Outdoor financials: Johnson Outdoors' Q3 sales drop 18.6 percent, plus Cabela's, Quiksilver, West Marine

Johnson Outdoors' Q3 sales dropped 18.6 percent, Cabela's reported that its Q2 profit rose 25 percent, Quiksilver closed several financing transactions, and West Marine's Q2 revenues dropped 5 percent.
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Johnson Outdoors' Q3 sales drop 18.6 percent

Johnson Outdoors (Nasdaq: JOUT) reported higher earnings on lower net sales for its third quarter. Johnson Outdoors is parent of Old Town, Ocean Kayak, Necky, Carlisle and Extrasport, among others.

Total net sales for the quarter ended July 3 dropped 18.6 percent to $114.9 million compared to $141.2 million in the prior year period.

Income was $9.0 million, or $0.98 per diluted share, during the third fiscal quarter, compared to $7.9 million, or $0.85 per diluted share, in the same quarter last year.

Watercraft sales were 26.4 percent below the prior year on lower customer reorders, unfavorable currency translation of 3.4 percent and continued scaling back of distribution in non-core channels.

Outdoor equipment sales were down 24.9 percent from a decrease in military tent orders and commercial tent market weakness.

Marine electronics revenues were 15.8 percent lower on continued weakness in domestic and international boat markets, while diving revenues dropped 11.3 percent on weak economies in key markets and an unfavorable currency translation.

Total company operating profit of $10.6 million for the third fiscal quarter compared unfavorably to operating profit of $14.6 million in the prior year quarter.

Also, in June, Johnson Outdoors said it was consolidating all domestic watercraft production and business and customer support services in Old Town, Maine, and closing its Ferndale, Wash., facility as part of an initiative to significantly reduce cost and complexity, optimize synergies and assets, strengthen competitiveness and improve profitability for the future.

It noted that consolidation is anticipated to result in annual cost-savings of more than $4 million going forward. Costs and charges associated with the action are estimated to have a negative impact on earnings per diluted share of between $0.16 and $0.20 in the fourth fiscal quarter of 2009, it added.

Cabela's Q2 profit up 25 percent

Cabela's (NYSE: CAB) said its second-quarter profit rose 25 percent as consumers bought more hunting equipment and it revalued a credit card portfolio.

Net income was $9.1 million, or $0.14 per diluted share, compared to $7.3 million, or $0.11 per diluted share, in the second quarter of 2008.

The quarter's results included $0.08 from a revision in the value of a credit card portfolio and an $0.11 charge from a real estate write-down. Cabela's wrote down the value of land where it will no longer open a store in Greenwood, Ind.

Total revenue increased 4.4 percent to $549.2 million compared to $526.0 million last year. Same-store sales rose 6.1 percent in the quarter.

For the full year, it expects total revenue growth and comparable store sales to increase at a low single-digit percentage rate as compared to its previous forecast for total revenue growth and comparable store sales to be approximately flat. It reiterated an earlier estimate that yearly profit would be about equal to what it earned in 2008.

Quiksilver closes several financing transactions

Working to improve its capital structure, Quiksilver (NYSE: ZQK) entered into an agreement with its European banking partners to consolidate its European debt obligations, including previously uncommitted lines of credit. Now it has a new committed four-year facility consisting of EUR 170 million (USD $242 million) in term loans, a letter of credit facility with a capacity of EUR 40 million (USD $57 million), and a EUR 58 million (USD $82 million) revolving line of credit.

The European facility is expected to close before the end of September. Its European bank group has extended the maturity of a EUR 55 million (USD $78 million) line of credit, which will be absorbed into the new facility, to accommodate the expected closure date of the transaction.

As part of a separate agreement, Societe Generale Bank & Trust, a member of the European bank group, has extended the maturity of a EUR 50 million (USD $71 million) term loan due to mature in July 2010 until July 2013.

Also, Quiksilver said two transactions previously announced by the company had closed and were funded on July 31. In the first transaction, Rhône, an international private equity firm, funded a five-year senior secured term loan of approximately $150 million. In the second transaction, Bank of America and GE Capital, as joint lead arrangers, funded a new three-year, $200 million asset-based credit facility for Quiksilver's Americas business.

West Marine's Q2 revenues down 5 percent

A do-it-yourself mentality among its boating customers was a boon to West Marine (Nasdaq: WMAR), which reported just a 5-percent decrease in net revenues for the second quarter.

For the quarter ended July 4, net revenues were $215.4 million compared to $226.7 million in 2008. Comparable store sales declined 1.0 percent versus the same period a year ago.

Gross profit was $73.1 million, a decrease of $5.3 million compared to 2008. As a percentage of net revenues, gross profit decreased by 0.7 percent to 33.9 percent compared to gross profit of 34.6 percent last year.

SG&A expense for the quarter was $40.5 million, a decrease of 17.2 percent, compared to $48.9 million for the same period last year, and expenses as a percentage of revenues decreased by 2.8 percent to 18.8 percent.

Earnings per share for the second quarter were $1.46 as compared to $0.20 last year. Last year’s earnings included charges on a per share basis of $0.66 for the valuation allowance and $0.06 for asset impairments.

--Compiled by Wendy Geister

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