Quarterlytics / Consumer Cyclical / Leisure / Johnson Outdoors Inc.

Johnson Outdoors Inc.

jout · NASDAQ Consumer Cyclical
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Ticker jout
Exchange NASDAQ
Sector Consumer Cyclical
Industry Leisure
Employees 1200
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FY2004 Annual Report · Johnson Outdoors Inc.
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T H E   S P I R I T   O F   A D V E N T U R E

Old Town® |  Canoes, touring

and recreational kayaks

Necky™ | Touring, recreational 

and whitewater kayaks

Escape® | Recreational electric watercraft

Ocean Kayak™ |  Sit-on-top kayaks

Carlisle® | Paddles and oars

Extrasport™ |  Personal flotation devices and

wearable paddle gear

Our market-leading brands 

are known worldwide for 

outstanding quality and 

performance.

Minn Kota® |  Electric trolling motors, 
batteries, chargers and
marine accessories

Humminbird® |  Sonar and GPS marine 

electronics

SCUBAPRO® |  Underwater breathing 

regulators, BCs, masks, 
fins, snorkels and suits

UWATEC™ |  Underwater dive 

computers and 
gauges

Cover photograph by Samuel C. Johnson

Eureka!® |  Camping tents, camping gear, 

Silva® | Compasses and gauges

specialty commercial and 
military tents

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C   H   A  

I

  R   M   A   N   ’

 S  

L   E   T   T   E   R

Throughout the excitement and challenges of 

2004, Johnson Outdoors held steady on our 

ultimate resolve: We are committed to ensuring 

sustainable growth and profi tability through 

continuous, meaningful innovation.

In 2004, we achieved double-digit 
improvements in net income, 
earnings and sales, while strength-
ening our business through a sig-
nificant acquisition and continued 
focus on creating a lean, flexible 
organization.

Our acquisition of Humminbird 
brand fishfinders and consumer 
electronics gave us an important 
growth platform for leading-edge 
technology, and a model to follow 
in the future.  

Our alliance with sports rack 
manufacturer Thule Inc. high-
lights our creativity in stimulat-
ing our markets — creativity all 
our businesses demonstrated in 
delivering market-winning new 
products that drove a third of 
sales this year.  

Our emphasis on enhanced 
systems points up the power of 
our innovative business model, 
enabling us to create a more 
efficient, productive organization.

At the same time, we demon-
strate our long-term commitment 
by investing more resources 
than ever to enhance our unique 
insight into the consumer, and 
to stay on the cutting edge of 
research and development in 
our industry. 

A   L O O K   B A C K
Watercraft. We restructured to 
remove cost and complexity and 
increase flexibility in this busi-
ness, treating people right when 
our decisions meant a change in 
their lives. Watercraft is now the 
right size, with the right systems 
and processes and the right team.   
Our investments have resulted 
in a change for the better, as this 
business will be stronger and 
more competitive going forward. 
We are on the upswing.  

We continue to invest in new 
products, which drove about 30 
percent of Watercraft sales this year. 
We’ve created a totally new market 
segment with our breakthrough 
Escape® brand “flip the switch and 
go” small electric boats. Excitement 
also surrounds the Old Town®
Dirigo kayak, with enhanced 
comfort and control features; 
the Ocean™ Kayak SideKick, a 
seat-and-a-half kayak for an adult 
and a child or a large pet; and our 
new Extrasport™ accessories and 
“comfort-fit” seating.   

Diving. We took a hard look at this 
global business and began taking 
action to rejuvenate our market, 
capitalizing on Diving’s synergies 
and strengths. Breakthrough prod-
ucts and marketing programs are 
key to growing sales and gaining 
market share.  We are working to 
reinvigorate our dealers’ business 
and consumer base with new prod-
ucts like the Scubapro® Xtender 

wrist computer and UWATEC™
Smart TEC and Aladin™ TEC 
computers.

Marine Electronics. Our 
integration of Humminbird®,
a leading global fishfinder brand, 
finished ahead of schedule, 
while the Maxxum™ from Minn 
Kota® generated record sales. 
Now our disciplined team is 
driving forward to capture new 
growth opportunities as we build 
on Minn Kota® strengths and 
Humminbird® potential.

The Marine Electronics group 
saw nine months of exceptional 
wholesale and retail sales. While 
fourth quarter sales softened due 
to retail uncertainty regarding the 
economy, happily, early season 
orders for fiscal 2005 are strong.

Outdoor Equipment. Military 
tent sales drove excellent perfor-
mance; however, with contracts 
and emergency orders slowing, 
we do not expect the same results 
in 2005. Our focus is creating 
better balance across all Outdoor 
Equipment segments, and this 
will take time. Commercial tent 
sales were up, albeit from a small 
base. Consumer camping—tents, 
sleeping bags, compasses and 
other accessories—was flat, 
suggesting declines here may 
have leveled and it’s time to grow. 
Again, our ability to innovate 
and reinvigorate our markets is 
crucial. We are combining new 
designs and new technology 
with exciting new alliances and 
cutting-edge market research to 
ensure new product success.    

A   L O O K   A H E A D
Johnson Outdoors seeks long-term, 
sustainable growth and profit-
ability through continuous inno-

vation—in our products, in our 
marketing, in our business model. 
That also means continuous 
investment in understanding our 
markets and consumers, building 
on superior insight to create suc-
cessful product “firsts” like those 
shown elsewhere in this report. 

While the proposed merger 
between Johnson Outdoors Inc. 
and JO Acquisition Corporation 
was not approved, the go-private 
analysis gave us valuable financial 
planning and strategic business 
insights on which we will build 
as we continue as a publicly 
traded company.

Looking ahead, there may never 
be a perfect year when all the 
trends are in our favor. We live 
by the principle that the economy 
should not be an excuse for why 
business is bad, nor should it be 
the reason for why business is 
good. We can’t let trends dictate 
our future. We can take charge of 
our destiny by out-innovating our 
competition. 

At Johnson Outdoors, we choose 
to innovate—and succeed. Our 
people and our brands are second 
to none. Our ability to turn ideas 
into winning products has never 
been greater, and our commit-
ment to our deeply-held values 
has never been stronger.  

Our possibilities and potential are 
endless. The future is ours for the 
making.  

Helen P. Johnson-Leipold
Chairman and
Chief Executive Officer

 
The lifeblood of our business
The lifeblood of our business

For Johnson Outdoors, the key to growth and profi tability is 

—continuous innovation that is meaningful to our consumers. 

That keeps us a clear step ahead of the competition. That 

Plastic boats

An Old Town® Canoe fi rst, created by Sam Johnson in 
the 1970s, that is now a half-a-billion-dollar market

Underwater 
breathing 
regulator

SCUBAPRO® innovation, still considered 
revolutionary decades after its introduction

Electric
trolling motors

Minn Kota® has become the fi shing enthusiast’s best 
friend and the market leader

Small electric-
powered boats

Escape® “fl ip the switch and go” boats bring a
completely new experience and add comfort, 
convenience and ease to water recreation

empowers us to take charge of our future. And our greatest 

Wireless 
fi shfi nder

Humminbird® breakthrough technology has captured 
the attention of fi shing enthusiasts around the world

source of innovation is our people, whose passion and 

creativity have led to many important product “firsts.” 

The Freedom 
tent

A fi rst for people with disabilities, developed by 
Eureka!® using universal design concepts to make the 
outdoor experience more accessible to more people

Extrasport™ 
life preserver

Extrasport™ innovation that brings “the most 
comfort in the water” to kayakers and other paddlers 
while earning U.S. Coast Guard safety approval

Modern-day
dive computer

UWATEC™ Air X Nitrox took underwater computer 
technology to new heights in the 1990s

Easy-to-use
sailboats

The Escape® patented rigging system opened sailing 
to a broader market

Wireless 
remote steering

CoPilot from Minn Kota® introduced hands-free 
steering from the fi shing rod, wrist or belt

M A N Y   M O R E   T O   C O M E

www.j ohnsonout do ors .com

Certain matters discussed in the Chairman’s Letter 

are “forward-looking statements” intended to be 

covered by the safe harbor provisions for forward-

looking statements contained in the Private 

Securities Litigation Reform Act of 1995. Please 

see “Forward Looking Statements” in the 2004 

Form 10-K for a discussion of uncertainties and 

risks associated with these statements.

J o h n s o n   O u t d o o r s   I n c .  

5 5 5   M a i n   S t r e e t

R a c i n e ,   W i s c o n s i n

5 3 4 0 3 -1015   U S A

( 2 6 2 )   6 31 - 6 6 0 0

 
 
 
A   T R I B U T E   T O   O U R   F O U N D E R

Where the Adventure Began

WHEN SAM JOHNSON JOINED JOHNSON WAX
in 1954, all the company’s products were 
wax-based. With a passion for innovation 
and a willingness to take calculated risks, 
Sam expanded the family business to new 
products in new markets, turning a small 
wax company into a multi-billion-dollar 
family of international companies. 

As part of that growth, Sam established 
Johnson Outdoors in 1970—and soon 
created the plastic boat industry through 
Old Town Canoe®. Though the world 
economy was in disarray, Sam knew there 
were always consumers looking for higher 
price value. He knew more affordable, 
more convenient plastic boats would 
be just what they wanted. Today plastic 
boats are a half-billion-dollar market, and 
Johnson Outdoors is the number one seller.

In the 35 years since our founding, 
Johnson Outdoors has grown into a lead-
ing provider of innovative, top-quality 
recreation products that make it easy for 
people to have fun in the great outdoors. 
We continue to employ the quintessential 
new product development model Sam 
created. We take to heart his innovation-
driven business strategy: “New products, 
new geographies, and every few years, an 
acquisition.” We pursue his commitment 
to serving employees, customers, the 
environment and the communities where 
we do business. 

“I believe that making a better place goes 
beyond providing jobs,” Sam once said. 
“It means being a worthy neighbor who 
cares about the neighborhood. It means 
adding an unspoken dimension of decency 
and consideration to the community.”

Though Sam’s consideration may have 
been unspoken, it did not go unrecognized. 
Fortune called him “corporate America’s 
leading environmentalist” when he was 
inducted into the U.S. National Business 
Hall of Fame. He held seven honorary 
doctoral degrees and received numerous 
international awards recognizing his busi-
ness, environmental and philanthropic 
contributions, including the Charles A. 
Lindbergh Award for balancing techno-
logical advancement and environmental 
preservation; the Experimental Aircraft 
Association’s Freedom of Flight Award 
for his contributions to aviation; and the 
Lifetime Environmental Award from the 
United Nations Environment Programme. 

Sam was a founding member of the 
World Business Council for Sustainable 
Development, and was named in 1993 to 
the U.S. President’s Council on Sustainable 
Development. From 1990 to 2000, he 
served on the Board of Governors for 
The Nature Conservancy, acting the last 
two years as Chairman of the Board of 
Governors. Most recently, he was a director 
of the World Resources Institute.  

In his book The Essence of a Family 
Enterprise, Sam wrote, “A good leader 
builds an organization infused with sound 
principles and values, indelibly locked into 
the intellect and soul of all.” His focus on 
innovation continues to guide Johnson 
Outdoors toward leadership in the global 
outdoor recreation industry. His strategic 
vision continues to fuel our drive toward 
sustainable, long-term growth and profi t-
ability. And his overriding principle—
“Do the right thing”—is indelibly locked 
into the soul of our enterprise.

SAMUEL  C.  JOHNSON  1928–2004

SAMUEL C. JOHNSON
SAMUEL C
 believed business
should serve a higher purpose and be
managed for the next generation. The
man known by all as simply “Sam” leaves 
a legacy of visionary leadership, remark-
able success and great humanitarianism.   

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Carlisle ® Black Magic Paddle

Extrasport™ Eagle  PFD

Ocean Kayak™
Prowler  15

Necky ™
OrbitFish

Old Town®
Dirigo

Old Town ®
Charles River

Necky ™
Manitou Sport

O u r   B r a n d s

Extrasport™
Drytop

Ocean Kayak™
SideKick

Escape ®
Chai se  Lounger

W A T E R C R A F T

Johnson Outdoors has a vision:
to own the water within a quarter
mile of shore. And we have the
passion to realize that vision. 
Our watercraft brands reflect
a rich tradition of innovation, 
from the fi rst elegant wooden 
canoes to sleek space-age-
composite kayaks to fun-time
peddle and patio boats to light-
weight, durable accessories. 

This year’s new Escape electric-
powered boats are the fi rst
real innovation in the marine 
industry in years. Using a clean 
and quiet patented Minn Kota®
electric propulsion system, this
line of recreational watercraft
brings new ease on the water 
to a whole new market for
Johnson Outdoors.

AN ADVENTURE IN PADDLING - 

OCEAN KAYAK, NECKY 

AND OLD TOWN  

 
 
 
 
 
 
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MK17/R390

MK25 X650

Cobalt and Hi-Viz TM Yellow 
Twin Jet Fins

Aladin  Computer  Console

Knighthawk

      Smart TEC Wrist

Aladin  TEC  Wrist

Classic Sport BC

O u r   B r a n d s

Ventana Mask

   Phoenix  Snorkel

EverFlex Wetsuit

D I V I N G

Some dive to get away from the 
world, others to get closer to it. 
Whatever the reason, divers are 
underwater adventurers exploring 
the amazing hidden realm beneath 
the waves. Deep down they want 
and need the best. Johnson 
Outdoors sees they get it. Our
SCUBAPRO® UWATEC brands 
are global leaders in innovative 
recreational diving equipment. 

Our products are designed for 
comfort and safety to provide a 
lifetime of reliable performance 
for the recreational and pro-
fessional technical diver alike. 
Our elite global dealer network 
has unparalleled expertise, 
ensuring SCUBAPRO® UWATEC 
consumers of outstanding 
products and world-class service.   

SCUBAPRO® UWATEC -

DEEP DOWN ONLY THE BEST WILL DO.

 
 
 
 
 
 
 
 
 
 
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K2

Digi tal Compass

Wild Basi n

Twister

Solar Shade

Extreme Coldweather 
Military Tent

O u r   B r a n d s

Freedom

Evolution 
Commercial  Tent

O U T D O O R   E Q U I P M E N T

When the great outdoors beckons, 
Eureka!® brand tents can meet 
every challenge. Specialty 
commercial and military tents, 
camping gear and Silva® com-
passes round out Outdoor Equip-
ment Group’s product portfolio 
at Johnson Outdoors.  

Field & Stream named the 
lightweight, durable Zeus 4EXO 
“2004 Best of the Best” for 
camping. The Freedom received 

kudos as the fi rst-ever camping 
tent especially for people with 
disabilities. The K-2 XT pro-
tected world-famous adventurer 
Pasquale Scaturro from Africa’s 
extreme heat, rain and insects 
as he fi lmed and solved “The 
Mystery of the Nile” — the new 
IMAX hit. New this year: solar 
shade day-shelters to add com-
fort and cool from the backyard 
to the beach. 

EUREKA!® -

TURNING THE OUTDOORS INTO 

A WELCOME ADVENTURE

 
 
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Vantage

Vector

MK-330  Charger

Riptide  Autopi lot

SmartCast RF35

Matri x 97

Maxxum Pro

O u r   B r a n d s

987c

M A R I N E   E L E C T R O N I C S

In 2004, Johnson Outdoors 
added Humminbird® to the 
Marine Electronics Group, estab-
lishing it alongside the ever-
popular Minn Kota® fl agship. 
The addition of this well-known 
fi shing and marine electronics 
brand gives us even stronger 
top-of-mind presence among 
serious anglers. Minn Kota®
enjoys the mantle of leadership 

in trolling and specialty electric 
motors, delivering “Anywhere. 
Anytime.” performance. Work 
has begun in earnest to lever-
age the strength of Minn Kota®
and Humminbird® to create 
a formidable presence in the 
marine electronics marketplace. 
Two iconic brands. One focused 
vision. A future of boundless 
opportunity.

MINN KOTA® - 

ANYWHERE. ANYTIME.

HUMMINBIRD® - 

SIMPLY. CLEARLY. BETTER.

 
M A N A G E M E N T   P E R S P E C T I V E

In fi scal 2004 Johnson Outdoors achieved double-digit growth in net 
sales, income and earnings. The Humminbird ® acquisition, strong 
military  tent  sales  and  record  growth  in  Motors  offset  declines  in 

Watercraft  and  Diving.  Investment  in  innovation  contributed  to  a 

growth  in  margins,  as  system  integration  and  restructuring  efforts 

helped to improve operating efficiency. This year’s emphasis on 

expense  control,  inventory  management  and  accounts  receivable 

reflects  our  continued  focus  on  cash  management.  We  ended  the 

year with cash reserves of nearly $70 million.   

We remain committed to strengthening the competitiveness of our 

businesses long-term. Maintaining a healthy balance sheet, with sub-

stantial liquidity, provides us the fl exibility to pursue that objective.

Jervis B. Perkins                                       Paul A. Lehmann

President and  
Chief Operating Offi cer 

           Vice President and 
           Chief Financial Offi cer

(thousands, except per share data)

2004

Operating Results
Net sales 

2002 

2003 

2004

$342,532  $315,892 

$355,274

Gross profi t 

Operating profi t 

Diluted earnings 
per common share 

Diluted average common
shares outstanding 

Capitalization
Total debt 

141,054 

127,989 

147,618

19,751 

11,613 

19,128

$      3.59(1)  $      0.63 

$      0.99

8,430 

8,600 

8,774

$  88,253  $  77,473 

$  67,019

Shareholders’ equity 

124,145 

144,194 

160,644

Total debt to total capital 

41.6% 

35.0% 

29.4%

(1)Includes a gain on sale of subsidiary of $2.65 per diluted share.

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B O A R D   O F   D I R E C T O R S

HELEN P. JOHNSON-LEIPOLD, 47

Chairman and Chief Executive Officer.

Director since 1994.

Also Chairman of Johnson Financial Group, 

Director of S.C. Johnson & Son, Inc. and 

JohnsonDiversey, Inc.,

THOMAS F. PYLE, JR., 63

Vice Chairman of the Board.

Director since 1987.

Chairman, The Pyle Group.

Also Director of Sub Zero Corporation.

JOHN M. FAHEY, JR., 52

Director since 2001.

President and Chief Executive Officer 

and Chairman of the Executive Committee 

of the Board of Trustees of the National 

Geographic Society. Also Director of Jason 

Foundation for Education.

GREGORY E. LAWTON, 53

Director since 1997.

President and Chief Executive Officer 

and Director of JohnsonDiversey, Inc.

Also Director of General Cable Corporation 

and Superior Metal Products, Inc.

TERRY E. LONDON, 55

Director since 1999.

President of London Partners LLC.

Also Director of Pier 1 Imports, Inc.

On behalf of the Company’s people and 

each of us individually, we, the Directors 

of Johnson Outdoors, express our deepest 

and most humble appreciation of Samuel 

Curtis Johnson for the enduring contribu-

tions he made to this Company and its 

reputation throughout the world; for the 

inspiring and visionary example he set for 

each of us; for showing us the joy to be 

found by simply being alive; and for the 

gift of having known such an honest and 

compassionate man.

From a resolution passed on December 8, 2004 

by the Board of Directors of Johnson Outdoors.

SAMUEL C. JOHNSON

Director since 1970.

Chairman of Johnson Financial Group 

and Chairman Emeritus of 

S.C. Johnson & Son, Inc.

SAMUEL  C.  JOHNSON  1928–2004