Hit by a sharp decline in its outdoor sales because of lower orders from the U.S. military, Johnson Outdoors just about stabilized its sales for the last quarter of its fiscal year, through the end of September. The American group ended the three months with total revenues of $77.4 million, up by 3.0 percent, but the turnover was flat in terms of local currencies.
The outdoor unit's turnover declined abruptly, down by 35.7 percent to $6.8 million, chiefly due to a 75 percent drop in military sales. Sales of kayaks, canoes and other watercraft were down as well, by 10.0 percent to $11.6 million. The drop was smaller in the diving unit, where Johnson's sales dipped by 1.5 percent to $23.0 million. The quarter was saved by Johnson's marine electronics unit, which lifted its sales by 27.4 percent to $36.1 million, on the back of many product launches
The company's management has already outlined a strategy to diversify its sales of Eureka tents and other outdoor and watersports products by expanding their presence in the smaller outdoor and paddlesports, stores. However, n commenting on the quarterly results, company officials admitted that this will take time.
The company's operating loss widened to $4.2 million for the quarter, compared with about $3.3 million for the same period last year, due in part to higher input costs and higher research and legal expenses.
Johnson Outdoors reported a quarterly net income of $17.4 million, compared with a net loss of $5.8 million for the same period last year, but this was mostly due to the reversal of the company's tax valuation allowance. The adjusted net loss of the quarter reached $4.5 million, a small improvement compared with the same period last year.
For the full year, the decline in military sales was heavily blamed for a fall of 20.1 percent to $38.9 million in Johnson's outdoor sales. Watercraft sales were lackluster as well, sagging by 9.8 percent to $57.7 million, which was partly blamed on unfavorable weather conditions weakening the paddling market. Thanks to higher sales in diving and marine electronics, Johnson's turnover was still up by 6.5 percent to $407.4 million, with 2 percentage points of the growth coming from currency changes.
The group's operating profit increased by 21.4 percent to $17.7 million for the year, almost entirely due to the stronger performance of marine electronics. The operating profit of the outdoor unit was nearly halved, down by 49 percent to just under $3 million. The watercraft unit's operating profit of $1.8 million last year turned into an operating loss of more than $1.3 million for the fiscal year just ended.
Johnson Outdoors ended the year with net income of $32.7 million, a more than fourfold increase compared with $6.5 million the previous year. Excluding a deferred tax asset valuation allowance, the company's adjusted net income reached $10.8 million, 66 percent more than in the previous year.
However, Johnson Outdoors said it was uncertain of reaching its financial targets for the current fiscal year, because it would have to make extra investments for research, and the recovery of its outdoor business was subject to external factors that remained unpredictable (more in SGI Europe).