What changed in this filing

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Item 1. Financial Statements

2021-08-09 compared with 2021-05-07 · 152 added, 128 removed, 513 unchanged (35% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Six Months Ended

(thousands, except per share data) April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

Three Months Ended Nine Months Ended

(thousands, except per share data) July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020

Net sales $ 213,568 $ 138,390 $ 585,391 $ 429,528

27 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

(thousands) April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

Three Months Ended Nine Months Ended

(thousands) July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020

Net income $ 28,774 $ 12,869 $ 76,455 $ 39,686

Other comprehensive (loss) income:

Other comprehensive income:

Foreign currency translation 742 1,537 1,672 630

2 unchanged sentences

123 180 325 303

Total other comprehensive (loss) income ( 1,411 ) ( 1,545 ) 1,132 ( 784 )

Total other comprehensive income 865 1,717 1,997 933

Total comprehensive income $ 29,639 $ 14,586 $ 78,452 $ 40,619

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(thousands, except share data) April 2, 2021 October 2, 2020 March 27, 2020

(thousands, except share data) July 2, 2021 October 2, 2020 June 26, 2020

Current assets:

47 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Six Months Ended April 2, 2021

Nine Months Ended July 2, 2021

(thousands except for shares) Shares Common Stock Capital in

22 unchanged sentences

BALANCE AT APRIL 2, 2021 10,118,188 $ 508 $ 80,183 $ 339,911 $ 5,849 $ ( 2,715 )

Six Months Ended March 27, 2020

Net income — — — 28,774 — —

Dividends declared — — — ( 2,103 ) — —

Award of non-vested shares 9,633 1 ( 1 ) — — —

Stock-based compensation — — 1,052 — — —

Restricted stock forfeitures ( 621 ) — 75 — — ( 75 )

Currency translation adjustment — — — — 742 —

Change in pension plans, net of tax of $ 41

BALANCE AT JULY 2, 2021 10,127,200 $ 509 $ 81,309 $ 366,582 $ 6,714 $ ( 2,790 )

JOHNSON OUTDOORS INC.

Nine Months Ended June 26, 2020

(thousands except for shares) Shares Common Stock Capital in

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BALANCE AT MARCH 27, 2020 10,082,609 $ 504 $ 76,237 $ 271,808 $ 774 $ ( 2,221 )

Net income — — — 12,869 — —

Dividends declared — — — ( 1,697 ) — —

Issuance of stock under employee stock purchase plan 2,190 — 126 — — —

Stock-based compensation — — 1,417 — — —

Currency translation adjustment — — — — 1,537 —

Change in pension plans, net of tax of $ 60

— — — — 180 —

BALANCE AT JUNE 26, 2020 10,084,799 $ 504 $ 77,780 $ 282,980 $ 2,491 $ ( 2,221 )

The accompanying notes are an integral part of the condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

(thousands) April 2, 2021 March 27, 2020

CASH USED FOR OPERATING ACTIVITIES

Nine Months Ended

(thousands) July 2, 2021 June 26, 2020

CASH PROVIDED BY OPERATING ACTIVITIES

Net income $ 76,455 $ 39,686

4 unchanged sentences

Stock based compensation 2,571 1,798

Loss (gain) on disposal of productive assets 99 ( 10 )

Loss on disposal of productive assets 44 149

Deferred income taxes ( 860 ) ( 65 )

13 unchanged sentences

CASH USED FOR FINANCING ACTIVITIES

Common stock transactions — 126

Dividends paid ( 6,297 ) ( 5,078 )

2 unchanged sentences

Effect of foreign currency rate changes on cash 1,228 255

Decrease in cash and cash equivalents ( 25,516 ) ( 41,126 )

Increase in cash and cash equivalents 36,579 9,063

CASH AND CASH EQUIVALENTS

2 unchanged sentences

Supplemental Disclosure:

Non-cash treasury stock activity $ 75 $ —

Non-cash dividends 7 5

Cash paid for taxes 18,828 4,418

6 unchanged sentences

In the opinion of management, these statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Johnson Outdoors Inc.

and subsidiaries (collectively, the “Company”) as of April 2, 2021 and March 27, 2020, and their results of operations for the three and six month periods then ended and cash flows for the six month periods then ended.

and subsidiaries (collectively, the “Company”) as of July 2, 2021 and June 26, 2020, and their results of operations for the three and nine month periods then ended and cash flows for the nine month periods then ended.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in 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.

Due to seasonal variations and other factors, some of which are described herein, including related to the coronavirus (COVID-19) outbreak and resulting pandemic, the results of operations for the three and six months ended April 2, 2021 are not necessarily indicative of the results to be expected for the Company’s full 2021 fiscal year.

Due to seasonal variations and other factors, some of which are described herein, including related to the ongoing coronavirus (COVID-19) outbreak and resulting pandemic, the results of operations for the three and nine months ended July 2, 2021 are not necessarily indicative of the results to be expected for the Company’s full 2021 fiscal year.

See "Coronavirus (COVID-19)" below and “Seasonality” and "Coronavirus (COVID-19)" in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere herein for additional information.

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As a result, in the latter part of fiscal 2020 we saw increased participation in fishing, camping and watercraft recreation and the related demand for our products in these business segments, largely driven by consumer desire to engage in socially distant and safe activities in the great outdoors.

This trend in increased demand for our outdoor recreation products continued into the first half of fiscal 2021.

Nonetheless, the COVID-19 pandemic continues to impact macroeconomic and societal developments in various key regions of the world.

This trend in increased demand for our outdoor recreation products continued into fiscal 2021.

Despite the availability of vaccines, and the overall reduction in restrictions on economic and social activities that were implemented at the start of the pandemic, COVID-19 continues to be a serious global health concern and has a significant impact on macroeconomic and societal developments, including on economic activity and supply chain continuity, in various key regions of the world and related to certain raw materials and components.

As a result, the Company cannot reasonably estimate the full impact of the COVID-19 pandemic on Company operations and profitability for the remainder of fiscal 2021 and beyond as the situation is dynamic and constantly changing.

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2 ACCOUNTS RECEIVABLE

Accounts receivable are stated net of allowances for doubtful accounts of $ 2,463 , $ 2,697 and $ 1,279 as of April 2, 2021, October 2, 2020 and March 27, 2020, respectively.

The increase in net accounts receivable to $ 130,139 as of April 2, 2021 from $ 67,292 as of October 2, 2020 is attributable to the seasonal nature of the Company’s business and the resulting increases in sales volumes between periods.

Accounts receivable are stated net of allowances for doubtful accounts of $ 1,446 , $ 2,697 and $ 2,834 as of July 2, 2021, October 2, 2020 and June 26, 2020, respectively.

The increase in net accounts receivable to $ 94,750 as of July 2, 2021 from $ 67,292 as of October 2, 2020 is attributable to the seasonal nature of the Company’s business and the resulting increases in sales volumes between periods.

The determination of the allowance for doubtful accounts is based on a combination of factors.

In circumstances where specific collection concerns about a receivable exist (including as a result of the impact of COVID-19), a reserve is established to value the affected account receivable at an amount the Company believes will be collected.

In circumstances where specific collection concerns about a receivable exist, a reserve is established to value the affected account receivable at an amount the Company believes will be collected.

For all other customers, the Company recognizes allowances for doubtful accounts based on historical experience of bad debts as a percent of accounts receivable outstanding for each business segment.

Uncollectible accounts are written off against the allowance for doubtful accounts after collection efforts have been exhausted.

The Company typically does not require collateral on its accounts receivable.

Uncollectible accounts are

JOHNSON OUTDOORS INC.

written off against the allowance for doubtful accounts after collection efforts have been exhausted.

The Company typically does not require collateral on its accounts receivable.

3 EARNINGS PER SHARE (“EPS”)

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In periods where there is a cumulative year to date net loss or no undistributed income because distributions through dividends exceed net income, Class B shares are treated as anti-dilutive and, therefore, net losses are allocated equally on a per share basis among all participating securities.

For the three and six month periods ended April 2, 2021 and March 27, 2020, basic income per share for the Class A and Class B shares has been presented using the two class method and reflects the allocation of undistributed income described above.

For the three and nine month periods ended July 2, 2021 and June 26, 2020, basic income per share for the Class A and Class B shares has been presented using the two class method and reflects the allocation of undistributed income described above.

Diluted net income per share is computed by dividing allocated net income by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options, restricted stock units (“stock units” or “units”) and non-vested restricted stock.

3 unchanged sentences

In periods where the Company reports a net loss, the effect of anti-dilutive stock options and units is excluded and diluted loss per share is equal to basic loss per share for both classes of stock.

For the three and six month periods ended April 2, 2021 and March 27, 2020, diluted net income per share reflects the effect of dilutive stock units and assumes the conversion of Class B common stock into Class A common stock.

Non-vested stock that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive totaled 40,024 and 39,078 for the three months ended April 2, 2021 and March 27, 2020, respectively, and 40,336 and 39,695 for the six months ended April 2, 2021 and March 27, 2020, respectively.

Stock units that could potentially dilute earnings per share in the future and which were not included in the fully diluted computation because they would have been anti-dilutive were 24,894 and 43,198 for the three month periods ended April 2, 2021 and March 27, 2020, respectively, and 32,917 and 44,546 for the six months ended April 2, 2021 and March 27, 2020, respectively.

For the three and nine month periods ended July 2, 2021 and June 26, 2020, diluted net income per share reflects the effect of dilutive stock units and assumes the conversion of Class B common stock into Class A common stock.

Shares of non-vested stock that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive totaled 40,743 and 41,390 for the three months ended July 2, 2021 and June 26, 2020, respectively, and 40,471 and 40,260 for the nine months ended July 2, 2021 and June 26, 2020, respectively.

Stock units that could potentially dilute earnings per share in the future and which were not included in the fully diluted computation because they would have been anti-dilutive were 20,277 and 36,495 for the three month periods ended July 2, 2021 and June 26, 2020, respectively, and 27,411 and 42,368 for the nine months ended July 2, 2021 and June 26, 2020, respectively.

Dividends per share

Dividends per share for the three and six month periods ended April 2, 2021 and March 27, 2020 were as follows:

Dividends per share for the three and nine month periods ended July 2, 2021 and June 26, 2020 were as follows:

JOHNSON OUTDOORS INC.

Three Months Ended Six months ended

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

Three Months Ended Nine months ended

July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020

Dividends declared per common share:

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Current plans also allow for issuance of shares of restricted stock, restricted stock units or stock appreciation rights in lieu of stock options.

Under the Company’s 2012 Non-Employee Director Stock Ownership Plan and the 2020 Long-Term Incentive Plan (the only plans where shares currently remain available for future equity incentive awards) there were a total of 502,542 shares of the Company’s Class A common stock available for future grant to non-employee directors and key executives at April 2, 2021.

Under the Company’s 2012 Non-Employee Director Stock Ownership Plan and the 2020 Long-Term Incentive Plan (the only plans where shares currently remain available for future equity incentive awards) there were a total of 501,314 shares of the Company’s Class A common stock available for future grant to non-employee directors and key executives at July 2, 2021.

Share awards previously made under the Company's 2010 Long-Term Stock Incentive Plan, which no longer allows for additional share grants, also remain outstanding.

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The fair value at date of grant is based on the number of shares granted and the average of the Company’s high and low Class A common stock price on the date of grant or, if the Company’s Class A shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock price on the last preceding date on which the Company’s Class A shares traded.

A summary of non-vested stock activity for the six months ended April 2, 2021 related to the Company’s stock ownership plans is as follows:

A summary of non-vested stock activity for the nine months ended July 2, 2021 related to the Company’s stock ownership plans is as follows:

Shares Weighted Average

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Restricted stock vested ( 17,234 ) 53.79

Non-vested stock at April 2, 2021 36,984 80.16

Forfeitures ( 621 ) 120.77

Non-vested stock at July 2, 2021 37,591 80.86

Non-vested stock grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of shares by tendering a portion of the vested shares back to the Company.

Shares tendered back to the Company were 2,341 and 4,054 during the six month periods ended April 2, 2021 and March 27, 2020, respectively.

Stock compensation expense, net of forfeitures, related to non-vested stock was $ 297 and $ 252 for the three month periods ended April 2, 2021 and March 27, 2020, respectively, and $ 576 and $ 492 for the six months ended April 2, 2021 and March 27, 2020, respectively.

Unrecognized compensation cost related to non-vested stock as of April 2, 2021 was $ 1,974 , which amount will be amortized to expense through November 2024 or adjusted for changes in future estimated or actual forfeitures.

The fair value of restricted stock vested during the six month periods ended April 2, 2021 and March 27, 2020 was $ 1,258 and $ 1,329 , respectively.

Shares tendered back to the Company were 2,341 and 4,054 during the nine month periods ended July 2, 2021 and June 26, 2020, respectively.

Stock compensation expense, net of forfeitures, related to non-vested stock was $ 286 and $ 270 for the three month periods ended July 2, 2021 and June 26, 2020, respectively, and $ 862 and $ 762 for the nine months ended July 2, 2021 and June 26, 2020, respectively.

Unrecognized compensation cost related to non-vested stock as of July 2, 2021 was $ 1,764 , which amount will be amortized to expense through November 2024 or adjusted for changes in future estimated or actual forfeitures.

The fair value of restricted stock vested during the nine month periods ended July 2, 2021 and June 26, 2020 was $ 1,950 and $ 1,329 , respectively.

Restricted Stock Units

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The fair value at the date of grant is based on the number of units granted and the average of the Company’s high and low Class A common stock trading price on the date of grant or, if the Company’s Class A shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock trading price on the last preceding date on which the Company’s Class A shares traded.

A summary of RSU activity for the six months ended April 2, 2021 follows:

A summary of RSU activity for the nine months ended July 2, 2021 follows:

Number of RSUs Weighted Average

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RSUs vested ( 18,112 ) 43.49

RSUs at April 2, 2021 69,768 80.58

Stock compensation expense, net of forfeitures, related to RSUs was $ 511 and $ 943 for the three and six months ended April 2, 2021, respectively.

For the three and six months ended March 27, 2020, the Company recognized income of $ 589 and $ 169 , respectively, related to RSUs as a result of reversing compensation expense previously recognized in prior periods during the quarter ended March 27, 2020.

The Company reversed this compensation expense due to an expectation at the time that performance conditions would not be met for certain awards as a result of market conditions at that time.

Unrecognized compensation cost related to non-vested RSUs as of April 2, 2021 was $ 3,488 , which amount will be amortized to expense through September 2023 or adjusted for changes in future estimated or actual forfeitures.

RSUs at July 2, 2021 69,768 80.58

Stock compensation expense, net of forfeitures, related to RSUs was $ 735 and $ 1,678 for the three and nine months ended July 2, 2021, respectively.

For the three and nine months ended June 26, 2020, the Company recognized expense of $ 1,161 and $ 992 , respectively.

Unrecognized compensation cost related to non-vested RSUs as of July 2, 2021 was $ 3,111 , which amount will be amortized to expense through September 2023 or adjusted for changes in future estimated or actual forfeitures.

RSU grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of units and issuance of unrestricted shares of Class A common stock by tendering a portion of such unrestricted shares back to the Company.

Shares tendered back to the Company for this purpose were 3,320 and 3,075 during the six month periods ended April 2, 2021 and March 27, 2020, respectively.

The fair value of restricted stock units recognized as a tax deduction during the six month periods ended April 2, 2021 and March 27, 2020 was $ 2,148 and $ 1,426 , respectively.

Shares tendered back to the Company for this purpose were 3,320 and 3,075 during the nine month periods ended July 2, 2021 and June 26, 2020, respectively.

The fair value of restricted stock units recognized as a tax deduction during the nine month periods ended July 2, 2021 and June 26, 2020 was $ 3,353 and $ 1,426 , respectively.

Compensation expense related to units earned by employees (as opposed to grants to outside directors) is based upon the attainment of certain Company financial goals related to cumulative net sales and cumulative operating profit over a three-year performance period.

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2009 Employees’ Stock Purchase Plan, which was most recently amended on March 2, 2017, and which provides for the issuance of shares of Class A common stock at a purchase price of not less than 85 % of the fair market value of such shares on the date of grant or on the date of purchase, whichever is lower.

During the three month period ended April 2, 2021, the Company issued 0 shares of Class A common stock and recognized $ 0 of expense in connection with the Employees' Stock Purchase Plan.

During the six month period ended April 2, 2021, the Company issued 0 shares of Class A common stock and recognized $ 0 of expense in connection with the Plan.

During the three month period ended March 27, 2020, the Company issued 0 shares of Class A common stock and recognized $ 51 of expense in connection with the Plan.

During the six month period ended March 27, 2020, the Company issued 0 shares of Class A common stock and recognized $ 58 of expense in connection with the Plan.

During the three month period ended July 2, 2021, the Company issued 0 shares of Class A common stock and recognized $ 31 of expense in connection with the Employees' Stock Purchase Plan.

During the nine month period ended July 2, 2021, the Company issued 0 shares of Class A common stock and recognized $ 31 of expense in connection with the Plan.

During the three month period ended June 26, 2020, the Company issued 2,190 shares of Class A common stock and recognized $ 14 of income in connection with the Plan.

During the nine month period ended June 26, 2020, the Company issued 2,190 shares of Class A common stock and recognized $ 44 of expense in connection with the Plan.

JOHNSON OUTDOORS INC.

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Normal retirement age is 65, with provisions for earlier retirement.

The Company made contributions of $ 44 and $ 44 to its pension plans for the three months ended April 2, 2021 and March 27, 2020, respectively, and contributions of $ 88 and $ 88 for the six months ended April 2, 2021 and March 27, 2020, respectively.

The Company made contributions of $ 42 and $ 44 to its pension plans for the three months ended July 2, 2021 and June 26, 2020, respectively, and contributions of $ 130 and $ 132 for the nine months ended July 2, 2021 and June 26, 2020, respectively.

During the first quarter of fiscal 2021, Company management commenced actions to terminate both of the pension plans.

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When the termination and related payouts occur, which is subject to numerous conditions under the plan document and applicable law, they are estimated to unfavorably impact net income by approximately $ 4 to $ 5 million.

The components of net periodic benefit cost related to Company sponsored defined benefit plans for the three and six month periods ended April 2, 2021 and March 27, 2020 were as follows:

Three Months Ended Six Months Ended

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

The components of net periodic benefit cost related to Company sponsored defined benefit plans for the three and nine month periods ended July 2, 2021 and June 26, 2020 were as follows:

Three Months Ended Nine Months Ended

July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020

Components of net periodic benefit cost:

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6 INCOME TAXES

For the three and six months ended April 2, 2021 and March 27, 2020, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:

Three Months Ended Six Months Ended

For the three and nine months ended July 2, 2021 and June 26, 2020, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:

Three Months Ended Nine Months Ended

(thousands, except tax rate data)

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

July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020

Profit before income taxes $ 39,074 $ 15,557 $ 102,395 $ 52,523

1 unchanged sentence

Effective income tax rate 26.4 % 17.3 % 25.3 % 24.4 %

The effective tax rate was lower for the three months ended April 2, 2021 compared to the prior year period due to the favorable impact of excess tax benefits on deductible stock compensation.

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 income tax benefit generated by the intra-entity transfer of an asset other than inventory.

The effective tax rate was higher for the three and nine months ended July 2, 2021 compared to the prior year periods due to the favorable impact from a decrease in reserves for unrecognized tax benefits reported in the prior year periods.

The impact of the Company’s operations in jurisdictions where a valuation allowance is assessed is removed from the overall effective tax rate methodology and recorded directly based on year to date results for the year for which no tax expense or benefit can be recognized.

The significant tax jurisdictions that have a valuation allowance for the periods ended April 2, 2021 and March 27, 2020 were:

JOHNSON OUTDOORS INC.

April 2, 2021 March 27, 2020

The significant tax jurisdictions that have a valuation allowance for the periods ended July 2, 2021 and June 26, 2020 were:

July 2, 2021 June 26, 2020

France France

1 unchanged sentence

Switzerland Switzerland

JOHNSON OUTDOORS INC.

The Company regularly assesses the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes.

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2021 October 2,

2020 March 27,

2020 June 26,

Raw materials $ 82,648 $ 48,874 $ 46,232

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$ 130,742 $ 97,437 $ 94,218

The changes in goodwill during the six months ended April 2, 2021 and March 27, 2020 were as follows:

April 2, 2021 March 27, 2020

The changes in goodwill during the nine months ended July 2, 2021 and June 26, 2020 were as follows:

July 2, 2021 June 26, 2020

Balance at beginning of period $ 11,184 $ 11,186

1 unchanged sentence

Balance at end of period $ 11,242 $ 11,163

JOHNSON OUTDOORS INC.

The Company evaluates the carrying value of goodwill for a reporting unit on an annual basis or more frequently when events and circumstances warrant such an evaluation.

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Fair value is determined primarily by using a discounted cash flow methodology that requires considerable management judgment and long-term assumptions and is considered a Level 3 (unobservable) fair value determination in the fair value hierarchy (see Note 13) below.

JOHNSON OUTDOORS INC.

The Company provides warranties on certain of its products as they are sold.

The following table summarizes the Company’s warranty activity for the six months ended April 2, 2021 and March 27, 2020.

April 2, 2021 March 27, 2020

The following table summarizes the Company’s warranty activity for the nine months ended July 2, 2021 and June 26, 2020.

July 2, 2021 June 26, 2020

Balance at beginning of period $ 10,849 $ 9,190

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11 INDEBTEDNESS

The Company had no debt outstanding at April 2, 2021, October 2, 2020, or March 27, 2020.

The Company had no debt outstanding at July 2, 2021, October 2, 2020, or June 26, 2020.

The Company and certain of its subsidiaries have entered into an unsecured credit facility with PNC Bank National Association and Associated Bank, N.A.

("the Lending Group").

This credit facility consists of a $ 75 million Revolving Credit Facility among the Company, certain of the Company’s subsidiaries, PNC Bank National Association, as lender and as administrative agent, and the other lender named therein (the “Credit Agreement” or “Revolver”).

The Revolver has an expiration date of November 15, 2022 and provides for borrowing of up to an aggregate principal amount not to exceed $ 75,000 with a $ 50,000 accordion feature that gives the Company the option to increase the maximum financing availability (i.e., an aggregate borrowing amount of $ 125,000 ) subject to the conditions of the Credit Agreement and subject to the approval of the lenders.

The Revolver provides for borrowing of up to an aggregate principal amount not to exceed $ 75,000 with a $ 50,000 accordion feature that gives the Company the option to increase the maximum financing availability (i.e., an aggregate borrowing amount of $ 125,000 ) subject to the conditions of the Credit Agreement and subject to the approval of the lenders.

On July 15, 2021, the Company entered into a First Amendment to this credit facility that extended its expiration date from November 15, 2022, to July 15, 2026.

Other key provisions of the credit facility remained as outlined above and the description herein is qualified in its entirety by the terms and conditions of the original Debt Agreement (a copy of which was filed as Exhibit 99.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on November 20, 2017) and the Amendment, (a copy of which was filed as Exhibit 10.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on July 16, 2021).

The interest rate on the Revolver is based on LIBOR plus an applicable margin, which margin resets each quarter.

The applicable margin ranges from 1.00 % to 1.75 % and is dependent on the Company’s leverage ratio for the trailing twelve month period.

The interest rates on the Revolver at April 2, 2021 and March 27, 2020 were approximately 1.1 % and 1.9 %, respectively.

The interest rates on the Revolver at July 2, 2021 and June 26, 2020 were approximately 1.1 % and 1.2 %, respectively.

The Credit Agreement restricts the Company's ability to incur additional debt, includes maximum leverage ratio and minimum interest coverage ratio covenants and is unsecured.

Other Borrowings

The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of April 2, 2021 or March 27, 2020.

The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance, which totaled approximately $ 181 and $ 181 as of April 2, 2021 and March 27, 2020, respectively.

The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of July 2, 2021 or June 26, 2020.

JOHNSON OUTDOORS INC.

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dollar, the sales, expenses, profits, losses, assets and liabilities of the Company’s foreign operations, as reported in the Company’s consolidated financial statements, increase or decrease, accordingly.

Approximately 11 % of the Company’s revenues for the six month period ended April 2, 2021 were denominated in currencies other than the U.S.

Approximately 12 % of the Company’s revenues for the nine month period ended July 2, 2021 were denominated in currencies other than the U.S.

Approximately 4 % were denominated in euros, approximately 7 % were denominated in Canadian dollars and approximately 1 % were denominated in Hong Kong dollars, with the remaining revenues denominated in various other foreign currencies.

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The Company may use such foreign currency forward contracts to mitigate the risk associated with changes in foreign currency exchange rates on financial instruments and known commitments, including commitments for inventory purchases, denominated in foreign currencies.

As of April 2, 2021 and March 27, 2020, the Company held no foreign currency forward contracts.

As of July 2, 2021 and June 26, 2020, the Company held no foreign currency forward contracts.

13 FAIR VALUE MEASUREMENTS

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These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

The carrying amounts of cash, cash equivalents, short term investments, accounts receivable, and accounts payable approximated their fair values at April 2, 2021, October 2, 2020 and March 27, 2020 due to the short term maturities of these instruments.

The carrying amounts of cash, cash equivalents, short term investments, accounts receivable, and accounts payable approximated their fair values at July 2, 2021, October 2, 2020 and June 26, 2020 due to the short term maturities of these instruments.

When indicators of impairment are present, the Company may be required to value certain long-lived assets such as property, plant, and equipment, and other intangibles at their fair value.

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The rabbi trust assets are used to fund amounts the Company owes to certain officers and other employees under the Company’s non-qualified deferred compensation plan.

These assets are included in "Other assets" in the accompanying Company's Condensed Consolidated Balance Sheets, and the mark to market adjustments on the assets are recorded in “Other income, net” in

The offsetting deferred compensation liability

JOHNSON OUTDOORS INC.

the accompanying Condensed Consolidated Statements of Operations.

The offsetting deferred compensation liability is also reported at fair value as "Deferred compensation liability" in the Company's accompanying Condensed Consolidated Balance Sheets.

is also reported at fair value as "Deferred compensation liability" in the Company's accompanying Condensed Consolidated Balance Sheets.

Changes in the liability are recorded in "Administrative management, finance and information systems" expense in the accompanying Condensed Consolidated Statements of Operations.

The following table summarizes the Company’s financial assets measured at fair value as of April 2, 2021:

The following table summarizes the Company’s financial assets measured at fair value as of July 2, 2021:

Level 1 Level 2 Level 3 Total

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Rabbi trust assets $ 21,550 $ — $ — $ 21,550

The following table summarizes the Company’s financial assets measured at fair value as of March 27, 2020:

The following table summarizes the Company’s financial assets measured at fair value as of June 26, 2020:

Level 1 Level 2 Level 3 Total

Rabbi trust assets $ 19,493 $ — $ — $ 19,493

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three and six month periods ended April 2, 2021 and March 27, 2020 was:

Three Months Ended Six months ended

Location of (income) loss recognized in Statement of Operations April 2, 2021 March 27, 2020 April 2, 2021 March 27, 2020

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three and nine month periods ended July 2, 2021 and June 26, 2020 was:

Three Months Ended Nine months ended

Location of (income) loss recognized in Statement of Operations July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020

Rabbi trust assets Other (income) expense, net $ ( 1,351 ) $ ( 2,732 ) $ ( 5,151 ) $ ( 398 )

There were no assets or liabilities measured at fair value on a non-recurring basis in periods subsequent to their initial recognition for either of the six month periods ended April 2, 2021 or March 27, 2020.

There were no assets or liabilities measured at fair value on a non-recurring basis in periods subsequent to their initial recognition for either of the nine month periods ended July 2, 2021 or June 26, 2020.

14 NEW ACCOUNTING PRONOUNCEMENTS

8 unchanged sentences

The additional disclosures required by the ASU and its updates are included in Note 18 "Leases" of these Notes to the Condensed Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326)” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively

Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at

JOHNSON OUTDOORS INC.

Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost.

amortized cost.

This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates.

10 unchanged sentences

The Company does not expect adoption of the new guidance to have a significant impact on its financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), intended to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848).

ASU 2020-04 is intended to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued.

The amendments in this guidance were effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022.

16 unchanged sentences

The Company provides customers the right to return eligible products under certain circumstances.

At April 2, 2021, the right to returns asset was $ 1,487 and the accrued returns liability was $ 4,030 .

At March 27, 2020, the right to returns asset was $ 1,349 and the accrued returns liability was $ 4,273 .

At July 2, 2021, the right to returns asset was $ 1,105 and the accrued returns liability was $ 3,043 .

At June 26, 2020, the right to returns asset was $ 1,082 and the accrued returns liability was $ 3,207 .

The Company also offers assurance-type warranties relating to its products sold to end customers that continue to be accounted for under ASC 460 Guarantees.

JOHNSON OUTDOORS INC.

The Company generally accounts for shipping and handling activities as a fulfillment activity, consistent with the timing of revenue recognition;

that is, when a customer takes control of the transferred goods.

In the event that a customer were to take control of a product upon or after shipment, the Company has made an accounting policy election to treat such shipping and handling activities as a fulfillment cost.

In the event that a

JOHNSON OUTDOORS INC.

customer were to take control of a product upon or after shipment, the Company has made an accounting policy election to treat such shipping and handling activities as a fulfillment cost.

Shipping and handling fees billed to customers are included in "Net Sales," and shipping and handling costs are recognized within "Marketing and selling expenses" in the same period the related revenue is recognized.

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Operations are conducted in the United States and various foreign countries, primarily in Europe, Canada and the Pacific Basin.

During the three and six month periods ended April 2, 2021, combined net sales to two customers of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 45,735 and $ 99,308 , respectively, of the Company's consolidated revenues.

During the three and six month periods ended March 27, 2020, combined net sales to two customers of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 48,663 and $ 80,984 , respectively, of the Company's consolidated revenues.

During the three and nine month periods ended July 2, 2021, combined net sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 25,138 and $ 88,649 , respectively, of the Company's consolidated revenues.

During the three and nine month periods ended June 26, 2020, combined net sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 20,433 and $ 70,269 , respectively, of the Company's consolidated revenues.

Net sales and operating profit include both sales to customers, as reported in the Company’s accompanying Condensed Consolidated Statements of Operations, and interunit transfers, which are priced to recover cost plus an appropriate profit margin.

2 unchanged sentences

A summary of the Company’s operations by business segment is presented below:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020 October 2, 2020

Unaffiliated customers $ 155,098 $ 102,542 $ 441,727 $ 335,445

25 unchanged sentences

17 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in Accumulated Other Comprehensive Income (“AOCI”) by component, net of tax, for the three months ended April 2, 2021 were as follows:

The changes in Accumulated Other Comprehensive Income (“AOCI”) by component, net of tax, for the three months ended July 2, 2021 were as follows:

JOHNSON OUTDOORS INC.

5 unchanged sentences

Income (Loss)

Balance at January 1, 2021 $ 9,765 $ ( 2,505 ) $ 7,260

Balance at April 2, 2021 $ 8,253 $ ( 2,404 ) $ 5,849

Other comprehensive income before reclassifications 742 — 742

1 unchanged sentence

Tax effects — ( 41 ) ( 41 )

Balance at April 2, 2021 $ 8,253 $ ( 2,404 ) $ 5,849

The changes in AOCI by component, net of tax, for the three months ended March 27, 2020 were as follows:

Balance at July 2, 2021 $ 8,995 $ ( 2,281 ) $ 6,714

The changes in AOCI by component, net of tax, for the three months ended June 26, 2020 were as follows:

Adjustment Unamortized

4 unchanged sentences

Income (Loss)

Balance at December 27, 2019 $ 5,490 $ ( 3,171 ) $ 2,319

Balance at March 27, 2020 $ 3,883 $ ( 3,109 ) $ 774

Other comprehensive income before reclassifications 1,537 — 1,537

1 unchanged sentence

Tax effects — ( 60 ) ( 60 )

Balance at March 27, 2020 $ 3,883 $ ( 3,109 ) $ 774

The changes in AOCI by component, net of tax, for the six months ended April 2, 2021 were as follows:

Balance at June 26, 2020 $ 5,420 $ ( 2,929 ) $ 2,491

The changes in AOCI by component, net of tax, for the nine months ended July 2, 2021 were as follows:

Adjustment Unamortized

8 unchanged sentences

Tax effects — ( 108 ) ( 108 )

Balance at April 2, 2021 $ 8,253 $ ( 2,404 ) $ 5,849

The changes in AOCI by component, net of tax, for the six months ended March 27, 2020 were as follows:

Balance at July 2, 2021 $ 8,995 $ ( 2,281 ) $ 6,714

The changes in AOCI by component, net of tax, for the nine months ended June 26, 2020 were as follows:

Adjustment Unamortized

8 unchanged sentences

Tax effects — ( 101 ) ( 101 )

Balance at March 27, 2020 $ 3,883 $ ( 3,109 ) $ 774

The reclassifications out of AOCI for the three months ended April 2, 2021 and March 27, 2020 were as follows:

Balance at June 26, 2020 $ 5,420 $ ( 2,929 ) $ 2,491

The reclassifications out of AOCI for the three months ended July 2, 2021 and June 26, 2020 were as follows:

JOHNSON OUTDOORS INC.

Three Months Ended

April 2, 2021 March 27, 2020 Statement of Operations

July 2, 2021 June 26, 2020 Statement of Operations

Unamortized loss on defined benefit pension plans:

2 unchanged sentences

Total reclassifications for the period $ 123 $ 180

The reclassifications out of AOCI for the six months ended April 2, 2021 and March 27, 2020 were as follows:

Six Months Ended

April 2, 2021 March 27, 2020 Statement of Operations

The reclassifications out of AOCI for the nine months ended July 2, 2021 and June 26, 2020 were as follows:

Nine Months Ended

July 2, 2021 June 26, 2020 Statement of Operations

Unamortized loss on defined benefit pension plans:

9 unchanged sentences

Additionally, the Company does not have any leases in which it is the lessor.

The adoption of the new standard had a significant impact on the Company's condensed consolidated balance sheet due to the recognition of approximately $ 41 million of lease liabilities with corresponding ROU assets for operating leases.

The adoption of the new standard had a significant impact on the Company's condensed consolidated balance sheet in fiscal year 2020 due to the initial recognition of approximately $ 41 million of lease liabilities with corresponding ROU assets for operating leases.

The new standard did not have a significant impact on the condensed consolidated statements of operations or cash flows, and did not impact our debt covenant compliance under our current credit agreements.

1 unchanged sentence

The Company leases certain facilities and machinery and equipment under long-term, non-cancelable operating leases.

As of April 2, 2021, the Company had approximately 200 leases, with remaining terms ranging from less than one year to 18 years.

As of July 2, 2021, the Company had approximately 200 leases, with remaining terms ranging from less than one year to 18 years.

Some of the leases contain variable payment terms, such as payments based on fluctuations in the Consumer Price Index (CPI).

4 unchanged sentences

The incremental borrowing rate is derived from information available to the Company at the lease commencement date based on lease length and location.

The components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended April 2, 2021 and March 27, 2020 were as follows:

JOHNSON OUTDOORS INC.

Three months ended Six months ended

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

The components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations for the three and nine months ended July 2, 2021 and June 26, 2020 were as follows:

Three months ended Nine months ended

July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020

Operating lease costs $ 2,107 $ 1,792 $ 6,184 $ 5,355

Short-term lease costs 403 478 1,206 1,435

Variable leases costs 49 43 92 86

Variable lease costs 46 42 138 129

Total lease cost $ 2,556 $ 2,312 $ 7,528 $ 6,919

Included in the amounts in the table above were rent expense to related parties of $ 261 and $ 516 for the three and six months ended April 2, 2021, respectively, and $ 247 and $ 493 for the three and six months ended March 27, 2020, respectively.

As of April 2, 2021, the Company did not have any finance leases.

There were no significant new leases entered into during the quarter ended April 2, 2021.

Included in the amounts in the table above were rent expense to related parties of $ 262 and $ 778 for the three and nine months ended July 2, 2021, respectively, and $ 246 and $ 739 for the three and nine months ended June 26, 2020, respectively.

As of July 2, 2021, the Company did not have any finance leases.

There were no significant new leases entered into during the quarter ended July 2, 2021.

Supplemental balance sheet, cash flow, and other information related to operating leases was as follows:

Six months ended

April 2, 2021 March 27, 2020

Nine months ended

July 2, 2021 June 26, 2020

Operating leases:

Operating lease ROU assets $ 43,741 $ 37,669

Current operating leases liabilities 5,715 5,820

Current operating lease liabilities 5,281 5,900

Non-current operating lease liabilities 39,382 32,474

3 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities $ 5,680 $ 4,726

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at April 2, 2021 were as follows:

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at July 2, 2021 were as follows:

Year Related parties included

6 unchanged sentences

Total net lease liability $ 480 $ 44,663

During the second quarter of fiscal 2021, the Company amended its agreement with the landlord on an existing leased facility.

Payments under the amended agreement are expected to begin in fiscal year 2022 and go through June 2039, and total estimated rental payments, not included in the amounts above, will be approximately $ 14 million over the

JOHNSON OUTDOORS INC.

course of the lease as amended.

As of April 2, 2021, the Company did not have any other additional significant operating leases commitments that have not yet commenced.

During the second quarter of fiscal 2021, the Company amended its agreement with the landlord on an existing leased facility.

As of July 2, 2021, the Company did not have any other additional significant operating lease commitments that have not yet commenced.

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 1. Financial Statements