S ECOND Q UARTER R ESULTS
Sales during the second fiscal quarter reflect initial shipments to customers in advance of the primary retail selling period for the outdoor recreation industry's warm-weather products season. Net sales were $132.1 million in the second fiscal quarter compared with net sales of $128.7 million in the prior year quarter. Increased sales in Marine Electronics and Outdoor Gear more than offset revenue declines in other units. Key drivers behind the year-over-year comparison in each business unit were:
- Marine Electronics revenue increased 9 percent year-over-year due to growth in all brands from innovative new products.
- Outdoor Gear revenue increased 7 percent due to the acquisition of the Jetboil ® brand midway through the fiscal first quarter, which added $2.4 million to sales during the current quarter to more than offset a 42 percent decline in military sales.
- Watercraft sales compared unfavorably to the same period last year due to a continuing de-emphasis on low-margin product lines and lower sales in Europe.
- Diving sales were 6 percent behind the prior year due to weak economic conditions in key diving markets.
Total Company operating profit of $12.6 million during the second quarter was $1.3 million below the prior year quarter, a period during which the Company benefitted from a $3.5 million settlement with the Company's insurance carriers. Higher gross margin was driven by successful new products in Marine Electronics. The Company reported record second-quarter net income of $8.9 million, or $0.90 per diluted share, during the current quarter, compared to net income of $7.3 million, or $0.74 per diluted share, in the same quarter last year.
Y EAR-TO- D ATE R ESULTSFiscal 2013 year-to-date net sales were $219.4 million, a 5 percent increase over net sales of $208.9 million in the same year-to-date period last year. Total Company operating profit increased 38 percent to $14.2 million during the first six months of fiscal 2013 compared to an operating profit of $10.3 million during the prior year-to-date period which included a favorable $3.5 million settlement with the Company's insurance carriers. Net income for the first six months of the year was a record $9.2 million, or $0.93 per diluted share, a 112 percent increase compared to net earnings of $4.3 million, or $0.44 per diluted share, in the first six months of the prior year. Net interest expense declined 37 percent compared with the same period last year. The Company's effective tax rate during the fiscal first six months was 33 percent compared to an effective tax rate of 57 percent in the prior year-to-date period.
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