Johnson Outdoors Watercraft has hired an industry veteran, Bob McDonough, as its director of research and development. He joins the American company from Confluence Watersports, where he led the development of numerous market-leading products as vice president of design and senior designer. In his new role, he will be responsible for the entire product development process, reporting directly to Bill Kelly, vice president of Johnson Outdoors Watercraft and Gear.
Meanwhile, Johnson Outdoors reported a sales increase of 1.2 percent to $412.3 million for the fiscal year ended Sept. 28, compared with $407.4 million in fiscal 2011, due to record sales in Marine Electronics that more than offset declines in other units. On a constant currency basis, net sales were 2.5 percent above the previous year. More than 45 percent of total sales were generated by the launch of successful new products, the company said.
The net income for the year was down to $10.1 million from $32.6 million in the prior year. Pre-tax income was 62.7 percent higher, but a significantly higher effective tax rate led to the overall decline in net profits.
Outdoor Gear revenues declined by 9.1 percent due to a significant drop in U.S. military spending and the division's exit from non-strategic consumer camping accounts. In the Diving segment, strong performance in North America and Asia-Pacific was offset by unfavorable currency translations, which had a negative 4.3 percent impact on sales. On a currency-neutral basis, diving sales were 2.6 percent above the prior year. Watercraft sales were up by 0.8 percent, thanks to higher sales of low-margin products and the sale of inventory to a distributor related to closure of the unit's U.K. sales office.
For the fourth quarter, total net sales declined by 3.3 percent compared with the prior year's quarter. A net loss of $3.2 million was registered in the quarter, against net income of $17.3 million in the same period a year ago, due primarily to the reversal of the company's tax valuation allowance. On an adjusted basis, the group would have suffered a net loss of $4.6 million in the fourth quarter of 2011.
The company said that its fourth-quarter results reflected an industry-wide slowing of sales and production, due to the seasonality of warm-weather outdoor recreational products.
Johnson reported a 69.4 percent increase in cash, net of debt, as of Sept. 28. On Nov. 14, the company announced the purchase of Jetboil, a leading American brand of outdoor cooking systems, which will become part of the company's Outdoor Gear business unit. The $16 million acquisition is expected to be accretive to earnings in the first full fiscal year of ownership (more in The Outdoor Industry Compass).
Under a three-year business plan that ended last September, Johnson has been focusing its efforts on strengthening operations and enhancing market performance against the backdrop of a gradual recovery of outdoor recreation markets. Looking ahead to 2015, the company says it plans to focus investments on sustaining leadership in fishing electronics, maintaining positive momentum in core dive equipment segments, and regaining leadership in specialty camping and paddling channels.
