Q1 2024 Johnson Outdoors Inc Earnings Call

February 2, 2024

Okay.

Everyone and welcome to the Johnson outdoors first quarter 2024 earnings conference call.

Operator: Hello everyone, and welcome to Johnson Outdoors' first quarter 2024 earnings conference call. Today's call will be led by Helen Johnson-Leopold, Johnson Outdoors Chairman and Chief Executive Officer. Also on the call is David Johnson, Vice President and Chief Financial Officer. Prior to the question-and-answer session, all participants will be placed in a listen-only mode.

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.

Prior to the question and answer session. All participants will be placed in a listen only mode.

Operator: After the prepared remarks, the question-and-answer session will begin. If you would like to ask a question during that time, please press star 11 on your telephone. You will then hear an automated message advising your hand is raised. This call is being recorded. Your participation implies consent to recording this call.

After the prepared remarks, the question and answer session will begin if you would like to ask a question during that time. Please press star one one on your telephone you will then hear an automated message advising your hand is raised.

This call is being recorded your participation implies consent to our recording this call. If you do not agree to these terms simply drop off the line I would now like to turn the call over to Pat Penman from Johnson outdoors. Please go ahead Ms Penman.

Operator: If you do not agree to these terms, simply drop off the line. I would now like to turn the call over to Pat Penman from Johnson Outdoors. Please go ahead, Ms. Penman. Thank you. Good morning, and thank you for joining us for our discussion of Johnson Outdoors results for the 2024 fiscal first quarter. If you need a copy of today's news release, it is available on our website at johnsonoutdoors.com under investor relations. I also need to remind you that this conference call may contain forward-looking statements. These statements are made on the basis of our current views and assumptions and are not guarantees of future performance. Actual events may differ materially from those statements due to a number of factors, many beyond Johnson Outdoors' control.

Thank you good morning, and thank you for joining us for our discussion of Johnson outdoors results for the 'twenty 'twenty four fiscal first quarter. If you need a copy of today's news release. It is available on our website at Johnson outdoors Dot com under Investor Relations.

Also need to remind you that this conference call may contain forward looking statements. These statements are made on the basis of our current views and assumptions and are not guarantees of future performance actual events may differ materially from those statements due to a number of factors many beyond Johnson outdoors control.

Patricia G. Penman: These risks and uncertainties include those listed in our press release and filings with the Securities and Exchange Commission. If you have additional questions following the call, please contact Dave Johnson or myself. It is now my pleasure to turn the call over to Helen Johnson-Lebizinski. Thanks, Pat. Good morning, everyone.

These risks and uncertainties include those listed in our press release and filings with the Securities and Exchange Commission. If you have additional questions. Following the call. Please contact Dave Johnson or myself.

It is now my pleasure to turn the call over to Helen Johnson Leipold.

Thanks, Pat Good morning, everyone and thank you for joining us I'll begin with an overview of our first quarter result, then I'll share our perspective on the performance and outlook for our businesses, David will review financial highlights.

Helen Johnson: And thank you for joining us. I'll begin with an overview of our first quarter results. Then I'll share my perspective on the performance and outlook for our businesses. Dave will review financial highlights, and then we'll take your questions. Sales in our first fiscal quarter ending December 2023 declined 22% to $138.6 million compared to $178.3 million in the prior year's first quarter. Net income for the quarter was $4 million, or $0.38 per diluted share, versus $5.9 million, or $0.57 per diluted share, in the previous year's first quarter.

And then we'll take your questions.

Sales in our first fiscal quarter, ending December 2023 declined 22% to $138 million compared to $178 $3 million in the prior year first quarter.

Net income for the quarter was $4 million or <unk> 38 cents per diluted share versus $5 $9 million or <unk> 57 per diluted share in the previous year's first quarter.

Our first quarter results were significantly impacted by high inventory levels at retail and slower consumer demand in this challenging marketplace. We are investing in consumer marketing programs to reinforce the strength of our brand support new product launches and to stimulate increased demand.

Helen Johnson: Our first quarter results were significantly impacted by high inventory levels at retail and slower consumer demand. In this challenging marketplace, we are investing in consumer marketing programs to reinforce the strength of our brands, support new product launches, and stimulate increased demand. In addition, we are executing on a cost savings program and diligently managing expenses. Additionally, we continue to invest in innovation to bring consumers the best outdoor experiences possible. In fishing, while we are seeing headwinds in the marketplace, we're excited to see solid trade support behind Minn Kota's Quest series, the all new brushless trolling motor technology that we announced last fiscal year. Nonetheless, consumer behavior in the season will be the critical factor.

In addition, we are executing on our cost savings program and diligently managing expenses.

<unk>, we continue to invest in innovation to bring consumers the best outdoor experience as possible.

In fishing, while we are seeing headwinds in the marketplace. We're excited to see solid trade support behind me coaches Quest series the all.

New breakfast trolling motor technology that we announced last fiscal year, Nonetheless consumer behavior in season will be the critical factor.

And our diving business sales declined slightly compared to the prior year quarter, which reflected a strong recovery from the pandemic.

In the current period, we have seen markets begin to normalize our camping and watercraft recreation sales are down due to a continued decline in their markets from the elevated pandemic fueled demand of the past few years in watercraft recreation. However, our old town sportsman like is outperforming its competitors in a very depressed.

Marketplace.

The award winning E pedal plus drive announced last year is the newest addition to the line and in Kansas. We continue to work on leveraging Jeff Boyles brand equity into expansive growth opportunities.

Helen Johnson: In our diving business, sales declined slightly compared to the prior year quarter, which reflected a strong recovery from the pandemic. However, in the current period, we have seen markets begin to normalize. Our camping and watercraft recreation sales are down due to a continued decline in their markets from the elevated pandemic field demand of the past few years. In watercraft recreation, however, our Old Town Sportsman line is outperforming competitors in a very diverse marketplace. The award-winning ePedal Plus Drive, announced last year, is the newest addition to the line, and in camping, we continue to work on leveraging Jeff Royal's brand equity into expansive growth opportunities.

As we head into the season, we expect the outdoor recreation marketplace will remain challenged with uncertainty in demand there were retailers continuing to tightly manage their inventory levels.

We will continue to execute on our cost savings programs manage expenses and focus on creating consumer focused innovation investing in marketing to keep our brands strong. So we can provide consumers with the best outdoor experience possible now.

Now I'll turn the call over to Dave for more details on the financials.

Thank you Helen good morning, everyone I wanted to highlight a few items from the quarter.

As Helen mentioned first quarter sales results were significantly impacted by inventory dynamics at retail and lower consumer demand.

The quarter's results also reflect the challenging comparison between quarters. During the first quarter of fiscal 2003, we were still feeling a significant amount of backlog customer orders in our fishing business.

We've been taking steps to strengthen our operating margins was enacted cost savings program and prudent expense management. The quarter's gross margin of 38, 1% is up two nine points from the prior year quarter, due primarily to reductions in material and freight costs.

Operating expenses decreased 8% or $4 $5 million versus the prior year quarter due primarily to lower sales volumes. Additionally, $1 $8 million of lower professional services expense was offset in part by $1 $3 million of additional deferred compensation expense, resulting from changes in market.

Helen Johnson: As we head into the season, we expect the outdoor recreation marketplace will remain challenged with uncertainty and demand and retailers continuing to tightly manage their inventory levels. We will continue to execute on our cost savings programs, manage expenses, and focus on creating consumer-focused innovation, investing in marketing to keep our brand strong so we can provide consumers with the best outdoor experience possible. Now I'll turn the call over to Dave for more details on the finances. Thank you, Helen. Good morning, everyone.

Our plant assets year over year.

Yes.

While operating profit fell $5 $5 million from the prior year.

Pretax income was down $2 $3 million in the current year quarter after gains on deferred compensation plan assets recognized in other income offset the impact of plant expenses and operating expenses.

Additionally, a $1 $9 million gain on the sale of a building in the fishing segment further bolster in other income.

Our inventory balance as of December was 200, $267 $3 million up about $16 million from last year's December quarter.

We have active plans in place to reduce our inventory levels throughout the balance of the year.

David W. Johnson: I wanted to highlight a few items from the quarter. As Helen mentioned, first quarter sales results were significantly impacted by inventory dynamics at retail and lower consumer demand. The quarter's results also reflect the challenging comparison between quarters.

Our balance sheet continues to have no debt and our net cash position enables us to invest in opportunities to strengthen the business. We remain confident in our ability to deliver long term value and consistently pay out cash dividends to our shareholders.

Now I'll turn the call over to the operator for the Q&A session.

Operator.

Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.

Sure. Your question. Please press star one again.

One moment for our first question.

I'm showing no questions at this time I would like to turn the call back to Helen Johnson Leipold for closing remarks.

Thank you all for joining us today I hope you have a good one.

Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

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David W. Johnson: Additionally, $1.8 million of lower professional services expense was offset in part by $1.3 million of additional deferred compensation expense resulting from changes in the market value of plan assets year-over-year, while operating profit fell $5.5 million from the prior year. However, pre-tax income was down $2.3 million in the current year quarter after gains on deferred compensation plan assets recognized in other income offset the impact of plan expense and operating expenses. Additionally, a $1.9 million gain on the sale of a building in the fishing segment further bolstered other earnings.

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David W. Johnson: Our inventory balance as of December was $267.3 million, up about $16 million from last year's December quarter. We have active plans in place to reduce our inventory levels throughout the balance of the year. Our balance sheet continues to have no debt, and our cash position enables us to invest in opportunities to strengthen the business. We remain confident in our ability to deliver long-term value and consistently pay out cash dividends to our shareholders. Now I'll turn the call over to the operator for the Q&A session. Operator?

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Operator: Thank you. At this time, we'll conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for our first question. I'm showing no questions at this time.

Helen Johnson: I would like to turn the call back to Helen Johnson-Leopold for her closing remarks. Thank you all for joining us today. I hope you have a good one.

Yes.

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Operator: Thank you. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Okay.

Operator: ?? ?? ?? ?? ?? ?? www.thevenusproject.com www.thevenusproject.com www.thevenusproject.com www.thevenusproject.com ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? www.thevenusproject.com www.thevenusproject.com www.thevenusproject.com ?? ?? ?? ?? ?? ?? ?? ?? Welcome to the Johnson Outdoors first quarter 2024 earnings conference call. Today's call will be led by Helen Johnson-Leopold, Johnson Outdoors Chairman and Chief Executive Officer. Also on the call is David Johnson, Vice President and Chief Financial Officer. Prior to the question-and-answer session, all participants will be placed in a listen-only mode.

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

Okay.

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Patricia G. Penman: Thank you. Good morning, and thank you for joining us for our discussion of Johnson Outdoors results for the 2024 fiscal first quarter. If you need a copy of today's news release, it is available on our website at johnsonoutdoors.com under investor relations. I also need to remind you that this conference call may contain forward-looking statements. These statements are made on the basis of our current views and assumptions and are not guarantees of future performance. However, actual events may differ materially from those statements due to a number of factors, many beyond Johnson Outdoors' control.

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Helen Johnson: These risks and uncertainties include those listed in our press release and filings with the Securities and Exchange Commission. If you have additional questions following the call, please contact Dave Johnson or myself. It is now my pleasure to turn the call over to Helen Johnson-Lebizinski. Thanks, Pat. Good morning, everyone.

Okay.

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Okay.

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Thank you.

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Welcome to the Johnson outdoors first quarter 2024 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.

Prior to the question and answer session. All participants will be placed in a listen only mode. After the prepared remarks. The question and answer session will begin if you would like to ask a question during that time. Please press star one one on your telephone you will then hear an automated message advising your hand is raised.

Helen Johnson: Our first quarter results were significantly impacted by high inventory levels at retail and slower consumer demand. In this challenging marketplace, we are investing in consumer marketing programs to reinforce the strength of our brands, support new product launches, and stimulate increased demand. In addition, we are executing on the cost savings program and diligently managing expenses. Importantly, we continue to invest in innovation to bring consumers the best outdoor experiences possible. In fishing, while we are seeing headwinds in the marketplace, we're excited to see solid trade support behind Minn Kota's Quest series, the all-new brushless trolling motor technology that we announced last fiscal year. Nonetheless, consumer behavior in the season will be the critical factor.

Thank you good morning, and thank you for joining us for our discussion of Johnson outdoors results for the 2020 for fiscal first quarter. If you need a copy of today's news release. It is available on our website at Johnson outdoors Dot com under Investor Relations.

It is now my pleasure to turn the call over to Helen Johnson Leipold.

Thanks, Pat Good morning, everyone and thank you for joining us I'll begin with an overview of our first quarter results, then I will share a perspective on that.

Performance and outlook for our businesses, David will review financial highlights.

Then we'll take your questions.

Sales in our first fiscal quarter, ending December 2023 declined 22% to $138 million compared to $178 $3 million in the prior year first quarter.

Helen Johnson: In our diving business, sales declined slightly compared to the prior year quarter, which reflected a strong recovery from the pandemic. However, in the current period, we have seen markets begin to normalize. Our camping and watercraft recreation sales are down due to a continued decline in their markets from the elevated pandemic fuel demand of the past few years. In watercraft recreation, however, our Old Town Sportsman line is outperforming competitors in a very diverse marketplace. The award-winning E-Pedal Plus Drive, announced last year, is the newest addition to the line, and in camping, we continue to work on leveraging Jeff Oil's brand equity into expansive growth opportunities.

Net income for the quarter was $4 million or 38 cents per diluted share versus $5 $9 million or <unk> 57 cents per diluted share in the previous year's first quarter.

In addition, we are executing on our cost savings program and diligently managing expenses importantly, we continued to invest in innovation to bring consumers the best outdoor experience possible.

In fishing, while we are seeing headwinds in the marketplace. We're excited to see solid trade support behind me codecs Quest theory the arm.

New breast with trolling motor Tech now LNG that we announced last fiscal year, Nonetheless consumer behavior in season will be the critical factor.

And our diving business sales declined slightly compared to the prior year quarter, which reflected a strong recovery from the pandemic.

In the current period, we have seen markets begin to normalize our camping and watercraft recreation sales are down due to a continued decline in their markets from the elevated pandemic fueled demand over the past few years in watercraft recreation. However, our old town sportsman line is outperforming its competitors in a very depressed.

Marketplace.

The award winning E pedal plus drive announced last year is the newest addition to the line and in <unk>. We continue to work on leveraging Jeff Boyles brand equity into expansive growth opportunities.

As we head into the season, we expect the outdoor recreation marketplace will remain challenged with uncertainty in demand to retailers continuing to tightly manage their inventory levels.

We will continue to execute on our cost savings programs manage expenses and focus on creating a consumer focused innovation investing in marketing to keep our brands strong. So we can provide consumers with the best outdoor experience possible.

Now I'll turn the call over to Dave for more details on the financials.

Thank you Helen good morning, everyone I wanted to highlight a few items from the quarter.

As Helen mentioned first quarter sales results were significantly impacted by inventory dynamics at retail and lower consumer demand.

The quarter's results also reflect the challenging comparison between quarters during the first quarter of fiscal 'twenty. Three we were still feeling a significant amount of backlog customer orders in our fishing business.

David W. Johnson: During the first quarter of fiscal 23, we were still filling a significant amount of backlogged customer orders in our fishing business. We've been taking steps to strengthen our operating margins with an active cost savings program and prudent expense management. The quarter's gross margin of 38.1% is up 2.9 points from the prior year quarter, due primarily to reductions in material and freight costs. Operating expenses decreased 8% or $4.5 million versus the prior year quarter due primarily to lower sales volumes. Additionally, $1.8 million of lower professional services expense was offset in part by $1.3 million of additional deferred compensation expense resulting from changes in the market value of plant assets year-over-year. While operating profit fell $5.5 million from the prior year, pre-tax income was down $2.3 million in the current year quarter after gains on deferred compensation plan assets recognized in other income offset the impact of plan expense and operating expenses. Additionally, a $1.9 million gain on the sale of a building in the fishing segment further bolstered other earnings.

We've been taking steps to strengthen our operating margins with an active cost savings program of prudent expense management two quarters gross margin of 38, 1% is up two nine points from the prior year quarter, due primarily to reductions in material and freight costs.

Our plant assets year over year.

While operating profit fell five $5 million from the prior year.

Pretax income was down $2 $3 million in the current year quarter after gains on deferred compensation plan assets recognized in other income.

Offset the impact of plant expenses operating expenses. Additionally, a $1 $9 million gain on the sale of a building in the fishing segment further bolstered other income.

Our inventory balance as of December was 200, $267 $3 million up about $16 million from last year's December quarter.

We have active plans in place to reduce our inventory levels throughout the balance of the year.

Operator: Now I'll turn the call over to the operator for the Q&A session. Operator. Thank you. At this time, we'll conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for our first question. I'm showing no questions at this time.

Now I'll turn the call over to the operator for the Q&A session operator.

Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.

Sure. Your question. Please press star one again.

One moment for our first question.

I'm showing no questions at this time I would like to turn the call back to Helen Johnson Leipold for closing remarks.

Helen Johnson: I would like to turn the call back to Helen Johnson Leopold for closing remarks. Thank you all for joining us today. I hope you have a good one. Thanks. This does conclude the program. You may now disconnect.

Thank you all for joining us today I hope you have a good one thanks.

Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Q1 2024 Johnson Outdoors Inc Earnings Call

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