Johnson Outdoors to cut jobs

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RACINE, Wisconsin (5 Dec 2008) — Johnson Outdoors Inc. said Friday after it swung to a large loss in its fourth quarter that it plans to slash spending, cut jobs and suspend its quarterly dividend in response to the global economic slump, which is hurting sales of boats and other products.

The outdoor-recreation company, which makes everything from canoes and kayaks to scuba diving equipment, said it is looking to reduce operating costs and spending by more than $30 million, including $20 million in cost-saving projects and reducing capital expenditures.

The Milwaukee-based company said it will also eliminate about 7 percent of its jobs, or around 90 positions, freeze wages, and suspend its quarterly dividend. The company also is in breach of the net worth covenant in its debt agreements, and is working with its banks to amend the agreements.

Johnson Outdoors said it swung to a large loss in the fiscal fourth quarter, as the U.S. recession and accompanying economic weakness led the company to write down the value of its assets by $41 million, and sales in most of its product categories were weakened by “the rapid and steep economic downturn.”

It posted a loss of $74.6 million, or $8.18 per share, in the three months that ended Oct. 3. That compares with a year-ago profit of $942,000, or 10 cents per share. Revenue dipped 6 percent, to $81.8 million from $87.3 million, as sales in the marine-electronics business and watercraft business each fell 11 percent, and diving revenue also decreased.

The company reported $29.5 million in marine-electronics revenue, down from $33 million a year ago, and watercraft revenue slipped to $16.3 million from $18.4 million. Diving revenue declined 3 percent, to $26 million from $26.8 million, due to unfavorable foreign-currency exchange.

Faced with declining sales of its Scubapro diving equipment and other products, Johnson Outdoors Inc. announced plans to slash spending, cut jobs and suspend its quarterly dividend

Outdoor-equipment revenue edged up to $10 million from $9.4 million, as the company said it saw some growth in the military, commercial and consumer sectors.

Johnson Outdoors employs about 1,340 people, and announced the elimination of 60 jobs in fiscal 2008 after relocating a manufacturing facility and downsizing a Binghamton, N.Y., plant that made military tents.

The company’s third-quarter dividend was 5.5 cents for holders of Class A shares and 5 cents for holders of Class B shares.

Other cost-reducing moves include consolidating its dive-computer making and lowering data-management costs by 20 percent.

For the full year, the company lost $71 million, or $7.81 per share, compared with a profit of $9.2 million, or $1 per share, a year ago. Full-year revenue came to $420.8 million, down 2 percent from the previous year.