What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-07 compared with 2021-02-05 · 98 added, 80 removed, 110 unchanged (62% 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 month periods ended January 1, 2021 and December 27, 2019.

and its subsidiaries (collectively, the “Company”) as of and for the three and six month periods ended April 2, 2021 and March 27, 2020.

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

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• Critical Accounting Policies and Estimates

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.

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fluctuations in the prices of raw materials or the availability of raw materials used by the Company;

any disruptions in the Company's supply chain as a result of material fluctuations in the Company's order volumes and requirements for raw materials and other components necessary to manufacture and produce the Company's products;

any disruptions in the Company's supply chain as a result of material fluctuations in the Company's order volumes and requirements for (as well as limitations on the availability of) raw materials and other components necessary to manufacture and produce the Company's products;

the success of the Company’s suppliers and customers and the impact of any consolidation in the industries of the Company's suppliers and customers;

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The Company assumes no obligation, and disclaims any obligation, to update such forward-looking statements to reflect subsequent events or circumstances.

JOHNSON OUTDOORS INC.

We have registered the following trademarks, among others, which may be used in this report:

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Coronavirus (COVID-19)

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.

In March 2020, the World Health Organization announced the COVID-19 outbreak had become a world-wide pandemic.

Various government mandates resulted in travel limitations and business and government shutdowns which had significant negative economic impacts around the world.

The Company temporarily halted certain production operations at the end of the second fiscal quarter and beginning of the third fiscal quarter of 2020, and saw a significant decline in demand and sales volumes during that time.

Although later during our 2020 third fiscal quarter, stay-at-home orders were lifted, 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 continued and, as a result, the outdoor recreation industry has benefited from increased participation.

As consumers took advantage of being outdoors, the Company saw an increase in demand for many of its warm weather outdoor recreational products and each of our Fishing, Camping and Watercraft Recreation segments experienced increased sales volumes during most of the second half of fiscal 2020.

As a result, our customers’ inventory levels were drawn down, and accordingly, we continued to experience strong orders from our customers during the first half of fiscal 2021 to fill their pipelines in anticipation of the warm-weather recreational season and to continue to satisfy strong customer demand for our products.

As the Company looks forward to the second half of the year, managing supply chains, and ensuring the availability of certain finished goods, components, parts and other raw materials across our segments will be essential to continue to meet this expected continued strong demand for our products.

Net sales of $206,156 for the second quarter of fiscal 2021 increased $43,072, or 26%, 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.

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The Company’s business is seasonal in nature.

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

The second fiscal quarter traditionally falls within 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 changes to the Company’s seasonality for fiscal 2020 which changes may continue to evolve in fiscal 2021.

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 have continued into fiscal 2021 and which changes are expected to continue to evolve over the remainder of fiscal 2021.

JOHNSON OUTDOORS INC.

2020 2019 2018

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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

January 1, 2021 December 27, 2019

Three Months Ended Six Months Ended

April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

Fishing $ 160,016 $ 133,955 $ 287,015 $ 233,233

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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 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.

Consolidated net sales for the three months ended April 2, 2021 were $206,156, an increase of $43,072, or 26%, compared to $163,084 for the three months ended March 27, 2020.

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

Net sales for the three months ended April 2, 2021 for the Fishing business were $160,016, an increase of $26,061, or 19%, from $133,955 during the second 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 which resulted in a significant increase in demand for our fishing products.

The higher consumer demand resulted in our customers' desire to fill their pipeline and stock inventory of our products in anticipation of the 2021 warm-weather recreational season.

Net sales for the Camping business were $14,244 for the second quarter of the current fiscal year, an increase of $5,395, or 61%, from the prior year net sales during the same period of $8,849.

Increased sales of Jetboil and Eureka!

consumer camping products as a result of increased participation in outdoor recreation activities described above were the primary drivers of the increase.

JOHNSON OUTDOORS INC.

Net sales for the second quarter of fiscal 2021 for the Watercraft Recreation business were $17,778, an increase of $11,714, or 193%, compared to $6,064 in the prior year same period.

COVID-19 related shutdowns unfavorably impacted both production and demand in the prior year period for this segment.

During the current fiscal year second quarter, increased participation in outdoor recreation activities and successful offerings of products further drove the significant increase over the prior year quarter.

Net sales for Diving, our most global business, were relatively flat quarter over quarter at $14,208 for the three months ended April 2, 2021 versus $14,261 for the three months ended March 27, 2020.

A decrease in demand due to the effects of COVID-19 as a result of the continued closure of destination travel locations and lower tourism activities, was offset by a favorable foreign currency translation impact on sales in this segment of approximately 5% versus the prior year quarter.

For the six months ended April 2, 2021, consolidated net sales of $371,823 increased $80,685 or 28% compared to $291,138 for the six months ended March 27, 2020.

Foreign currency translation had a favorable impact of less than 1% on net sales of the current year to date period versus the prior year to date period.

Net sales for the six months ended April 2, 2021 for the Fishing business were $287,015, an increase of $53,782, or 23% from $233,233 during the same period of the prior year.

The increase over the prior year to date period 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 and increased customer orders to fill their pipelines in anticipation of the warm-weather recreational season in the current fiscal year to date period.

Net sales for the Camping business were $26,438 for the six months ended April 2, 2021, an increase of $10,075, or 62%, from the prior year net sales during the same period of $16,363.

Increased sales of Jetboil and Eureka!

consumer camping products as a result of increased participation in outdoor recreation activities were the primary driver of the increase.

Net sales for the six months ended April 2, 2021 for the Watercraft Recreation business were $30,221, an increase of $19,348, or 178%, compared to $10,873 in the prior year same period.

Increased demand as a result of increased participation in watercraft recreation during the COVID-19 pandemic drove the overall increase over the prior year to date period.

Diving net sales were $28,301 for the six months ended April 2, 2021 versus $30,720 for the six months ended March 27, 2020, a decrease of $2,419, or 8%.

The sales decrease is largely due to the impact of COVID-19 and the resulting disruptions to the global tourism industry.

The decrease in demand was offset in part by the favorable effect of foreign currency translation of 5% versus the prior year to date period.

Cost of Sales

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.

Cost of sales for the three months ended April 2, 2021 was $112,902 compared to $87,952 for the three months ended March 27, 2020.

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.

Furthermore, the Company incurred $1,400 of additional tariff costs versus the prior year quarter and experienced increased air freight costs as the Company continues to manage its supply chain to ensure the availability of necessary components, parts and other raw materials across our segments.

For the six months ended April 2, 2021, cost of sales was $203,539 compared to $162,394 in the same period of the prior year.

The increase year over year was primarily driven by increased sales volumes in the current year versus the prior year as described above.

Gross Profit Margin

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.

For the three months ended April 2, 2021, gross profit as a percentage of net sales was 45.2% compared to 46.1% in the three month period ended March 27, 2020.

The gross profit impact of cost increases noted above was nearly offset by increased sales volume related efficiencies and favorable product mix.

For the six months ended April 2, 2021, gross profit as a percentage of net sales was 45.3% compared to 44.2% in the prior six month period, mainly due to pricing increases and increased sales volume efficiencies, which more than offset a $2,000 increase in tariffs over the prior year to date period.

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 $9 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.

The expiration of tariff exclusions that the Company secured in prior periods, combined with the application of tariffs on a broader assortment of goods, as well as additional purchase volume are driving the expected year over year increase in tariff costs.

JOHNSON OUTDOORS INC.

Operating Expenses

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 expenses were $57,218 for the three months ended April 2, 2021, compared to $43,338 for the three months ended March 27, 2020.

The increase of $13,880 was primarily due to the impact of higher sales volume-driven expenses, as well as higher variable and deferred compensation expense between quarters.

Favorable market conditions on the Company's deferred compensation plan assets resulted in approximately $4,700 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 $108,691 for the six months ended April 2, 2021, compared to $90,149 for the six months ended March 27, 2020.

The increase of $18,542 was primarily due to the impact of higher sales volume-driven expenses, as well as higher variable and deferred compensation expense between periods.

Favorable market conditions on the Company's deferred compensation plan assets resulted in approximately $6,100 of higher deferred compensation expense in the current year to date period as compared to the prior year to date period, which was entirely offset by a gain in Other (Income) Expense, 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 January 1, 2021 was $23,557 compared to an operating profit of $6,801 in the first quarter of the prior fiscal year.

Operating profit on a consolidated basis for the three month period ended April 2, 2021 was $36,036, compared to an operating profit of $31,794 in the second 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.

Operating profit on a consolidated basis for the six months ended April 2, 2021 was $59,593, compared to an operating profit of $38,595 in the prior year to date period.

The improvement year over year was driven primarily by increased sales volumes as well as the other factors discussed above.

Interest expense remained flat at $35 for each of the three months ended April 2, 2021 and March 27, 2020.

Interest expense was $67 for the six months ended April 2, 2021 compared to $70 for the six months ended March 27, 2020.

Interest income for the three month periods ended April 2, 2021 and March 27, 2020 was $80 and $484, respectively.

For the six months ended April 2, 2021, interest income was $162, compared to $1,139 for the six months ended March 27, 2020.

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.

Other income was $1,229 for the three months ended April 2, 2021 compared to expense of $3,866 in the prior year period.

Investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan were $1,257 in the three month period ended April 2, 2021 compared to net investment losses of $3,468 in the three month period ended March 27, 2020.

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.

For the three months ended April 2, 2021, foreign currency exchange gains were $217 compared to losses of $265 for the three months ended March 27, 2020.

For the six months ended April 2, 2021, other income was $3,633 compared to expense of $2,698 in the six months ended March 27, 2020.

Net investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan in the six months ended April 2, 2021 were $3,994, compared to net investment losses of $2,144 in the six months ended March 27, 2020.

Foreign currency exchange gains were $121 for the six months ended April 2, 2021, compared to losses of $297 for the six months ended March 27, 2020.

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 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

The effective tax rate for the three and six month periods ended April 2, 2021 were 25.4% and 24.7%, respectively, compared to 28.2% and 27.5% in the corresponding periods of the prior year.

The key factors impacting the effective tax rate for the six months ended April 2, 2021 were the net excess tax benefits related to share-based compensation and a current period income tax benefit of an intra-entity transfer of an asset other than inventory.

JOHNSON OUTDOORS INC.

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.

Net income for the three months ended April 2, 2021 was $27,834, or $2.74 per diluted common class A and B share, compared to net income of $20,387, or $2.02 per diluted common class A and B share, for the second quarter of the prior fiscal year.

Net income for the six months ended April 2, 2021 was $47,681, or $4.70 per diluted common class A and B share, compared to net income of $26,817, or $2.66 per diluted common class A and B share, for the six months ended March 27, 2020.

Liquidity and Financial Condition

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.

Cash and cash equivalents totaled $186,921 as of April 2, 2021, compared to cash and cash equivalents of $131,256 as of March 27, 2020.

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

The Company’s debt to total capitalization ratio was 0% as of April 2, 2021 and March 27, 2020.

The Company’s total debt balance was $0 as of each of April 2, 2021 and March 27, 2020.

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 $97,386 as of January 1, 2021, an increase of $19,137 compared to $78,249 as of December 27, 2019.

Accounts receivable, net of allowance for doubtful accounts, were $130,139 as of April 2, 2021, an increase of $23,510 compared to $106,629 as of March 27, 2020.

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.

Inventories were $124,538 as of April 2, 2021, an increase of $16,858, compared to $107,680 as of March 27, 2020.

The increase in inventory balance 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 $50,609 at April 2, 2021 compared to $36,349 as of March 27, 2020, which increase corresponded with the increase in inventory balances between periods.

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:

Three months ended

(thousands) January 1,

2021 December 27,

Cash provided by (used for):

Six months ended

(thousands) April 2,

2021 March 27,

Cash (used for) provided by:

Operating activities $ (11,955) $ (28,991)

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Operating Activities

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.

Cash used for operations totaled $11,955 for the six months ended April 2, 2021 compared to $28,991 during the corresponding period of the prior fiscal year.

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

Depreciation and amortization charges were $6,751 for the six month period ended April 2, 2021 compared to $6,796 for the corresponding period of the prior year.

Investing Activities

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.

Cash used for investing activities totaled $9,822 for the six months ended April 2, 2021 compared to cash used for investing activities of $7,762 for the corresponding period of the prior fiscal year.

Cash usage for capital expenditures totaled $9,828 for the current year six month period and $7,772 for the prior year period.

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

Financing Activities

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.

Cash used for financing activities totaled $4,690 for the six months ended April 2, 2021 compared to $3,842 for the six month period ended March 27, 2020 and represents the payment of dividends and purchase of treasury stock.

The Company had no

JOHNSON OUTDOORS INC.

debt during either quarter ended April 2, 2021 and March 27, 2020.

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

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

As of April 2, 2021 the Company held approximately $44,944 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 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

Open purchase orders 134,066 134,066 — — —

Contractually obligated interest payments 211 84 127 — —

Total contractual obligations $ 180,525 $ 140,658 $ 10,062 $ 8,293 $ 21,512

There have been no changes outside of the ordinary course of business in the specified contractual obligations during the quarter ended April 2, 2021.

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 $181 as of January 1, 2021 and December 27, 2019, respectively.

Letters of credit outstanding were approximately $181 and $181 as of April 2, 2021 and March 27, 2020, respectively.

The Company anticipates making contributions of $83 to its defined benefit pension plans during the remainder of fiscal 2021.

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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.

There were no significant changes to the Company’s critical accounting policies and estimates during the six months ended April 2, 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