Johnson Outdoors reported a 6 percent sales increase to $137.1 million in the third quarter ended June 27 as compared to the year-ago period. Sales growth was mostly driven by consistently strong demand for new products across its brand portfolio. Despite the growth in the quarter, year-to-date sales compare unfavorably to the same period last year, due largely to the negative impact of unusually long winter conditions in the first six months of the current fiscal year. Year-to-date sales for the nine-month period were $340.5 million, a 2 percent decline versus the prior-year period. The long, harsh winter significantly delayed the start of the warm-weather outdoor recreation retail season, negatively impacting every market, the company said.
The group's net income declined to $4.7 million in the latest quarter from $13.7 million in the previous third quarter. Operating profit of $9.3 million was down from $16.1 million, but excluding non-recurring charges, it would have been $0.1 million ahead of the previous year. While profitable, Jetboil's revenues were lower than initially projected, triggering a reevaluation of the entire Outdoor Gear - Consumer Camping reporting unit's intangible assets, which resulted in non-cash impairment charges of $8.5 million in the Outdoor Gear segment. The company's $1.6 million cash recovery from the Jetboil indemnity escrow offset some, but not all of the negative effect of these non-cash charges.
The Outdoor Gear division posted a 6.6 percent sales increase to $15.8 million in the third quarter, thanks mainly to a 46 percent increase in military tent sales, but it reported an operating loss of $4.95 million against profit of $2.1 million in the year-ago period. An 8.7 percent rise in Marine Electronics revenues, which reached $80.0 million, was driven primarily by new product performance and growth in Minn Kota. Watercraft sales rose by 3.4 percent to $19.7 million due to the strength of new products, which accounted for more than a third of the unit's revenues, including the successful Old Town Predator fishing kayak.
The Diving unit reported a 17.9 percent drop in operating income to $1.6 million for the quarter on 3.4 percent lower sales of $21.8 million. Revenue gains in North America and northern European diving markets could not offset declines in the Red Sea, southern Europe and other key diving regions around the world, resulting in a 3 percent drop in sales. Scubapro performed better than Subgear, the lower-priced scuba diving line of the group.
Before communicating third quarter results, the company announced, on Aug. 4, the appointment of Julie Andersen as global marketing director for its dive gear and equipment business. Andersen will lead the design, harmonization and implementation of multi-channel, multi-media marketing strategies worldwide for Scubapro and Subgear brands, reporting to Joe Stella, group vice president in charge of Johnson Outdoors Diving.
Commenting on the quarter's results, the company said it is working hard to lessen the impact of weak European economies on its Diving business. Marine Electronics continues to be a steady engine of growth, and the benefit of the company's investment in the performance of the Watercraft unit is beginning to appear. Looking ahead to the remainder of the year, the company intends to focus on sustaining marketplace momentum and ensuring the success of next year's new product line-up.