Patricia Penman - VP, Global Marketing Services & Communication Helen Johnson-Leipold - Chairman and CEO David Johnson - VP and CFO

Hello, everyone and welcome to the Johnson Outdoors Third Quarter 2016 Earnings Conference Call. Today’s call will be led 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. [Operator Instructions] This call is being recorded. Your participation implies consent to our recording of 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, Shannon. Good afternoon, everyone and thank you for joining us for our discussion of Johnson Outdoors’ results for the 2016’s fiscal third quarter. If you need a copy of our news release issued this morning and is available on the Johnson Outdoors’ Web site at www.johnsonoutdoors.com under Investor Relations. Before I turn the call over to Helen, I need to remind you that this conference call may contain forward-looking statements. These statements are made on the basis of our views and assumptions at this time and are not guarantees of future performance. Actual events may differ materially from those statements due to a number of factors, many of which are beyond Johnson Outdoors’ control. These risks and uncertainties include those listed in today’s press release and our filings with the Securities and Exchange Commission. If you have additional questions following the call, please contact me. I’d now like to turn the call over to Helen Johnson-Leipold, Chairman and Chief Executive Officer.

Good morning. Thank you for joining us. I’ll start off with comments on the quarter and year-to-date results and outline key priorities in each business. Dave will review key financials. The warm weather outdoor recreational season is in full swing during our fiscal third quarter. This is the time of the year we gauge consumer response at retail the key measure of marketplace performance. Total Company sales were $139.3 million, a slight 1% dip versus the prior year quarter; one-time items in both the current and prior year quarters resulting in unfavorable comparisons and operating profit and earnings. Dave will discuss the details on these in his remarks. On a year-to-date basis, the strong marketplace performance of new products throughout the year drove a 4% growth in sales year-over-year. On a constant currency basis, sales are up 5%. Year-over-year operating profit and net earnings increased significantly compared with last year. Our core fishing watercraft recreation and camp cooking brands are doing exceptionally well. In our fishing business, new product success drove the 9% increase in revenue year-over-year. This year’s new large-screen Humminbird HELIX fishfinders and Minn Kota saltwater Ulterra trolling motors are exceeding for projections. Last year’s Minn Kota fish -- fresh water fishing Ulterra which introduced our all new power assist and automatic stow and deploy feature is also doing very well in its second year in the market. Likewise, the Minn Kota i-Pilot and i-Pilot LINK wireless steering and navigation system and the Talon shallowater anchor continue to beat growth expectations three plus years out. Pioneering innovation in our fishing business has strengthened brand equities, improved shares and enhanced margins. The goal is to continue building on this legacy of success and our 2017 new product line up promises to do just that. The revolutionary Minn Kota Ultrex…

Thank you, Helen. Good morning, everyone. This quarter Minn Kota and Hummingbird brand sales combined to deliver marine electronics, its third record setting per quarter in the many years. Likewise, Old Town and Jetboil brands generated solid top line growth, and both our fishing and watercraft recreation businesses reported double-digit increases in operating profit. Despite the positives, third quarter earnings were down entirely to higher operating expense quarter-on-quarter. The increase was driven by one-time items, particularly a $6.2 million non-cash goodwill impairment charge in diving, which was partially offset by improved legal expense of $4.6 million in the quarter. While we can’t predict an end date to the geopolitical and economic issues facing diving, at this time, we have enough information to better project the impact of those issues will likely have on future revenue. This is what triggered the re-evaluation of diving’s intangible assets, and ultimately the non-cash goodwill impairment charge. Importantly, this charge does not affect the competence we have in this great and long-term credential of our SCUBAPRO brand. There was no tax benefits associated with the quarter’s non-cash goodwill impairment charges, leading to a higher year-to-date effective tax rate of 44.2% compared to 40.9% last year. We expect to end the year with taxes in the low to mid-40% range. Year-to-date cash flow from operations has been strong, up $29 million from prior year, and cash net of debt stands at $68.2 million, a 47% increase versus last year at the same time. Our healthy cash position enables us to continue to invest in future growth strategies and platforms while continuing to pay cash dividends to our investors. As Helen said, our focus is on delivering a strong end to the season moving forward aggressively against our strategic priorities. Now I’ll turn the call back over to the operator for the Q&A session. Operator?

Thanks again everyone for joining us. If you have any questions, please give Dave or Pat a call. Have a good day.

Ladies and gentlemen, this concludes today’s conference. Thanks for your participation and have a wonderful day. You may now disconnect.