What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-12-10 compared with 2020-12-11 · 155 added, 197 removed, 1131 unchanged (24% of the section changed)

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Information with respect to this item is incorporated herein by reference to the discussion under the headings “Proposal 1:

Election of Directors,” “Executive Officers,” “Delinquent Section 16(a) Reports,” "Directors Meetings and Committees - Nominating and Corporate Governance Committee” and “Audit Committee Matters – Audit Committee Financial Expert” in the Company’s Proxy Statement for the 2021 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 30, 2021.

Election of Directors,” “Executive Officers,” “Section 16(a) Reports,” "Directors Meetings and Committees - Nominating and Corporate Governance Committee” and “Audit Committee Matters – Audit Committee Financial Expert” in the Company’s Proxy Statement for the 2022 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 29, 2022.

Information regarding the Company’s Code of Business Ethics is incorporated herein by reference to the discussion under “Corporate Governance Matters – Employee Code of Conduct and Code of Ethics;

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The Audit Committee of the Company’s Board of Directors is an “audit committee” for purposes of Section 3(a)(58)(A) of the Securities Exchange Act of 1934.

The members of the Audit Committee are Terry E.

London (Chairman), Thomas F.

Pyle, Jr., Edward F.

Lang and Edward Stevens.

The members of the Audit Committee are Edward F.

Lang (Chairman), Thomas F.

Pyle, Jr., William D.

Perez and Edward Stevens.

EXECUTIVE COMPENSATION

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• Reports of Independent Registered Public Accounting Firm

• Consolidated Statements of Operations – Years ended October 2, 2020, September 27, 2019 and September 28, 2018

• Consolidated Statements of Comprehensive Income – Years ended October 2, 2020, September 27, 2019 and September 28, 2018

• Consolidated Balance Sheets – October 2, 2020 and September 27, 2019

• Consolidated Statements of Shareholders’ Equity – Years ended October 2, 2020, September 27, 2019 and September 28, 2018

• Consolidated Statements of Cash Flows – Years ended October 2, 2020, September 27, 2019 and September 28, 2018

• Consolidated Statements of Operations – Years ended October 1, 2021, October 2, 2020 and September 27, 2019

• Consolidated Statements of Comprehensive Income – Years ended October 1, 2021, October 2, 2020 and September 27, 2019

• Consolidated Balance Sheets – October 1, 2021 and October 2, 2020

• Consolidated Statements of Shareholders’ Equity – Years ended October 1, 2021, October 2, 2020 and September 27, 2019

• Consolidated Statements of Cash Flows – Years ended October 1, 2021, October 2, 2020 and September 27, 2019

• Notes to Consolidated Financial Statements

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated on the 10 th day of December 2021.

Johnson-Leipold Chairman and Chief Executive Officer

Johnson-Leipold) and Director

(Principal Executive Officer)

Johnson-Leipold Chairman and Chief Executive Officer and Director

Johnson-Leipold) (Principal Executive Officer)

/s/ Thomas F.

Vice Chairman of the Board

Pyle, Jr.) and Lead Outside Director

London Director

Vice Chairman of the Board and Lead Outside Director

/s/ Edward Stevens Director

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Perez Director

/s/ Annie Zipfel Director

(Annie Zipfel)

Alexander Director

Johnson Vice President and Chief Financial Officer

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(Filed as Exhibit 99.3 to the registration statement on Form S-8 dated and filed with the Securities and Exchange Commission on May 5, 2020 and incorporated herein by reference.)

First Amendment dated July 15, 2021 to Amended and Restated Credit Agreement dated as of November 15, 2017 among Johnson Outdoors Inc., certain subsidiaries of Johnson Outdoors Inc., PNC Bank, National Association, as lender and administrative agent, PNC Capital markets LLC, as sole lead arranger and bookrunner, and the other lender named therein (filed as Exhibit 10.1 to the Company's Form 8-K dated and filed with the Securities and Exchange Commission on July 16, 2021 and incorporated herein by reference).

Subsidiaries of the Company as of October 1, 2021

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and (vi) Notes to Consolidated Financial Statements.

XBRL Instance Document - the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

104 The cover page from the Company's Annual Report on Form 10-K for the year ended October 1, 2021 has been formatted in Inline XBRL (included in Exhibit 101).

+ A management contract or compensatory plan or arrangement.

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Chairman and Chief Executive Officer Vice President and Chief Financial Officer

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Johnson Outdoors Inc.

Opinion on the Internal Control Over Financial Reporting

We have audited Johnson Outdoors Inc.'s internal control over financial reporting as of October 2, 2020, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have audited Johnson Outdoors Inc.'s (the Company) internal control over financial reporting as of October 1, 2021, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 1, 2021, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of Johnson Outdoors Inc.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the Company.

and our report dated December 10, 2021 expressed an unqualified opinion.

Basis for Opinion

Johnson Outdoors Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management Report on Internal Control over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Johnson Outdoors Inc.

in accordance with U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Johnson Outdoors Inc.;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Johnson Outdoors Inc.

are being made only in accordance with authorizations of management and directors of Johnson Outdoors Inc.;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Johnson Outdoors Inc.'s assets that could have a material effect on the financial statements.

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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We have audited the accompanying consolidated balance sheets of Johnson Outdoors Inc.

as of October 2, 2020 and September 27, 2019, the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended October 2, 2020, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 2, 2020 and September 27, 2019, and the results of its operations and its cash flows for each of the three years in the period ended October 2, 2020, in conformity with accounting principles generally accepted in the United States of America.

and its subsidiaries (the Company) as of October 1, 2021 and October 2, 2020, the related consolidated statements of operations, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended October 1, 2021, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 1, 2021 and October 2, 2020, and the results of its operations and its cash flows for each of the three years in the period ended October 1, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of October 1, 2021, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated December 10, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of Johnson Outdoors Inc.’s management.

Our responsibility is to express an opinion on Johnson Outdoors Inc.'s financial statements based on our audits.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

We determined that there are no critical audit matters.

/s/ RSM US LLP

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(thousands, except per share data)

2020 September 27

2021 October 2

2020 September 27

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(thousands, except per share data)

2020 September 27

2021 October 2

2020 September 27

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(thousands, except share data)

2020 September 27

2021 October 2

Current assets:

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Currency translation adjustment — — — — 2,533 —

Write off of currency translation adjustment loss — — — — ( 761 ) —

Change in pension plans, net of tax of $ 209

— — — — 626 —

Non-vested stock forfeitures ( 4,290 ) — — — — —

Purchase of treasury stock at cost ( 7,129 ) — — — — ( 460 )

BALANCE AT SEPTEMBER 27, 2019 10,045,771 504 75,856 248,377 1,558 ( 1,761 )

BALANCE AT OCTOBER 2, 2020 10,084,799 504 78,668 296,431 4,717 ( 2,220 )

Net income — — — 83,381 — —

Dividends declared — — — ( 9,311 ) — —

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

Award of non-vested shares 48,683 5 ( 4 ) — —

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Currency translation adjustment — — — — 283 —

Write off of currency translation adjustment gain — — — — —

Change in pension plans, net of tax of $ 357

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(thousands) October 1

2020 September 27

2021 October 2

2020 September 27

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Stock based compensation 4,160 2,686 2,346

Write off of currency translation adjustment (gain) loss — ( 761 ) ( 2,378 )

Write off of currency translation adjustment — — ( 761 )

Provision for doubtful accounts receivable 308 2,095 2,003

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The fiscal year ended October 1, 2021 (hereinafter 2021) comprised 52 weeks.

The fiscal years ended September 27, 2019 (hereinafter 2019) and September 28, 2018 (hereinafter 2018) each comprised 52 weeks.

The fiscal year ended October 2, 2020 (hereinafter 2020) comprised 53 weeks.

The fiscal year ended September 27, 2019 (hereinafter 2019) comprised 52 weeks.

Coronavirus (COVID-19)

In March 2020, the World Health Organization recognized the current coronavirus (COVID-19) outbreak as a global pandemic.

In response to the COVID-19 outbreak, the governments of many countries, states, cities and other geographic regions imposed varying degrees of restrictions on social and commercial activity, including travel restrictions, quarantine guidelines and related actions, to promote social distancing and other similar programs all in an effort to slow the spread of the illness.

In response to the COVID-19 outbreak, the governments of many countries, states, cities and other geographic regions imposed varying degrees of restrictions on social and commercial activity, including travel restrictions, quarantine guidelines and related actions, to promote social distancing, encourage and promote taking the vaccine and implementing other similar programs all in an effort to slow the spread of the illness.

These measures have had a significant adverse impact upon many sectors of the economy, including manufacturing and retail commerce.

In response to these measures and for the protection of our employees, we temporarily closed our manufacturing locations and warehouses for a portion of our fiscal year, some of which fell during our primary selling season.

As of the end of fiscal 2020, we have resumed nearly all production and shipping activities under appropriate safety protocols, however, the period of suspended operations had an impact on the pacing of sales and operating profits between fiscal quarters.

While government mandates allowed us to re-open our manufacturing and distribution centers in the latter half of the fiscal year, these mandates continued to emphasize social distancing measures to the general public.

As such, the Company began to see growing demand and improved sales volumes in the latter part of the year for certain of its outdoor recreation businesses.

This includes, but is not limited to, the duration, spread, severity and impact of the COVID-19 pandemic, or future waves, increasing outbreaks or hot spots of the pandemic in our areas of operations or in key markets, the effects of the pandemic on our customers, consumers, suppliers and vendors and the remedial actions and stimulus measures adopted by federal, state and local governments in reaction to the pandemic.

As the COVID-19 pandemic continues to impact various key regions of the world, even after it subsides, we may continue to experience adverse impacts to our business as a result of any economic recession that has occurred or may occur in the future.

As a result, the Company cannot reasonably estimate the full impact of the COVID-19 pandemic on Company operations and profitability at this time as the situation is dynamic and constantly changing.

We continue to monitor evolving economic and general business conditions stemming from the COVID-19 pandemic and the actual and potential impacts on our financial position, results of operations and cash flows.

While government mandates allowed us to re-open our manufacturing and distribution centers in the latter half of fiscal 2020, these mandates continued to emphasize social distancing measures to the general public.

As such, the Company began to see growing demand and improved sales volumes in the latter part of fiscal 2020 for certain of its outdoor recreation businesses.

This demand continued into and throughout fiscal 2021 across all segments.

Nonetheless, the full extent to which the COVID-19 pandemic will impact our business, results of operations, and financial condition will depend on future developments, including any potential worsening of the pandemic, the lingering impact of the pandemic in disrupting the global supply chain (including with respect to impacting the sourcing, timing, availability and cost of raw materials and components that are necessary to manufacturing our products), all of which are beyond our control and which remain highly uncertain and cannot be predicted.

Cash, Cash Equivalents and Short-term Investments

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

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

In circumstances where specific collection concerns exist, a reserve is established to reduce the amount recorded to 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 outstanding accounts receivable for each business unit.

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Inventories at the end of the respective fiscal years consisted of the following:

2020 September 27

2021 October 2

Raw materials $ 110,974 $ 48,874

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$ 166,615 $ 97,437

The COVID-19 pandemic has caused widely-documented supply chain and logistics disruptions in the industries in which we operate, resulting in supply shortages across all of our segments for certain materials and components necessary to manufacture our products.

As a result of these disruptions, the Company took action to build and procure numerous categories of inventory (in some cases at significantly higher price points than what was historically paid) in an attempt to mitigate against potential shortages during fiscal 2022.

These actions have resulted in the Company carrying significantly higher levels of inventory for a number of its materials, components and products at the end of fiscal 2021.

Property, Plant and Equipment

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Currency translation ( 2 ) — — — ( 2 )

Balance at September 27, 2019

Balance at October 2, 2020

Goodwill 17,413 7,038 6,242 33,078 63,771

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Amortization of patents and other intangible assets with definite lives was $ 421 , $ 2,334 and $ 1,031 for 2021, 2020 and 2019, respectively.

Amortization of these definite-lived intangible assets is expected to be approximately $ 419 , $ 264 , $ 264 , $ 264 and $ 264 for fiscal years 2021, 2022, 2023, 2024, and 2025 respectively.

Amortization of these definite-lived intangible assets is expected to be approximately $ 264 for each of the next 5 fiscal years.

Intangible assets at the end of the last two years consisted of the following:

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If impairment is determined to exist, any related impairment loss is calculated based on the difference between the fair value and the carrying value on these assets.

During the fourth quarter of fiscal 2019, the Company performed an impairment analysis, in which the carrying value of long-lived assets in its Watercraft segment exceeded the fair value of undiscounted and discounted cash flow analysis.

During the fourth quarters of fiscal 2020 and 2019, the Company performed an impairment analysis, in which the carrying value of long-lived assets in its Watercraft segment exceeded the fair value of undiscounted and discounted cash flow analysis.

Accordingly, the Company evaluated the fair value of the underlying long-lived assets and determined there was no impairment.

During fiscal 2018, the Company performed an impairment analysis, which included a discounted cash flow analysis, on the long-lived assets in its Watercraft segment during the fourth quarter.

No impairment was indicated.

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

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Less current period warranty claims paid 10,055

Balance at September 27, 2019 $ 9,190

Balance at October 2, 2020 $ 10,849

Expense accruals for warranties issued during the period 13,112

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Total reclassifications for the period $ 432

The reclassifications out of AOCI for the year ended September 27, 2019 were as follows:

The reclassifications out of AOCI for the year ended October 2, 2020 were as follows:

Statement of Operations

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Tax effects ( 134 ) Income tax expense

Foreign currency translation adjustments:

Write off of currency translation amounts ( 761 ) Other income and expense

Total reclassifications for the period $ 403

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Income (Loss)

Balance at September 27, 2019 $ 4,790 $ ( 3,232 ) $ 1,558

Balance at October 2, 2020 $ 7,323 $ ( 2,606 ) $ 4,717

Other comprehensive income before reclassifications 283 2,167 2,450

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Balance at October 1, 2021 $ 7,606 $ ( 220 ) $ 7,386

The changes in AOCI by component, net of tax, for the year ended September 27, 2019 were as follows:

The changes in AOCI by component, net of tax, for the year ended October 2, 2020 were as follows:

Adjustment Unamortized

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Balance at September 27, 2019 $ 4,790 $ ( 3,232 ) $ 1,558

Other comprehensive income (loss) before reclassifications ( 2,245 ) 1,037 ( 1,208 )

Other comprehensive income before reclassifications 2,533 298 2,831

Amounts reclassified from accumulated other comprehensive income — 537 537

Tax effects — ( 209 ) ( 209 )

Balance at September 27, 2019 $ 4,790 $ ( 3,232 ) $ 1,558

Balance at October 2, 2020 $ 7,323 $ ( 2,606 ) $ 4,717

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 years ended October 2, 2020, September 27, 2019 and September 28, 2018, basic income per share for Class A and Class B shares has been presented using the two class method as described above.

For the years ended October 1, 2021, October 2, 2020 and September 27, 2019, basic income per share for Class A and Class B shares has been presented using the two class method as 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 and non-vested restricted stock.

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Therefore, diluted net income per share is the same for both Class A and Class B common shares.

In periods where the

Company reports a net loss, the effect of anti-dilutive stock options, restricted stock units and non-vested stock is excluded and diluted loss per share is equal to basic loss per share.

For the years ended October 2, 2020, September 27, 2019 and September 28, 2018, diluted net income per share reflects the effect of dilutive stock options and restricted stock units and assumes the conversion of Class B common stock into Class A common stock.

There were no stock options 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 for the years ended October 2, 2020, September 27, 2019 and September 28, 2018.

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 40,094 , 43,963 and 46,776 shares for the years ended October 2, 2020, September 27, 2019 and September 28, 2018, respectively.

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

For the years ended October 1, 2021, October 2, 2020 and September 27, 2019, diluted net income per share reflects the effect of dilutive stock options and restricted 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 38,914 , 40,094 and 43,963 shares for the years ended October 1, 2021, October 2, 2020 and September 27, 2019, respectively.

The following table sets forth a reconciliation of net income to dilutive earnings used in the diluted earnings per common share calculations and the computation of basic and diluted earnings per common share:

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Pension obligations, which are generally based on compensation and years of service, are funded by payments to pension fund trustees.

The Company’s policy is to annually fund the minimum amount required under the Employee Retirement Income Security Act of 1974 for plans subject thereto although the Company may choose to fund

more than the minimum amount at its discretion.

The Company’s policy is to annually fund the minimum amount required under the Employee Retirement Income Security Act of 1974 for plans subject thereto although the Company may choose to fund more than the minimum amount at its discretion.

Other retirement costs are funded at least annually.

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Additionally, currency gains and losses are recognized through the settlement of transactions denominated in other than the local currency.

The Company recognized currency losses from transactions of $ 269 , and currency gains of $ 645 and $ 1,985 in 2020, 2019, and 2018, respectively, which were included in Other income, net in the accompanying Consolidated Statements of Operations.

The Company recognized currency losses from transactions of $ 215 , $ 269 and gains of $ 645 in 2021, 2020, and 2019, respectively, which were included in Other income, net in the accompanying Consolidated Statements of Operations.

Because the Company operates internationally, it has exposure to market risk from movements in foreign currency exchange rates.

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Revenue Recognition

On September 29, 2018, the Company adopted Accounting Standards Update 2014-09 and all subsequent updates that modified accounting standards Topic 606, Revenue from contracts with customers.

During fiscal 2019, the Company adopted Accounting Standards Update 2014-09 and all subsequent updates that modified accounting standards Topic 606, Revenue from contracts with customers.

See Note 12 of these Notes to Consolidated Financial Statements for further discussion.

Prior to adoption of Topic 606, during 2018, the Company followed Topic 605, Revenue Recognition.

Under Topic 605, the Company recognized revenue when all of the following criteria had been met:

• Persuasive evidence of an arrangement existed.

Contracts, internet commerce agreements, and customer purchase orders were generally used to determine the existence of an arrangement.

• All substantial risk of ownership transferred to the customer.

Shipping documents and customer acceptance, when applicable, were used to verify delivery.

• The fee was fixed or determinable.

This was assessed based on the payment terms associated with the transaction and whether the sales price was subject to refund or adjustment.

• Collectability was reasonably assured.

Collectability was assessed based on the creditworthiness of the customer as determined by credit checks and analysis, as well as by the customer’s payment history.

Estimated costs of returns and allowances and discounts were accrued as a reduction to sales when revenue was recognized.

Advertising & Promotions

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Advertising and promotions expense in 2021, 2020 and 2019 totaled $ 30,882 , $ 26,727 and $ 28,397 , respectively.

These charges are included in “Marketing and selling expenses.” Capitalized advertising costs, included in Other current assets, totaled $ 611 and $ 466 at October 2, 2020 and September 27, 2019, respectively, and primarily included catalogs and costs of advertising which have not yet run for the first time.

These charges are included in “Marketing and selling expenses.” Capitalized advertising costs, included in Other current assets, totaled $ 429 and $ 611 at October 1, 2021 and October 2, 2020, respectively, and primarily included catalogs and costs of advertising which have not yet run for the first time.

Shipping and Handling Costs

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The Company expenses research and development costs as incurred except for costs of software development for new electronic products and bathymetry data collection and processing, which are capitalized once technological feasibility is established and are included in Furniture, Fixtures and Equipment.

The gross amount capitalized related to software development was $ 48,711 , less accumulated amortization of $ 29,579 , at October 2, 2020 and $ 43,304 , less accumulated amortization of $ 25,750 , at September 27, 2019.

The gross amount capitalized related to software development was $ 50,850 , less accumulated amortization of $ 30,428 , at October 1, 2021 and $ 48,711 , less accumulated amortization of $ 29,579 , at October 2, 2020.

These costs are amortized over the expected life of the software of three to seven years .

Amortization expense related to capitalized software in 2021, 2020 and 2019 was $ 3,637 , $ 3,829 and $ 3,962 , respectively, and is included in depreciation expense on plant, property and equipment.

The carrying amounts of cash, cash equivalents, short-term investments, accounts receivable, and accounts payable approximated fair value at October 2, 2020 and September 27, 2019 due to the short maturities of these instruments.

The carrying amounts of cash, cash equivalents, short-term investments, accounts receivable, and accounts payable approximated fair value at October 1, 2021 and October 2, 2020 due to the short maturities of these instruments.

During 2021, 2020 and 2019, the Company held investments in equity and debt securities that were carried at fair value related to its deferred compensation liability which was also carried at the same fair value.

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In assessing the recoverability of the Company’s goodwill and other intangible assets, the Company estimates the future discounted cash flows of the business segments to which the goodwill relates.

When estimated future discounted cash flows are less than the carrying value of the net assets and related goodwill, an impairment charge is recognized based on the excess of the carrying amount over the fair value.

When estimated future discounted cash flows are less than the carrying value of the net assets and related goodwill, an impairment charge is recognized based on the excess of

the carrying amount over the fair value.

In determining estimated future cash flows, the Company makes assumptions regarding anticipated financial position, future earnings and other factors to determine the fair value of the respective assets.

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The additional disclosures required by the ASU and its updates are included in Note 5 "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).

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

This guidance was effective for the Company in the first quarter of fiscal year 2021, and must be adopted by applying a cumulative effect adjustment to retained earnings.

The Company adopted the provisions of this ASU at the beginning of the first quarter of fiscal 2021, however the ASU did not have a significant impact on its financial statements, and therefore no adjustment to retained earnings was necessary.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes existing revenue recognition requirements and provides a new comprehensive revenue recognition model.

The underlying principle of the new standard requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for those goods or services.

The Company adopted the provisions of this ASU in the first quarter of fiscal 2019 for all contracts on a modified retrospective basis, with no cumulative-effect adjustment to retained earnings upon adoption.

The additional disclosures required by the ASU are included in Note 12 "Revenues" of these Notes to the Consolidated Financial Statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220) , which allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017.

2 unchanged sentences

The Company early adopted the ASU in the second quarter of fiscal 2019, and elected not to make this optional reclassification.

The underlying principle of

the new standard requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for those goods or services.

The comparative information has not been restated and continues to be reported under the accounting standards that were in effect for those periods.

The additional disclosures required by the ASU are included in Note 12 "Revenues" of these Notes to the Consolidated Financial Statements.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory .

The ASU includes provisions intended to simplify the measurement of inventory and to more clearly articulate the requirements for the measurement and disclosure of inventory.

Under such provisions, an entity should measure inventory within the scope of this amendment at the lower of cost or net realizable value.

Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

The Company adopted this standard at the beginning of the first quarter of fiscal 2018.

The adoption of this ASU did not have a significant impact on the Company's consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost .

The ASU includes, among other provisions, one that will require presentation of the service cost component of net benefit cost in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period.

The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of a subtotal of income from operations.

This amendment is effective for annual periods beginning after December 15, 2017 and the interim periods within those annual periods.

The Company elected to adopt this accounting standard at the beginning of the first quarter of fiscal 2018.

The adoption of this standard resulted in a reduction of an annual operating expense of $ 848 and an increase in other expense of $ 848 .

The adoption of this standard did not have an effect on the Company's consolidated balance sheets or consolidated statements of cash flows.

Recently issued accounting pronouncements

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

The amendments in this guidance are effective for fiscal years beginning after December 15, 2019, with early adoption permitted for certain amendments.

Topic 326 must be adopted by applying a cumulative effect adjustment to retained earnings.

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

In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans (Topic 715).

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The amendments in this guidance are effective for fiscal years ending after December 15, 2020, with early adoption permitted.

The Company is currently evaluating the potential impact of this guidance on its disclosures.

The Company adopted the provisions of this ASU in fiscal 2021, however, the ASU did not have a significant impact on its disclosures.

Recently issued accounting pronouncements

In December 2019, the FASB issued ASU No.

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2 INDEBTEDNESS

The Company had no outstanding debt at October 2, 2020 or September 27, 2019.

On November 15, 2017, the Company and certain of its subsidiaries entered into a new unsecured revolving credit facility with PNC Bank, National Association and Associated Bank, N.A.

The Company had no outstanding debt at October 1, 2021 or October 2, 2020.

The Company and certain of its subsidiaries have entered into an unsecured revolving 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 of 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 were approximately 1.1 % at October 2, 2020 and 3.0 % at September 27, 2019.

The interest rates on the Revolver were approximately 1.1 % at October 1, 2021 and 1.1 % at October 2, 2020.

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 utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance which totaled $ 181 and $ 181 at October 2, 2020 and September 27, 2019, respectively.

The Company had no other unsecured lines of credit as of October 2, 2020 or September 27, 2019.

The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance which totaled $ 181 and $ 181 at October 1, 2021 and October 2, 2020, respectively.

The Company had no other unsecured lines of credit as of October 1, 2021 or October 2, 2020.

The weighted average borrowing rate for short-term debt was approximately 1.1 %, 1.1 % and 3.0 % for 2021, 2020 and 2019, respectively.

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Approximately 12 % of the Company’s revenues for the fiscal year ended October 1, 2021 were denominated in currencies other than the U.S.

Approximately 5 % were denominated in euros and approximately 5 % were denominated in Canadian dollars, with the remaining 2 % denominated in various other foreign currencies.

Approximately 4 % were denominated in euros and approximately 6 % were denominated

in Canadian dollars, with the remaining 2 % denominated in various other foreign currencies.

Changes in foreign currency exchange rates can cause unexpected financial losses or cash flow needs.

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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 denominated in foreign currencies.

As of October 2, 2020 and September 27, 2019, the Company held no foreign currency forward contracts.

As of October 1, 2021 and October 2, 2020, the Company held no foreign currency forward contracts.

Interest Rate Risk

As of October 2, 2020 and September 27, 2019, the Company held no interest rate swap contracts.

As of October 1, 2021 and October 2, 2020, the Company held no interest rate swap contracts.

4 FAIR VALUE MEASUREMENTS

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Rabbi trust assets $ 27,851 $ — $ — $ 27,851

The following table summarizes the Company’s financial assets measured at fair value as of September 27, 2019:

The following table summarizes the Company’s financial assets measured at fair value as of October 2, 2020:

Level 1 Level 2 Level 3 Total

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

The effect of changes in the fair value of financial instruments on the Consolidated Statements of Operations for the years ended October 2, 2020, September 27, 2019 and September 28, 2018 was:

The effect of changes in the fair value of financial instruments on the Consolidated Statements of Operations for the years ended October 1, 2021, October 2, 2020 and September 27, 2019 was:

Location of income recognized in Statement of

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Under the effective date transition method, financial results reported in periods prior to fiscal year 2020 are unchanged.

The Company also elected the package of practical expedients

permitted under the standard, which does not require reassessment of prior conclusions related to contracts containing a lease, lease classification and initial direct lease costs.

The Company also elected the package of practical expedients permitted under the standard, which does not require reassessment of prior conclusions related to contracts containing a lease, lease classification and initial direct lease costs.

As an ongoing accounting policy election, the Company will exclude short-term leases (terms of 12 months or less) from the balance sheet presentation and will account for non-lease and lease components in a contract as a single lease component for most asset classes.

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As of October 1, 2021, the components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations were as follows:

October 2, 2020

Year ended Year ended

October 1, 2021 October 2, 2020

Operating lease costs $ 8,323 $ 7,483

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Total lease cost $ 10,056 $ 9,484

Included in the amounts in the table above was rent expense to related parties of $ 1,028 for the year ended October 2, 2020.

As of October 2, 2020, the Company did not have any finance leases.

There were no significant new leases entered into during the year ended October 2, 2020.

Included in the amounts in the table above was rent expense to related parties of $ 1,043 and $ 1,028 for the years ended October 1, 2021 and October 2, 2020, respectively.

As of October 1, 2021 and October 2, 2020, the Company did not have any finance leases.

While the Company extended or renewed various existing leases during the year, there were no significant new leases entered into during the year ended October 1, 2021.

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

October 2, 2020

Year ended Year ended

October 1, 2021 October 2, 2020

Operating leases:

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2023 1,143 6,735

Thereafter — 22,222

Total undiscounted lease payments 1,345 47,996

Imputed interest ( 15 ) ( 6,478 )

Total net lease liability $ 1,330 $ 41,518

As of October 2, 2020, the Company did not have any additional significant operating lease commitments that have not yet commenced.

Disclosures related to periods prior to adoption of Topic 842 (Fiscal 2019 and 2018)

Rental expense under all leases was $ 9,352 and $ 8,316 for the years ended September 27, 2019 and September 28, 2018, respectively.

Rent expense to related parties was $ 998 and $ 992 for the years ended September 27, 2019 and September 28, 2018, respectively.

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at September 27, 2019 were as follows:

Year Related parties included

in total Total

2024 1,178 6,474

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Thereafter 209 29,653

Total undiscounted lease payments 6,116 60,501

Imputed interest ( 245 ) ( 10,507 )

Total net lease liability $ 5,871 $ 49,994

During the second fiscal 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 course of the lease as amended.

As of October 1, 2021, the Company did not have any other additional significant operating lease commitments that have not yet commenced.

6 INCOME TAXES

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Net deferred tax assets $ 11,530 $ 9,261

The net deferred tax assets recorded in the accompanying Consolidated Balance Sheets as of the years ended October 2, 2020 and September 27, 2019 were as follows:

The net deferred tax assets recorded in the accompanying Consolidated Balance Sheets as of the years ended October 1, 2021 and October 2, 2020 were as follows:

Non-current assets $ 13,129 $ 10,679

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Foreign-derived intangible income ("FDII") deduction ( 1.1 ) % ( 1.1 ) % ( 0.9 ) %

Section 199 manufacturer's deduction — % — % ( 2.2 ) %

Taxes related to foreign income, net of credits — % 0.5 % 0.1 %

Net tax cost of foreign income 0.7 % — % 0.5 %

Compensation 0.8 % 0.7 % ( 0.7 ) %

Tax rate or law change — % ( 0.2 ) % 12.3 %

Other 0.3 % — % ( 1.0 ) %

26.2 % 25.1 % 22.7 %

* The federal statutory rate is a blended rate which reflects 35% through December 31, 2017 and the lower rate of 21.0% beginning on January 1, 2018 due to tax reform.

The Tax Act included a new provision designed to tax global intangible low taxed income (“GILTI”) starting in fiscal 2019.

The Tax Cuts and Jobs Act of 2017 included a new provision designed to tax global intangible low taxed income (“GILTI”) starting in fiscal 2019.

The Company elected to record the tax effects of the GILTI provision as a period expense in the applicable tax year.

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Ending balance $ 6,757 $ 7,372

The total accrued interest and penalties with respect to income taxes was approximately $ 1,947 and $ 1,942 for the years ended October 2, 2020 and September 27, 2019, respectively.

The total accrued interest and penalties with respect to income taxes was approximately $ 1,884 and $ 1,947 for the years ended October 1, 2021 and October 2, 2020, respectively.

The Company’s liability for unrecognized tax benefits as of October 1, 2021 was $ 6,757 , and if recognized, $ 5,474 of such amount would have an effective tax rate impact.

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defined benefit pension plans as of September 30, 2009 and, as a result, there are no benefit accruals related to service performed after that date.

During the fourth quarter of 2021, the Company terminated its Johnson Outdoors Inc.

Mankato Operations Pension Plan and Old Town Canoe Company Pension Plan (collectively, "the Terminated Plans"), both of which were frozen defined benefit pension plans at the time of termination.

In connection with the plan terminations, the Company settled all future obligations under the Terminated Plans through a combination of lump-sum payments to eligible participants who elected to receive them, and the transfer of any remaining benefit obligations under the Terminated Plans to a third-party insurance company under a group annuity contract.

As a result of these actions, the Company recognized a non-cash pre-tax pension termination charge of $ 2,526 in our Consolidated Statements of Operations as Other Expense (Income), Net.

The remaining over-funded plan assets will be utilized by the Company to fund remaining expenses related to the Terminated Plans, as well as obligations associated with other qualified retirement programs.

The Company still maintains the Johnson Outdoors Inc.

Supplemental Executive Retirement Plan ("SERP"), and all future benefit payments to participants under this plan are made from the Company's general assets.

The Company has elected the practical expedient pursuant to ASU 2015-04, Compensation-retirement benefits (Topic 715) and has selected the measurement date of September 30, the calendar month end closest to the Company's fiscal year end.

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Actuarial (gain) loss ( 610 ) 2,588

Settlements ( 31,062 ) —

Benefits paid ( 1,126 ) ( 1,136 )

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Fair value of plan assets, beginning of year 32,923 30,356

Actual gain on plan assets 3,526 5,250

Actual (loss) gain on plan assets ( 172 ) 3,526

Company contributions 172 177

Settlements ( 31,424 ) —

Benefits paid ( 1,126 ) ( 1,136 )

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Amortization of unrecognized net actuarial loss 576 537 328

Pension termination charge 2,526 — —

Net periodic pension cost 3,504 827 576

Other changes in benefit obligations recognized in other comprehensive income ("OCI"):

Pension termination charge ( 2,288 ) — —

Net actuarial gain ( 455 ) ( 835 ) ( 1,365 )

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At October 1, 2021, the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with plan assets in excess of benefit obligations was $ 0 and $ 373 , respectively, and the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with benefit obligations in excess of plan assets was $ 671 and $ 0 , respectively.

At September 27, 2019, the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with plan assets in excess of benefit obligations was $ 29,018 and $ 30,356 , respectively, and the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with benefit obligations in excess of plan assets was $ 1,230 and $ 0 , respectively.

At October 2, 2020, the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with plan assets in excess of benefit obligations was $ 31,446 and $ 32,923 , respectively, and the aggregate accumulated benefit obligation and aggregate fair value of plan assets for plans with benefit obligations in excess of plan assets was $ 1,185 and $ 0 , respectively.

The Company anticipates making contributions to the defined benefit pension plans of $ 96 through fiscal year 2022.

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Average salary increase rate N/A N/A N/A N/A N/A N/A

The change in discount rates in 2020, 2019 and 2018 resulted in an actuarial loss during the year of approximately $ 2,358 , and actuarial gains of $ 4,320 , and $ 1,633 , respectively.

The remainder of the actuarial gains or losses for each of the three years was related to adjustments to mortality tables and other modifications to actuarial assumptions.

To determine the discount rate assumption used in the Company’s pension valuation, the Company identified a benefit payout stream based on the demographics of the pension plans and constructed a hypothetical bond portfolio using high-quality corporate bonds with cash flows that matched that benefit payout stream.

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The expected asset class returns are weighted by the targeted asset allocations, resulting in a weighted average return which is rounded to the nearest quarter percent.

The Company uses measurement dates of October 1 to determine pension expenses for each year and the last day of the fiscal year to determine the fair value of the pension assets.

The Company’s pension plans’ weighted average asset allocations at October 2, 2020 and September 27, 2019, by asset category were as follows:

The Company uses measurement dates of October 1 to determine pension expenses for each year and September 30 to determine the fair value of the pension assets.

The Company’s pension plans’ weighted average asset allocations at October 1, 2021 and October 2, 2020, by asset category were as follows:

Equity securities — % 5 %

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Other securities 100 % 3 %

The Company elected to make additional contributions to its defined benefit plans in fiscal 2018, continuing its strategy to de-risk the plans.

As a result of the improved funded status, the Company changed its investment strategy for the plans, allocating the majority of its assets, 95%, into fixed income securities designed to minimize the pension plans' exposure to changes in interest rates.

The remaining 5% of assets are allocated to global equities.

The following table summarizes the Company’s pension plan assets measured at fair value as of October 1, 2021:

Level 1 Level 2 Level 3 Total

Fixed income $ 5,657 $ 24,734 $ — $ 30,391

Mutual funds 1,468 — — 1,468

Money market funds $ — $ 373 $ — $ 373

Group annuity contract — — 8 8

Total $ — $ 373 $ — $ 373

The following table summarizes the Company’s pension plan assets measured at fair value as of September 27, 2019:

The following table summarizes the Company’s pension plan assets measured at fair value as of October 2, 2020:

Level 1 Level 2 Level 3 Total

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Total $ 7,125 $ 25,790 $ 8 $ 32,923

The tables below set forth a summary of changes in fair value of the Company’s Level 3 pension plan assets for the years ended October 2, 2020 and September 27, 2019:

The tables below set forth a summary of changes in fair value of the Company’s Level 3 pension plan assets for the years ended October 1, 2021 and October 2, 2020:

Level 3 assets, beginning of year $ 8 $ 31

Unrealized gain (loss) ( 1 ) 2

Gain/(loss) 12 ( 1 )

Sales ( 20 ) ( 22 )

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The fair value of the group annuity contract was derived using a discounted cash flow model with inputs based on current yields of similar instruments with comparable durations.

The annuity contract consists of high quality bonds.

The annuity contract consisted of high quality bonds.

The Company also has a non-qualified deferred compensation plan that provides certain officers and employees the ability to defer a portion of their compensation until a later date.

The deferred amounts and earnings thereon are payable to participants, or designated beneficiaries, at specified future dates upon retirement, death or termination of employment from the Company.

The deferred compensation liability, which is reported at fair value equal to the related rabbi trust assets, and is classified as “Deferred compensation liability” on our accompanying Consolidated Balance Sheets, was approximately $ 21,585 and $ 19,092 as of October 2, 2020 and September 27, 2019, respectively.

The deferred compensation liability, which is reported at fair value equal to the related rabbi trust assets, and is classified as “Deferred compensation liability” on our accompanying Consolidated Balance Sheets, was approximately $ 27,885 and $ 21,585 as of October 1, 2021 and October 2, 2020, respectively.

See “Note 4 Fair Value” for additional information.

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Holders of Class A common stock are entitled to elect 25 %, or the next highest whole number, of the members of the Company’s Board of Directors and holders of Class B common stock are entitled to elect the remaining directors.

With respect to matters other than the election of directors or any matters for which class voting is required by law, holders of Class A common stock are entitled to one vote per share while holders of Class B common stock are entitled to ten votes per share.

With respect to matters other than the election of directors or any matters for which class voting is required by law, holders of Class A

common stock are entitled to one vote per share while holders of Class B common stock are entitled to ten votes per share.

If any dividends (other than dividends paid in shares of the Company’s stock) are paid by the Company on its common stock, a dividend would be paid on each share of Class A common stock equal to 110 % of the amount paid on each share of Class B common stock.

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Non-vested stock grants 19,105 63.33

Non-vested stock forfeited ( 4,290 ) 38.14

Restricted stock vested ( 20,221 ) 41.93

Non-vested stock at September 27, 2019 41,608 51.78

Non-vested stock at October 2, 2020 40,492 62.15

Non-vested stock grants 14,954 101.97

Non-vested stock forfeited ( 621 ) 120.77

Restricted stock vested ( 17,234 ) 53.79

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The tax benefit recognized during 2021, 2020 and 2019 related to stock based compensation was $ 287 , $ 252 and $ 163 , respectively.

Unrecognized compensation cost related to non-vested stock as of October 2, 2020 was $ 1,176 , which amount will be amortized to expense through November 2022 or adjusted for changes in future estimated or actual forfeitures.

Unrecognized compensation cost related to non-vested stock as of October 1, 2021 was $ 1,447 , which amount will be amortized to expense through September 2023 or adjusted for changes in future estimated or actual forfeitures.

Restricted Stock Units

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RSUs granted 27,517 64.51

RSUs forfeited ( 3,052 ) 58.99

RSUs vested ( 18,404 ) 42.80

RSUs at September 27, 2019 58,708 62.13

RSUs at October 2, 2020 67,821 68.34

RSUs granted 20,059 88.49

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The fair value of restricted stock recognized as a tax deduction during 2021, 2020 and 2019 was approximately $ 3,353 , $ 1,600 and $ 2,945 , respectively.

Stock compensation expense, net of forfeitures, related to restricted stock units was $ 1,611 , $ 1,652 and $ 1,743 for the years ended October 2, 2020, September 27, 2019 and September 28, 2018, respectively.

Stock compensation expense, net of forfeitures, related to restricted stock units was $ 2,895 , $ 1,611 and $ 1,652 for the years ended October 1, 2021, October 2, 2020 and September 27, 2019, respectively.

The tax benefit recognized during 2021, 2020 and 2019 related to restricted stock unit based compensation was $ 534 , $ 166 and $ 405 , respectively.

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Total costs of these transactions were $ 1,243 , $ 1,099 and $ 1,261 for 2021, 2020 and 2019, respectively.

Amounts due to/from related parties were immaterial at October 2, 2020 and September 27, 2019.

Adoption of Topic 606

On September 29, 2018, the Company adopted ASU 2014-09 and all subsequent ASUs that modified accounting standards Topic 606 using the modified retrospective adoption method.

Upon adoption, the Company recorded a right to returns asset of $ 763 and a corresponding increase in the accrued return liability, resulting in an accrued returns liability of $ 2,725 .

Other than as discussed above, the adoption of this new revenue standard did not have an impact on the Company's consolidated financial statements, and the timing and amount of its revenue recognition remained substantially unchanged under this new guidance.

Amounts due to/from related parties were immaterial at October 1, 2021 and October 2, 2020.

Revenue recognition

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At October 1, 2021, the right to returns asset was $ 769 and the accrued returns liability was $ 2,061 .

At September 27, 2019, the right to returns asset was $ 2,013 and the accrued returns liability was $ 4,847 .

At October 2, 2020, the right to returns asset was $ 1,091 and the accrued returns liability was $ 2,990 .

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.

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and various foreign countries, primarily in Europe, Canada and the Pacific Basin.

During the years ended October 2, 2020, September 27, 2019, and September 28, 2018, combined net sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 93,478 , $ 93,056 , and $ 90,554 respectively, of the Company's consolidated revenues.

During the years ended October 1, 2021, October 2, 2020, and September 27, 2019, combined sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 114,008 , $ 93,478 , and $ 93,056 respectively, of the Company's consolidated revenues.

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

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Reserves for sales returns 3,043 1,705 2,653 2,095

Year ended September 27, 2019

Year ended October 2, 2020

Allowance for doubtful accounts $ 2,550 $ 2,095 $ 1,948 $ 2,697

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Gross profit 75,030 53,612 93,254 75,132 97,511 62,562 68,330 73,687

Operating profit (loss) 6,801 5,978 31,794 27,844 12,929 28,029 19,546 1,923

Income (loss) before income taxes 8,589 4,331 28,377 30,020 15,557 28,892 21,179 3,264

Operating profit 23,557 6,801 36,036 31,794 38,099 12,929 13,591 19,546

Income before income taxes 26,011 8,589 37,310 28,377 39,074 15,557 10,527 21,179

Income tax expense 6,164 2,159 9,476 7,990 10,300 2,688 3,601 5,632

Net income (loss) $ 6,430 $ 3,521 $ 20,387 $ 21,923 $ 12,869 $ 22,066 $ 15,547 $ 3,903

Net income (loss) per common share - Basic:

Net income $ 19,847 $ 6,430 $ 27,834 $ 20,387 $ 28,774 $ 12,869 $ 6,926 $ 15,547

Net income per common share - Basic:

Class A $ 1.99 $ 0.65 $ 2.78 $ 2.05 $ 2.87 $ 1.29 $ 0.70 $ 1.56

Class B $ 1.81 $ 0.59 $ 2.53 $ 1.86 $ 2.61 $ 1.17 $ 0.62 $ 1.42

Net income (loss) per common share - Diluted:

Net income per common share - Diluted:

Class A $ 1.96 $ 0.64 $ 2.74 $ 2.02 $ 2.83 $ 1.27 $ 0.68 $ 1.53

Class B $ 1.96 $ 0.64 $ 2.74 $ 2.02 $ 2.83 $ 1.27 $ 0.68 $ 1.53

Due to changes in stock prices during the year and the timing of issuance of shares, the cumulative total of quarterly net income (loss) per share amounts may not equal the net income (loss) per share for the entire year.

17 SUBSEQUENT EVENTS

In September 2020, the Company's Board of Directors approved termination of, and authorized Company management to commence taking actions to terminate, the Company's defined benefit pension plans.

In November 2020, Company management commenced actions to terminate the plans.

When the termination and related payouts occur, they are estimated to unfavorably impact net income by approximately $ 4 to $ 5 million.

Due to changes in stock prices during the year and the timing of issuance of shares, the cumulative total of quarterly net income per share amounts may not equal the net income per share for the entire year.

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

What changed 10-K

Item 9A. Controls and Procedures