Johnson Outdoors Inc.

Hello, everyone, and welcome to the Johnson Outdoors Second Quarter 2020 Earnings Conference Call. Helen Johnson-Leipold, Johnson Outdoors Chairman and Chief Executive Officer will lead today's call. Also on the call is David Johnson, Vice President and Chief Financial Officer. Prior to the question and answer session, all participants will be placed in a listen-only mode. After the prepared remarks, the question and answer session will begin. If you would like to ask a question during that time, please press star then the number one on your telephone keypad. This call is being recorded. Your participation implies consent to our recording this call. If you do not agree to these terms, simply drop off the line. I would now like to turn the call over to Patricia Penman from Johnson Outdoors. Please go ahead, Ms. Penman.

Thank you. Good morning and welcome to our discussion of Johnson Outdoors fiscal 2020 second quarter results. If you need a copy of today's news release, it is available on our website at johnsonoutdoors.com under investor relations. I also need to remind you that this conference may contain forward-looking statements. These statements are made on the basis of our current views and assumptions and are not guarantees of future performance. Actual events may differ materially from those statements due to a number of factors, many beyond Johnson Outdoors control. These risks and uncertainties include those listed in our press releases and filings with the Securities and Exchange Commission. If you have additional questions following the call, please contact either Dave Johnson or me. It is now my pleasure to turn the call over to Helen Johnson-Leipold.

Good morning, everyone. Thank you for joining us. I'll begin with a brief overview of financial results for the quarter and first six months, review the initial impact of COVID-19 on our businesses, and outline our priorities as we work to help mitigate its ongoing effect. I'll turn things over to Dave to review the key financials, and then we'll take your questions. Total company sales declined 8% to $163.1 million during the second quarter. Each business was impacted differently by the pandemic this quarter, some more, some less, some earlier, some later. Improved margins and cost-cutting efforts helped offset the impact of lower sales. Operating profit for the quarter improved to $31.8 million, and Dave will discuss the factors behind this increase in this section. Net income was $20.4 million, or $2.02 per diluted share. On a year-to-date basis, sales, profit before taxes, and net income all compared favorably to prior year's six-month period due to this year's very strong first quarter performance. Government-ordered stay-at-home mandates led to temporary suspensions at many of our operations. Diving, our most global business, was affected first due to the rolling spread of COVID-19 around the world. As a result, dive markets across the globe have been negatively impacted by government-ordered stay-at-home mandates. Watercraft and camping production was temporarily suspended in mid to late March, followed by fishing in early April. Due to the timing of all this, the heart of our primary selling season has dramatically disrupted, and we expect the third quarter to be significantly impacted as a result of COVID-19. During these unsettling times, employee health and safety has been our primary focus. With employees working from home and while production and shipments were on temporary hiatus, every location was deep cleaned and sanitized, strict operating processes and procedures put into place consistent with CDC guidelines for COVID-19 and good personal hygiene directives advanced. As a result of these measures, we are able to ramp up operations at levels consistent with demand in each business and with applicable government requirements, which vary by state and location. Despite the physical distance between us, my management team has worked closely together, monitoring all aspects of this rapidly changing situation to bring clarity to near-term priorities and longer-term needs. Government mandates have restricted activities enjoyed by our outdoor consumers thus far, and while these are just beginning to ease, this year's warm weather outdoor recreation season will be constricted. Our focus now and for the remainder of the year is implementing strategies and plans designed to optimize sales. Key to this will be leveraging our digital marketing capability and capacity to maximize e-commerce and in-market opportunities. When our consumers are once again able to get out there and to experience the great outdoors, Johnson Outdoors will be there for them. Once stay-at-home mandates and restrictions on travel are eased, we hope to have a clearer view on the fuller impact of COVID-19 on the outdoor recreation industry and our markets, and thus greater clarity on the full-year outlook. Importantly, our unwavering commitment to building a thriving enterprise long-term remains stronger than ever. Now, as always, consumer-driven innovation will play a critical role in helping us overcome challenging times and emerge stronger and better positions for the future. Now, I'll turn things over to Dave.