[GRAPHIC OMITTED][JOHNSON OUTDOORS INC. LOGO] News Release
AT JOHNSON OUTDOORS: AT FRB|WEBER SHANDWICK:
Paul A. Lehmann Larry Stein
VP and Chief Financial Officer General Inquiries
(262) 631-6600 (312) 266-7800
Mark Muehlfelt Tim Grace
Analyst Contact Media Contact
(312) 266-7800 (312) 266-7800
FOR IMMEDIATE RELEASE
THURSDAY, APRIL 24, 2003
JOHNSON OUTDOORS INC. REPORTS
HIGHER SALES AND EARNINGS
ON CONTINUING BUSINESSES IN SECOND QUARTER
Racine, Wisconsin, April 24, 2003 - Johnson Outdoors Inc. (Nasdaq: JOUT) today
announced improved results for its continuing businesses in the second fiscal
quarter ended March 28, 2003. Comparisons of continuing businesses exclude the
Company's Jack Wolfskin subsidiary, which was sold in last year's fourth
quarter.
As reported, including the results of Jack Wolfskin, Johnson Outdoors sales
decreased 15% to $83.3 million and operating profit declined 26% to $6.1 million
compared with last year's second quarter. Income from continuing operations
increased 10% to $4.3 million compared with $3.9 million in the year-ago
quarter. This year's second quarter income from continuing operations included
other income of $2.1 million primarily due to a currency gain on the settlement
of a loan related to the sale of Jack Wolfskin. Earnings from continuing
operations increased 9% to $0.50 per diluted share in this year's second quarter
compared with $0.46 per diluted share a year ago. Last year's second quarter net
earnings were $0.52 per diluted share, which included income of $0.06 per
diluted share from a discontinued operation.
On a continuing business basis (see chart below), three of Johnson Outdoors'
four business segments - Motors, Outdoor Equipment and Diving -- produced higher
sales and strong double-digit growth in operating profit during the second
fiscal quarter compared with last year. Overall, sales increased 2% to $83.3
million from $81.7 million a year ago. Driven by a 190 basis-point increase in
gross profit to 43.5%, operating profit increased 8% to $6.1 million from $5.7
million, as operating margin rose 50 basis points to 7.4%. The favorable impact
of currency translations added approximately $2.7 million to sales and $0.6
million to operating profit in this year's second quarter. Benefiting from the
$2.1 million in other income noted above, second quarter income from continuing
operations increased to $4.3 million from $2.2 million in the year-ago quarter.
Excluding the contribution of the Jack Wolfskin business in the
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prior year, earnings from continuing operations of the continuing businesses
rose to $0.50 per diluted share from $0.26 per diluted share in last year's
second quarter.
Second Quarter Comparisons - As Reported and on Continuing Business Basis
(Amounts in millions, except per share data)
- ---------------------------------------------------------------------------------------------------------------------
For the Quarter Ended March 28, 2003 For the Quarter Ended March 29, 2002
Jack Continuing Jack Continuing
As Reported Wolfskin Business(1) As Reported Wolfskin Business(1)
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Net sales $ 83.3 $ - $ 83.3 $97.7 $ 16.0 $ 81.7
Gross profit 36.2 - 36.2 40.7 6.7 34.0
Operating profit 6.1 - 6.1 8.3 2.6 5.7
Income (2) 4.3 - 4.3 3.9 1.7 2.2
Earnings per share (2) 0.50 - 0.50 0.46 0.20 0.26
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(1) Continuing Business for the second quarter of both years excludes results
from the Jack Wolfskin operation, which was sold in the fourth quarter of
fiscal 2002, but was not treated as a discontinued operation according to
GAAP.
(2) Income and earnings per share are from continuing operations.
"Considering the challenging economic and market conditions, we were pleased
with the sales and profit growth of our continuing businesses in the second
quarter," said Helen Johnson-Leipold, Chairman and CEO of Johnson Outdoors. "The
improvement was broad-based, with strong profit growth in Motors, Outdoor
Equipment and Diving, which together comprise more than 75% of our total sales.
Clearly, our operations are becoming more efficient and our new products are
driving gains in market share. While Watercraft posted lower comparisons against
last year's results, we believe the encouraging progress of Ocean/Necky is
further evidence that we are taking the right steps to improve Watercraft. We
are now bringing those successful strategies to the few businesses remaining in
the segment that are still underperforming."
"During the third fiscal quarter, our key selling season, while business
conditions may dampen growth, we are encouraged that our emphasis on innovation
continues to drive gains in market share. In fact, new products produced over
the past three years accounted for approximately 30% of the Company's total
sales in the second quarter. At the same time, we're responding effectively to
changes in the marketplace, creating customized products that appeal to larger
retailers. Sales to our largest customers are growing faster than the Company's
average and are becoming a larger part of our overall business. All told, while
market conditions are very difficult to predict, we are well-positioned as we
enter our key selling season."
Outdoor Equipment
Including the results of Jack Wolfskin, sales declined 43% to $18.8 million in
the second quarter and operating profit was down 38% or $1.8 million to $3.0
million from the prior year quarter. However, for our continuing business in
this segment (see charts below), continued growth in military tents drove a 12%
increase in the segment's second quarter sales to $18.8 million from $16.8
million in the year ago quarter. With a 150-basis point rise in gross margin,
operating profit climbed 33% to $3.0 million from $2.3 million in the prior year
quarter for our continuing business in this segment. Military sales in the
current fiscal year contributed to these results; however, the
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Company does not
necessarily expect the same level of growth in this channel in future years.
Outdoor Equipment Segment
Second Quarter Comparisons - As Reported and on Continuing Business Basis
(Amounts in millions)
- ---------------------------------------------------------------------------------------------------------------------------
For the Quarter Ended March 28, 2003 For the Quarter Ended March 29, 2002
Jack Continuing Jack Continuing
As Reported Wolfskin Business(1) As Reported Wolfskin Business(1)
- ---------------------------------------------------------------------------------------------------------------------------
Net sales $ 18.8 $ - $ 18.8 $ 32.8 $ 16.0 $ 16.8
Operating profit 3.0 - 3.0 4.9 2.6 2.3
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(1) Continuing Business for the second quarter of both years excludes results
from the Jack Wolfskin operation, which was sold in the fourth quarter of
fiscal 2002, but was not treated as a discontinued operation according to
GAAP.
Outdoor Equipment Segment
Six Month Comparisons - As Reported and on Continuing Business Basis
(Amounts in millions)
- ---------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended March 28, 2003 For the Six Months Ended March 29, 2002
Jack Continuing Jack Continuing
As Reported Wolfskin Business(1) As Reported Wolfskin Business(1)
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Net sales $ 30.7 $ 0.4 $ 30.3 $ 55.6 $ 28.3 $ 27.3
Operating profit (loss) 4.4 (0.1) 4.5 7.5 3.9 3.6
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(1) Continuing Business for the six months of both years excludes results from
the Jack Wolfskin operation, which was sold in the fourth quarter of fiscal
2002, but was not treated as a discontinued operation according to GAAP.
Watercraft
Although Watercraft's brands continue to experience strong customer acceptance
and gains in volume, operational inefficiencies in certain businesses continue
to hamper results. Second quarter sales decreased 10% to $19.9 million and the
segment had an operating loss of $1.1 million compared with a $0.8 million
operating profit in last year's second quarter.
Johnson-Leipold commented, "We continue to invest in new systems and new people,
and there are some signs of improvement, most notably Ocean/Necky. While these
major changes disrupted operations to an extent during the second quarter, we
believe they will have a positive impact on productivity over the long term. We
have a good track record of improving businesses and, while we're beginning to
see some positive indications at Watercraft, we know this is a long process and
more time will be needed to get all of the businesses back on track."
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Motors
The Motors segment continued to post solid results, even against comparisons to
last year's strong second quarter. This year's second quarter sales increased 6%
to $27.3 million, as new products continued to drive gains in market share.
Gross margin rose by 300-basis points, helping to boost operating profit by 35%
to $4.3 million.
Diving
Despite difficult market conditions in the Diving segment, further improvements
in production efficiency drove a 750-basis point increase in gross margin and
higher profits. Sales rose 1% to $17.7 million, while operating profit increased
26% to $3.2 million. Forecasting for this business remains difficult in light of
the impact of the war in Iraq, the SARS epidemic, and uncertainty relating to
the timing of the economic recovery.
Six-Month Results
As reported, for the six months ended March 28, 2003, net sales totaled $138.2
million compared with $157.5 million in the year-ago period. Operating profit
decreased to $6.3 million from $9.2 million in last year's first six months. The
decrease in sales and operating profit was entirely due to the sale of Jack
Wolfskin in the fourth quarter of last year. Income from continuing operations
increased to $4.0 million from $3.5 million, due to lower interest expense and
$2.5 million in other income, mainly related to the currency gain discussed
previously. Earnings from continuing operations increased to $0.47 per diluted
share compared with $0.42 in the year-ago period. Last year, Johnson Outdoors
reported a net loss of $2.28 per diluted share for the six-month period, which
included a non-cash after-tax charge of $2.76 per diluted share for goodwill
impairment from a change in accounting due to the adoption of SFAS No. 142.
On a continuing business basis (see chart below), six-month sales rose 7% to
$137.8 million, operating profit increased 20% to $6.4 million and income from
continuing operations rose to $4.1 million from $1.1 million in the year-ago
period. Earnings from continuing operations increased to $0.48 per diluted share
from $0.13 per diluted share in last year's six-month period.
Six Month Comparisons - As Reported and on Continuing Business Basis (Amounts in
millions, except per share data)
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For the Six Months Ended March 28, 2003 For the Six Months Ended March 29, 2002
Jack Continuing Jack Continuing
As Reported Wolfskin Business(1) As Reported Wolfskin Business(1)
- ---------------------------------------------------------------------------------------------------------------------------
Net sales $ 138.2 $ 0.4 $ 137.8 $ 157.5 $ 28.3 $ 129.2
Gross profit 59.9 - 59.9 66.0 11.4 54.6
Operating profit (loss) 6.3 (0.1) 6.4 9.2 3.9 5.3
Income (loss)(2) 4.0 (0.1) 4.1 3.5 2.4 1.1
Earnings (loss)
per share(2) 0.47 (0.01) 0.48 0.42 0.29 0.13
- ---------------------------------------------------------------------------------------------------------------------------
(1) Continuing Business for the six months of both years excludes results from
the Jack Wolfskin operation, which was sold in the fourth quarter of fiscal
2002, but was not treated as a discontinued operation according to GAAP.
(2) Income and earnings per share are from continuing operations before
cumulative effect of change in accounting principle.
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Financial Condition
Johnson Outdoors continued to operate with a much stronger financial position
compared with one year ago. At March 28, 2003, cash and short-term investments
totaled $44.8 million. The Company's debt to total capital was 36%,
substantially below last year's second quarter end 60% and 42% at the close of
fiscal 2002.
Among key working capital items, receivables decreased $5.4 million and
inventories decreased $5.7 million versus the prior year quarter end. The prior
year included Jack Wolfskin receivables of $10.6 million and inventory of $13.2
million. The Company's working capital normally builds during the second quarter
in preparation for the key selling season in the third quarter.
Depreciation and amortization totaled $2.0 million for the second quarter, and
$3.9 million for this year's six month period compared with $2.1 and $4.5
million in last year's second quarter and first six months, respectively.
Capital expenditures were $3.5 million year to date compared with $2.5 million
in the prior year's first six months. The increases are primarily due to
investments to upgrade information systems in the Watercraft business.
"A strong cash position and continued balance sheet focus are providing solid
support for our Company's growth in this difficult market environment," said
Paul Lehmann, Chief Financial Officer. "In addition, we are in a good position
to continue to consider potential acquisitions."
Webcast
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Johnson Outdoors will hold a conference call on April 24, 2003 at 11:00 a.m.
Eastern Time. The call will be webcast at www. johnsonoutdoors.com and
www.companyboardroom.com. A replay will be available on both web sites for 30
days, and by telephone through May 1st by dialing 800-405-2236 or 303-590-3000
and providing confirmation code 534831.
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Johnson Outdoors Inc. is a global company engaged in the design, manufacture and
marketing of branded outdoor recreation products, including:
Outdoor Equipment: Eureka!(R)tents and backpacks, Camp Trails(R)
backpacks, Silva(R)compasses
Watercraft: Old Town(R)canoes and kayaks, Ocean Kayak(TM), Necky and
Dimension(R)kayaks, Leisure Life watercraft, Escape(R)sailboats,
Carlisle(TM)paddles and oars, Extrasport(R)and Swiftwater(R)personal
flotation devices
Motors: Minn Kota(R) electric motors
Diving: Scubapro(R)diving equipment and Uwatec(R)instruments
Visit Johnson Outdoors online at www.JohnsonOutdoors.com.
Certain matters discussed in this press release are "forward-looking
statements," intended to qualify for the safe harbors from liability established
by the Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement includes phrases such as the Company "expects," "believes" or other
words of similar meaning. Similarly, statements that describe the Company's
future outlook, plans, objectives or goals are also forward-looking statements.
Such forward-looking statements are subject to certain risks and uncertainties
which could cause actual results or outcomes to differ materially from those
currently anticipated. Factors that could affect actual results or outcomes
include changes in consumer spending patterns, actions of companies that compete
with Johnson Outdoors, the Company's success in managing inventory, movements in
foreign currencies or interest rates, the success of suppliers and customers,
the ability of Johnson Outdoors' to deploy its capital successfully as well as
adverse weather conditions. Shareholders, potential investors and other readers
are urged to consider these factors in evaluating the forward-looking statements
and are cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements included herein are only made as of
the date of this press release and the Company undertakes no obligations to
publicly update such forward-looking statements to reflect subsequent events or
circumstances.
Financial Tables Follow
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JOHNSON OUTDOORS INC. AND SUBSIDIARIES
(thousands, except per share amounts)
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Operating Results THREE MONTHS ENDED SIX MONTHS ENDED
- -----------------------------------------------------------------------------------------------------------------------------------
March 28 March 29 March 28 March 29
2003 2002 2003 2002
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Net sales $ 83,265 $ 97,718 $ 138,160 $ 157,456
Cost of sales 47,072 56,977 78,284 91,425
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Gross profit 36,193 40,741 59,876 66,031
Operating expenses 30,069 31,793 53,586 55,631
Strategic charges -- 690 -- 1,151
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Operating profit 6,124 8,258 6,290 9,249
Interest expense, net 1,114 1,679 2,132 3,085
Other (income) expense, net (2,115) 92 (2,471) 337
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Income from continuing operations before cumulative effect of change
in accounting principle and income taxes 7,125 6,487 6,629 5,827
Income tax expense 2,828 2,598 2,612 2,334
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Income from continuing operations before cumulative effect of change
in accounting principle 4,297 3,889 4,017 3,493
Income on disposal of discontinued operations, net of tax -- 495 -- 495
Cumulative effect of change in accounting principle, net of tax -- -- -- (22,876)
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Net income (loss) $ 4,297 $ 4,384 $ 4,017 $ (18,888)
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Basic earnings (loss) per common share:
Income from continuing operations before cumulative effect of
change in accounting principle $ 0.51 $ 0.48 $ 0.48 $ 0.43
Income on disposal of discontinued operations, net of tax -- 0.06 -- 0.06
Cumulative effect of change in accounting principle, net of tax -- -- -- (2.80)
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Net income (loss) $ 0.51 $ 0.54 $ 0.48 $ (2.31)
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Diluted earnings (loss) per common share:
Income from continuing operations before cumulative effect of
change in accounting principle $ 0.50 $ 0.46 $ 0.47 $ 0.42
Income on disposal of discontinued operations, net of tax -- 0.06 -- 0.06
Cumulative effect of change in accounting principle, net of tax -- -- -- (2.76)
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Net income (loss) $ 0.50 $ 0.52 $ 0.47 $ (2.28)
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Diluted average common shares outstanding 8,561 8,381 8,525 8,289
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Segment Results
Net sales:
Outdoor equipment $ 18,820 $ 32,828 $ 30,710 $ 55,553
Watercraft 19,949 22,099 31,858 32,835
Motors 27,331 25,749 42,337 38,302
Diving 17,686 17,469 34,161 31,292
Other/eliminations (521) (427) (906) (526)
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Total $ 83,265 $ 97,718 $ 138,160 $ 157,456
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Operating profit (loss):
Outdoor equipment $ 3,039 $ 4,867 $ 4,440 $ 7,453
Watercraft (1,111) 842 (3,040) (506)
Motors 4,296 3,190 5,873 3,740
Diving 3,157 2,508 5,183 3,992
Other/eliminations (3,257) (3,149) (6,166) (5,430)
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Total $ 6,124 $ 8,258 $ 6,290 $ 9,249
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Balance Sheet Information (End of Period)
Cash and short-term investments $ 44,821 $ 13,794
Accounts receivable, net 71,520 76,944
Inventories, net 62,655 68,378
Total current assets 190,226 169,856
Total assets 271,293 250,718
Short-term debt 9,538 44,765
Total current liabilities 61,010 84,826
Long-term debt 68,488 78,256
Shareholders' equity 136,196 83,078
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