Johnson Outdoors Inc. (JOUT) filed Quarterly Report for the period ended 2009-04-03.
Johnson Outdoors Inc. 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; Lendal paddles; Escape electric boats; Minn Kota motors; Cannon downriggers; Humminbird Bottom Line and Fishin' Buddy fishfinders; Scubapro and UWATEC dive equipment; Silva compasses and digital instruments; and Eureka! tents. Johnson Outdoors Inc. has a market cap of $64.86 million; its shares were traded at around $7 with a P/E ratio of 53.85 and P/S ratio of 0.15. Johnson Outdoors Inc. had an annual average earning growth of 8.8% over the past 5 years.
Highlight of Business Operations:
Operating expenses were $34.2 million for the quarter ended April 3, 2009, a decrease of $9.0 million over the prior year quarter amount of $43.2 million. Primary factors driving the reduced level of operating expenses were headcount reductions, curtailed spending in administrative costs, a temporary 10% wage reduction in the U.S., no incentive compensation expenses in the current year quarter versus an expense of $1.8 million in the prior year quarter, and favorable foreign currency exchange translation of $1.6 million in the current year quarter. Operating expenses were $64.5 for the six months ended April 3, 2009, a decrease of $12.5 million over the prior year period amount of $77.0 million.
Interest expense totaled $3.1 million for the three months ended April 3, 2009, compared to $1.5 million in the corresponding period of the prior year, which was due to higher interest rates on the Company s outstanding debt, $0.5 of amortization of the fair value of the effective portion of the Company s interest rate swap and an expense of $0.7 million to mark the Company s interest rate swaps to market. Interest expense for the six months ended April 3, 2009 was $4.7 million, compared to $2.6 million in the corresponding period of the prior year. See “Note 13 – Derivative Instruments and Hedging Activities” to the Company s condensed consolidated financial statements for further discussion.
Interest income was less than $0.1 million and $0.1 million, respectively, for the three and six months ended April 3, 2009 compared to $0.2 million and $0.5 million, respectively, for the three and six months ended March 28, 2008.
Other expense included a net $0.5 million foreign currency exchange gain for the three month period ended April 3, 2009. Included in this amount are mark to market gains of $0.3 million on foreign currency denominated liabilities offset by losses of $0.3 million on foreign currency forward contracts. The foreign currency forward contracts were held as economic hedges in order to minimize currency risk of the related foreign currency denominated liabilities. Foreign currency exchange losses were $1.4 million for the three month period ended March 28, 2008. For the six months ended April 3, 2009, net foreign currency exchange losses were $0.6 million compared to losses of $1.7 million for the six months ended March 28, 2008. See “Note 13 – Derivative Instruments and Hedging Activities” to the Company s condensed consolidated financial statements for further discussion.
Historically, as of the end of the Company s second fiscal quarter each year, the Company is heavily invested in operating assets to support its selling season, which is strongest in the second and third quarters of the Company s fiscal year. Accounts receivable net of allowance for doubtful accounts were $100.5 million as of April 3, 2009, a decrease of $19.7 million compared to $120.2 million as of March 28, 2008. The decrease year over year was due to lower sales and the effect of foreign currency translation of $5.3 million.
Inventories were $75.4 million as of April 3, 2009, a decrease of $39.7 million compared to $115.1 million as of March 28, 2008. The decrease year over year was due to the effect of foreign currency translation of $6.1 million and a concerted effort by the Company to reduce working capital levels through strict controls and improved processes.Michael Price of MFP Investors LLC.