JOHNSON OUTDOORS INC 10-K

ITEM 9A. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that the information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company carried out an evaluation as of October 1, 2021, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of October 1, 2021 at reaching a level of reasonable assurance. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has designed its disclosure controls and procedures to reach a level of reasonable assurance of achieving the desired control objectives. The report of management required under this Item 9A is included on page F-2 of the Company’s Consolidated Financial Statements attached to this Report under the heading “Management’s Report on Internal Control over Financial Reporting” and is incorporated herein by reference. (b) Changes in Internal Control over Financial Reporting. There was no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. (c) Attestation Report of Independent Registered Public Accounting Firm RSM US LLP, the independent registered public accounting firm who audited the Company’s consolidated financial statements, has issued an attestation report on the Company’s internal control over financial reporting, which is contained in the Company’s consolidated financial statements under the heading “Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting.” ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information with respect to this item is incorporated herein by reference to the discussion under the headings “Proposal 1: 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; Corporate Governance Guidelines; and Procedures for Reporting of Accounting Concerns” 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. 27 Table of Contents 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 Edward F. Lang (Chairman), Thomas F. Pyle, Jr., William D. Perez and Edward Stevens. ITEM 11. EXECUTIVE COMPENSATION Information with respect to this item is incorporated herein by reference to the discussion under the headings “Directors Compensation” and “Executive Compensation” and “CEO Pay Relative to Median Pay of our Employees” 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. The information incorporated by reference from “Report of the Compensation Committee” 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, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information with respect to this item is incorporated herein by reference to the discussion under the heading “Stock Ownership of Management and Others” 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. Equity Compensation Plan Information The following table summarizes share information, as of October 1, 2021, for the Company’s equity compensation plans, including the Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan, the Johnson Outdoors Inc. 2010 Long-Term Stock Incentive Plan, the Johnson Outdoors Inc. 2020 Long-Term Stock Incentive Plan and the Johnson Outdoors Inc. 2009 Employee Stock Purchase Plan. All of these plans have been approved by the Company’s shareholders. Plan Category Number of Common Shares to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-average Exercise Price of Outstanding Options, Warrants and Rights Number of Common Shares Available for Future Issuance Under Equity Compensation Plans 2020 Long-Term Stock Incentive Plan — $ — 471,183 2010 Long-Term Stock Incentive Plan 73,885 (1) — 108,769 (2) 2012 Non-Employee Director Stock Ownership Plan 18,108 — 30,131 2009 Employee Stock Purchase Plan — — 83,840 Total All Plans 91,993 — 693,923 (1) Includes 69,768 performance stock unit awards previously awarded at their target values. The ultimate amount of performance stock units that could vest can range from 0% to 150% of the target amount, or from 0 units to 104,652 units for all previously issued awards. (2) Includes up to 104,652 shares of performance stock units that may be issued in shares of Class A Common Stock at the maximum earned level. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE 28 Table of Contents Information with respect to this item is incorporated herein by reference to the discussion under the heading “Certain Relationships and Related Transactions” 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 director independence is incorporated by reference to the discussions under “Corporate Governance Matters-Director Independence” 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. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Information with respect to this item is incorporated herein by reference to the discussion under the heading “Audit Committee Matters – Fees of Independent Registered Public Accounting Firm” 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. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The following documents are filed as a part of this report: Financial Statements Included in Item 8 of Part II of this report are the following: • Reports of Independent Registered Public Accounting Firm • 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 Exhibits See Exhibit Index. 29 Table of Contents ITEM 16. FORM 10-K SUMMARY None. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Racine and State of Wisconsin, on the 10 th day of December 2021. JOHNSON OUTDOORS INC. (Registrant) By /s/ Helen P. Johnson-Leipold Helen P. Johnson-Leipold Chairman and Chief Executive Officer 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. /s/ Helen P. Johnson-Leipold Chairman and Chief Executive Officer and Director (Helen P. Johnson-Leipold) (Principal Executive Officer) /s/ Thomas F. Pyle, Jr. Vice Chairman of the Board and Lead Outside Director (Thomas F. Pyle, Jr.) /s/ John M. Fahey, Jr. Director (John M. Fahey, Jr.) /s/ Edward Stevens Director (Edward Stevens) /s/ Edward F. Lang Director (Edward F. Lang) /s/ Katherine Button Bell Director (Katherine Button Bell) /s/ Richard Sheahan Director (Richard (“Casey”) Sheahan) /s/ William D. Perez Director (William D. Perez) /s/ Annie Zipfel Director (Annie Zipfel) /s/ Paul G. Alexander Director (Paul G. Alexander) /s/ David W. Johnson Vice President and Chief Financial Officer (David W. Johnson) (Principal Financial and Accounting Officer) 30 Table of Contents EXHIBIT INDEX Exhibit Title 3.1 Articles of Incorporation of the Company as amended through February 17, 2000. (Filed as Exhibit 3.1(a) to the Company’s Form 10-Q for the quarter ended March 31, 2000 and incorporated herein by reference.) 3.2 Bylaws of the Company as amended and restated through December 6, 2010. (Filed as Exhibit 3.2 to the Company’s Form 10-K for the year ended October 1, 2010 and incorporated herein by reference.) 4.1 Description of Registrant's Securities (Filed as Exhibit 4.1 to the Company's Form 10-K for the year ended September 27, 2019 and incorporated herein by reference.) 9.1 Johnson Outdoors Inc. Class B common stock Amended and Restated Voting Trust Agreement, dated as of February 16, 2010 (Filed as Exhibit 2 to Amendment No. 14 to the Schedule 13D filed by Helen P. Johnson-Leipold on February 24, 2017 and incorporated herein by reference.) 10.1 Registration Rights Agreement regarding Johnson Outdoors Inc. common stock issued to the Johnson family prior to the acquisition of Johnson Diversified, Inc. (Filed as Exhibit 10.1 to the Company’s Form 10-K dated and filed with the Securities and Exchange Commission on December 8, 2017 and incorporated herein by reference.) 10.2 Registration Rights Agreement regarding Johnson Outdoors Inc. Class A common stock held by Mr. Samuel C. Johnson. (Filed as Exhibit 10.2 to the Company’s Form 10-K dated and filed with the Securities and Exchange Commission on December 8, 2017 and incorporated herein by reference.) 10.3 + Johnson Outdoors Inc. 2000 Long-Term Stock Incentive Plan. (Filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated July 29, 2005 and incorporated herein by reference.) 10.4 + Johnson Outdoors Inc. Worldwide Key Executives’ Discretionary Bonus Plan. (Filed as Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 13, 2014 and incorporated herein by reference.) 10.5 + Johnson Outdoors Inc. 2003 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 10.2 to the Company’s Form 10-Q dated April 2, 2004 and incorporated herein by reference.) 10.6 + Form of Restricted Stock Agreement under Johnson Outdoors Inc. 2003 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 4.2 to the Company’s Form S-8 Registration Statement No. 333-115298 and incorporated herein by reference.) 10.7 + Form of Stock Option Agreement under Johnson Outdoors Inc. 2003 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 4.3 to the Company’s Form S-8 Registration Statement No. 333-115298 and incorporated herein by reference.) 10.8 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 99.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on November 20, 2017). 10.9 + Johnson Outdoors Inc. 2009 Employees’ Stock Purchase Plan. (Filed as Exhibit 99.2 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on March 8, 2010.) 31 Table of Contents 10.10 + Johnson Outdoors Inc. 2010 Long Term Stock Incentive Plan. (Filed as Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 15, 2015 and incorporated herein by reference.) 10.11 + Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan. (Filed as Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 13, 2017 and incorporated herein by reference.) 10.12 + Form of Restricted Stock Unit Agreement under Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 10.31 to the annual report on Form 10-K dated and filed with the Securities and Exchange Commission on December 5, 2014.) 10.13 + Form of Restricted Stock Unit Agreement (Performance Based) under Johnson Outdoors Inc. 2010 Long Term Stock Incentive Plan. (Filed as Exhibit 10.32 to the annual report on Form 10-K dated and filed with the Securities and Exchange Commission on December 7, 2015.) 10.14 + Form of Restricted Stock Agreement under Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 10.14 to the annual report on Form 10-K dated and filed with the Securities and Exchange Commission on December 7, 2018.) 10.15 + Johnson Outdoors Inc. 2020 Long Term Stock Incentive Plan. (Filed as Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 10, 2020 and incorporated herein by reference.) 10.16 + Form of Restricted Stock Unit Agreement (Performance Based) under Johnson Outdoors Inc. 2020 Long Term Stock Incentive Plan. (Filed as Exhibit 99.2 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.) 10.17 + Form of Restricted Stock Agreement under Johnson Outdoors Inc. 2020 Long Term Stock Incentive Plan. (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.) 10.18 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). 21 Subsidiaries of the Company as of October 1, 2021 23 Consent of Independent Registered Public Accounting Firm. 31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a). 31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a). 32.1 Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350. (1) 101 The following materials from Johnson Outdoors Inc.’s Annual Report on Form 10-K for the fiscal year ended October 1, 2021 formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) Consolidated Statements of Operations; (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Statements of Cash Flows; 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. 32 Table of Contents 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. (1) This certification is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. 33 Table of Contents CONSOLIDATED FINANCIAL STATEMENTS Table of Contents Page Management’s Report on Internal Control over Financial Reporting F- 2 Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting F- 3 Report of Independent Registered Public Accounting Firm F- 4 Consolidated Statements of Operations F- 5 Consolidated Statements of Comprehensive Income F- 6 Consolidated Balance Sheets F- 7 Consolidated Statements of Shareholders’ Equity F- 8 Consolidated Statements of Cash Flows F- 9 Notes to Consolidated Financial Statements F- 10 Table of Contents MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of Johnson Outdoors Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements. The Company’s internal control over financial reporting includes those policies and procedures that: (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (c) 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. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of the Company’s internal control over financial reporting as of October 1, 2021. In making this assessment, management used the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. Based on our assessment, management believes that, as of October 1, 2021, the Company’s internal control over financial reporting was effective based on those criteria. /s/ Helen P. Johnson-Leipold /s/ David W. Johnson Chairman and Chief Executive Officer Vice President and Chief Financial Officer F-2 Table of Contents 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 (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 the Company. and our report dated December 10, 2021 expressed an unqualified opinion. Basis for Opinion 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 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. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting 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 the Company; (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 the Company are being made only in accordance with authorizations of management and directors of the Company; 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. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ RSM US LLP Milwaukee, Wisconsin December 10, 2021 F-3 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Johnson Outdoors Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Johnson Outdoors Inc. 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 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. 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 We have served as the Company’s auditor since 2010. Milwaukee, Wisconsin December 10, 2021 F-4 Table of Contents CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended (thousands, except per share data) October 1 2021 October 2 2020 September 27 2019 Net sales $ 751,651 $ 594,209 $ 562,419 Cost of sales 417,526 329,216 312,663 Gross profit 334,125 264,993 249,756 Operating expenses: Marketing and selling 141,059 121,517 121,480 Administrative management, finance and information systems 56,083 47,785 42,576 Research and development 25,700 24,621 21,926 Total operating expenses 222,842 193,923 185,982 Operating profit 111,283 71,070 63,774 Interest income ( 366 ) ( 1,413 ) ( 2,109 ) Interest expense 145 143 172 Other income, net ( 1,418 ) ( 1,362 ) ( 796 ) Profit before income taxes 112,922 73,702 66,507 Income tax expense 29,541 18,469 15,094 Net income $ 83,381 $ 55,233 $ 51,413 Weighted average common shares - Basic: Class A 8,864 8,822 8,782 Class B 1,212 1,212 1,212 Dilutive stock options and restricted stock units 44 30 27 Weighted average common shares - Dilutive 10,120 10,064 10,021 Net income per common share - Basic: Class A $ 8.34 $ 5.54 $ 5.18 Class B $ 7.57 $ 5.04 $ 4.71 Net income per common share - Diluted: Class A $ 8.21 $ 5.47 $ 5.11 Class B $ 8.21 $ 5.47 $ 5.11 Dividends declared per common share: Class A $ 0.93 $ 0.72 $ 0.59 Class B $ 0.85 $ 0.65 $ 0.54 The accompanying notes are an integral part of the Consolidated Financial Statements. F-5 Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended (thousands, except per share data) October 1 2021 October 2 2020 September 27 2019 Net income $ 83,381 $ 55,233 $ 51,413 Other comprehensive income (loss): Foreign currency translation: Foreign currency translation 283 2,533 ( 2,245 ) Reclassification adjustment for currency translation gains related to the liquidation of foreign entities included in net income — — ( 761 ) Defined benefit pension plan: Change in pension plans, net of tax of $( 357 ), $( 209 ), and $( 288 ), respectively 2,386 626 1,077 Total other comprehensive income (loss) 2,669 3,159 ( 1,929 ) Total comprehensive income $ 86,050 $ 58,392 $ 49,484 The accompanying notes are an integral part of the Consolidated Financial Statements. F-6 Table of Contents CONSOLIDATED BALANCE SHEETS (thousands, except share data) October 1 2021 October 2 2020 ASSETS Current assets: Cash and cash equivalents $ 240,448 $ 212,437 Accounts receivable, net 71,321 67,292 Inventories 166,615 97,437 Other current assets 12,880 11,372 Total current assets 491,264 388,538 Property, plant and equipment, net of accumulated depreciation of $ 163,891 and $ 156,541 , respectively 71,510 63,037 Right of use assets 49,032 40,666 Deferred income taxes 13,129 10,679 Goodwill 11,221 11,184 Other intangible assets, net 8,633 9,052 Other assets 29,498 22,870 Total assets $ 674,287 $ 546,026 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 56,744 37,327 Current lease liability 5,938 6,587 Accrued liabilities: Salaries, wages and benefits 26,820 23,275 Accrued warranty 14,073 10,849 Income taxes payable 9,436 6,681 Accrued discounts and returns 6,633 5,113 Accrued customer programs 6,874 4,426 Other 11,052 11,349 Total current liabilities 137,570 105,607 Non-current lease liability 44,056 34,931 Deferred income taxes 1,599 1,418 Retirement benefits 1,389 853 Deferred compensation liability 27,885 21,585 Other liabilities 3,283 3,532 Total liabilities 215,782 167,926 Shareholders' equity: Preferred stock: no ne issued — — Common stock: Class A shares issued and outstanding: 8,915,636 and 8,873,235 , respectively 448 443 Class B shares issued and outstanding: 1,211,564 and 1,211,564 , respectively 61 61 Capital in excess of par value 82,899 78,668 Retained earnings 370,501 296,431 Accumulated other comprehensive income 7,386 4,717 Treasury stock at cost, shares of Class A common stock: 42,598 and 36,316 , respectively ( 2,790 ) ( 2,220 ) Total shareholders' equity 458,505 378,100 Total liabilities and shareholders' equity $ 674,287 $ 546,026 The accompanying notes are an integral part of the Consolidated Financial Statements. F-7 Table of Contents CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (thousands except for shares) Shares Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock BALANCE AT SEPTEMBER 28, 2018 9,999,046 $ 503 $ 75,025 $ 202,828 $ 3,487 $ ( 2,646 ) Net income — — — 51,413 — — Dividends declared — — — ( 5,864 ) — — Issuance of stock under employee stock purchase plan 1,594 — 79 — — — Award of non-vested shares 59,311 1 ( 1,594 ) — — 1,593 Stock-based compensation — — 2,346 — — — Currency translation adjustment — — — — ( 2,245 ) — Write off of currency translation adjustment loss — — — — ( 761 ) — Change in pension plans, net of tax of $ 288 — — — — 1,077 — Non-vested stock forfeitures ( 4,290 ) — — — — — Purchase of treasury stock at cost ( 9,890 ) — — — — ( 708 ) BALANCE AT SEPTEMBER 27, 2019 10,045,771 504 75,856 248,377 1,558 ( 1,761 ) Net income — — — 55,233 — — Dividends declared — — — ( 7,179 ) — — Issuance of stock under employee stock purchase plan 2,190 — 126 — — — Award of non-vested shares 43,967 — — — — 1 Stock-based compensation — — 2,686 — — — Currency translation adjustment — — — — 2,533 — Change in pension plans, net of tax of $ 209 — — — — 626 — Purchase of treasury stock at cost ( 7,129 ) — — — — ( 460 ) 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 ) — — Award of non-vested shares 48,683 5 ( 4 ) — — Stock-based compensation — — 4,160 — — — Currency translation adjustment — — — — 283 — Change in pension plans, net of tax of $ 357 — — — — 2,386 — Non-vested stock forfeitures ( 621 ) — 75 — — ( 75 ) Purchase of treasury stock at cost ( 5,661 ) — — — — ( 495 ) BALANCE AT OCTOBER 1, 2021 10,127,200 $ 509 $ 82,899 $ 370,501 $ 7,386 $ ( 2,790 ) The accompanying notes are an integral part of the Consolidated Financial Statements. F-8 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended (thousands) October 1 2021 October 2 2020 September 27 2019 CASH PROVIDED BY OPERATING ACTIVITIES Net income $ 83,381 $ 55,233 $ 51,413 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 12,980 12,592 12,933 Amortization of intangible assets 421 2,334 1,031 Amortization of deferred financing costs 29 27 27 Loss (gain) on sale of productive assets 161 217 ( 28 ) Stock based compensation 4,160 2,686 2,346 Write off of currency translation adjustment — — ( 761 ) Provision for doubtful accounts receivable 308 2,095 2,003 Provision for inventory reserves 518 878 1,009 Pension contributions ( 166 ) ( 176 ) ( 178 ) Deferred income taxes ( 2,277 ) 486 213 Change in operating assets and liabilities: Accounts receivable, net ( 3,948 ) ( 24,625 ) ( 6,104 ) Inventories, net ( 69,637 ) ( 2,867 ) ( 7,356 ) Accounts payable and accrued liabilities 31,702 10,417 ( 4,733 ) Other current assets ( 1,499 ) ( 12 ) ( 5,983 ) Other non-current assets ( 226 ) ( 22 ) 198 Other long-term liabilities 2,780 1,934 ( 117 ) Other, net ( 369 ) 296 ( 69 ) 58,318 61,493 45,844 CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES Purchase of short-term investments — — ( 7,124 ) Proceeds from sales of short-term investments — — 35,838 Capital expenditures ( 21,409 ) ( 15,600 ) ( 16,786 ) Proceeds from sale of productive assets 28 13 61 ( 21,381 ) ( 15,587 ) 11,989 CASH USED FOR FINANCING ACTIVITIES Debt issuance costs paid ( 138 ) — — Common stock transactions — 126 79 Dividends paid ( 8,400 ) ( 6,773 ) ( 5,557 ) Purchases of treasury stock ( 495 ) ( 460 ) ( 708 ) ( 9,033 ) ( 7,107 ) ( 6,186 ) Effect of foreign currency rate changes on cash 107 1,256 ( 1,142 ) Increase in cash and cash equivalents 28,011 40,055 50,505 CASH AND CASH EQUIVALENTS Beginning of period 212,437 172,382 121,877 End of period $ 240,448 $ 212,437 $ 172,382 Supplemental Disclosure: Non-cash dividends $ 911 $ 406 $ 307 Non-cash treasury activity — 1 1,593 Cash paid for taxes 26,544 19,240 16,746 Cash paid for interest 114 112 144 The accompanying notes are an integral part of the Consolidated Financial Statements. F-9 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 1, 2021 (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS) 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Johnson Outdoors Inc. (the “Company”) is an integrated, global outdoor recreation products company engaged in the design, manufacture and marketing of brand name camping, diving, watercraft and marine electronics products. Principles of Consolidation The consolidated financial statements include the accounts of Johnson Outdoors Inc. and all majority owned subsidiaries and are stated in conformity with U.S. generally accepted accounting principles. Intercompany accounts and transactions have been eliminated upon consolidation. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and operating results and the disclosure of commitments and contingent liabilities. Actual results could differ significantly from those estimates. Fiscal Year The Company’s fiscal year ends on the Friday nearest September 30. The fiscal year ended October 1, 2021 (hereinafter 2021) 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, 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. 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 The Company considers all short-term investments in interest-bearing bank accounts, and all securities and other instruments with an original maturity of three months or less, to be equivalent to cash. Cash equivalents are stated at cost which approximates market value. Short-term investments consist of certificates of deposit with original maturities greater than three months but less than one year. The Company maintains cash in bank accounts in excess of insured limits. The Company has not experienced any losses and does not believe that significant credit risk exists as a result of this practice. F-10 Table of Contents As of October 1, 2021, the Company held approximately $ 61,353 of cash and cash equivalents in bank accounts in foreign jurisdictions. Accounts Receivable Accounts receivable are recorded at face value less an allowance for doubtful accounts. The allowance for doubtful accounts is based on a combination of factors. 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. 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. Inventories The Company values inventory at the lower of cost (determined using the first-in first-out method) or net realizable value. Management’s judgment is required to determine the reserve for obsolete or excess inventory. Inventory on hand may exceed future demand either because the product is outdated or because the amount on hand is more than will be used to meet future needs. Inventory reserves are estimated by the individual operating companies using standard quantitative measures based on criteria established by the Company. The Company also considers current forecast plans, as well as market and industry conditions in establishing reserve levels. Though the Company considers these reserve balances to be adequate, changes in economic conditions, customer inventory levels or competitive conditions could have a favorable or unfavorable effect on required reserve balances. Inventories at the end of the respective fiscal years consisted of the following: October 1 2021 October 2 2020 Raw materials $ 110,974 $ 48,874 Work in process 116 39 Finished goods 55,525 48,524 $ 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 Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation of property, plant and equipment is determined by straight-line methods over the following estimated useful lives: Property improvements 5 - 20 years Buildings and improvements 20 - 40 years Furniture and fixtures, equipment and computer software 3 - 10 years Upon retirement or disposition of any of the foregoing types of assets, cost and the related accumulated depreciation are removed from the applicable account and any resulting gain or loss is recognized in the statements of operations. Property, plant and equipment at the end of the respective years consisted of the following: F-11 Table of Contents 2021 2020 Property improvements $ 589 $ 589 Buildings and improvements 26,769 24,416 Furniture and fixtures, equipment and computer software 208,043 194,573 235,401 219,578 Less accumulated depreciation 163,891 156,541 $ 71,510 $ 63,037 Goodwill The Company applies a fair value-based impairment test to the carrying value of goodwill on an annual basis as of the last day of the eleventh month of the Company’s fiscal year and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. The results of the impairment tests performed in 2021, 2020, and 2019 indicated no impairment to the Company’s goodwill. In conducting its analysis, the Company uses the income approach to compare the reporting unit’s carrying value to its indicated fair value. 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 4 below). The Company’s impairment analysis is based on management’s estimates. Due to the uncertainty of future events, the Company cannot assure that growth rates will not be lower than expected, that discount rates will not increase or that projected cash flows will not decline, all of which factors could impact the carrying value of any remaining goodwill (or portion thereof) in future periods, and accordingly, whether any impairment losses need to be recorded in future periods. The changes in the carrying amount and the composition of the Company's goodwill for fiscal 2021 and 2020 were as follows: Fishing Camping Watercraft Diving Total Balance at September 27, 2019 Goodwill $ 17,415 $ 7,038 $ 6,242 $ 33,078 $ 63,773 Accumulated impairment losses ( 6,229 ) ( 7,038 ) ( 6,242 ) ( 33,078 ) ( 52,587 ) 11,186 — — — 11,186 Currency translation ( 2 ) — — — ( 2 ) Balance at October 2, 2020 Goodwill 17,413 7,038 6,242 33,078 63,771 Accumulated impairment losses ( 6,229 ) ( 7,038 ) ( 6,242 ) ( 33,078 ) ( 52,587 ) 11,184 — — — 11,184 Currency translation 37 — — — 37 Balance at October 1, 2021 Goodwill 17,450 7,038 6,242 33,078 63,808 Accumulated impairment losses ( 6,229 ) ( 7,038 ) ( 6,242 ) ( 33,078 ) ( 52,587 ) $ 11,221 $ — $ — $ — $ 11,221 Other Intangible Assets Indefinite-lived intangible assets are also tested for impairment annually and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. There were no impairment losses recognized in fiscal 2021, 2020 or 2019. Intangible assets with definite lives are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over periods ranging from 4 to 15 years. 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 $ 264 for each of the next 5 fiscal years. F-12 Table of Contents Intangible assets at the end of the last two years consisted of the following: 2021 2020 Gross Intangible Accumulated Amortization Net Gross Intangible Accumulated Amortization Net Amortized other intangible assets: Patents and trademarks $ 4,207 $ ( 4,203 ) $ 4 $ 4,174 $ ( 4,169 ) $ 5 Other amortizable intangibles 11,234 ( 9,630 ) 1,604 11,236 ( 9,214 ) 2,022 Non-amortized trademarks 7,025 — 7,025 7,025 — 7,025 $ 22,466 $ ( 13,833 ) $ 8,633 $ 22,435 $ ( 13,383 ) $ 9,052 Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in business circumstances such as unplanned negative cash flow indicate that the carrying amount of these assets may not be fully recoverable. In such an event, the carrying amount of the asset group is compared to the future undiscounted cash flows expected to be generated by the asset group to determine if impairment exists on these assets. 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 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. Warranties The Company provides for warranties of certain products as they are sold. Warranty reserves are estimated using standard quantitative measures based on criteria established by the Company. Estimates of costs to service its warranty obligations are based on historical experience, expectation of future conditions and known product issues. The following table summarizes the warranty activity for the three years in the period ended October 1, 2021. Balance at September 28, 2018 $ 8,499 Expense accruals for warranties issued during the period 9,581 Less current period warranty claims paid 8,890 Balance at September 27, 2019 $ 9,190 Expense accruals for warranties issued during the period 11,714 Less current period warranty claims paid 10,055 Balance at October 2, 2020 $ 10,849 Expense accruals for warranties issued during the period 13,112 Less current period warranty claims paid 9,888 Balance at October 1, 2021 $ 14,073 Accumulated Other Comprehensive Income The components of Accumulated other comprehensive income ("AOCI") on the accompanying Consolidated Balance Sheets as of the end of fiscal year 2021, 2020 and 2019 were as follows: 2021 2020 2019 Pre-Tax Amount Tax Effect Net of Tax Effect Pre-Tax Amount Tax Effect Net of Tax Effect Pre-Tax Amount Tax Effect Net of Tax Effect Foreign currency translation adjustment $ 7,606 $ — $ 7,606 $ 7,323 $ — $ 7,323 $ 4,790 $ — $ 4,790 Unamortized loss on pension plans ( 386 ) 166 ( 220 ) ( 3,129 ) 523 ( 2,606 ) ( 3,964 ) 732 ( 3,232 ) Accumulated other comprehensive income $ 7,220 $ 166 $ 7,386 $ 4,194 $ 523 $ 4,717 $ 826 $ 732 $ 1,558 F-13 Table of Contents The reclassifications out of AOCI for the year ended October 1, 2021 were as follows: Statement of Operations Presentation Unamortized loss on defined benefit pension plans Amortization of loss $ 576 Cost of sales / Operating expense Tax effects ( 144 ) Income tax expense Total reclassifications for the period $ 432 The reclassifications out of AOCI for the year ended October 2, 2020 were as follows: Statement of Operations Presentation Unamortized loss on defined benefit pension plans: Amortization of loss $ 537 Cost of sales / Operating expense Tax effects ( 134 ) Income tax expense Total reclassifications for the period $ 403 The reclassifications out of AOCI for the year ended September 27, 2019 were as follows: Statement of Operations Presentation Unamortized loss on defined benefit pension plans: Amortization of loss $ 328 Cost of sales / Operating expense Tax effects ( 82 ) Income tax expense Foreign currency translation adjustments: Write off of currency translation amounts ( 761 ) Other income and expense Total reclassifications for the period $ ( 515 ) The changes in AOCI by component, net of tax, for the year ended October 1, 2021 were as follows: Foreign Currency Translation Adjustment Unamortized Loss on Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance at October 2, 2020 $ 7,323 $ ( 2,606 ) $ 4,717 Other comprehensive income before reclassifications 283 2,167 2,450 Amounts reclassified from accumulated other comprehensive income — 576 576 Tax effects — ( 357 ) ( 357 ) Balance at October 1, 2021 $ 7,606 $ ( 220 ) $ 7,386 The changes in AOCI by component, net of tax, for the year ended October 2, 2020 were as follows: F-14 Table of Contents Foreign Currency Translation Adjustment Unamortized Loss on Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance at September 27, 2019 $ 4,790 $ ( 3,232 ) $ 1,558 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 October 2, 2020 $ 7,323 $ ( 2,606 ) $ 4,717 Earnings per Share (“EPS”) Net income or loss per share of Class A common stock and Class B common stock is computed using the two-class method. Grants of restricted stock (whether vested or unvested) which receive non-forfeitable dividends are required to be included as part of the basic weighted average share calculation under the two-class method. Holders of Class A common stock are entitled to cash dividends equal to 110 % of all dividends declared and paid on each share of Class B common stock. The Company grants shares of unvested restricted stock in the form of Class A shares, which carry the same distribution rights as the Class A common stock described above. As such, the undistributed earnings for each period are allocated to each class of common stock based on the proportionate share of the amount of cash dividends that each such class is entitled to receive. Basic EPS Basic net income or loss per share is computed by dividing net income or loss allocated to Class A common stock and Class B common stock by the weighted-average number of shares of Class A common stock and Class B common stock outstanding, respectively. In periods with cumulative year to date net income and undistributed income, the undistributed income for each period is allocated to each class of common stock based on the proportionate share of the amount of cash dividends that each such class is entitled to receive. 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 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 EPS 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. Anti-dilutive stock options, restricted stock units and non-vested stock are excluded from the calculation of diluted EPS. The computation of diluted net income per share of Class A common stock assumes that Class B common stock is converted into Class A common stock. 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 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. 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 1, 2021, October 2, 2020 and September 27, 2019. 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: F-15 Table of Contents 2021 2020 2019 Net income $ 83,381 $ 55,233 $ 51,413 Less: Undistributed earnings reallocated to non-vested shareholders ( 320 ) ( 220 ) ( 226 ) Dilutive earnings $ 83,061 $ 55,013 $ 51,187 Weighted average common shares – Basic: Class A 8,864 8,822 8,782 Class B 1,212 1,212 1,212 Dilutive stock options and restricted stock units 44 30 27 Weighted average common shares - Dilutive 10,120 10,064 10,021 Net income per common share – Basic: Class A $ 8.34 $ 5.54 $ 5.18 Class B $ 7.57 $ 5.04 $ 4.71 Net income per common share – Diluted: Class A $ 8.21 $ 5.47 $ 5.11 Class B $ 8.21 $ 5.47 $ 5.11 Stock-Based Compensation Stock-based compensation cost is recorded for all awards of non-vested stock and restricted stock units based on their grant-date fair value. Stock-based compensation expense is recognized on a straight-line basis over the vesting period of each award. See Note 10 of these Notes to Consolidated Financial Statements for information regarding the Company’s stock-based incentive plans, including non-vested stock, restricted stock units and employee stock purchase plans. Income Taxes The Company provides for income taxes currently payable and deferred income taxes resulting from temporary differences between financial statement income/loss and taxable income/loss. Accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. Deferred income tax assets and liabilities are determined based on the difference between the amounts reported in the financial statements and the tax basis of assets and liabilities, using enacted tax rates in effect in the years in which the differences are expected to reverse. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. A valuation allowance is established if it is more likely than not that some portion or all of a deferred income tax asset will not be realized. See Note 6 of these Notes to Consolidated Financial Statements for further discussion. Employee Benefits The Company and certain of its subsidiaries have various retirement and profit sharing plans. The Company does not have any significant foreign retirement plans. 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. Other retirement costs are funded at least annually. See Note 7 of these Notes to Consolidated Financial Statements for additional discussion. Foreign Operations and Related Derivative Financial Instruments The functional currencies of the Company’s foreign operations are the local currencies. Accordingly, assets and liabilities of foreign operations are translated into U.S. dollars at the rate of exchange existing at the end of the year. Results of operations are translated at monthly average exchange rates. Adjustments resulting from the translation of foreign currency financial statements are classified as “Accumulated other comprehensive income (loss),” a separate component of Shareholders’ equity. Currency gains and losses are recognized when assets and liabilities of foreign operations, denominated in other than their local currency, are converted into the local currency of the entity. 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 $ 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. F-16 Table of Contents Because the Company operates internationally, it has exposure to market risk from movements in foreign currency exchange rates. Approximately 12 % of the Company’s revenues for the year ended October 1, 2021 were denominated in currencies other than the U.S. dollar. Approximately 4 % were denominated in euros and approximately 6 % were denominated in Canadian dollars, with the remaining 2 % denominated in various other foreign currencies. The Company may mitigate the impact on its operating results of a portion of the fluctuations in certain foreign currencies through the purchase of foreign currency swaps, forward contracts and options to hedge known commitments denominated in foreign currencies or borrowings in foreign currencies. The Company did not use foreign currency forward contracts in 2021, 2020 or 2019. The Company does not enter into foreign exchange contracts for trading or speculative purposes. Revenue Recognition 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. Advertising & Promotions The Company expenses substantially all costs related to the production of advertising the first time the advertising takes place. Cooperative promotional arrangements are accrued as related revenue is earned. 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 $ 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 Shipping and handling fees billed to customers are included in “Net sales.” Shipping and handling costs are included in “Marketing and selling expenses” and totaled $ 16,093 , $ 12,651 and $ 12,409 for 2021, 2020 and 2019, respectively. Research and Development 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 $ 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. Fair Values 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. 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 fair value. Valuation Techniques Rabbi Trust Assets Rabbi trust assets, used to fund amounts the Company owes to certain officers and other employees under the Company’s non-qualified deferred compensation plan, are included in “Other assets,” and are classified as trading securities. These assets are comprised of marketable debt and equity securities that are marked to fair value based on unadjusted quoted prices in active markets. Goodwill and Other Intangible Assets 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 F-17 Table of Contents 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. See Note 4 of these Notes to Consolidated Financial Statements for disclosures regarding fair value measurements. New Accounting Pronouncements Recently adopted accounting pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) . In July 2018, the FASB also issued ASU 2018-10 Codification Improvements to Topic 842, Leases and ASU 2018-11 Leases (Topic 842) Targeted Improvements. In February 2019, the FASB also issued ASU 2019-01 Leases (Topic 842): Codification Improvements . This ASU and the updates to this ASU require organizations to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. This guidance was effective for the Company in the first quarter of fiscal year 2020, and may be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements with certain practical expedients available. The Company adopted the provisions of these ASU's using the modified retrospective approach at the beginning of the first quarter of fiscal 2020, coinciding with the standard's effective date. 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. ASU No. 2018-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The ASU allows for early adoption in any interim period after issuance of the update. The Company early adopted the ASU in the second quarter of fiscal 2019, and elected not to make this optional reclassification. In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans (Topic 715). This ASU will modify the disclosure requirements for employers that sponsor defined pension or postretirement plans. The amendments in this guidance are effective for fiscal years ending after December 15, 2020, with early adoption permitted. 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. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company does not expect adoption of the new guidance to have a significant impact on its financial statements. F-18 Table of Contents 2 INDEBTEDNESS The Company had no outstanding debt at October 1, 2021 or October 2, 2020. Revolvers 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 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 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 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. Under the Company’s Credit Agreement, a change in control of the Company would constitute an event of default. A change in control would be deemed to have occurred if, among other events described in the terms of the Credit Agreement, a person or group other than the Company’s Chief Executive Officer, Helen P. Johnson-Leipold, members of her family and related entities (hereinafter the Johnson Family) became or obtained rights as a beneficial owner (as interpreted under the Securities Exchange Act of 1934) of a certain minimum percentage of the outstanding capital stock of the Company. 3 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The following disclosures describe the Company’s objectives in using derivative instruments, the business purpose or context for using derivative instruments, and how the Company believes the use of derivative instruments helps achieve the stated objectives. In addition, the following disclosures describe the effects of the Company’s use of derivative instruments and hedging activities on its financial statements. See Note 4 of these Notes to Consolidated Financial Statements for disclosures regarding the fair value and effects of changes in the fair value of derivative instruments. Foreign Exchange Risk The Company has significant foreign operations, for which the functional currencies are denominated primarily in euros, Swiss francs, Hong Kong dollars and Canadian dollars. As the values of the currencies of the foreign countries in which the Company has operations increase or decrease relative to the U.S. 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 12 % of the Company’s revenues for the fiscal year ended October 1, 2021 were denominated in currencies other than the U.S. dollar. Approximately 4 % were denominated in euros and approximately 6 % were denominated F-19 Table of Contents 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. The Company may mitigate the impact on its operating results of a portion of the fluctuations in certain foreign currencies through the use of foreign currency forward contracts. Foreign currency forward contracts enable the Company to lock in the foreign currency exchange rate for a fixed amount of currency to be paid or received on a specified date in the future. 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 1, 2021 and October 2, 2020, the Company held no foreign currency forward contracts. Interest Rate Risk As of October 1, 2021 and October 2, 2020, the Company held no interest rate swap contracts. 4 FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable. • Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. • Level 2 - Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments. • Level 3 - Unobservable inputs, where there is little or no market activity for the asset or liability. 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 following table summarizes the Company’s financial assets measured at fair value as of October 1, 2021: Level 1 Level 2 Level 3 Total Assets: Rabbi trust assets $ 27,851 $ — $ — $ 27,851 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 Assets: Rabbi trust assets $ 21,550 $ — $ — $ 21,550 Rabbi trust assets are classified as trading securities and are comprised of marketable debt and equity securities that are marked to fair value based on unadjusted quoted prices in active markets. The rabbi trust assets are owed by the Company to certain officers and other employees under the Company’s non-qualified deferred compensation plan. These assets are included in "Other assets" in the Company's Consolidated Balance Sheets, and the mark-to-market adjustments on the assets are recorded in “Other income, net” in the accompanying Consolidated Statements of Operations. The offsetting deferred compensation liability is also reported at fair value and is included in “Deferred compensation liability” in the Company’s Consolidated Balance Sheets. 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 1, 2021, October 2, 2020 and September 27, 2019 was: F-20 Table of Contents Location of income recognized in Statement of Operations 2021 2020 2019 Rabbi trust assets Other income, net $ 4,878 $ 2,140 $ 572 Certain assets and liabilities are measured at fair value on a non-recurring basis in periods subsequent to their initial recognition. No assets or liabilities were measured at fair value on a non-recurring basis in 2021, 2020, or 2019. 5 LEASES Adoption of Topic 842 At the beginning of fiscal 2020, the Company adopted ASU 2016-02 and all subsequent ASUs that modified accounting standards Topic 842 using a modified retrospective adoption method, in which right-of-use ("ROU") assets and lease liabilities are recognized in the condensed consolidated balance sheets. 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. 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. All leases in which the Company is the lessee are classified as operating leases, and the Company does not have any finance leases or sublease agreements. Additionally, the Company does not have any leases in which it is the lessor. The adoption of this 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 this 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. The Company determines if an arrangement is a lease at inception. The Company leases certain facilities and machinery and equipment under long-term, non-cancelable operating leases. As of October 1, 2021, the Company had approximately 200 leases, with remaining terms ranging from less than one year to 15 years. Some of the leases contain variable payment terms, such as payments based on fluctuations in the Consumer Price Index (CPI). Some leases also contain options to extend or terminate the lease. To the extent the Company is reasonably certain to exercise these options, they have been considered in the calculation of the ROU assets and lease liabilities. Under current lease agreements, there are no residual value guarantees or restrictive lease covenants. In calculating the ROU assets and lease liabilities, several assumptions and judgments were made by the Company, including whether a contract is or contains a lease under the new definition, and the determination of the discount rate, which is assumed to be the incremental borrowing rate. The incremental borrowing rate is derived from information available to the Company at the lease commencement date based on lease length and location. As of October 1, 2021, the components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations were as follows: Year ended Year ended October 1, 2021 October 2, 2020 Lease Cost Operating lease costs $ 8,323 $ 7,483 Short-term lease costs 1,549 1,828 Variable leases costs 184 173 Total lease cost $ 10,056 $ 9,484 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: F-21 Table of Contents Year ended Year ended October 1, 2021 October 2, 2020 Operating leases: Operating lease ROU assets $ 49,032 $ 40,666 Current operating leases liabilities 5,938 6,587 Non-current operating lease liabilities 44,056 34,931 Total operating lease liabilities $ 49,994 $ 41,518 Weighted average remaining lease term (in years) 12.20 10.05 Weighted average discount rate 3.08 % 2.85 % Cash paid for amounts included in the measurement of lease liabilities $ 7,608 $ 6,716 Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at October 1, 2021 were as follows: Year Related parties included in total Total 2022 $ 1,123 $ 7,791 2023 1,143 6,735 2024 1,178 6,474 2025 1,213 5,275 2026 1,250 4,573 Thereafter 209 29,653 Total undiscounted lease payments 6,116 60,501 Less: 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 The U.S. and foreign income before income taxes for the respective years consisted of the following: 2021 2020 2019 United States $ 99,774 $ 72,602 $ 59,261 Foreign 13,148 1,100 7,246 $ 112,922 $ 73,702 $ 66,507 Income tax expense for the respective years consisted of the following: F-22 Table of Contents 2021 2020 2019 Current: Federal $ 22,860 $ 13,735 $ 11,074 State 6,392 3,348 2,752 Foreign 3,236 1,109 1,422 Deferred ( 2,947 ) 277 ( 154 ) $ 29,541 $ 18,469 $ 15,094 The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at the end of the respective years are presented below: 2021 2020 Deferred tax assets: Inventories $ 1,355 $ 1,346 Compensation 8,771 7,726 Tax credit carryforwards 2,817 3,235 Net operating loss carryforwards 3,996 4,427 Other 8,756 7,154 Total gross deferred tax assets 25,695 23,888 Less valuation allowance 6,372 6,524 Deferred tax assets 19,323 17,364 Deferred tax liabilities: Goodwill and other intangibles 1,717 2,080 Depreciation and amortization 5,714 5,735 Foreign statutory reserves 362 288 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 1, 2021 and October 2, 2020 were as follows: 2021 2020 Non-current assets $ 13,129 $ 10,679 Non-current liabilities 1,599 1,418 Net deferred tax assets $ 11,530 $ 9,261 The significant differences between the statutory federal tax rate and the effective income tax rates for the Company for the respective years shown below were as follows: 2021 2020 2019 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % * State income tax, net of federal benefit 4.4 % 4.6 % 4.3 % Uncertain tax positions, net of settlements 0.1 % ( 0.1 ) % ( 0.5 ) % Foreign-derived intangible income ("FDII") deduction ( 1.1 ) % ( 1.1 ) % ( 0.9 ) % Net tax cost of foreign income 0.7 % — % 0.5 % Compensation 0.8 % 0.7 % ( 0.7 ) % Other 0.3 % — % ( 1.0 ) % 26.2 % 25.1 % 22.7 % 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. The Company’s net operating loss carryforwards and their expirations as of October 1, 2021 were as follows: F-23 Table of Contents State Foreign Total Year of expiration 2022-2026 $ 653 $ 6,403 $ 7,056 2027-2031 2,928 4,689 7,617 2032-2036 6,857 — 6,857 2037-2041 648 — 648 Indefinite — 3,372 3,372 Total $ 11,086 $ 14,464 $ 25,550 The Company has tax credit carryforwards as follows: State Federal Total Year of expiration 2022-2026 $ 1,554 $ — $ 1,554 2027-2031 904 — 904 2032-2036 359 — 359 Total $ 2,817 $ — $ 2,817 A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: 2020 2019 Beginning balance $ 7,372 $ 7,931 Gross increases - tax positions in prior period — 82 Gross increases - tax positions in current period 1,288 909 Settlements — — Lapse of statute of limitations ( 1,903 ) ( 1,550 ) Ending balance $ 6,757 $ 7,372 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. In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. Interest and penalties of $( 63 ), $ 5 and $ 79 were recorded as a component of income tax expense in the accompanying Consolidated Statements of Operations during fiscal years 2021, 2020 and 2019, respectively. The Company’s policy is to remit earnings from foreign subsidiaries only to the extent the remittance does not result in an incremental U.S. tax liability. The Company does not currently provide for the additional U.S. and foreign income taxes which would become payable upon remission of undistributed earnings of foreign subsidiaries. If all undistributed earnings were remitted, an additional income tax provision of approximately $ 1.9 million would have been necessary as of October 1, 2021. F-24 Table of Contents The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The amount of unrecognized tax benefits recognized within the next twelve months may decrease due to expiration of the statute of limitations for certain years in various jurisdictions. However, it is possible that a jurisdiction may open an audit prior to the statute expiring that may result in adjustments to the Company’s tax filings. At this time, an estimate of the range of the reasonably possible change cannot be made. The following tax years remain subject to examination by the Company's respective major tax jurisdictions: Jurisdiction Fiscal Years United States 2018-2021 Canada 2017-2021 France 2018-2021 Germany 2019-2021 Italy 2019-2021 Switzerland 2011-2021 7 EMPLOYEE BENEFITS The Company has non-contributory defined benefit pension plans covering certain U.S. employees. Retirement benefits are generally provided based on the employees’ years of service and average earnings. Normal retirement age is 65, with provisions for earlier retirement. The Company elected to freeze its U.S. 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. The financial position of the Company’s non-contributory defined benefit plans as of fiscal year end 2021 and 2020 was as follows: F-25 Table of Contents 2021 2020 Projected benefit obligation: Projected benefit obligation, beginning of year $ 32,631 $ 30,248 Service cost — — Interest cost 838 931 Actuarial (gain) loss ( 610 ) 2,588 Settlements ( 31,062 ) — Benefits paid ( 1,126 ) ( 1,136 ) Projected benefit obligation, end of year 671 32,631 Fair value of plan assets: Fair value of plan assets, beginning of year 32,923 30,356 Actual (loss) gain on plan assets ( 172 ) 3,526 Company contributions 172 177 Settlements ( 31,424 ) — Benefits paid ( 1,126 ) ( 1,136 ) Fair value of plan assets, end of year 373 32,923 Funded status of the plans ( 298 ) 292 Amounts recognized in the Consolidated Balance Sheets consist of: Current pension liabilities 96 171 Non-current pension liabilities 575 — Non-current pension assets 373 462 Accumulated other comprehensive loss ( 385 ) ( 3,129 ) Components of accumulated other comprehensive loss: Net actuarial loss ( 385 ) ( 3,129 ) Accumulated other comprehensive loss $ ( 385 ) $ ( 3,129 ) Net periodic benefit cost for the non-contributory defined benefit pension plans for the respective years included the following pre-tax amounts: 2021 2020 2019 Interest cost $ 838 $ 931 $ 1,103 Expected return on plan assets ( 436 ) ( 641 ) ( 855 ) 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 ) Total recognized in net periodic pension cost and OCI $ 761 $ ( 8 ) $ ( 789 ) The Company expects to recognize $ 45 of unrecognized loss amortization as a component of net periodic benefit cost in 2022. This amount is included in accumulated other comprehensive income as of October 1, 2021. 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 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. F-26 Table of Contents The Company anticipates making contributions to the defined benefit pension plans of $ 96 through fiscal year 2022. Estimated benefit payments from the Company’s defined benefit plans to participants for each of the next five years and the five years thereafter are as follows: 2022 $ 96 2023 89 2024 82 2025 75 2026 67 Five years thereafter 230 Actuarial assumptions used to determine the projected benefit obligation and net periodic pension cost as of the following fiscal years were as follows: Projected Benefit Obligation Net Periodic Pension Cost 2021 2020 2019 2021 2020 2019 Discount rate 2.80 % 2.60 % 3.13 % 2.60 % 3.13 % 4.22 % Long-term rate of return N/A N/A N/A 1.70 % 2.50 % 3.45 % Average salary increase rate N/A N/A N/A N/A N/A N/A 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. A yield curve was calculated based on this hypothetical portfolio which was used for the discount rate determination. The Company determines the long-term rate of return assumption for plan assets by using the historical asset returns for various investment asset classes and adjusting them to reflect future expectations. 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 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: 2021 2020 Equity securities — % 5 % Fixed income securities — % 92 % Other securities 100 % 3 % 100 % 100 % 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 Description: Money market funds $ — $ 373 $ — $ 373 Total $ — $ 373 $ — $ 373 The following table summarizes the Company’s pension plan assets measured at fair value as of October 2, 2020: F-27 Table of Contents Level 1 Level 2 Level 3 Total Description: Fixed income $ 5,657 $ 24,734 $ — $ 30,391 Mutual funds 1,468 — — 1,468 Money market funds — 1,056 — 1,056 Group annuity contract — — 8 8 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 1, 2021 and October 2, 2020: 2021 2020 Level 3 assets, beginning of year $ 8 $ 31 Gain/(loss) 12 ( 1 ) Sales ( 20 ) ( 22 ) Level 3 assets, end of year $ — $ 8 The fair values of the treasury fixed income and mutual fund assets were derived from quoted market prices as substantially all of these instruments have active markets. The fair values of agency and corporate bond fixed income and money market assets are derived from other observable market inputs or independent pricing services. 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 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 $ 27,885 and $ 21,585 as of October 1, 2021 and October 2, 2020, respectively. See “Note 4 Fair Value” for additional information. A majority of the Company’s full-time employees are covered by defined contribution programs. Expenses attributable to the defined contribution programs were approximately $ 1,680 , $ 1,592 and $ 1,422 for 2021, 2020 and 2019, respectively. 8 PREFERRED STOCK The Company is authorized to issue 1,000,000 shares of preferred stock in various classes and series, of which there are no ne currently issued and no ne outstanding. 9 COMMON STOCK The number of authorized and outstanding shares of each class of the Company’s common stock at the end of the respective years was as follows: 2021 2020 Class A, $ 0.05 par value: Authorized 20,000,000 20,000,000 Outstanding 8,915,636 8,873,235 Class B, $ 0.05 par value: Authorized 3,000,000 3,000,000 Outstanding 1,211,564 1,211,564 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 F-28 Table of Contents 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. Each share of Class B common stock is convertible at any time into one share of Class A common stock. During 2021 and 2020 there were 0 and 38 shares of Class B common stock converted into Class A common stock, respectively. 10 STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS The Company’s current stock ownership plans provide for issuance of options to acquire shares of Class A common stock by key executives and non-employee directors. Current plans also allow for issuance of shares of restricted stock, restricted stock units or stock appreciation rights in lieu of 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 501,314 shares of the Company’s Class A common stock available for grant to key executives and non-employee directors at October 1, 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. The Company recognized additional tax benefits from the vesting of restricted stock and restricted stock units of $ 581 , $ 238 and $ 646 for 2021, 2020 and 2019, respectively. In 2021 and 2020, these amounts were recorded as a component of income tax expense. In 2019, the amount was recorded as an increase in additional paid-in capital on the consolidated balance sheets and as cash from financing activities on the consolidated statements of cash flows. The Company recognizes forfeitures of equity awards as incurred. Non-Vested Stock All shares of non-vested stock awarded by the Company have been granted at their fair market value on the date of grant and vest within five years after the grant date. 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 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 shares traded. A summary of non-vested stock activity for the two year period ended October 1, 2021 related to the Company’s stock ownership plans is as follows: Shares Weighted Average Grant Price Non-vested stock at September 27, 2019 41,608 $ 51.78 Non-vested stock grants 19,105 63.33 Restricted stock vested ( 20,221 ) 41.93 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 Non-vested stock October 1, 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 2021 and 2020, respectively. The fair value of restricted stock vested during 2021, 2020 and 2019 was approximately $ 1,950 , $ 1,288 and $ 1,237 , respectively. Stock compensation expense, net of forfeitures, related to non-vested stock was $ 1,179 , $ 1,032 and $ 667 during 2021, 2020 and 2019, respectively. 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 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. F-29 Table of Contents Restricted Stock Units All restricted stock units awarded by the Company during fiscal 2021 and in prior years have been granted at their fair market value on the date of grant. The fair value at 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 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 shares traded. The vesting period for RSUs is generally one year from the date of grant for RSUs granted to directors and three years from the date of the grant for RSUs granted to employees. A summary of RSU activity follows: Number of RSUs Weighted Average Grant Price RSUs at September 27, 2019 58,708 $ 62.13 RSUs granted 27,517 64.51 RSUs vested ( 18,404 ) 42.80 RSUs at October 2, 2020 67,821 68.34 RSUs granted 20,059 88.49 RSUs vested ( 18,112 ) 70.39 RSUs at October 1, 2021 69,768 73.60 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 were 3,320 and 3,075 during 2021 and 2020, respectively. 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 $ 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. Unrecognized compensation cost related to non-vested restricted stock units as of October 1, 2021 was $ 2,885 , which amount will be amortized to expense through September 2022 or adjusted for changes in future estimated or actual forfeitures. Compensation expense related to units earned by certain employees is based upon the attainment of certain financial goals related to cumulative net sales and cumulative operating profit over a three-year performance period. Awards are only paid if at least 80 % of the target levels are met and maximum payouts are made if 120 % of more of target levels are achieved. The payouts for achievement at the minimum threshold levels of performance are equal to 50 % of the target award amount. The payouts for achievement at maximum levels of performance are equal to 150 % of the target award amount. To the extent earned, awards are issued in shares of Company common stock after the end of the three year performance period. Employee Stock Purchase Plan The 2009 Employees’ Stock Purchase Plan (the “Purchase Plan”) 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 at the end of the offering period, whichever is lower. The Company issued 0 , 2,190 and 1,594 shares of Class A common stock under the Purchase Plan during the years 2021, 2020 and 2019, respectively, and recognized expense of $ 86 , $ 43 and $ 27 in 2021, 2020 and 2019, respectively. 11 RELATED PARTY TRANSACTIONS The Company conducts transactions with certain related parties including organizations controlled by the Johnson Family. These transactions include product purchases, aviation services, office rental, and facility fees. 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 1, 2021 and October 2, 2020. F-30 Table of Contents 12 REVENUES Revenue recognition Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our goods at a point in time based on shipping terms and transfer of title. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. The amount of consideration received can vary, primarily because of customer incentive or rebate arrangements. The Company estimates variable consideration based on the expected value of total consideration to which customers are likely to be entitled based on historical experience and projected market expectations. Included in the estimate is an assessment as to whether any variable consideration is constrained. Revenue estimates are adjusted at the earlier of a change in the expected value of consideration or when the consideration becomes fixed. For all contracts with customers, the Company has not adjusted the promised amount of consideration for the effects of a significant financing component as the period between the transfer of the promised goods and the customer's payment is expected to be one year or less. Sales are made on normal and customary short-term credit terms, generally ranging from 30 to 90 days, or upon delivery of point of sale transactions. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. The Company enters into contractual arrangements with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company does not have contracts which are satisfied over time. Due to the nature of these contracts, no significant judgment exists in relation to the identification of the customer contract, satisfaction of the performance obligation, or transaction price. The Company expenses incremental costs of obtaining a contract due to the short-term nature of the contracts. Estimated costs of returns, allowances and discounts, based on historic experience, are accrued as a reduction to sales when revenue is recognized. The Company provides customers the right to return eligible products under certain circumstances. At October 1, 2021, the right to returns asset was $ 769 and the accrued returns liability was $ 2,061 . 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. 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. 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. The Company has a wide variety of seasonal, outdoor recreation products used primarily for fishing from a boat, diving, paddling, hiking and camping, that are sold to a variety of customers in multiple end markets. While there are multiple products sold, the nature of products are similar in terms of the nature of the revenue recognition policies. See Note 13 of these Notes to Consolidated Financial Statements for required disclosures of disaggregated revenue. 13 SEGMENTS OF BUSINESS The Company conducts its worldwide operations through separate business segments, each of which represent major product lines. Operations are conducted in the U.S. and various foreign countries, primarily in Europe, Canada and the Pacific Basin. 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. Total assets represent assets that are used in the Company’s operations in each business segment at the end of the years presented. F-31 Table of Contents A summary of the Company’s operations by business segment is presented below: 2021 2020 2019 Net sales: Fishing: Unaffiliated customers $ 552,073 $ 449,186 $ 411,566 Interunit transfers 927 692 555 Camping: Unaffiliated customers 62,879 41,554 40,339 Interunit transfers 42 38 40 Watercraft Recreation: Unaffiliated customers 66,396 41,786 33,405 Interunit transfers 207 71 93 Diving Unaffiliated customers 69,433 60,853 76,279 Interunit transfers 14 20 27 Other / Corporate 870 830 830 Eliminations ( 1,190 ) ( 821 ) ( 715 ) Total $ 751,651 $ 594,209 $ 562,419 Operating profit (loss): Fishing $ 122,490 $ 95,884 $ 84,092 Camping 14,025 4,406 2,896 Watercraft Recreation 9,173 ( 329 ) ( 2,822 ) Diving 1,530 ( 2,576 ) 3,043 Other / Corporate ( 35,935 ) ( 26,315 ) ( 23,435 ) $ 111,283 $ 71,070 $ 63,774 Depreciation and amortization expense: Fishing $ 8,770 $ 8,654 $ 8,730 Camping 644 639 705 Watercraft Recreation 707 899 1,051 Diving 765 1,761 1,005 Other / Corporate 2,515 2,973 2,473 $ 13,401 $ 14,926 $ 13,964 Capital expenditures: Fishing $ 18,570 $ 12,847 $ 13,712 Camping 399 206 210 Watercraft Recreation 681 685 727 Diving 742 947 955 Other / Corporate 1,017 915 1,182 $ 21,409 $ 15,600 $ 16,786 Goodwill, net: Fishing $ 11,221 $ 11,184 Camping — — Watercraft Recreation — — Diving — — $ 11,221 $ 11,184 Total assets (end of period): Fishing $ 285,321 $ 206,244 Camping 54,276 37,514 Watercraft Recreation 27,530 21,038 Diving 67,069 67,393 Other / Corporate 240,091 213,837 $ 674,287 $ 546,026 F-32 Table of Contents A summary of the Company’s operations by geographic area is presented below: 2021 2020 2019 Net sales: United States: Unaffiliated customers $ 659,330 $ 525,204 $ 482,326 Interunit transfers 30,593 17,503 20,991 Europe: Unaffiliated customers 30,509 28,880 35,114 Interunit transfers 9,974 8,561 9,792 Canada: Unaffiliated customers 48,867 29,512 30,039 Interunit transfers 12 35 — Other: Unaffiliated customers 12,945 10,613 14,940 Interunit transfers 106 10 29 Eliminations ( 40,685 ) ( 26,109 ) ( 30,812 ) $ 751,651 $ 594,209 $ 562,419 Total assets: United States $ 574,916 $ 456,188 Europe 45,916 45,429 Canada and other 53,455 44,409 $ 674,287 $ 546,026 Long-term assets (1) : United States $ 158,868 $ 134,932 Europe 8,038 7,889 Canada and other 2,988 3,988 $ 169,894 $ 146,809 (1) Long term assets consist of net property, plant and equipment, right of use assets, net intangible assets, goodwill and other assets excluding deferred income taxes. 14 CONTINGENCIES The Company is subject to various legal actions and proceedings in the normal course of business, including those related to commercial disputes, product liability, intellectual property and environmental matters. The Company is insured against loss for certain of these matters. Although litigation is subject to many uncertainties and the ultimate exposure with respect to these matters cannot be ascertained, management does not believe the final outcome of any pending litigation will have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company. F-33 Table of Contents 15 VALUATION AND QUALIFYING ACCOUNTS The following summarizes changes to valuation and qualifying accounts for 2021, 2020 and 2019: Balance at Beginning of Year Additions Charged to Costs and Expenses Less Deductions Balance at End of Year Year Ended October 1, 2021 Allowance for doubtful accounts $ 2,697 $ 308 $ 511 $ 2,494 Reserves for inventory valuation 5,385 518 355 5,548 Valuation of deferred tax assets 6,524 1,352 1,504 6,372 Reserves for sales returns 3,043 1,705 2,653 2,095 Year ended October 2, 2020 Allowance for doubtful accounts $ 2,550 $ 2,095 $ 1,948 $ 2,697 Reserves for inventory valuation 5,223 878 716 5,385 Valuation of deferred tax assets 5,964 875 315 6,524 Reserves for sales returns 4,880 1,532 3,369 3,043 Year ended September 27, 2019 Allowance for doubtful accounts $ 1,637 $ 2,003 $ 1,090 $ 2,550 Reserves for inventory valuation 5,124 1,009 910 5,223 Valuation of deferred tax assets 6,402 430 868 5,964 Reserves for sales returns 1,532 7,040 3,692 4,880 16 QUARTERLY FINANCIAL SUMMARY (UNAUDITED) The following summarizes quarterly operating results for the years presented below: First Quarter Second Quarter Third Quarter Fourth Quarter (thousands, except per share data) 2021 2020 2021 2020 2021 2020 2021 2020 Net sales $ 165,667 $ 128,054 $ 206,156 $ 163,084 $ 213,568 $ 138,390 $ 166,260 $ 164,681 Gross profit 75,030 53,612 93,254 75,132 97,511 62,562 68,330 73,687 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 $ 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 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 per share amounts may not equal the net income per share for the entire year. F-34