What changed in this filing

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Item 1. Business

2020-12-11 compared with 2019-12-06 · 73 added, 124 removed, 92 unchanged (68% of the section changed)

Johnson Outdoors is a leading global manufacturer and marketer of branded seasonal, outdoor recreation products used primarily for fishing from a boat, diving, paddling, hiking and camping.

The Company’s portfolio of well-known consumer brands has

attained leading market positions due to continuous innovation, marketing excellence, product performance and quality.

Company values and culture support innovation in all areas, promoting and leveraging best practices and synergies within and

across its subsidiaries to advance the Company’s strategic vision set by executive management and approved by the Board of Directors.

The Company’s portfolio of well-known consumer brands has attained leading market positions due to continuous innovation, marketing excellence, product performance and quality.

Company values and culture support innovation in all areas, promoting and leveraging best practices and synergies within and across its subsidiaries to advance the Company’s strategic vision set by executive management and approved by the Board of Directors.

The Company is controlled by Helen P.

Johnson-Leipold (Chairman and Chief Executive Officer), members of her family

and related entities.

Johnson-Leipold (Chairman and Chief Executive Officer), members of her family and related entities.

The Company was incorporated in Wisconsin in 1987 as successor to various businesses.

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Minn Kota electric motors for quiet trolling or primary propulsion, marine battery chargers and shallow water anchors;

sonar and GPS equipment for fishfinding, navigation and marine cartography;

Humminbird sonar and GPS equipment for fishfinding, navigation and marine cartography;

and Cannon downriggers for controlled-depth fishing.

Minn Kota trolling motors and shallow water anchors and Cannon downriggers are

designed and manufactured primarily at the Company’s Mankato, Minnesota facility.

Minn Kota trolling motors and shallow water anchors and Cannon downriggers are designed and manufactured primarily at the Company's Mankato, Minnesota facility.

Humminbird sonar and GPS equipment are designed and manufactured in Eufaula, Alabama and Alpharetta, Georgia.

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large retail store chains;

marine distributors;

original equipment manufacturers (OEM) of boat brands such as Tracker, Skeeter and Ranger;

and internet retailers and distributors.

The Company also sells direct to consumers via its Minn Kota and Humminbird websites.

Markets outside of North

America are accessed through a network of international distributors.

distributors that service independent marine, sporting goods and internet dealers;

and original equipment manufacturers (OEM) of boat brands such as Tracker, Skeeter and Ranger.

The Company also sells direct to consumers via its Minn Kota, Humminbird and Cannon websites.

Markets outside of North America are accessed through a network of international distributors.

Fishing has achieved market share gains by focusing on innovative technology, quality products and effective marketing.

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the Minn Kota, Humminbird and Cannon brand websites;

networks and online promotions;

social media networks;

product placements on fishing-related television shows;

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professional angler and tournament sponsorships;

and packaging and

point-of-purchase materials and offers to increase consumer appeal and sales.

and packaging and point-of-purchase materials and offers to increase consumer appeal and sales.

The Company’s Camping segment key brands are:

consumer, commercial and military tents and accessories, sleeping bags, camping furniture and stoves and other recreational camping products;

consumer, commercial and military tents and accessories, camping furniture and stoves and other recreational camping products;

and Jetboil portable outdoor cooking systems.

consumer tents, camping furniture, camping stoves and other recreational camping products are mid- to high-price range products sold in the U.S.

and Canada through independent sales representatives, primarily to camping and backpacking

specialty stores, sporting goods stores, internet retailers and direct to consumer via the Eureka!

and Canada, primarily to camping and backpacking specialty stores, sporting goods stores, internet retailers and direct to consumer via the Eureka!

brand website.

The Company’s consumer camping products are produced by third party manufacturing sources in Asia.

Marketing of the Company’s tents and

other recreational camping products is focused on building the Eureka!

brand name and establishing the Company as a leader in design and innovation.

Consumer marketing and promotion activities include:

digital marketing and social media networks;

print advertising and editorial coverage in general outdoor magazines.

Marketing of brands is focused on building brand awareness and leadership in product features and innovation, primarily through digital marketing and social media.

commercial tents include party tents and accessories, sold primarily to general rental stores, and other commercial tents and accessories sold directly to tent erectors.

The Company’s commercial tent products range from 10’x10’ canopies to

120’ wide pole tents and other large scale frame structures and are primarily manufactured by the Company at the Company’s Binghamton, New York location.

The Company’s commercial tent products range from 10’x10’ canopies to 120’ wide pole tents and other large scale frame structures and are primarily manufactured by the Company at the Company’s Binghamton, New York location.

also designs and manufactures large, heavy-duty tents and lightweight backpacking tents primarily for the U.S.

military at its Binghamton, New York location.

Tents produced for military use in the last twelve months include modular general

purpose tents, rapid deployment shelters and various lightweight one and two person tents.

The Company manufactures military tent accessories like fabric floors and insulated thermal liners and is also a subcontract manufacturer for other providers

of military tents.

Tents produced for military use in the last twelve months include modular general purpose tents, rapid deployment shelters and various lightweight one and two person tents.

The Company manufactures military tent accessories like fabric floors and insulated thermal liners and is also a subcontract manufacturer for other providers of military tents.

Jetboil portable outdoor cooking systems, single burner and two burner stoves, and accessories are sold in the U.S.

and Canada through independent sales representatives, primarily to camping and backpacking specialty stores, sporting goods stores,

internet retailers, and direct to consumer via the Jetboil brand website.

and Canada through independent sales representatives, primarily to camping and backpacking specialty stores, sporting goods stores, internet retailers, and direct to consumer via the Jetboil brand website.

Marketing of Jetboil systems is focused on building brand awareness and leadership in product features and innovation, primarily through digital marketing and social media.

Jetboil products are produced at both the Company’s operating location in Manchester, New Hampshire and by third party manufacturing sources in Asia.

Markets outside of North America are accessed through a network of international

distributors.

Jetboil products are designed at the Company’s operating location in Manchester, New Hampshire and manufactured by third party sources in Asia.

Markets outside of North America are accessed through a network of international distributors.

Watercraft Recreation

The Company’s Watercraft Recreation segment designs and markets canoes and kayaks under the Ocean Kayaks and Old Town brand names for family recreation, touring,

angling and tripping.

The Company’s Watercraft Recreation segment designs and markets canoes and kayaks under the Ocean Kayaks and Old Town brand names for family recreation, touring, angling and tripping.

These brands are manufactured at the Company’s facility in Old Town, Maine.

The Company uses a rotational molding process for manufacturing mid- to high-end polyethylene kayaks and canoes and uses a thermoform molding process in the manufacturing of lower priced models at its facility in Old Town, Maine.

Recreation accessory brands, including Carlisle branded paddles, are produced primarily by third party sources located in North America and Asia.

The company’s personal flotation devices are manufactured by

third party sources located in Asia and are sold primarily under the Old Town brand.

Watercraft Recreation accessory brands, including Carlisle branded paddles, are produced primarily by third party sources located in North America and Asia.

The company's personal flotation devices are manufactured by third party sources located in Asia and are sold primarily under the Old Town brand.

The Company’s kayaks, canoes and accessories are sold through multiple channels primarily in the U.S.

with an emphasis on independent specialty retailers and large outdoor retailers.

The Company also sells equipment direct to consumers via the

Old Town and Ocean Kayak websites.

and Canada with an emphasis on independent specialty dealers and outdoor specialty chain retailers.

The Company also sells products direct to consumers via the Old Town and Ocean Kayak websites, and through Amazon and other internet retailer sites.

The Company has a network of distributors who sell Company products outside of North America.

The Company’s Watercraft Recreation business competes in the mid- to high-end of the product category by introducing product innovations, creating quality products and by focusing on the product-specific needs of each marketing channel.

marketing and promotion activities include:

digital marketing and social media networks;

print advertising and editorial coverage in outdoor, general interest and sport magazines;

and direct marketing.

Marketing of brands is focused on building brand awareness and leadership in product features and innovation, primarily through digital marketing and social media.

The Company manufactures and markets underwater diving products for recreational divers, which it sells and distributes under the SCUBAPRO brand name.

The Company markets a complete line of underwater diving and snorkeling equipment, including regulators, buoyancy compensators, dive computers and gauges, wetsuits, masks, fins, snorkels and accessories.

SCUBAPRO diving equipment is marketed to

the premium segment and high performance technical diving market.

SCUBAPRO diving equipment is marketed to the premium segment and high performance technical diving market.

Products are sold via select distribution to independent specialty dive stores worldwide.

These specialty dive stores generally provide a wide range of services to divers, including

regular maintenance, product repair, diving education and travel programs.

These specialty dive stores generally provide a wide range of services to divers, including regular maintenance, product repair, diving education and travel programs.

The Company also sells diving gear direct to consumers via the SCUBAPRO website and to dive training centers, resorts, public safety units and armed forces around the world.

The Company’s consumer communication focuses on building brand awareness and highlighting exclusive product features and consumer benefits of its product lines.

The Company’s communication and distribution strategies reinforce the SCUBAPRO brand’s

position as the industry’s quality and innovation leader.

The Company’s communication and distribution strategies reinforce the SCUBAPRO brand’s position as the industry’s quality and innovation leader.

The Company markets its equipment via websites, through social media, through information and displays in dive specialty stores, and in diving magazines.

The Company manufactures regulators, dive computers, gauges, and instruments at its Italian and Indonesian facilities.

The Company sources buoyancy compensators, neoprene goods, plastic products, proprietary materials, and other components from

third parties.

The Company sources buoyancy compensators, neoprene goods, plastic products, proprietary materials, and other components from third parties.

Financial Information for Business Segments

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See Note 13 to the consolidated financial statements included elsewhere in this report for financial information regarding the Company’s domestic and international operations.

See Note 1, subheading “Foreign Operations and Related Derivative

Financial Instruments,” to the consolidated financial statements included elsewhere in this report, along with the information under “Risk Factors” below, for information regarding risks related to the Company’s foreign operations.

See Note 1, subheading “Foreign Operations and Related Derivative Financial Instruments,” to the consolidated financial statements included elsewhere in this report, along with the information under “Risk Factors” below, for information regarding risks related to the Company’s foreign operations.

Research and Development

The Company commits significant resources to new product research and development in each of its business segments.

Fishing conducts its product research, design, engineering and software development activities at its locations in Mankato and

Little Falls, Minnesota;

Fishing conducts its product research, design, engineering and software development activities at its locations in Mankato and Little Falls, Minnesota;

Alpharetta, Georgia;

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Diving maintains research and development facilities in Zurich, Switzerland and Casarza Ligure, Italy.

Research and development activities for Watercraft

Recreation are performed in Old Town, Maine.

Research and development activities for Watercraft Recreation are performed in Old Town, Maine.

Product research, design and innovation for Camping products are conducted at the Company's Binghamton, New York and Manchester, New Hampshire locations.

The Company expenses research and development costs as incurred, except for software development for new electronics products and bathymetry data collection and processing.

These software development and bathymetry data collection and processing

costs are capitalized once technological feasibility is established and then amortized over the expected useful life of the software or database.

The amounts expensed by the Company in connection with research and development activities for each of

the last three fiscal years are set forth in the Company’s Consolidated Statements of Operations included elsewhere in this report.

These software development and bathymetry data collection and processing costs are capitalized once technological feasibility is established and then amortized over the expected useful life of the software or database.

The amounts expensed by the Company in connection with research and development activities for each of the last three fiscal years are set forth in the Company’s Consolidated Statements of Operations included elsewhere in this report.

Industry and Competitive Environment

The Company believes its products compete favorably on the basis of product innovation, product performance and marketing support and, to a lesser extent, price.

Minn Kota’s main competitor in the electric trolling motors business is Motor Guide®, owned by Brunswick Corporation.

Further, two existing competitors in the on-boat electronics category have

recently announced their entry into the electric trolling motor category during 2019.

Minn Kota’s competitors in the electric trolling motors business are Motor Guide®, owned by Brunswick Corporation, Garmin ™ and Lowrance ™ .

Competition in this business is focused on technological innovation, product quality and durability as well as product benefits and features for fishing.

The primary competitors in the marine battery charging business are Dual Pro™ and various Pro Mariner™ products.

Competition in this business is based on charging time, reliability and battery protection.

The primary competitor in shallow water

anchors is Power Pole®.

Competition in this business is based on secure positioning, speed of deployment and quiet operation.

Humminbird’s main competitors in the market for on-boat electronics are Garmin ™ , Lowrance ™ , Simrad and Raymarine®.

Competition in this business is primarily focused on the quality of sonar imaging and display, easy to use

graphical interfaces as well as the integration of mapping and GPS technology.

Competition in this business is primarily focused on the quality of sonar imaging and display, easy to use graphical interfaces as well as the integration of mapping and GPS technology.

Humminbird products contain marine cartography features.

Competitors offering marine cartography products include Navionics®, owned by Garmin, and C-Map®, owned by

Competitors offering marine cartography products include Navionics®, owned by Garmin, and C-Map®, owned by Navico.

Competition in this business focuses primarily on quality of data and quantity of available charts for inland lakes and ocean shoreline.

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The Company’s Camping brands and products compete in the sporting goods and specialty segments of the Camping market.

Competitive brands with a strong position in the sporting goods channel include

Coleman® and private label brands.

The Company also competes with specialty companies such as Kelty®, The North Face®, Marmot® and Big Agnes® on the basis of materials and innovative designs for consumers who want performance products priced at a

Competitive brands with a strong position in the sporting goods channel include Coleman® and private label brands.

The Company’s portable outdoor cooking systems compete in the specialty and higher end performance backpacking and camping markets.

The primary competitor in portable outdoor cooking systems is MSR®.

Competition in this market is based on

product size and weight, ease of use, reliability and performance.

Competition in this market is based on product size and weight, ease of use, reliability and performance.

The Company’s competitors in the commercial tent market include Anchor Industries® and Aztec Tents for tension, frame and canopy tents.

Competition in the commercial tent business is based on price, quality, structure, styling, ease of

installation and technical support.

Competition in the commercial tent business is based on price, quality, structure, styling, ease of installation and technical support.

The Company sells military tents via third party distributors who hold supply contracts primarily with the U.S.

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The Company primarily competes in this segment in the kayak and canoe product categories of the paddlesports market.

The Company’s main competitors in this market are Confluence

Outdoor, Hobie Cat®, Wenonah Canoe, Jackson Kayak and Legacy Paddlesports™, each of which competes on the basis of their product’s design, performance, quality and price.

The Company’s main competitors in this market are Confluence Outdoor, Hobie Cat®, Wenonah Canoe, Jackson Kayak and Legacy Paddlesports™, each of which competes on the basis of their product’s design, performance, quality and price.

The main competitors in the Diving segment include Aqua Lung®, Suunto®, Atomic Aquatics, Oceanic, Cressi and Mares®.

Competitive advantage in the life support product category of this segment,

which consists of regulators, dive computers, and buoyancy compensators, is a function of product innovation, performance, quality and safety.

Competition in the general diving product category of fins, masks, snorkels and wetsuits is characterized

by low barriers to entry and numerous competitors who compete on the basis of product innovation, performance, quality and price.

Unfilled orders for future delivery of products totaled approximately $64 million at September 27, 2019.

For the majority of its products, the Company’s businesses do not receive significant orders in advance of expected shipment dates.

At September 27, 2019, the Company had approximately 1,200 regular, full-time employees.

Competitive advantage in the life support product category of this segment, which consists of regulators, dive computers, and buoyancy compensators, is a function of product innovation, performance, quality and safety.

Competition in the general diving product category of fins, masks, snorkels and wetsuits is characterized by low barriers to entry and numerous competitors who compete on the basis of product innovation, performance, quality and price.

Unfilled orders for future delivery of products varies as a result of numerous factors impacting the Company (including those described in the section titled “Risk Factors” below ) and because of the non-binding nature of such orders, the Company does not believe that backlog information is material to the understanding of its business.

At October 2, 2020, the Company had approximately 1,200 regular, full-time employees.

The Company considers its employee relations to be excellent.

Temporary employees are utilized primarily to manage peaks in the seasonal manufacturing of

Temporary employees are utilized primarily to manage peaks in the seasonal manufacturing of products.

Patents, Trademarks and Proprietary Rights

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Supply Chain and Sourcing of Materials

The Company manufactures some products that use parts or materials that, due to geographical distance, limited supplier capacity or availability or competing demands for such parts or materials, are only available in a cost effective manner from a

single vendor or require the Company to place orders several months in advance of required delivery.

The Company attempts to mitigate product availability and these supply chain risks when possible through the purchase of safety stock, use of forecast-based supply contracts, and, to a lesser extent, with just in time inventory deliveries or

supplier-owned inventory located close to the Company’s manufacturing locations.

The Company strives to balance the businesses’ need to maintain adequate inventory levels with the cost of holding such inventory by manufacturing to forecast for high

volume products, utilizing build-to-order strategies wherever possible, and by having contract-manufactured products delivered to customers directly from the supplier.

The Company also seeks to manage its inventory through on-going product design

and logistical initiatives with its suppliers to reduce lead times.

The Company strives to balance the businesses’ need to maintain adequate inventory levels with the cost of holding such inventory by manufacturing to forecast for high volume products, utilizing build-to-order strategies wherever possible, and by having contract-manufactured products delivered to customers directly from the supplier.

The Company also seeks to manage its inventory through on-going product design and logistical initiatives with its suppliers to reduce lead times.

As most military contracts require utilization of domestic suppliers, the Company is limited to key vendors for materials used in its military tent business.

The Company’s products are primarily warm-weather, outdoor recreation-related, which results in seasonal variations in sales and profitability for the Company.

This seasonal variability is due to customers’ increasing their inventories in the

quarters ending March and June, the primary selling season for the Company’s outdoor recreation products, with lower inventory volumes during the quarters ending September and December.

The Company mitigates the seasonality of its businesses somewhat

by encouraging customers to purchase and take delivery of products more evenly through the year.

The following table shows, for the past three fiscal years, the total consolidated net sales and operating profit or loss of the Company for each

quarter, as a percentage of the total year.

Quarter Ended

This seasonal variability is due to customers’ increasing their inventories in the quarters ending March and June, the primary selling season for the Company’s outdoor recreation products, with lower inventory volumes during the quarters ending September and December.

The Company mitigates the seasonality of its businesses somewhat by encouraging customers to purchase and take delivery of products more evenly through the year.

The following table shows, for the past three fiscal years, the total consolidated net sales and operating profit or loss of the Company for each quarter, as a percentage of the total year.

See “Coronavirus (COVID-19)” in Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information of the impact of COVID-19 on the Company’s seasonality for fiscal 2020.

2020 2019 2018

Quarter Ended Net

Sales Operating

December 22 % 10 % 19 % 9 % 21 % 11 %

March 27 % 45 % 32 % 43 % 31 % 41 %

June 23 % 17 % 31 % 43 % 31 % 51 %

September 28 % 28 % 18 % 5 % 17 % (3) %

100 % 100 % 100 % 100 % 100 % 100 %

Environment and Climate Change

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We believe we comply with such laws and regulations.

Expenditures on

environmental compliance have not had, and we believe in the future, are not expected to have, a material adverse effect on the Company’s capital expenditures, earnings or competitive position.

We do not believe that any direct or indirect

consequences of legislation related to climate change will have a material adverse effect on our operating costs, facilities or products.

Expenditures on environmental compliance have not had, and we believe in the future, are not expected to have, a material adverse effect on the Company’s capital expenditures, earnings or competitive position.

We do not believe that any direct or indirect consequences of legislation related to climate change will have a material adverse effect on our operating costs, facilities or products.

Available Information

The Company maintains a website at www.johnsonoutdoors.com.

On its website, the Company makes available, free of charge, its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports,

as soon as reasonably practical after the reports have been electronically filed or furnished to the Securities and Exchange Commission.

In addition, the Company makes available on its website, free of charge, its (a) proxy statement for its annual

meeting of shareholders;

On its website, the Company makes available, free of charge, its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as soon as reasonably practical after the reports have been electronically filed or furnished to the Securities and Exchange Commission.

In addition, the Company makes available on its website, free of charge, its (a) proxy statement for its annual meeting of shareholders;

(b) Code of Business Conduct;

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and (e) Corporate Governance Guidelines, Insider Trading Policy and Incentive Compensation Recovery Policy.

Except as specifically provided herein, the Company is not including the information

contained on or available through its website as a part of, or incorporating such information by reference into, this Annual Report on Form 10-K.

This report includes all material information about the Company that is included on the Company’s

website and is otherwise required to be included in this report.

Except as specifically provided herein, the Company is not including the information contained on or available through its website as a part of, or incorporating such information by reference into, this Annual Report on Form 10-K.

This report includes all material information about the Company that is included on the Company’s website and is otherwise required to be included in this report.

Copies of any materials the Company files with the Securities and Exchange Commission (SEC) can also be obtained free of charge through the SEC’s website at www.sec.gov.

Public Reference Room can be contacted at 100 F Street, N.E., Washington, D.C.

The SEC’s Public Reference Room can be contacted at 100 F Street, N.E., Washington, D.C.

20549, or by calling 1 (800) 732-0330.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business