Johnson Outdoors reported essentially flat sales of $128.7 million for the second quarter of its financial year, ended March 31. The gross margin declined to 39.3 percent from 41.1 percent, but operating earnings rose by 22.4 percent to $14.0 million, thanks in part to a favorable $3.5 million settlement with Johnson's insurance company and lower legal and warranty costs.

Due to higher taxes, net income dropped to $7.3 million from $8.5 million in the same period a year ago. An analysis by product segment shows that the group's sales of diving products, marketed under the Scuba Pro and Sub Gear brands, inched up by 1.6 percent to $22.1 million in the quarter, driven by new products. The rate of increase would have been 2.0 percentage points higher if currency exchange rates had been the same.

Solid growth in the U.S., Northern Europe and Asia was partly offset by weak market conditions in Southern Europe. The segment delivered an operating profit of $1.7 million against a loss in the year-ago period.

Sales of tents and other outdoor equipment, partially under the Eureka! brand, fell by 8.2 percent to $9.4 million because of a drop of 23.5 percent in military sales, but they generated a slightly higher operating profit of $831,000. Sales of marine electronics rose by 1.7 percent to $80.2 million, and their operating profit declined slightly to $12.3 million.