Hello, everyone, and welcome to the Johnson Outdoors First Quarter 2020 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. Good morning, everyone. Thank you for joining us for our discussion of Johnson Outdoors' results for the 2020 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 release 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..

consumer understanding, sustained innovation leadership, new sources and paths of growth in our markets, accelerated digital sophistication and e-commerce.Our ongoing hard work on these priorities ensures that our portfolio of market-leading brands is well positioned for success in 2020 and that we continue to deliver sustained profitable long-term growth for Johnson Outdoors.Now I'll turn the call over to Dave for a review of the financial highlights..

Thank you, Helen. Good morning everyone.As Helen mentioned, total company sales for the first quarter improved 23% over the prior year.

While sales were up across all business units, the total company revenue increase was driven primarily by a delay in the prior year first quarter in the availability of new products in Fishing.Gross margin dipped slightly due primarily to an increase in tariff expense versus the prior year period.

As a result of recent developments in trade negotiations between the United States and China, as well as our own mitigation efforts, we now expect the impact of tariffs on Chinese goods and components to be approximately $45 million on fiscal 2020 profits.Operating expenses rose due to higher sales volume related expenses, and the impact of favorable market conditions on the company's deferred compensation plan assets.

This resulted in approximately $3.4 million of higher deferred compensation expense in the current year quarter, which was completely offset by a gain in the other income related markets to asset - marketing the assets to market.Operating profit was up versus the prior year quarter due to the increase in sales volume, partially offset by the additional deferred compensation costs.

Pre-tax income was up $4.3 million. The tax rate for the first fiscal quarter was 25.1%, and we expect the tax rate for the first fiscal year to be in the mid-20.While we're pleased with the strong start to the year, we continue to expect moderate sales growth for the full fiscal year.

Our strong balance sheet and healthy cash position enables us to invest strategically in growing our business, while continuing to pay a cash dividend to shareholders.Now I'll turn the call back over to the operator for the Q&A session.

Operator?.

[Operator Instructions] Our first question comes from the line of Anthony Lebiedzinski with Sidoti. Your line is open..

So obviously a strong start to fiscal '20.

Now just looking at your core Fishing segment, just curious, in light of some new upcoming competition, what are you seeing in terms of shelf space allocation from your - from the major retail partners that you work with?.

Well, you know, we're obviously keeping an eye on it, but it is just the selling period, and you know they are present and they're there. I would say they are going to be on the shelf. We haven't experienced the exact impact, but certainly when competition comes in, they automatically, you know they're sharing space with you.

But right now, things are going well..

Now turning to the Diving segment, kind of, where are you with your simplification business process there. I know you've closed some offices throughout the world, but kind of, what inning are you in terms of how should we think about the potential improvements there on the bottom line..

Well, they have done some very good work and we continue to work on simplification. Some of it has to do with the SKUs in our business as well. So it's not just related to organization, there is a lot of other opportunities. So we continue to have opportunities. It is impacting positively on the bottom line. We have more opportunities going forward..

And also as far as your operating expenses, so those were up, sort of, the above 22% in the quarter.

Kind of, how should we think about the expense growth through the rest of the fiscal year?.

Yes, I mean, a lot of the expense growth was volume related. So our expenses tend to obviously correlate with our volume increase or decrease as the case may be. We had that weird thing with the deferred comp. So I would expect, kind of, a normalized operating expense rate going forward..

Okay, great.

And last, as far as any updated thoughts on your - on usage of cash?.

Again, it's a constant activity for us looking externally. But right now, we also have some great opportunities internally that we're focused on. So we're always -we're always out there and keeping an eye on things. I think it's still that, you know multiples are high there. It's not a great buyer's market, but again, we don't turn down opportunities.

We take a look at them. So we're active..

Thank you. And I'm not showing any further questions at this time..

Okay, operator. I guess, we thank everybody for joining us, and I hope everyone has a great day..

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