MILWAUKEE, Wisconsin (8 Feb 2005) -- Despite strong sales of military tents and fish-finding gear, Johnson Outdoors said it lost $1 million in its first quarter because of flagging demand for boats and diving-equipment. In what may be its final profit report as a public company, Johnson Outdoors said it swung to a loss of 12 cents a share, from profit of $200,000, or 2 cents, a year earlier. Sales jumped 19% to $75 million. Much of that gain was attributable to the company's May acquisition of Humminbird, a maker of sonar equipment for fishermen. The company has scheduled a March 22 meeting for shareholders to vote on whether to accept an offer by the Johnson family to take the company private. Costs for the going-private deal were $900,000 in the quarter, and now total $2.4 million overall, the company said. The maker of kayaks, scuba gear, boats and tents said it is taking steps to reorganize its unprofitable diving business, including the Scubapro and Uwatec brands, and is banking on introductions of new products to help drive sales and profit. Johnson Outdoors needs sales of other products to offset what is projected to be a decline of up to 40% in sales of military tents this year. Among the products the company sees potential for are a new line of electric boats just now hitting the market. The company introduced the Escape line of electric-powered boats that Johnson Outdoors hopes will attract novices because of its simplicity. "This is a product category that we've created from scratch," Chairwoman Helen Johnson-Leipold said. "We've combined our technical expertise in boats and electric motors and created a totally new flip-the-switch-and-go line of electric boats." The new Escapes debuted at boat shows recently in Minneapolis and Chicago. The Escapes come in four electric models, ranging from a 7-foot Fun Boat that costs $2,000 to a 13-foot, 750-pound Electric Deck Boat that costs $7,499. The electric boats are powered by batteries that have a running time of up to eight hours, and maximum speeds of 3-3.5 mph for the small boat and 5 mph for the deck boat. The boats are made by the watercraft division, which closed down one factory and moved production from another last year as part of a restructuring that eliminated 69 manufacturing jobs. The boats are made for Johnson by KL Industries of Muskegon, Mich. | | Johnson Outdoors has reported financial losses due to its unprofitable Scubapro and Uwatec scuba diving equipment. Following a restructuring, the boat unit is more efficient, said Jervis "Jerry" Perkins, Johnson Outdoors president and chief operating officer. "Suffice it to say we believe watercraft is far stronger and more competitive than a year ago," he said. "Now we need to simply sell some boats." The company plans to go private and said it will save at least $700,000 a year, by eliminating costs that include those associated with the Sarbanes-Oxley corporate governance law, company officials said. In addition, as a private company Johnson Outdoors would be relieved of the market's focus on quarter-to-quarter earnings growth, the company said in its proxy statement. The Johnson family offered to buy the company last year for $18 a share, but increased that to $20.10 after some investors complained that the first offer didn't represent a fair valuation of the company. Even at that higher amount, some investors have said the offer is too low, but the Johnson family refused to budge from its final offer of $20.10. "We have grown substantially and achieved many important strategic milestones since becoming a public company in 1987," Johnson-Leipold said. "Over the years we have continued to invest in our businesses to ensure that they are vital and thriving enterprises 100 years from now." |
