Outdoor financials: Minority shareholder looks to increase shares of Johnson Outdoors, plus Dick's, Outdoor Channel Holdings, Wolverine, Visa/MC increase interchange

Minority shareholder looks to increase shares of Johnson Outdoors, Dick's adjusts numbers based on accounting review, Outdoor Channel Holdings posts 4Q, FY '04 results, Wolverine names new board member, Major credit card companies increase interchange.

Minority shareholder looks to increase shares of Johnson Outdoors
Dolphin Limited Partnership I, L.P., a Stamford, Conn.-based, private investment partnership, which holds approximately 290,000 shares of Johnson Outdoors Inc. (Nasdaq: JOUT), contacted members of Johnson's Special Committee in a bid to buy 1.5 million common shares and obtain seats on its board of directors.

On March 22, Johnson Outdoors unsuccessfully tried to take the company private, unable to get the two-thirds majority vote it needed from shareholders. The Johnson family had offered $20.10 per share, but said the buyout was not supported by more recent shareholders. Dolphin Limited holds approximately 290,000 shares of Johnson Outdoors Inc. Class A common stock.

Donald T. Netter, Dolphin Limited's senior managing director, wrote: "If the Special Committee of 'independent' directors is committed to obtaining fair value for the minority shareholders of the company, now is the time to make a clean break with the past and, without predisposition, pursue all methods to maximize value for all shareholders."

Under its proposal, Dolphin Limited said it would make a non-control investment in Johnson Outdoors by acquiring approximately 1.5 million newly issued treasury Class B common shares (each with 10 votes per share and convertible at any time into Class A common shares) at a per share price of $21.10, adding "If our diligence should confirm greater value, we would be prepared to amend our proposed transaction terms accordingly."

Dolphin said its objectives in making the proposal were: to acquire a non-controlling equity stake in Johnson Outdoors at a price in excess of the $20.10 offered to minority shareholders in the going private transaction; to provide Johnson with additional funds to take-out at a premium those shareholders who voted in favor of the $20.10 going private transaction; to provide Johnson Outdoors with funds to pursue accretive, value enhancing acquisitions; to level the corporate playing field, so that no shareholder on its own can effectively dictate the transactions that Johnson Outdoors, its board, the Special Committee and the minority shareholders may consider; and to add for minority shareholders independent board representation committed to seeking out potential acquirers and exploring all methods to maximize value, including continuing to run the business as an independent company and pursuing analyst coverage, among other strategies. Dolphin Limited added that the proposal will be withdrawn at the close of business on April 15.

In other news, Johnson Outdoors had entered into a definitive agreement and plan of merger with JO Acquisition Corp., an entity established by members of the family of the late Samuel C. Johnson, including Helen P. Johnson-Leipold, chairman and CEO of the company, on Oct. 28, 2004. Now that the shareholders have voted against the company going private, the merger agreement was terminated on March 31 by both parties based on the terms of the agreement. The termination did not result in the imposition of any penalties on Johnson Outdoors.

Dick's adjusts numbers based on accounting review
Dick's Sporting Goods (NYSE: DKS) has completed the review of its accounting for leases, tenant and construction allowances and found that they are not consistent with generally accepted accounting standards and is restating past annual reports.

Dick's said that previously reported earnings per share is unchanged from the $0.79 and $1.30 for the quarter and year ended Jan. 29, 2005, respectively. However, Dick's said it is restating the previously issued consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended Jan. 31, 2004, and all years presented, and intends to restate the Form 10-Q's filed for the first three quarters of fiscal 2004. The effect of the restatement will be to increase earnings reported in the most recent period ended Jan. 29, 2005, due to restating prior years rather than including the prior year's effect in the current reporting period.

As previously reported, the fourth quarter ended Jan. 29, 2005, included an after-tax cumulative charge of $2.6 million, or $0.05 per share of which $471,000, or $0.01 per share related to fiscal 2004. Due to Dick's decision to restate previously issued consolidated financial statements, only the current year income statement effect will be recorded in 2004 and the effect remains $0.01 as previously reported. Its earnings per share for the quarter and year ended Jan. 29, 2005, have each increased by $0.04, and are now $0.79 and $1.30, respectively.

Dick's said there will be an increase in net income of $2.0 million for the fiscal year ended Jan. 29, 2005, and a reduction of net income of $0.4 million, $0.1 million and $0.2 million for the fiscal years ended Jan. 31, 2004, Feb. 1, 2003, and Feb. 2, 2002, respectively. The impact on previously released earnings per share will be an increase of $0.04 for the fiscal year ended Jan. 29, 2005, and a reduction in earnings per share of $0.01 for each of the fiscal years ended Jan. 31, 2004, and Feb. 2, 2002, with no change in earnings per share for the fiscal year ended Feb. 1, 2003.

Dick's said the restatement of previously issued consolidated financial statements will not have an impact on total net cash flows during any of the periods amended.

Outdoor Channel Holdings posts 4Q, FY '04 results
Outdoor Channel Holdings (Nasdaq: OUTD) got a fourth-quarter and year-end boost from its Outdoor Channel TV network, but took an expense hit after buying a minority interest in the network.

For the 2004 fourth quarter, total revenues increased 18.3 percent to $10.2 million from $8.6 million a year ago. Advertising sales rose to a quarterly record of $5.9 million, up 25.1 percent from 2003's $4.7 million. Subscriber fees also grew to a quarterly record, totaling $3.6 million, an increase of 18.5 percent. Net income for the fourth quarter more than doubled to $1.6 million, or $0.07 per diluted share, based on 22.3 million average weighted shares outstanding, from $721,000, or $0.03 per diluted share, based on 15.2 million average weighted shares outstanding, in the prior-year fourth quarter.

For 2004, the company posted total revenues of $40.0 million, a 26.1 percent increase over $31.7 million in the prior year. Advertising sales rose 33.1 percent to $21.8 million, and subscriber fees grew 23.6 percent to $13.4 million from 2003 levels. Total expenses for the year rose to $83.7 million from $24.1 million in 2003. The company said the increase in expenses was principally driven by a non-cash, non-recurring compensation expense charge of $52.2 million as a result of buying a minority interest of The Outdoor Channel not then owned by the company. As a result, the company posted a net loss of $26.7 million, or $1.67 per share, based on 16.0 million average weighted shares outstanding, for 2004. This compares to a net income of $3.6 million, or $0.19 per diluted share, based on 14.8 million average weighted shares outstanding, in 2003.

Also, The Outdoor Channel flipped the switch on its new high-definition network -- Outdoor Channel 2 HD, which is now fully operational and available to cable and satellite operators. In May 2004, it had announced plans to launch its new and separate network offering the channel's outdoor programming entirely in high-definition. The new network will offer exclusive new programming in addition to select fan favorites from the existing The Outdoor Channel, all filmed entirely in real (not up- converted), high-definition. It plans to launch a full media and marketing campaign to consumers on July 1.

Wolverine names new board member
Wolverine World Wide (NYSE: WWW) has appointed Shirley D. Peterson to its board of directors. Peterson joins the Wolverine board having served as president of Hood College of Frederick, Maryland, and as a partner and head of tax practice at Steptoe & Johnson of Washington, D.C. She has also served as commissioner of the Internal Revenue Service and as assistant attorney general of the tax division for the U.S. Department of Justice. Peterson is also a director of AK Steel Corp., Champion Enterprises, Federal-Mogul Corp., Goodyear Tire & Rubber Co., and she serves as an independent trustee for Scudder Mutual Funds.

Major credit card companies increase interchange
As of April 1, both Visa and MasterCard have increased their interchanges. Interchange is a percentage of each transaction -- sometimes accompanied by a flat fee -- that banks collect from retailers every time a credit card or debit card is used to pay for a purchase, adding up to billions of dollars each year. The National Retail Federation (NRF) said an average is difficult to calculate because of the complicated fee structure, but the increases range from 2.7 percent for Visa Consumer Standard Credit to 9 percent or more on typical retail purchases for MasterCard Corporate Face-to-Face transactions. In addition, some transactions are being moved into new categories, having the effect of a rate increase for merchants even where published rates are unchanged. Fees for a few categories of transactions will decrease slightly, but most will increase.

The April increases are part of a long-term trend in rising interchange rates, the NRF said. A recent Morgan Stanley report found that the weighted average for Visa and MasterCard interchange had increased from 1.58 percent in 1998 to 1.75 percent in 2004 and is forecast to grow to 1.86 percent in 2010. Dollar volume has grown from $9.4 billion in 1998 to $17.4 billion and is projected to reach $32.4 billion in 2010.

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