JOUT - Earnings call transcript Q4 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, everyone, and welcome to the Johnson Outdoors Fourth Quarter 2018 Earnings Conference Call. Today’s call will be led by Helen Johnson-Leipold, Johnson Outdoors’ Chairman and Chief Executive Officer; also on the call is, David Johnson, Vice President and Chief Financial Officer. [Operator Instructions]. After the prepared remarks, the question-and-answer session will begin. [Operator Instructions] This call is being recorded.

to this consent implies participation our call. recording Your

from to simply now Ms. drop you Patricia to do the Penman. terms, agree not Penman to over would If off go these line. the call Outdoors. Johnson Please turn ahead, like I

Patricia Penman

our XXXX Thank for fiscal and year. morning, fourth joining Good Outdoors’ Johnson Brigitte. and thank quarter of you, for results you everyone, us discussion for the full

these www.johnsonoutdoors.com a copy this on statements to of today’s of Investor are it Johnson need control. release, also filings available at many our contain number not conference Outdoors’ forward-looking Exchange that need due news our statements. beyond of are is Securities to factors, website of and basis releases and These in risks views with you those Actual the listed guarantees the our include under may you from and and events press and uncertainties These I Relations. statements If performance. a remind on assumptions materially current made call future may differ Commission.

questions the have call additional to to the Johnson now my following It you call, pleasure turn Dave please over Johnson-Leipold. Helen or If me. contact is

Helen Johnson-Leipold

share. we’ll remarks. continued an our Dave fiscal million which or the will will for review XX% thanks had discuss industry fourth net us. of XX% versus the Pat. morning $XX.X decline were income a $XX Dave great per period due your outlook net priorities year. record next record this quarter key results and quarter Johnson in the to take diluted million Overall, Good million then expanded for questions. last grew his year XX% our brands level high year's Thanks, we behind continued Minn ramp company $XXX and million, down Total flagship year results the the an taxes fiscal to results, fourth sales had Strong for channel. profits into grew sales in Kota, in on performance mode. a is revenue. highlights products the largely rec in XXXX, of momentum annual I’ll overview to was when begin is extraordinarily brands successes growth our $XX.X product our our slight impact new every positive new joining high Fishing portfolio. Outdoors year, $X.XX perspectives Humminbird segment This drove and with to SCUBAPRO and and of outstanding give and strong and outline financial in in quarter

steering our to this choice. their foot. is and pedal get of breakthrough to features control leap Our is it a flocked foot at of pioneer Fishing a all motor, is the brands great delivered only the and against product Ultrex The new most our electric better a fishing motor Kota Minn cable technology and navigational avid motor winning This award anglers patented goal who The the made of first of advanced example. have bigger, anglers and steered Ultrex technical group tap technologically in success.

perspective, For market. two one both expectations Ultrex year year exceeded in and has in the

market an success technology of good Minn last imaging our for equally growth by Kota covered with Link Additionally, units driven demand and entire double-digit growth these across double-digit large technology. motor electric screen technology another GPS i-Pilot of which up. had in line patented added to restage price upgraded also wireless year's and of sonar Legacy this fish strong year i-Pilot gear year innovations, primarily year-over-year side finders growth. Humminbird and

series. in fish model to finder continued imaging this excitement pioneering in MEGA Helix Additionally, second generation generate

water to a work that unique shallow Together, sonar MEGA experience. detail seen. and positioning Minn the an including products system provide Humminbird provide network to boat Net, for effortless talent underwater greatest the technology reminder, into Minn definition Fishing integrated one fish create a incredible enabled for and range This network ever As launched fish even and year clarity, our finding and net Kota navigation together megahertz entrance. talk Humminbird another anglers in brand. finding and Kota anchored better is unison to and

leadership growth brands. Looking Johnson invest ahead, and we Outdoors profitable more continue to to we and moderated a are see engines Minn in in the continue Fishing technology Together and for key Humminbird will Kota with at market these pace. sustaining growth

to on Diving. Moving

successful positive respected world's dive momentum equipment the sustained innovation most in Our brand. SCUBAPRO,

in This improve GX share bottom boost demand Continued sales dive new Galileo top core line reduction category. for to successes compensator and strengthening support infrastructure help product line a buoyancy performance. and computer year’s new SCUBAPRO to life our Pro Hydros gave

look Going growing profitability. forward, emphasis into and same network fast greater on dive resources more to against at for place and market focused simplification maximize is driving we our efficiency key further dealer the digital the consumers elite time more

the due Watercraft personal In facing consumer uptick specialty market disruptions new work driving progress expectations, and and headwinds years, in arena need beat restructuring a couple for cooking have targets the key digital the softness overall where is system Camping, Jetboil been bankruptcies more both consumers to Camping new focus. in success retailer in And international and and improved with nice repositioning markets. for Lastly, strong in emerging first over of Rec past chain is a our outdoor and from the continuing. resulting flash go to sales. Eureka! more camp Ongoing

than perspective people among camp other and outdoor hike particularly millennials For margin. segment wide recreation by a more any

investment in will to win when emphasis is camping Watercraft time In our So, to positioned there and needed compete kayak business. overall stabilizes. our and on are is well market a ensuring we growth more performance real opportunity be value the maximize more for of and

and We segments have growing. both still particularly great innovation paddles which in brands and fishing of are great

to our new paddle design and For which the provides business Kayak the grow sets large water to transport revenue. and easier success drive series in And Watercraft and recreational bar compact have Town fun new on drive the that’s for to our continues Old fishing water top nimble instance, plan popularity. the performance series of our right angler in believe we We kayak long-term navigate. more lightweight Ocean higher which

Looking back, success results. new drove year's is high in this products financial bigger fishing record better

of overall this every outdoor likes need of are is to Our innovation our Deeper, core consumer who deliver driven and an with of insights point experience. goal entire M&A the what kind intimate is consumer do, they at across consistently great outdoor and on for they brand our everything portfolio. we richer expect from want, knowledge exactly consumer touch

more leverage and maximize with enable in us all fully to ability and our in and meaningful digital forward, to will Going improve connect more ways marketing channels. to sophistication investments in transformation, segments performance new consumers e-commerce

our success in price Johnson brands changing for Outdoors We have built for a continued sustainable growth the market future rapidly and foundation profitability.

Now, Dave of I'll highlights. to review call financial a and our turn the over

David Johnson

we selling for the impact Thank XX% cost actions. of Year-over-year higher increased average compared Net prices unusually year. more last a relatively XXXX. X.X sales. foreseeable you, to estimate rate margin digital Investment In of had recently as led the of in impact full last reflected high a $X mitigation the factors of increase. to the year in for year. compensation $XX.X drove million. drove point rate in implementation of That rest. $X percent in accounted XX.X%, on volume, of the and related a X.X XX.X%, and profits XXXX to income points dollar Operating half expect of unfavorable million, fiscal increases operating minor the Increased gross a includes cost to year-over-year. infrastructure margin was tax XXXX, comparison. could than Helen. but increase versus A XX.X%, tariff year expense tariffs negatively million tame range for an effective nearly an year-over-year the costs tax improvement Volume Two imposed expense declined

of year. foreign from in the $X.X by from net tax we $XX million year last And for overseas. approximately repatriation this charges First, in accounting tax one-time legislation income fiscal taxes in by have U.S. changes reform resulting year, during the enacted created the from recorded cash credits million prompted benefited

fiscal year, a investments grew We million. ago year $XXX.X and from expect U.S. reduction XXXX income the At tax rate rate. the to reflecting cash Federal Corporate $XX.X million to the short-term the of tax our decline, in end

new position cash in for continued growing enables investment and strategies our growth brand. organic Our

of As goal enhancing always, consumers and with There targeted strategic is connection when acquisitions outdoor to Outdoors strengthening remain a the capabilities, growth no on for emerge. acquisition strategy playing our Johnson field. opportunities may timetable our expanding

our and proactively radar valuation process unique appropriate active screen disciplined to and us brands that and our investment enabling our targets looking to We return a for on with innovation have acquisitions evaluate on we're identify segments. at Ultimately, building applications technologies, M&A business to ongoing reasonable deliver an and shareholders.

continue sheet balance growth our strong us healthy to and in position investors. cash the our pay opportunities continuing enables while to Importantly, invest dividend cash is to to

turn to will Operator. call the I over session. for the Now, Q&A the back operator

Operator

[Operator & from first line of Anthony Lebiedzinski question Sidoti Instructions] Company. with the Our comes

line now Your is open.

Anthony Lebiedzinski

as the actually, up touching that was this true as tax Dave far So, year the first, just in at the on end had expense quarter quarter? essentially so fourth you fiscal

David Johnson

to than exactly. we they other to we We clarification was were and rate that assets at have the That's -- from deferred so have recognize. get Yes. there tax the tax expected, new IRS higher some some revalued

Anthony Lebiedzinski

your specific better the better and get percentage in China And to, to as insight of that actually wanted of as on what come make come I you've know, from and finished sense but far a quantified China? as the percentage you a get, want call, goods from don't wanted release to tariff how just get components impact the to just what to your press be, again

David Johnson

percentages coming China say necessarily. impact the just imports this that on mostly of range I share componentry won’t will reflects in. I

Anthony Lebiedzinski

Okay. effect Xst assuming on are guidance? March goes tariff that you And the into in XX% that

David Johnson

Yes, yes, delay, XX we the in guidance. put days that and

Anthony Lebiedzinski

keep impact be say deal XX%,I of let’s you a So, hypothetically ballpark if tariff is made, then? a estimate mean say, they give well, would can XX% instead if any, XX, us a the okay, what at maybe

David Johnson

three and tariffs impacting they're us. all There layers China are of

definitely but because X range at from it not China place. it's So, to going in the an going X XX% and help stay change but for XX% just year, still our XX% to to is impact, materially would there

Anthony Lebiedzinski

comparison as a the got fiscal And you it. now difficult growth in far know first revenue guidance, quarter. the as for facing rather full you're the year then expect Okay, I

be bit growth followed it would through you the would December the say, of of year? safe rest So, in a a expect decline quarter by to

David Johnson

the what’s double-digit think growth for should is, numbers, year, again. don't I moderate. get quarter I’m the we not expect year think but to to into safe growth full we I for expect the the say full to going rate

Anthony Lebiedzinski

out as 'XX. And fiscal perhaps a segment things was maybe in lastly, that segment the go Is planned? I challenged Watercraft consider as guess would this you don't divesting the

Helen Johnson-Leipold

are feel evaluating caught on We very in would are our bullish that the towards timeframe plans disruption of actually the break but but we ability and through and focus growth. this I and very always this have we place kind We we options, segment. say that market, path our in the forward to this long-term about good move got in

we segment. what best we but will this the think again, are to are at definitely I options, always Watercraft So case committed looking in the

Operator

from with of comes the Imperial Capital. question next Our Kelly George line

Your line open. is

George Kelly

first Hi, about on year. previous growth one of up follow questions to next the

out there? that sounds there? to anything out the anything Fishing What just strengthen continue get segment? from Can aside new in products just on growth you in continue that in you it So, confident going you will the else especially like are point products are there or will that already any Is segment.

Helen Johnson-Leipold

the The year. solid the one just that of business. feel We very dynamics It's new multiple cycle the team pipeline. is product has years product of given new just not a launch

don’t are launched, and we yes, the and So, we gives benefit new year, you Kota, but right them have build. we a but you massive got to product that kind launch that Minn both every to product each of stagger new we continue a have so for from have it will that products Humminbird chance

but innovation growth segments see continue across we good also business. all the to of have So, we

records, years, of hard. kind a breakthrough doubling So, that so is matter Again, it's just we on up it's and positive. some have of

Dave So, will I as and it's be growth digits at on products, double said would it the business base and level. based say continue new both but won't

George Kelly

not up build you're looking you to repurchases building? next I using the consider this cash but acquisitions. And have just your dividends size would historically, for comes then for special or keep and cash cash, dividend, cash question the understand on the anywhere out it so But the share you should the approaching balance isn't just of occasionally, continues

David Johnson

something definitely the that. And on talk are about. options table. all about we are that it's cognize Yes, We very

other that strategy say for acquisitions back build never So, the dividend. would right to look though. invest business, on and is any now, our I continue never into options

Helen Johnson-Leipold

add for acquisition. play. of though very is sure we to not very given for but been of market and to not right sellers' where it’s I'm a the kind historically we where mean, we key Just not market focused those business what looking stock we It's we’re that, definitely about exactly I buyback but buyers win have, on strategic our also and profile

And so, very that best use of we’re will cash. was optimal that we to that have diligent to the for we looking hate options that say all anything keep at because the I on decision, not but do

George Kelly

this finance past an leverage M&A comfortable would been separate I I you And be relatively it in to be small. wouldn’t has mean, guess my question kind the easy acquisition? with? What be. would of

cash million, like it guess seems big XXX So a I of balance.

Helen Johnson-Leipold

lot multiples just is us. we gives great there. a that would And out cash we afraid what that. It's if to not would so the leveraging we opportunity I long-term issue The high strategic across the have we would not be a consider of finance fit necessarily us, the fit company our able are of and for we’re be situation, came do that don’t, with growth

think to that, multiples fit a we not it if and done. strategic high, one, about of to it figure acquisition the So I the is necessarily the the was would right be it do -- way it's out get but happen more

George Kelly

from ones simplification year just what and about something year? then I rate quick wondering for second didn’t wondering that your you next so what other exact Diving, is on What expectation your one two tax me. GAAP just mentioned Okay this meant? language catch And but simplification that,

David Johnson

So, should the year tax rate normalize. next

would few foreign kind rate, U.S. plus of tax. federal and a we so for expect the state tax points And

year. So, that next would be the expectation

Helen Johnson-Leipold

about be, to making it is hard I you think for really consumer to time be a line, focusing me simplification, push offering online at from not on the we see there buy very the really we one let add segmentation, the have and great other. go products to simplification would And all our and I clear think the have you do in to clear the you when that product product differentiation our the easier why bricks-and-mortar get buy you same and and

We do well push a as think I our with So, there distributor to a a simplification reduced it’s went through line little simplification as we model diving. complexity. Japan did which

complexity, we’re focus. So, always and simplify looking for ways to reduce

Operator

will back Instructions] further for [Operator I turn Ms. the to any I’m remarks. not call over questions, showing Johnson-Leipold now closing

Helen Johnson-Leipold

joining have Hope next holiday. forward great to you a to everyone Thanks for we And talking you year. us. look

Operator

program. conclude does this gentlemen, and the Ladies

You day. may now disconnect. Everyone great have a

Johnson Outdoors (JOUT) 7 Dec 182018 Q4 Earnings call transcript