What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-02-05 compared with 2020-07-31 · 103 added, 110 removed, 87 unchanged (71% of the section changed)

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This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes comments and analysis relating to the results of operations and financial condition of Johnson Outdoors Inc.

and its subsidiaries (collectively, the “Company”) as of and for the three and nine month periods ended June 26, 2020 and June 28, 2019 .

and its subsidiaries (collectively, the “Company”) as of and for the three month periods ended January 1, 2021 and December 27, 2019.

All monetary amounts, other than share and per share amounts, are stated in thousands.

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• Critical Accounting Policies and Estimates

This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related notes that immediately precede this section, as well as the Company’s Annual Report on Form 10-K for the fiscal year ended September 27, 2019 which was filed with the Securities and Exchange Commission on December 6, 2019.

JOHNSON OUTDOORS INC.

This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related notes that immediately precede this section, as well as the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2020 which was filed with the Securities and Exchange Commission on December 11, 2020.

Forward Looking Statements

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trade policies, tariffs, and the reaction of other countries to such changes;

the global outbreaks of disease, such as the COVID-19 pandemic beginning in late 2019 and spreading across the globe in 2020, which has affected, and may continue to affect,

JOHNSON OUTDOORS INC.

market and economic conditions, along with wide-ranging impacts on employees, customers and various aspects of our operations;

the global outbreaks of disease, such as the COVID-19 pandemic which has affected, and may continue to affect, market and economic conditions, and the timing, pricing and continued availability of raw materials and components from our supply chain, along with wide-ranging impacts on employees, customers and various aspects of our operations;

the Company’s success in implementing its strategic plan, including its targeted sales growth platforms, innovation focus and its increasing digital presence;

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Coronavirus (COVID-19)

Due to the timing of COVID-19 outbreak, the Company's primary-selling season was interrupted resulting in a significant impact on sales volumes for the current year third fiscal quarter versus the prior year period Once stay at home restrictions were lifted later in the current year third quarter, the Company saw an increase in demand for many of its warm weather outdoor recreational products as consumers took advantage of being outdoors.

Each of our Fishing, Camping and Watercraft Recreation segments experienced strong demand at the end of the current year third quarter.

However, strong sales in the latter part of the third quarter were not enough to overcome the sales declines experienced at the start of the stay at home mandates instituted throughout the United States and the rest of the world.

Due to the unique aspects of this pandemic and the various government prescriptions for the general public to maintain social distancing and other behaviors to mitigate the spread of the virus, the warm weather outdoor recreation season appears to have shifted.

As a result, the longer-term impacts from the COVID-19 pandemic are highly uncertain and cannot be predicted.

Nonetheless, the Company currently has no debt, has over $180,000 of cash reserves as of the June 26, 2020 quarter end and has access to $75,000 of revolver debt, through its current credit facilities if such additional funds are needed to be accessed for operations, all of which factors the Company believes will continue to help it through the COVID-19 pandemic.

Moreover, the Company intends to continue to manage the impact of the COVID-19 pandemic through targeting disciplined investments for future growth.

Net sales of $138,390 for the third quarter of fiscal 2020 decreased $37,863 , or 21% , from the same period in the prior year, reflecting decreased sales volumes across all businesses, except Watercraft Recreation, mainly attributable to the COVID-19 pandemic and its disruption to the business environment in Asia-Pacific, Europe, and the United States early in the quarter.

This sales volume decrease was the primary driver of the decrease of $15,100 in operating profit over the prior year quarter.

Due to the timing of the COVID-19 outbreak, the Company's fiscal 2020 first quarter was not impacted by the pandemic.

The Company began seeing the impacts of the pandemic during the second fiscal quarter of 2020, which continued through the remainder of fiscal year 2020 and into the fiscal 2021 first quarter.

JOHNSON OUTDOORS INC.

Due to the unique aspects of this pandemic and the various government prescriptions for the general public to maintain social distancing and avoid activities involving large crowds or being in confined spaces with others to mitigate the spread of the virus, the warm weather outdoor recreation industry has benefited from increased participation in outdoor recreation activities.

As consumers took advantage of being outdoors, the Company has seen an increase in demand for many of its warm weather outdoor recreational products.

As a result, each of our Fishing, Camping and Watercraft Recreation segments experienced increased sales volumes in the first quarter of the current fiscal year versus the prior period.

Our customers’ inventory levels, were drawn down during the past fiscal year as consumers purchased related products, and accordingly, we experienced strong orders from our customers in the fiscal 2021 first quarter to fill their pipelines in anticipation of the fiscal 2021 warm-weather recreational season.

Managing the supply chain, and ensuring the availability of components, parts and other raw materials across our segments will be essential to meeting this increased demand.

The Company continues to monitor and strategically plan for the longer-term impacts from the COVID-19 pandemic on demand for the Company's products, as well as the impact on its supply chain, including with respect to the timely availability of raw materials and other components that get incorporated into the Company's end products.

Nonetheless because the Company has product offerings in several segments that allow consumers to engage in socially distant and relatively pandemic-safe activities outdoors year round, the Company continues to promote and encourage the use of its products as outdoor recreational options for the public in light of the continued COVID-19 health crisis.

Moreover, the Company continues to strategically evaluate and leverage the increased demand for many of its products by making disciplined investments for future, long-term growth in spite of the ongoing COVID-19 pandemic.

Net sales of $165,667 for the first quarter of fiscal 2021 increased $37,613, or 29%, from the same period in the prior year, reflecting increased sales volumes across all businesses, except Diving, mainly attributable to increased participation in outdoor recreation activities as a result of social distancing and other indoor activity restrictions related to the COVID-19 pandemic.

Additionally, we have seen our customers replenish their inventory levels of our products to meet expected demand for the Fiscal 2021 warm-weather outdoor recreational season.

This sales volume increase was the primary driver of the increase of $16,756 in operating profit over the prior year quarter.

The Company’s business is seasonal in nature.

The third fiscal quarter traditionally falls within the Company’s primary selling season for its warm-weather outdoor recreation products.

The first fiscal quarter traditionally falls prior to the Company’s primary selling season for its warm-weather outdoor recreation products.

The table below sets forth a historical view of the Company’s seasonality during the last three fiscal years.

See “Coronavirus (COVID-19)” above for additional information of the impact of COVID-19 on the Company’s seasonality for fiscal 2020.

Quarter Ended

See “Coronavirus (COVID-19)” above for additional information of the impact of COVID-19 on changes to the Company’s seasonality for fiscal 2020 which changes may continue to evolve in fiscal 2021.

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 %

Results of Operations

The Company’s net sales and operating profit (loss) by business segment for the periods shown below were as follows:

JOHNSON OUTDOORS INC.

Three Months Ended

Nine Months Ended

June 26, 2020

June 28, 2019

June 26, 2020

June 28, 2019

January 1, 2021 December 27, 2019

Fishing $ 126,999 $ 99,278

Camping 12,194 7,514

Watercraft Recreation 12,443 4,809

Diving 14,093 16,459

Other / Eliminations (62) (6)

Total $ 165,667 $ 128,054

Operating profit (loss):

Fishing $ 27,763 $ 15,018

Camping 2,808 66

Watercraft Recreation 1,069 (1,563)

Diving (341) 205

Other / Eliminations (7,742) (6,925)

Total $ 23,557 $ 6,801

See “Note 16 – Segments of Business” of the notes to the accompanying Condensed Consolidated Financial Statements for the definition of segment net sales and operating profit.

Consolidated net sales for the three months ended June 26, 2020 were $138,390 , a decrease of $37,863 , or 21% , compared to $176,253 for the three months ended June 28, 2019 .

As described above under “Coronavirus (COVID-19),” our comparative results between quarterly periods were heavily impacted by COVID-19 on our operations for our 2020 fiscal third quarter.

Foreign currency translation had an unfavorable impact of less than 1% on current year third quarter net sales compared to the prior year's third quarter net sales.

Consolidated net sales for the three months ended January 1, 2021 were $165,667, an increase of $37,613, or 29%, compared to $128,054 for the three months ended December 27, 2019.

Foreign currency translation had a favorable impact of less than 1% on current year first quarter net sales compared to the prior year's first quarter net sales.

Net sales for the three months ended January 1, 2021 for the Fishing business were $126,999, an increase of $27,721, or 28%, from $99,278 during the first fiscal quarter of the prior year.

The increase over the prior year quarter was driven by increased participation in outdoor recreation, principally as a result of the effect of COVID-19 on consumer recreation and leisure choices, resulting in higher demand across all product lines in the current year quarter.

Net sales for the Camping business were $12,194 for the first quarter of the current fiscal year, an increase of $4,680, or 62%, from the prior year net sales during the same period of $7,514.

Increased sales of consumer tents, commercial tents and Jetboil products as a result of increased participation in outdoor recreation activities drove the increase.

Net sales for the first quarter of fiscal 2021 for the Watercraft Recreation business were $12,443, an increase of $7,634, or 159%, compared to $4,809 in the prior year same period.

New product success and increased demand throughout the quarter drove the overall increase over the prior year quarter.

As noted above, as consumers took on greater interest in outdoor activities due to the COVID-19 pandemic, demand for many of our outdoor recreation products in our fishing, camping and watercraft recreation segments increased beyond the normal seasonal selling period.

This resulted in our inventory levels, as well as the inventory levels for many of our customers, being depleted, which subsequently resulted in continued strong demand for our customers to fill their pipeline and stock inventory of our products in these three business segments in anticipation of the 2021 warm-weather recreational season.

All of these actions resulted in strong demand for our products in these segments which generated the favorable quarter over quarter sales comparison.

Net sales for Diving, our most global business, were $14,093 for the three months ended January 1, 2021 versus $16,459 for the three months ended December 27, 2019, a decrease of $2,366, or 14%.

The decrease is largely due to the effects of COVID-19 on demand as a result of the continued closure of destination travel locations and lower tourism activities, which more than offset a favorable foreign currency translation impact on sales in this segment of approximately 4% versus the prior year quarter.

Due to the timing of the COVID-19 pandemic upon our business, our results for the prior year first quarter were not impacted by COVID-19.

JOHNSON OUTDOORS INC.

Net sales for the three months ended June 26, 2020 for the Fishing business were $102,741 , a decrease of $25,455 , or 20% , from $128,196 during the third fiscal quarter of the prior year.

Increased demand late in the current year quarter was not enough to overcome sales declines in April driven by COVID-19 shutdowns of our operations and those implemented by many retailers, as well as restrictions that consumers engage in essential activities only.

Net sales for the Camping business were $9,665 for the third quarter of the current fiscal year, a decrease of $5,063 , or 34% , from the prior year net sales during the same period of $14,728 .

The impact of COVID-19 on both production and demand drove the decrease over the prior year quarter.

Net sales for the third quarter of fiscal 2020 for the Watercraft Recreation business were $15,267 , an increase of $2,257 , or 17% , compared to $13,010 in the prior year same period.

Despite COVID-19 related shutdowns early in the fiscal 2020 third quarter, increased demand later in the quarter drove the overall increase over the prior year quarter.

Net sales for Diving, our most global business, were $10,696 for the three months ended June 26, 2020 versus $20,243 for the three months ended June 28, 2019 , a decrease of $9,547 , or 47% .

The decrease is largely due to the effects of COVID-19 on demand as a result of the closure of destination travel and tourism.

In addition, foreign currency translation unfavorably impacted sales in this segment by approximately 1% versus the prior year quarter.

For the nine months ended June 26, 2020 , consolidated net sales of $429,528 decreased $28,872 or 6% , compared to $458,400 for the nine months ended June 28, 2019 .

Foreign currency translation had an unfavorable impact of less than 1% on net sales of the current year period compared to the prior year period.

Again, similar to the results for the fiscal third quarter as noted above, our comparative results for the year to date period were heavily impacted by COVID-19 for fiscal 2020.

Net sales for the nine months ended June 26, 2020 for the Fishing business were $335,974 , a decrease of $9,248 , or 3% , from $345,222 during the same period of the prior year.

The impact of COVID-19 drove the overall decrease year over year.

Net sales for the Camping business were $26,028 for the nine months ended June 26, 2020 , a decrease of $4,049 , or 13% , from the prior year net sales during the same period of $30,077 .

The impact of COVID-19 drove the decrease over the prior year.

Net sales for the nine months ended June 26, 2020 for the Watercraft Recreation business were $26,140 , a decrease of $1,046 , or 4% , compared to $27,186 in the prior year same period.

The segment's strong third fiscal quarter was not enough to overcome the sales declines in the first two fiscal quarters versus the prior year.

Diving net sales were $41,416 for the nine months ended June 26, 2020 versus $55,866 for the nine months ended June 28, 2019 , a decrease of $14,450 , or 26% .

As explained earlier, the decrease is largely due to the impact of COVID-19 and the disruptions it caused on our operations during the current year to date period, as well as disruptions to global travel.

In addition, foreign currency translation unfavorably impacted sales in this segment in the current year to date period by approximately 1% versus the prior year period.

Cost of Sales

Cost of sales for the three months ended June 26, 2020 was $75,828 compared to $96,528 for the three months ended June 28, 2019 .

The decrease year over year was driven primarily by lower sales volume in the current year quarter over the prior year quarter.

For the nine months ended June 26, 2020 , cost of sales was $238,222 compared to $255,227 in the same period of the prior year.

The decrease year over year was primarily due to lower sales volume in the current year versus the prior year.

Section 301 tariffs on the import of certain components and other supplies from China did not materially impact the comparability of results between the year to date periods, as they were generally consistent with those incurred in the prior year first nine months.

Cost of sales for the three months ended January 1, 2021 was $90,637 compared to $74,442 for the three months ended December 27, 2019.

The increase year over year was driven primarily by increases in variable costs due to the higher sales volume in the current year quarter over the prior year quarter.

Gross Profit Margin

For the three months ended June 26, 2020 , gross profit as a percentage of net sales was 45.2% which was flat compared to 45.2% in the three month period ended June 28, 2019 .

Reduced efficiencies related to COVID-19 shutdowns were offset by improved product mix and pricing between quarters.

JOHNSON OUTDOORS INC.

For the nine months ended June 26, 2020 , gross profit as a percentage of net sales was relatively flat at 44.5% compared to 44.3% in the prior nine month period.

Similar to the quarterly comparison, reduced efficiencies related to COVID-19 shutdowns were offset by improved product mix and pricing.

The Company anticipates an aggregate negative impact of Section 301 tariffs on China sourced goods, net of mitigation actions, on the Company's full fiscal 2020 gross profit of approximately $3 to $4 million, compared to approximately $3 million during the full previous fiscal year.

For the three months ended January 1, 2021, gross profit as a percentage of net sales was 45.3% compared to 41.9% in the three month period ended December 27, 2019.

The improvement year over year was due primarily to product mix and increased efficiencies between periods, which more than offset $700 of higher tariff costs year over year.

At current expected rates, the Company anticipates an aggregate negative impact of Section 301 tariffs on China sourced goods, net of mitigation actions, on the Company's full fiscal 2021 gross profit of approximately $7 million, compared to approximately $3.5 million during the full previous fiscal year.

The expiration of tariff exclusions that the Company secured in prior periods, combined with the application of new tariffs on a broader assortment of goods, is driving the expected year over year increase in tariff costs.

Operating Expenses

Operating expenses were $49,633 for the three months ended June 26, 2020 compared to $51,696 for the three months ended June 28, 2019 .

The decrease of $2,063 was primarily due to the impact of lower sales and sales volume driven expenses which were offset in part by higher employee compensation costs including deferred compensation expense.

Favorable market conditions on the Company's deferred compensation plan assets resulted in approximately $2,100 of higher deferred compensation expense in the current year quarter as compared to the prior year quarter, which was entirely offset by a gain in Other (Income) Expense, net related to marking these deferred compensation plan assets to market.

Operating expenses were $139,782 for the nine months ended June 26, 2020 compared to $141,322 for the nine months ended June 28, 2019 .

The decrease was primarily due to decreased sales and sales volume related expenses year over year.

On a year to date basis, deferred compensation expense was consistent with the prior year nine month period.

Operating expenses were $51,473 for the three months ended January 1, 2021 compared to $46,811 for the three months ended December 27, 2019.

The increase of $4,662 was primarily due to the impact of higher sales and sales volume driven expenses, as well as higher deferred compensation expense between quarters.

Favorable market conditions on the Company's deferred compensation plan assets resulted in approximately $1,400 of higher deferred compensation expense in the current year quarter as compared to the prior year quarter, which was entirely offset by a gain in Other Income, net related to marking these deferred compensation plan assets to market.

Operating Profit

Operating profit on a consolidated basis for the three month period ended June 26, 2020 was $12,929 compared to an operating profit of $28,029 in the third quarter of the prior fiscal year.

Lower sales volumes due to COVID-19 and the other factors discussed above were the primary drivers of the decline.

Operating profit on a consolidated basis for the nine months ended June 26, 2020 was $51,524 compared to an operating profit of $61,851 in the prior year to date period.

The decrease year over year was driven primarily by lower sales volumes due to COVID-19.

For the three months ended June 26, 2020 , interest expense was $35 compared to $64 in the three months ended June 28, 2019 .

Interest expense was $105 for the nine months ended June 26, 2020 compared to $137 for the nine months ended June 28, 2019 .

Interest income for the three month periods ended June 26, 2020 and June 28, 2019 was $170 and $434 , respectively.

For the nine months ended June 26, 2020 , interest income was $1,309 , compared to $1,291 for the nine months ended June 28, 2019 .

The increase in interest income year over year was mainly driven by the increase in interest earnings on increased balances of interest bearing cash in fiscal 2020 versus the corresponding periods of fiscal 2019.

Other (Income) Expense, net

Other income was $2,493 for the three months ended June 26, 2020 compared to $493 in the prior year period.

Investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan were $2,791 in the three month period ended June 26, 2020 compared to $710 in the three month period ended June 28, 2019 .

This $2,081 increase year over year in the investment value of these assets was offset by the deferred compensation expense included in the Company's Operating expenses during the same periods.

For the three months ended June 26, 2020 , foreign currency exchange gains were $74 compared to losses of $194 for the three months ended June 28, 2019 .

For the nine months ended June 26, 2020 , other expense was $205 compared to other income of $238 in the nine months ended June 28, 2019 .

Net investment gains and earnings on the assets related to the Company's non-qualified deferred compensation plan were $648 in the nine month period ended June 26, 2020 , compared to $635 in the nine month period ended June 28, 2019 .

Foreign currency losses were $224 for the nine months ended June 26, 2020 , compared to $18 in the nine months ended June 28, 2019 .

Operating profit on a consolidated basis for the three month period ended January 1, 2021 was $23,557 compared to an operating profit of $6,801 in the first quarter of the prior fiscal year.

Higher sales volumes and the other factors discussed above were the primary drivers of the increase in operating profit between quarters.

For the three months ended January 1, 2021, interest expense was $32 compared to $35 in the three months ended December 27, 2019.

Interest income for the three month periods ended January 1, 2021 and December 27, 2019 was $82 and $655, respectively.

The decrease in interest income year over year was mainly driven by the decrease in interest rates in fiscal 2021 versus the corresponding period of fiscal 2020.

Other Income, net

Other income was $2,404 for the three months ended January 1, 2021 compared to $1,168 in the prior year period.

Investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan were $2,737 in the three month period ended January 1, 2021 compared to $1,324 in the three month period ended December 27, 2019.

The increase year over year in the investment value of these assets was offset by the deferred compensation expense included in the Company's Operating expenses during the same periods.

For the three months ended January 1, 2021, foreign currency exchange losses were $96 compared to $33 for the three months ended December 27, 2019.

Income Tax Expense

The Company’s provision for income taxes is based upon estimated annual effective tax rates in the tax jurisdictions in which the Company operates.

The effective tax rate for the three and nine month periods ended June 26, 2020 were 17.3% and 24.4% , respectively, compared to 23.6% and 24.9% in the corresponding periods of the prior year.

The key factor impacting the

The effective tax rate for the three month period ended January 1, 2021 was 23.7% compared to 25.1% in the corresponding period of the prior year.

The key factor impacting the effective tax rate for the three months ended January 1, 2021 was a current period income tax benefit of an intra-entity transfer of an asset other than inventory.

Net income for the three months ended January 1, 2021 was $19,847, or $1.96 per diluted common class A and B share, compared to net income of $6,430, or $0.64 per diluted common class A and B share, for the first quarter of the prior fiscal

JOHNSON OUTDOORS INC.

effective tax rate for the three and nine months ended June 26, 2020 was a decrease in reserves for unrecognized tax benefits from the expiration of statutes of limitations.

Net income for the three months ended June 26, 2020 was $12,869 , or $1.27 per diluted common class A and B share, compared to net income of $22,066 , or $2.19 per diluted common class A and B share, for the third quarter of the prior fiscal year.

Net income for the nine months ended June 26, 2020 was $39,686 , or $3.93 per diluted common class A and B share, compared to net income of $47,510 , or $4.72 per diluted common class A and B share, for the nine months ended June 28, 2019 .

The increase in net income between quarters was driven by the increased sales demand for many of the Company’s products between quarters and the other factors described above.

Liquidity and Financial Condition

Cash and cash equivalents totaled $181,445 as of June 26, 2020 , compared to cash and cash equivalents of $148,968 as of June 28, 2019 .

The increase in cash year over year was due primarily to operating profits earned since the end of the prior year to date period.

The Company’s debt to total capitalization ratio was 0% as of June 26, 2020 and June 28, 2019 .

The Company’s total debt balance was $0 as of each of June 26, 2020 and June 28, 2019 .

Cash and cash equivalents totaled $195,923 as of January 1, 2021, compared to cash and cash equivalents of $138,257 as of December 27, 2019.

The increase in cash year over year was due primarily to increased operating profits earned over the prior year quarter.

The Company’s debt to total capitalization ratio was 0% as of January 1, 2021 and December 27, 2019.

The Company’s total debt balance was $0 as of each of January 1, 2021 and December 27, 2019.

See “Note 11 – Indebtedness” in the notes to the Company’s accompanying condensed consolidated financial statements for further discussion.

Accounts receivable, net of allowance for doubtful accounts, were $82,577 as of June 26, 2020 , a decrease of $283 compared to $82,860 as of June 28, 2019 .

Inventories were $94,218 as of June 26, 2020 , a decrease of $1,615 , compared to $95,833 as of June 28, 2019 .

Accounts payable were $31,026 at June 26, 2020 compared to $37,190 as of June 28, 2019 .

Accounts receivable, net of allowance for doubtful accounts, were $97,386 as of January 1, 2021, an increase of $19,137 compared to $78,249 as of December 27, 2019.

The increase is consistent with increased sales volumes year over year.

Inventories were $114,849 as of January 1, 2021, an increase of $10,964, compared to $103,885 as of December 27, 2019.

The increase over the prior year period is due to increased raw material and other component purchases in an effort to meet increased demand for products in the current year period.

Accounts payable were $44,908 at January 1, 2021 compared to $35,384 as of December 27, 2019, which increase corresponded with the increase in inventory balances between quarters.

The Company’s cash flows from operating, investing and financing activities, as presented in the Company’s accompanying Condensed Consolidated Statements of Cash Flows, are summarized in the following table:

Nine months ended

Three months ended

(thousands) January 1,

2021 December 27,

Cash provided by (used for):

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Effect of foreign currency rate changes on cash 1,701 419

Increase in cash and cash equivalents

Decrease in cash and cash equivalents $ (16,514) $ (34,125)

Operating Activities

Cash provided by operations totaled $25,560 for the nine months ended June 26, 2020 compared to $15,620 during the corresponding period of the prior fiscal year.

The increase in cash provided by operations over the prior year nine month period was due primarily to changes in working capital between periods, partially offset by lower net income.

Depreciation and amortization charges were $11,489 for the nine month period ended June 26, 2020 compared to $10,377 for the corresponding period of the prior year.

Cash used for operations totaled $11,238 for the three months ended January 1, 2021 compared to $29,088 during the corresponding period of the prior fiscal year.

The decrease in cash used for operations over the prior year three month period was due primarily to increased net income between periods, as well as changes in working capital balances between quarters.

Depreciation and amortization charges were $3,493 for the three month period ended January 1, 2021 compared to $3,432 for the corresponding period of the prior year.

Investing Activities

Cash used for investing activities totaled $11,340 for the nine months ended June 26, 2020 compared to cash provided by investing activities of $16,743 for the corresponding period of the prior fiscal year.

Cash provided by investing activities in the prior year period reflected proceeds from the sale of short-term investments in that period.

No such sales occurred in the current year nine month period.

Cash usage for capital expenditures totaled $11,350 for the current year nine month period and $12,031 for the prior year period.

Cash used for investing activities totaled $4,388 for the three months ended January 1, 2021 compared to cash used for investing activities of $3,307 for the corresponding period of the prior fiscal year.

Cash usage for capital expenditures totaled $4,390 for the current year three month period and $3,307 for the prior year period.

Any additional capital expenditures in fiscal 2021 are expected to be funded by working capital.

Financing Activities

JOHNSON OUTDOORS INC.

Cash used for financing activities totaled $5,412 for the nine months ended June 26, 2020 compared to $4,794 for the nine month period ended June 28, 2019 and represents the payment of dividends and purchase of treasury stock.

The Company had no debt during either quarter ended June 26, 2020 and June 28, 2019 .

Cash used for financing activities totaled $2,589 for the three months ended January 1, 2021 compared to $2,149 for the three month period ended December 27, 2019 and represents the payment of dividends and purchase of treasury stock.

The Company had no debt during either quarter ended January 1, 2021 and December 27, 2019.

See Note 11 "Indebtedness" to the accompanying Condensed Consolidated Financial Statements for additional information on our credit facilities.

As of June 26, 2020 the Company held approximately $37,005 of cash and cash equivalents in bank accounts in foreign taxing jurisdictions.

As of January 1, 2021 the Company held approximately $48,609 of cash and cash equivalents in bank accounts in foreign taxing jurisdictions.

Contractual Obligations and Off Balance Sheet Arrangements

JOHNSON OUTDOORS INC.

The Company has contractual obligations and commitments to make future payments including under operating leases and open purchase orders.

The following schedule details these significant contractual obligations existing at June 26, 2020 .

Less than 1 year

After 5 years

The following schedule details these significant contractual obligations existing at January 1, 2021.

Total Less than 1 year 2-3 years 4-5 years After 5 years

Operating lease obligations $ 46,248 $ 6,508 $ 9,935 $ 8,293 $ 21,512

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The Company utilizes letters of credit primarily as security for the payment of future claims under its workers compensation insurance.

Letters of credit outstanding were approximately $181 and $279 as of June 26, 2020 and June 28, 2019 , respectively.

Letters of credit outstanding were approximately $181 and $181 as of January 1, 2021 and December 27, 2019, respectively.

The Company anticipates making contributions of $128 to its defined benefit pension plans during the remainder of fiscal 2021.

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Critical Accounting Policies and Estimates

The Company’s critical accounting policies and estimates are identified in the Company’s Annual Report on Form 10-K for the fiscal year ending September 27, 2019 in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “Critical Accounting Estimates.” There were no significant changes to the Company’s critical accounting policies and estimates during the nine months ended June 26, 2020 .

The Company’s critical accounting policies and estimates are identified in the Company’s Annual Report on Form 10-K for the fiscal year ending October 2, 2020 in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “Critical Accounting Estimates”, which was filed with the Securities and Exchange Commission on December 11, 2020.

There were no significant changes to the Company’s critical accounting policies and estimates during the three months ended January 1, 2021.

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-Q

Item 2. Management’s Discussion and Analysis