RACINE, Wis.-- JOHNSON OUTDOORS (NASDAQ:JOUT), a leading global innovator in outdoor recreation equipment and technology, reported double-digit growth in revenue and profits for the fiscal third quarter ended June 29, 2018. Strong new product demand drove expanded margins leading to a robust increase in net income versus the prior year third quarter results.
“Unprecedented growth in our flagship Fishing brands throughout the year underscores the importance of our ongoing emphasis on consumer insight driven innovation. Delivering this same level of continuous new product success across our entire brand portfolio is a key priority, and we are working to further strengthen organizational capacity and capability to do so,” said Helen Johnson-Leipold, Chairman and Chief Executive Officer. “Future plans will focus on strategies targeted on fully leveraging our company-wide digital transformation and data analytics to enhance accelerated profitable growth for all channels long-term.”
THIRD QUARTER RESULTS
Fiscal third quarter results reflect in-season replenishment orders for the Company’s warm-weather outdoor recreation products. Favorable marketplace momentum for new products, particularly in Fishing and Camping, fueled a 10 percent increase in total Company net sales of $170.8 million compared to $155.7 million in the previous year quarter. Foreign currency translation had a favorable 1 percent impact on net sales. Key factors behind the year-over-year comparison in each business unit were:
Total Company operating profit during the quarter was $32.0 million, a 29 percent increase compared to $24.7 million in the prior year quarter. Gross margin improved to 46.5 percent versus 45.5 percent in last year’s same quarter. Net income in the fiscal third quarter rose to $23.8 million, or $2.37 per diluted share, a 44 percent increase compared to $16.6 million, or $1.65 per diluted share, in the previous year third quarter.
YEAR-TO-DATE RESULTS
Fiscal 2018 year-to-date net sales grew 13.6 percent to $453.1 million versus net sales of $398.8 million in the same fiscal nine-month period last year. Total Company operating profits rose to $65.0 million compared with $45.7 million during the prior fiscal year’s first nine-months. Exceptionally strong new product demand in Fishing and gross margin expansion were key drivers behind improved operating results.
Net income in the fiscal nine-month period surged 32 percent to $45.6 million, or $4.54 per diluted share, compared with $34.6 million, or $3.45 per diluted share, in the same nine-month period last year. The year-to-date effective tax rate of 34.4 percent reflects $6.8 million in charges during the year resulting from changes in accounting for taxes prompted by new U.S. tax reform legislation.
OTHER FINANCIAL INFORMATION
The Company reported cash and short-term investments of $129.3 million as of June 29, 2018, versus $93.7 million on June 30, 2017. Depreciation and amortization was $9.6 million, compared to $9.7 million during the first nine months of the prior fiscal year. Capital spending totaled $14.7 million during the first nine months of fiscal 2018 compared with $8.1 million in the same fiscal 2017 period. Investment in systems upgrades and digital transformation accounted for the year-to-date increase.
“At this time, we are working hard to sustain positive momentum through the end of the fiscal and ensure our brands are well-positioned for a strong start next year. Looking ahead to 2019, we are in the process of determining the impact, and our mitigation plans, of recently announced U.S. tariffs and retributive sanctions in other countries,” said David W. Johnson, Chief Financial Officer.
“The balance sheet remains very strong and our growing cash position enables us to invest in strategic priorities and other opportunities to strengthen our brands and grow our businesses, while continuing to create value and consistently pay dividends to shareholders.”
PRODUCT NEWS
The new pioneering Minn Kota® Ultrex™ with Built-In Mega Down Imaging grabbed Best Boating Accessory honors at the 2018 ICAST, the world’s most prestigious fishing show. Beginning next year, select models of Minn Kota bow-mounted trolling motors will be available with the Humminbird®MEGA Down Imaging transducer and wiring fully integrated providing clean rigging protected from wear and tear, and providing anglers crystal clear viewing directly below the boat.
WEBCAST
The Company will host a conference call and audio web cast at 10:00 a.m. Eastern Time on Tuesday August 7, 2018. A live listen-only web cast of the conference call may be accessed at Johnson Outdoors’ home page. A replay of the call will be available for 30 days on the Internet.
About Johnson Outdoors Inc.
JOHNSON OUTDOORS is a leading global innovator of outdoor recreation equipment and technologies that inspire more people to experience the awe of the great outdoors. The company designs, manufactures and markets a portfolio of winning, consumer-preferred brands across four categories: Watercraft Recreation, Fishing, Diving and Camping. Johnson Outdoors' iconic brands include: Old Town® canoes and kayaks; Ocean Kayak™; Carlisle® paddles; Minn Kota® fishing motors, batteries and anchors; Cannon® downriggers; Humminbird® marine electronics and charts; SCUBAPRO® dive equipment; Jetboil® outdoor cooking systems; and, Eureka!®camping and hiking equipment.
Visit Johnson Outdoors at http://www.johnsonoutdoors.com