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): August
3, 2006
|
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
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
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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|
[
]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
[
]
|
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
August
3, 2006, Johnson Outdoors Inc. (the “Company”) issued a press release announcing
results for the fiscal third quarter ended June 30, 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.
|
(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 August 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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|
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Date: August
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
|
99.1
|
Press
Release dated August 3, 2006.
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4
EXHIBIT
99.1
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 THIRD QUARTER RESULTS
RACINE,
WISCONSIN,
August 3, 2006……Johnson Outdoors Inc. (JOUT:NASDAQ),
a
leading global outdoor recreation company, today announced net sales of $135.5
million for the third quarter ended June 30, 2006, an increase of 11% compared
to $122.4 million for the prior year quarter. Net earnings were $6.6 million
or
$0.72 per diluted share compared to $6.8 million or $0.77 per diluted share
in
the prior year quarter.
THIRD
QUARTER
RESULTS
Third
quarter sales are historically the highest of the year, reflecting consumer
demand during the key retail selling period of the Company’s seasonal outdoor
products. Significant gains in the Marine Electronics and Watercraft business
units more than offset anticipated declines in military sales and lower Diving
sales. Excluding military sales in both the current and the prior year third
quarter, total Company net sales would have increased $15.6 million. Key changes
included:
| § |
Marine
Electronics sales grew 21% 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.
|
| § |
Watercraft
sales jumped 14% ahead of last year’s third quarter results due to strong
double-digit growth in Old Town® and Ocean Kayak™ brands.
|
| § |
Diving
revenues declined 2% due primarily to weakness in European and US
markets
and unfavorable currency exchange rates.
|
| § |
Outdoor
Equipment revenues were 1% behind last year due entirely to a 25%
decline
in military sales from the prior year quarter. Consumer camping continued
to benefit significantly this quarter from specialty market sales.
Temporary closure of the Company’s Outdoor Equipment operations, due to
flooding caused by heavy rains in the Northeast, halted shipments
of
finished goods during the final week of the
quarter.
|
Total
Company operating profit in the quarter increased 18% to $13.9 million compared
with $11.8 million in the prior year quarter. Operating profit during the period
was impacted by the following factors:
| § |
Significant
growth in Marine Electronics and Watercraft sales due to successful
new
product introductions.
|
| § |
One-time
charges totaling $1.2 million related to the temporary closure of
the
Company’s Outdoor Equipment operations due to flooding caused by heavy
rains in the Northeast.
|
| § |
Lower
margins on lower sales in Diving due partly to business disruption
from
European restructuring.
|
| § |
Investment
in sales and marketing for Escape® electric
boats.
|
| § |
Reduced
overhead costs at corporate and operational levels.
|
Net
income was $6.6 million, or $0.72 per diluted share, for the quarter versus
$6.8
million, or $0.77 per diluted share, in the prior year quarter. In addition
to
the same stated factors which impacted operating profit, net income was also
affected by increased net interest expense due to short-term borrowings related
to working capital growth, and by recognized charges of $0.9 million related
to
foreign tax audits.
“We
had a
solid quarter as investments in new businesses, new products and new systems
began to drop to the bottom-line. Marine Electronics delivered another
outstanding performance, and Watercraft is moving in the right direction on
the
strength of paddlesports’ brands, despite continued investment in building sales
and distribution for the Escape brand. In Diving, more time and more investment
is needed to complete restructuring and generate positive momentum, and I am
confident we are taking the right actions to return Diving to historical levels
of profitability in the future. As we look ahead to the fourth quarter, we
are
focused on bringing military tent production back on-line as quickly as
possible, and on working to minimize the continued impact of restructuring
on
Diving,” observed Helen Johnson-Leipold, Chairman and Chief Executive Officer,
Johnson Outdoors Inc. “Our vision is to own the outdoor adventure with
innovation and passion, and by doing so, to deliver sustainable profitable
growth and enhanced shareholder value. Our performance this year demonstrates
we
have the capability and capacity to realize our vision as we begin to set our
sights on growing revenues to half a billion dollars over the next few years.”
YEAR-TO-DATE RESULTS
Net
sales
for the first nine months of fiscal 2006 were $315.5 million, a 4% increase
over
$303.6 million during the same period last year. Excluding the anticipated
$10.8
million decline in military sales year-to-date, total Company net sales would
have increased $22.7 million. Key drivers in the nine-month period were:
| § |
Cannon®
and Bottomline® brands, which added $7.7 million to year-to-date
sales.
|
| § |
Increased
sales in Humminbird®, Old Town® and Ocean Kayak™ brands.
|
| § |
The
anticipated decline in military sales and lower Diving revenues during
the
period.
|
| § |
Unfavorable
currency exchange which reduced revenues by $1.7 million
year-to-date.
|
| § |
Temporary
closure of the Company’s Outdoor Equipment operations, due to flooding
caused by heavy rains in the Northeast, which halted shipments of
finished
goods during the final week of the year-to-date period.
|
Total
Company operating profit was $21.4 million during the nine-month period compared
to $20.1 million during the prior year-to-date period which reflected $2.5
million in costs associated with the terminated buy-out proposal. Key factors
impacting the year-to-date results were:
| § |
Improved
results in Watercraft due to increased sales and enhanced operational
efficiency in paddlesports’ brands.
|
2
| § |
Company-wide
cost-saving and overhead reduction programs.
|
| § |
The
continued, yet expected, decline in military sales versus the prior
year
which resulted in the unfavorable comparison in Outdoor Equipment
profits
versus the same period last year.
|
| § |
Significant
increases in commodity and freight costs which had a combined negative
impact of 1.5 gross margin points.
|
| § |
Lower
profits in Diving due to the impact of European restructuring and
weak
markets.
|
Net
income year-to-date was $9.6 million, or $1.05 per diluted share, versus net
income of $10.5 million, or $1.20 per diluted share, in the prior year
nine-month period.
OTHER
FINANCIAL
INFORMATION
The
Company’s debt to total capitalization stood at 26% at the end of the fiscal
third quarter versus 23% at July 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 $20.2 million at the end of this quarter versus $11.2 million
at
the end of the prior year quarter. Depreciation and amortization is $6.6 million
year-to-date compared to $7.1 million last year-to-date. Capital spending
totaled $6.3 million year-to-date, compared with $4.7 million in the prior
year
first nine months. Gross margin percentage year-to-date was 41.6%, compared
to
42.1% in the prior year period, with each gross margin point contributing
approximately $0.19 to earnings per diluted share.
“Short-term
debt has increased as we funded sales and working capital growth in our Marine
Electronics and Watercraft businesses. Our balance sheet remains healthy and
we
expect our working capital levels to return to seasonal levels next quarter,”
said David Johnson, Vice President and Chief Financial Officer.
OUTDOOR
EQUIPMENT -
OPERATIONAL
UPDATE
On
June
29, 2006 the Company announced the temporary closure of its Binghamton, New
York
Outdoor Equipment Group production facility and administrative offices due
to
flooding caused by heavy rains in the Northeast. Extensive clean-up and
restoration efforts are ongoing and limited production is expected to begin
by
mid-August. The Company has taken a charge of $1.2 million in the third quarter;
however, the full financial impact of the business interruption is not yet
known. The Company will be able to make a determination near the end of the
fiscal fourth quarter on the total amount of recoverable losses, and expects
its
insurance coverage will indemnify the balance of those losses.
MILITARY
UPDATE
The
Company has received eleven (11) separate orders year-to-date totaling $19.5
million awarded under the multi-vendor, multi-product military contract
announced on September 7, 2005. Further orders are not expected until production
capacity is restored to pre-flood levels at the Company’s Binghamton, New York
operation where military tents are manufactured. As a result of the business
interruption, the Company now expects fiscal 2006 military sales will be in
the
$30-$35 million range.
INNOVATION
UPDATE
Johnson
Outdoors delivers meaningful innovation to the outdoor recreation marketplace
driven by unique consumer insights, with new products this quarter representing
one-third of total Company net sales. Strong new product growth continues to
bolster the Company’s already robust existing brands and differentiate the
Company in the industry. Marine Electronics’ innovative new product line-up for
2007 includes, among others:
3
| § |
The
Minn Kota® Terrova™, the most advanced bow-mount trolling motor, showcases
a breakthrough effortless motor stow and deploy mechanism, enhanced
precision steering and an ergonomically-designed foot-pedal control
to
enhance the fishing experience. The Terrova™ received the boating
accessory “Best of Show” honors at the 2006 ICAST in July, the world’s
largest sportfishing show.
|
| § |
The
Humminbird® 797c SI Combo Fishing System also took home “Best of Show”
honors at the 2006 ICAST in the electronics category. The new 797c
SI
combines the unique, award-winning Humminbird® Side Imaging™ technology
with the next generation high-resolution screen for a compact,
professional grade fishing system for broader
appeal.
|
| § |
Minn
Kota® Trim Tabs mark the brand’s expansion into an estimated $25 million
product category. Engineered with a proprietary curved and winged
composite design, Minn Kota® Trim Tabs provide up to 50% more boat lift
compared to standard tab designs, and work together with the new
Minn
Kota® Trim-n-Troll™ electric propulsion system to enable anglers to
silently position the boat for maximum fishing ease.
|
CONFERENCE
CALL AND
WEBCAST
The
Company will host a conference call and audio web cast on Wednesday, August
3,
2006 at 10:00 a.m. Eastern 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 99988716. The replay will be available
through August 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
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 ability of the Company to recover
losses through insurance coverage; 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.
|
(thousands,
except per share amounts)
|
|||||||||||||
| Operating Results |
THREE
MONTHS ENDED
|
NINE
MONTHS ENDED
|
|||||||||||
|
June
30
2006 |
July
1
2005 |
June
30
2006 |
July 1
2005 |
||||||||||
|
Net
sales
|
$
|
135,540
|
$
|
122,445
|
$
|
315,476
|
$
|
303,595
|
|||||
|
Cost
of sales
|
78,133
|
70,727
|
184,300
|
175,830
|
|||||||||
|
Gross
profit
|
57,407
|
51,718
|
131,176
|
127,765
|
|||||||||
|
Operating
expenses
|
43,495
|
39,898
|
109,807
|
107,620
|
|||||||||
|
Operating
profit
|
13,912
|
11,820
|
21,369
|
20,145
|
|||||||||
|
Interest
expense, net
|
1,455
|
996
|
3,575
|
3,114
|
|||||||||
|
Other
(income) expense, net
|
167
|
(189
|
)
|
458
|
(909
|
)
|
|||||||
|
Income
before income taxes
|
12,290
|
11,013
|
17,336
|
17,940
|
|||||||||
|
Income
tax expense
|
5,727
|
4,219
|
7,694
|
7,440
|
|||||||||
|
Net
income
|
$
|
6,563
|
$
|
6,794
|
$
|
9,642
|
$
|
10,500
|
|||||
|
Basic
earnings per common share
|
$
|
0.73
|
$
|
0.79
|
$
|
1.07
|
$
|
1.22
|
|||||
|
Diluted
earnings per common share
|
$
|
0.72
|
$
|
0.77
|
$
|
1.05
|
$
|
1.20
|
|||||
|
Diluted
average common shares outstanding
|
9,151
|
8,781
|
9,151
|
8,779
|
|||||||||
|
Segment
Results
|
|||||||||||||
|
Net
sales:
|
|||||||||||||
|
Marine
electronics
|
$
|
57,585
|
$
|
47,759
|
$
|
139,132
|
$
|
122,751
|
|||||
|
Outdoor
equipment
|
20,430
|
20,715
|
53,467
|
60,434
|
|||||||||
|
Watercraft
|
35,533
|
31,286
|
68,061
|
62,364
|
|||||||||
|
Diving
|
22,265
|
22,782
|
55,203
|
58,350
|
|||||||||
|
Other/eliminations
|
(273
|
)
|
(97
|
)
|
(387
|
)
|
(304
|
)
|
|||||
|
Total
|
$
|
135,540
|
$
|
122,445
|
$
|
315,476
|
$
|
303,595
|
|||||
|
Operating
profit (loss):
|
|||||||||||||
|
Marine
electronics
|
$
|
9,852
|
$
|
8,715
|
$
|
20,713
|
$
|
20,816
|
|||||
|
Outdoor
equipment
|
2,476
|
3,001
|
7,094
|
9,469
|
|||||||||
|
Watercraft
|
3,047
|
1,753
|
(584
|
)
|
(2,030
|
)
|
|||||||
|
Diving
|
2,143
|
3,790
|
3,178
|
5,104
|
|||||||||
|
Other/eliminations
|
(3,606
|
)
|
(5,439
|
)
|
(9,032
|
)
|
(13,214
|
)
|
|||||
|
Total
|
$
|
13,912
|
$
|
11,820
|
$
|
21,369
|
$
|
20,145
|
|||||
|
Balance
Sheet Information (End
of Period)
|
|||||||||||||
|
Cash
and short-term investments
|
$
|
43,629
|
$
|
39,625
|
|||||||||
|
Accounts
receivable, net
|
94,770
|
83,765
|
|||||||||||
|
Inventories,
net
|
65,388
|
55,127
|
|||||||||||
|
Total
current assets
|
220,439
|
193,741
|
|||||||||||
|
Total
assets
|
325,390
|
289,745
|
|||||||||||
|
Short-term
debt
|
43,001
|
13,001
|
|||||||||||
|
Total
current liabilities
|
115,036
|
74,897
|
|||||||||||
|
Long-term
debt
|
20,806
|
37,800
|
|||||||||||
|
Shareholders’
equity
|
181,525
|
169,721
|
|||||||||||
5