fast-growing female paddler segment. New products represent
more than half of Ocean Kayak™ sales this year and more than two-thirds of
Necky® sales.
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WEBCAST
The
Company will host a conference call and audio web cast on Wednesday, May 3,
2006
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 59171752. The replay will be available through
May 10, 2006 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
3
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 sales; the
success of suppliers and customers; the ability of the Company to deploy its
capital successfully; adverse weather conditions; 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 - - -
4
JOHNSON
OUTDOORS INC.
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(thousands,
except per share amounts)
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||||||||||||||||
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Operating
Results
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THREE
MONTHS ENDED
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SIX
MONTHS ENDED
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||||||||||||||
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March
31
2006
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April
1
2005
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March
31
2006
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April
1
2005
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||||||||||||
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Net
sales
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$
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107,374
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$
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106,168
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$
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179,937
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$
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181,150
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||||||||
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Cost
of sales
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63,033
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60,394
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106,167
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105,104
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||||||||||||
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Gross
profit
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44,341
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45,774
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73,770
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76,046
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||||||||||||
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Operating
expenses
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36,070
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37,376
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66,310
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67,722
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||||||||||||
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Operating
profit
|
8,271
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8,398
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7,460
|
8,324
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||||||||||||
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Interest
expense, net
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1,218
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1,027
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2,120
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2,118
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||||||||||||
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Other
(income) expense, net
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222
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(603
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)
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293
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(721
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)
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||||||||||
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Income
before income taxes
|
6,831
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7,974
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5,047
|
6,927
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||||||||||||
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Income
tax expense
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2,657
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3,236
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1,968
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3,221
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||||||||||||
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Net
income
|
$
|
4,174
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$
|
4,738
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$
|
3,079
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$
|
3,706
|
||||||||
|
Basic
earnings per common share
|
$
|
0.46
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$
|
0.55
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$
|
0.34
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$
|
0.43
|
||||||||
|
Diluted
earnings per common share
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$
|
0.46
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$
|
0.54
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$
|
0.34
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$
|
0.42
|
||||||||
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Diluted
average common shares outstanding
|
9,127
|
8,776
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9,135
|
8,777
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||||||||||||
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Segment
Results
|
||||||||||||||||
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Net
sales:
|
||||||||||||||||
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Marine
electronics
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$
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51,572
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$
|
47,141
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$
|
81,546
|
$
|
74,991
|
||||||||
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Outdoor
equipment
|
18,514
|
20,868
|
33,037
|
39,719
|
||||||||||||
|
Watercraft
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20,244
|
19,011
|
32,528
|
31,077
|
||||||||||||
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Diving
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17,119
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19,243
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32,937
|
35,568
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||||||||||||
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Other/eliminations
|
(75
|
)
|
(95
|
)
|
(111
|
)
|
(205
|
)
|
||||||||
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Total
|
$
|
107,374
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$
|
106,168
|
$
|
179,937
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$
|
181,150
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||||||||
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Operating
profit (loss):
|
||||||||||||||||
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Marine
electronics
|
$
|
8,445
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$
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9,214
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$
|
10,861
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$
|
12,101
|
||||||||
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Outdoor
equipment
|
2,970
|
3,060
|
4,618
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6,467
|
||||||||||||
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Watercraft
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(1,140
|
)
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(964
|
)
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(3,631
|
)
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(3,783
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)
|
||||||||
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Diving
|
969
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1,450
|
1,035
|
1,314
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||||||||||||
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Other/eliminations
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(2,973
|
)
|
(4,362
|
)
|
(5,423
|
)
|
(7,775
|
)
|
||||||||
|
Total
|
$
|
8,271
|
$
|
8,398
|
$
|
7,460
|
$
|
8,324
|
||||||||
|
Balance
Sheet Information (End
of Period)
|
||||||||||||||||
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Cash
and short-term investments
|
$
|
31,710
|
$
|
11,338
|
||||||||||||
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Accounts
receivable, net
|
99,367
|
89,141
|
||||||||||||||
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Inventories,
net
|
73,664
|
69,411
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||||||||||||||
|
Total
current assets
|
219,858
|
187,533
|
||||||||||||||
|
Total
assets
|
321,387
|
286,238
|
||||||||||||||
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Short-term
debt
|
56,000
|
13,488
|
||||||||||||||
|
Total
current liabilities
|
123,350
|
72,600
|
||||||||||||||
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Long-term
debt
|
20,800
|
37,800
|
||||||||||||||
|
Shareholders’
equity
|
169,341
|
168,447
|
||||||||||||||
5