Hello everyone and welcome to the Johnson Outdoors First Quarter 2021 Earnings Conference Call. Today’s call will be held by Helen Johnson-Leipold, Johnson Outdoors Chairman and Chief Executive Officer. 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. 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 everyone. Thank you for joining us for our discussion of Johnson Outdoors results for the 2021 fiscal first quarter. 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 call 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 Dave Johnson or me. It is now my pleasure to turn the call over to Helen Johnson-Leipold.

Thanks Pat. Good morning and thank you for joining us. I'll begin with comments on performance this quarter and outline priorities going forward, Dave will review financial highlights, and then we'll take your questions. First fiscal quarter sales reflect the continued impact of the COVID-19 pandemic, driving high demand for outdoor recreation products that began in the second half of our 2020 fiscal year. Consumer demand remains strong during the quarter and customers replenish their depleted inventory levels in anticipation of the upcoming warm weather recreational season. First quarter sales rose 29% to $165.7 million versus $128.1 million in the prior year period. Operating profit of $23.6 million was up significantly versus $6.8 million in the prior year first quarter. Net income was $19.8 million or $1.96 per diluted share, which compared very favorably to the previous year's first quarter net income of $6.4 million or $0.64 per diluted share. Dave will provide more details on the quarter's results in his remarks. In Fishing, our largest business, demand remains high across all brands and we continue to build on a powerful legacy of innovation that draws both seasoned anglers and new anglers to Johnson Outdoors for a great fishing experience. Hummingbird's award-winning MEGA 360 imaging, the only sonar option that provides a high resolution 360 degree view with an unmatched -- with unmatched detail and coverage, continues to do well in its second year on the market. Before MEGA 360, anglers were limited to a sonar view either below or to the sides of their boats while moving. Now, with MEGA 360, anglers can make an accurate cast in any direction to either side in front of and behind them, even if the boat is anchored. When MEGA 360 imaging is used together with Minn Kota Spot-lock technology, it provides anglers with an effortless command of your boat and an uncompromised view of fish in the world below.

Thank you, Helen. Good morning everyone. As Helen mentioned, we came into our fiscal first quarter with a strong demand in our Fishing, Camping, and Watercraft Recreation businesses. We’ve been working hard to produce as much as we can, including adding more shifts and managing our supply chain to increase capacity where possible. Operating profit was up significantly versus the prior year quarter, driven primarily by sales growth year-over-year. Gross margin of 45.3% is up 3.4 points from last year’s first quarter, primarily driven by a higher absorption of fixed cost due to increased sales volume and we had an improved product mix. Operating expenses rose due to higher volume-related expenses and the impact of favorable market conditions on the company’s deferred compensation plan assets. This resulted in approximately $1.4 million of higher deferred compensation expense in the current year quarter, which was completely offset by a gain in other income related to marking the assets to market. Net income for the year was $19.8 million compared to $6.4 million in the prior fiscal first quarter. The effective tax rate is 23.7% compared to last year’s rate of 25.1%. We expect the full year tax rate to be in the mid-20s.

Your first question comes from Anthony Lebiedzinski from Sidoti & Company.

Yes, good morning and thank you for taking the questions. So, certainly, yes, impressive performance. So, looking at the topline, can you give us a sense as to the volume versus ASP? If you could just start with that, please?

Yes, Anthony, hi. It’s actually more unit volume related than ASP for the quarter, at least. We’re seeing kind of a broad based increase in volume, both lower-priced, mid-priced, high-priced products. So, at least for the quarter, it hasn’t been a ton of ASP enhancement.

Got it. Okay. Thanks for that. Dave. So, also, do you guys have a sense as to the growth in the participation rate from consumers that you’re looking to engage in outdoor recreation? Just wondering about like how many new customers entered the market and your sense for the upcoming season.

Well, as far as participation rate, we don’t have a specific way of getting at that data and it’s very different by business. So, we can’t give you that answer. It’s our assumption that there are new consumers coming in, as well as more active participation by existing consumers, and I think we could say that across all the outdoors spaces that we’ve seen growth in. So, until we get some participation data from syndicated sources, which have a lag time, I think at this point, it’s truly assumption, but we definitely feel that there are some new participants in the market across the board.

Okay, got it. Good to hear. So, -- and as far as the new product innovation, yes, you mentioned some examples as far as the fish finders and some others. So, when you look at the upcoming season, I mean, would you say that you’re going to be introducing more new products than usual or is this kind of the typical kind of pipeline of new products and if there is any one category, other than the fish finders where you’re particularly excited about for new product introductions?

Well, I think, we’ve got new products for every business and in Fishing, this is a solid year and we talked about a few of those. So, I don’t think it’s any different than the past. It’s just part of us doing business and we try to innovate and have something new every year depending on the category.

Got it. Okay, perfect. Okay. And then as far as the supply chain constraints, can you just -- little bit more details as to what your -- obviously, it didn’t look like it impacted your first fiscal quarter, but can you give us some more details about what you’re seeing there?

Yes, I mean, like a lot of other companies, we’re seeing a lot of longer lead-times and difficulty getting some product out of Asia for electronic components, in particular, and then logistics constraints as everyone’s heard about, the port and getting shipping containers here on time. So, right now, I think we seem to be in okay shape. It hasn’t necessarily affected us currently. But we’re looking into the season and just, this is something we’re trying to actively manage.

Got it. Okay, perfect. All right, well thank you. Best of luck.

Thank you.

There are no further questions at this time. I would like to turn the conference back to Ms. Helen Johnson-Leipold.

Thank you everyone for joining us today. Hope you stay healthy, stay safe, and hope you have a great day. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.