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Johnson Outdoors Inc. Reports Operating Results (10-Q)

August 07, 2009 | About:

Johnson Outdoors Inc. (JOUT) filed Quarterly Report for the period ended 2009-07-03.

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 $66.6 million; its shares were traded at around $7.18 with a P/E ratio of 23.2 and P/S ratio of 0.2. Johnson Outdoors Inc. had an annual average earning growth of 8.8% over the past 5 years.

Highlight of Business Operations:

Operating expenses were $35.5 million for the quarter ended July 3, 2009, a decrease of $5.7 million over the prior year quarter amount of $41.2 million. Primary factors driving the reduced level of operating expenses were volume, headcount reductions, curtailed spending in administrative costs, and favorable foreign currency exchange translation of $1.4 million in the current year quarter, partially offset by restructuring and related charges of $1.4 million associated with the consolidation of Watercraft operations, and the effect of the reversal in the prior year quarter of $3.2 million of bonus and profit sharing expense related to the first six months of the year. Operating expenses were $100.0 for the nine months ended July 3, 2009, a decrease of $18.2 million over the prior year period amount of $118.2 million.

Interest expense totaled $2.6 million for the three months ended July 3, 2009, compared to $1.7 million in the corresponding period of the prior year, which increase was due primarily to amortization of the Company s interest rate swap. Interest expense for the nine months ended July 3, 2009 was $7.4 million, compared to $4.2 million in the corresponding period of the prior year. The increase was due to amortization of the Company s interest rate swap and the increase in interest rate on the Company s term debt. 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 $0.2 million, respectively, for the three and nine months ended July 3, 2009 compared to $0.1 million and $0.6 million, respectively, for the three and nine months ended July 27, 2008.

Accounts receivable net of allowance for doubtful accounts were $82.4 million as of July 3, 2009, a decrease of $21.4 million compared to $103.8 million as of June 27, 2008. The decrease year over year was due to lower sales in the current year and the effect of foreign currency translation of $4.1 million.

Accounts receivable increased $29.3 million for the nine months ended July 3, 2009, down from a $40.8 million increase in the prior fiscal year period. Inventories decreased by $24.2 million for the nine months ended July 3, 2009 compared to an increase of $0.9 million in the prior year period. The year to date change in inventory year over year was due to concerted efforts to enhance controls and processes to bring down working capital levels and the effect of reduced production activity in the current year period. Accounts payable and accrued liabilities decreased $2.5 million for the nine months ended July 3, 2009 versus a decrease of $1.1 million for the corresponding period of the prior year period. The year to date change in accounts payable year over year reflects reduced production activity in the current year.

Cash used for investing activities totaled $12.8 million for the nine months ended July 3, 2009 and $14.1 million for the corresponding period of the prior year. Capital expenditures totaled $5.2 million for the nine months ended July 3, 2009 compared to $8.4 million for the corresponding period of the prior year. The Company s recurring investments are made primarily for tooling for new products and enhancements on existing products. Any additional expenditures in fiscal 2009 are expected to be funded by working capital or existing credit facilities.

Read the The complete ReportJOUT is in the portfolios of Michael Price of MFP Investors LLC.

Rating: 2.7/5 (3 votes)

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