What changed in this filing

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Item 1. Financial Statements

2022-05-09 compared with 2022-02-04 · 172 added, 122 removed, 458 unchanged (39% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

(thousands, except per share data) December 31, 2021 January 1, 2021

Three Months Ended Six Months Ended

(thousands, except per share data) April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Net sales $ 189,623 $ 206,156 $ 343,147 $ 371,823

9 unchanged sentences

Interest expense 49 35 87 67

Other income, net ( 774 ) ( 2,404 )

Other expense (income), net 2,272 ( 1,229 ) 1,498 ( 3,633 )

Profit before income taxes 13,210 37,310 27,799 63,321

15 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

(thousands) December 31, 2021 January 1, 2021

Three Months Ended Six Months Ended

(thousands) April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Net income $ 9,900 $ 27,834 $ 20,756 $ 47,681

Other comprehensive income:

Other comprehensive income (loss):

Foreign currency translation 168 ( 1,512 ) ( 255 ) 930

1 unchanged sentence

Change in pension plans, net of tax of $ 6 , $ 33 , $ 11 , and $ 67 respectively

Total other comprehensive (loss) income ( 407 ) 2,543

16 101 32 202

Total other comprehensive income (loss) 184 ( 1,411 ) ( 223 ) 1,132

Total comprehensive income $ 10,084 $ 26,423 $ 20,533 $ 48,813

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(thousands, except share data) December 31, 2021 October 1, 2021 January 1, 2021

(thousands, except share data) April 1, 2022 October 1, 2021 April 2, 2021

Current assets:

47 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Three Months Ended December 31, 2021

Six Months Ended April 1, 2022

(thousands except for shares) Shares Common Stock Capital in

8 unchanged sentences

Award of non-vested shares 34,422 1 ( 2 ) — — —

B to A conversion — — ( 154 ) — — 154

Stock-based compensation — — 1,126 — — —

3 unchanged sentences

BALANCE AT DECEMBER 31, 2021 10,157,045 $ 510 $ 83,869 $ 378,352 $ 6,979 $ ( 3,097 )

Three Months Ended January 1, 2021

Net income — — — 9,900 — —

Dividends declared — — — ( 3,023 ) — —

Award of non-vested shares 13,493 1 — — — —

Stock-based compensation — — 959 — — —

Tax effects on stock based awards — — — — — —

Currency translation adjustment — — — — 168 —

Change in pension plans, net of tax of $ 6

Non-vested stock forfeitures ( 2,040 ) — 150 — — ( 150 )

Purchase of treasury stock at cost ( 512 ) — — — — ( 48 )

BALANCE AT APRIL 1, 2022 10,167,986 $ 511 $ 84,978 $ 385,229 $ 7,163 $ ( 3,295 )

Six Months Ended April 2, 2021

(thousands except for shares) Shares Common Stock Capital in

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BALANCE AT JANUARY 1, 2021 10,112,172 $ 504 $ 79,379 $ 314,184 $ 7,260 $ ( 2,715 )

Net income — — — 27,834 — —

Dividends declared — — — ( 2,107 ) — —

Award of non-vested shares 6,016 4 ( 4 ) — — —

Stock-based compensation — — 808 — — —

Currency translation adjustment — — — — ( 1,512 ) —

Change in pension plans, net of tax of $ 33

— — — — 101 —

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

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

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

(thousands) December 31, 2021 January 1, 2021

Six Months Ended

(thousands) April 1, 2022 April 2, 2021

CASH USED FOR OPERATING ACTIVITIES

5 unchanged sentences

Stock based compensation 2,085 1,519

Loss on disposal of productive assets 1 —

(Gain) loss on disposal of productive assets ( 1 ) 99

Deferred income taxes ( 4 ) ( 663 )

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

and subsidiaries (collectively, the “Company”) as of December 31, 2021 and January 1, 2021, and their results of operations for the three month periods then ended and cash flows for the three month periods then ended.

and subsidiaries (collectively, the “Company”) as of April 1, 2022 and April 2, 2021, and their results of operations for the three and six month periods then ended and cash flows for the six month periods then ended.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 1, 2021 which was filed with the Securities and Exchange Commission on December 10, 2021.

Due to seasonal variations and other factors, some of which are described herein, including related to the ongoing coronavirus (COVID-19) pandemic and subsequent disruption to the Company's global supply chain, the results of operations for the three months ended December 31, 2021 are not necessarily indicative of the results to be expected for the Company’s full 2022 fiscal year.

Due to seasonal variations and other factors, some of which are described herein, including related to the ongoing coronavirus (COVID-19) outbreak and resulting pandemic and the continued disruption to the global supply chain and logistics infrastructure, the results of operations for the three and six months ended April 1, 2022 are not necessarily indicative of the results to be expected for the Company’s full 2022 fiscal year.

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

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While government mandates eased in the latter half of fiscal 2020, these mandates continued to emphasize social distancing measures to the general public.

As a result, the Company saw increased participation in fishing, camping and watercraft recreation and the related demand for our products in these business segments throughout fiscal 2021, largely driven by consumer desire to engage in socially distant and safe activities in the great outdoors.

This trend in increased demand for our outdoor recreation products continued into fiscal 2022 across all segments.

Nonetheless, the full extent to which the COVID-19 pandemic will impact our business, results of operations and financial condition during the remainder of fiscal 2022 will depend on future developments, including any potential worsening of the pandemic, and 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.

As a result, because we sell products that are used in a safe and socially distant manner in the great outdoors, the COVID-19 pandemic has had an overall favorable effect on our sales levels and the demand for our products starting at the end of our fiscal 2020 and continuing into fiscal 2022.

Specifically, the Company has seen increased participation in fishing, camping and watercraft recreation and consumer demand for our products in these business segments.

Nonetheless, the continued evolution of the pandemic has resulted in disruptions to the global supply chain and the logistics infrastructure (including with respect to the sourcing, timing, availability and cost of raw materials and components that are necessary to manufacture our products).

The lingering impact of these disruptions is not fully known as they, along with certain inflationary pressures in the economy, may result in economic slowdowns and ultimately lower demand for discretionary goods like our outdoor recreational products.

Furthermore, the continued impact of the pandemic on the global supply chain (including with respect to impacting the sourcing, timing, availability and cost of raw materials and components that are necessary to manufacture our products) is beyond our control and remains highly uncertain and cannot be predicted at his time.

2 ACCOUNTS RECEIVABLE

Accounts receivable are stated net of allowances for doubtful accounts of $ 2,662 , $ 2,494 and $ 2,823 as of December 31, 2021, October 1, 2021 and January 1, 2021, respectively.

The increase in net accounts receivable to $ 86,689 as of December 31, 2021 from $ 71,321 as of October 1, 2021 is attributable to the seasonal nature of the Company’s business.

Accounts receivable are stated net of allowances for doubtful accounts of $ 1,504 , $ 2,494 and $ 2,463 as of April 1, 2022, October 1, 2021 and April 2, 2021, respectively.

The increase in net accounts receivable to $ 119,517 as of April 1, 2022 from $ 71,321 as of October 1, 2021 is attributable to the seasonal nature of the Company’s business and the impact COVID-19 has had on generating heightened interest in outdoor activities which has resulted in increases in sales volumes between periods.

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

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

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

For all other customers, the Company recognizes allowances for doubtful accounts based on historical experience of bad debts as a percent of

JOHNSON OUTDOORS INC.

accounts receivable outstanding for each business segment.

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

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

JOHNSON OUTDOORS INC.

3 EARNINGS PER SHARE (“EPS”)

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

For the three month periods ended December 31, 2021 and January 1, 2021, basic income per share for the Class A and Class B shares has been presented using the two class method and reflects the allocation of undistributed income described above.

For the three and six month periods ended April 1, 2022 and April 2, 2021, basic income per share for the Class A and Class B shares has been presented using the two class method and reflects the allocation of undistributed income described above.

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

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

For the three month periods ended December 31, 2021 and January 1, 2021, diluted net income per share reflects the effect of dilutive stock units and assumes the conversion of Class B common stock into Class A common stock.

Shares of non-vested stock that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive totaled 37,916 and 40,647 for the three months ended December 31, 2021 and January 1, 2021, respectively.

Stock units that could potentially dilute earnings per share in the future and which were not included in the fully diluted computation because they would have been anti-dilutive were 26,232 and 30,786 for the three month periods ended December 31, 2021 and January 1, 2021, respectively.

For the three and six month periods ended April 1, 2022 and April 2, 2021, diluted net income per share reflects the effect of dilutive stock units and assumes the conversion of Class B common stock into Class A common stock.

Shares of non-vested stock that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive totaled 39,163 and 40,024 for the three months ended April 1, 2022 and April 2, 2021, respectively, and 38,540 and 40,336 for the six months ended April 1, 2022 and April 2, 2021, respectively.

Stock units that could potentially dilute earnings per share in the future and which were not included in the fully diluted computation because they would have been anti-dilutive were 37,904 and 24,894 for the three month periods ended April 1, 2022 and April 2, 2021, respectively, and 33,966 and 32,917 for the six month periods ended April 1, 2022 and April 2, 2021, respectively.

Dividends per share

Dividends per share for the three month periods ended December 31, 2021 and January 1, 2021 were as follows:

Dividends per share for the three and six month periods ended April 1, 2022 and April 2, 2021 were as follows:

JOHNSON OUTDOORS INC.

Three Months Ended

December 31, 2021 January 1, 2021

Three Months Ended Six months ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Dividends declared per common share:

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

Under the Company’s 2012 Non-Employee Director Stock Ownership Plan and the 2020 Long-Term Incentive Plan (the only plans where shares currently remain available for future equity incentive awards) there were a total of 474,393 shares of the Company’s Class A common stock available for future grant to non-employee directors and key executives at December 31, 2021.

Under the Company’s 2012 Non-Employee Director Stock Ownership Plan and the 2020 Long-Term Incentive Plan (the only plans where shares currently remain available for future equity incentive awards) there were a total of 466,598 shares of the Company’s Class A common stock available for future grant to non-employee directors and key executives at April 1, 2022.

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

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

A summary of non-vested stock activity for the three months ended December 31, 2021 related to the Company’s stock ownership plans is as follows:

A summary of non-vested stock activity for the six months ended April 1, 2022 related to the Company’s stock ownership plans is as follows:

Shares Weighted Average

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Restricted stock vested ( 10,098 ) 92.08

Non-vested stock at December 31, 2021 39,003 86.13

Forfeitures ( 2,040 ) 73.52

Non-vested stock at April 1, 2022 40,411 82.02

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 1,778 and 2,341 during the three month periods ended December 31, 2021 and January 1, 2021, respectively.

Stock compensation expense, net of forfeitures, related to non-vested stock was $ 295 and $ 279 for the three month periods ended December 31, 2021 and January 1, 2021, respectively.

Unrecognized compensation cost related to non-vested stock as of December 31, 2021 was $ 1,858 , which amount will be amortized to expense through November 2025 or adjusted for changes in future estimated or actual forfeitures.

The fair value of restricted stock vested during the three month periods ended December 31, 2021 and January 1, 2021 was $ 573 and $ 658 , respectively.

Shares tendered back to the Company were 1,778 and 2,341 during the six month periods ended April 1, 2022 and April 2, 2021, respectively.

Stock compensation expense, net of forfeitures, related to non-vested stock was $ 266 and $ 297 for the three month periods ended April 1, 2022 and April 2, 2021, respectively, and $ 561 and $ 576 for the six month periods ended April 1, 2022 and April 2, 2021, respectively.

Unrecognized compensation cost related to non-vested stock as of April 1, 2022 was $ 2,072 , which amount will be amortized to expense through November 2025 or adjusted for changes in future estimated or actual forfeitures.

The fair value of restricted stock vested during the six month periods ended April 1, 2022 and April 2, 2021 was $ 1,053 and $ 1,258 , respectively.

Restricted Stock Units

All restricted stock units (RSUs) awarded by the Company have been granted in the form of units payable in shares of Class A common stock upon vesting.

The units are valued at the fair market value of a share of Class A common

JOHNSON OUTDOORS INC.

stock on the date of grant and vest within one year from the date of grant for RSUs granted to directors and three years from the date of grant for RSUs granted to employees.

All restricted stock units (RSUs) awarded by the Company have been granted in the form of units payable in shares of Class A common stock upon vesting.

The units are valued at the fair market value of a share of Class A common stock on the date of grant and vest within one year from the date of grant for RSUs granted to directors and three years from the date of grant for RSUs granted to employees.

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

A summary of RSU activity for the three months ended December 31, 2021 follows:

A summary of RSU activity for the six months ended April 1, 2022 follows:

Number of RSUs Weighted Average

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RSUs vested ( 22,192 ) 71.42

RSUs at December 31, 2021 67,334 82.42

Stock compensation expense, net of forfeitures, related to RSUs was $ 727 and $ 432 for the three months ended December 31, 2021 and January 1, 2021, respectively.

Unrecognized compensation cost related to non-vested RSUs as of December 31, 2021 was $ 4,322 , which amount will be amortized to expense through September 2024 or adjusted for changes in future estimated or actual forfeitures.

RSU's forfeited ( 1,340 ) 74.62

RSUs at April 1, 2022 65,994 82.58

Stock compensation expense, net of forfeitures, related to RSUs was $ 597 and $ 511 for the three month periods ended April 1, 2022 and April 2, 2021, respectively, and $ 1,325 and $ 943 for the six month periods ended April 1, 2022 and April 2, 2021, respectively.

Unrecognized compensation cost related to non-vested RSUs as of April 1, 2022 was $ 3,577 , which amount will be amortized to expense through September 2024 or adjusted for changes in future estimated or actual forfeitures.

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

Shares tendered back to the Company for this purpose were 2,799 and 3,320 during the three month periods ended December 31, 2021 and January 1, 2021, respectively.

The fair value of restricted stock units recognized as a tax deduction during the three month periods ended December 31, 2021 and January 1, 2021 was $ 2,759 and $ 2,148 , respectively.

Shares tendered back to the Company for this purpose were 2,799 and 3,320 during the six month periods ended April 1, 2022 and April 2, 2021, respectively.

The fair value of restricted stock units recognized as a tax deduction during the six month periods ended April 1, 2022 and April 2, 2021 was $ 2,849 and $ 2,148 , respectively.

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

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

During the three month period ended December 31, 2021, the Company issued 0 shares of Class A common stock and recognized $ 104 of expense in connection with the Employees' Stock Purchase Plan.

During the three month period ended January 1, 2021, the Company issued 0 shares of Class A common stock and recognized $ 0 of expense in connection with the Plan.

During the three month period ended April 1, 2022, the Company issued 0 shares of Class A common stock and recognized $ 96 of expense in connection with the Employees' Stock Purchase Plan.

During the six month period ended April 1, 2022, the Company issued 0 shares of Class A common stock and recognized $ 199 of expense in connection with the Employees' Stock Purchase Plan.

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

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

JOHNSON OUTDOORS INC.

5 PENSION PLANS

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

JOHNSON OUTDOORS INC.

During fiscal 2021, the Company terminated both the Johnson Outdoors Inc.

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

During the fourth quarter of fiscal 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.

1 unchanged sentence

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 made contributions of $ 25 and $ 43 to its plans for the three months ended December 31, 2021 and January 1, 2021, respectively.

The components of net periodic benefit cost related to Company sponsored defined benefit plans for the three month periods ended December 31, 2021 and January 1, 2021 were as follows:

Three Months Ended

December 31, 2021 January 1, 2021

The Company made contributions of $ 25 and $ 44 to its pension plans for the three months ended April 1, 2022 and April 2, 2021, respectively, and contributions of $ 50 and $ 88 for the six months ended April 1, 2022 and April 2, 2021, respectively.

The components of net periodic benefit cost related to Company sponsored defined benefit plans for the three and six month periods ended April 1, 2022 and April 2, 2021 were as follows:

Three Months Ended Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Components of net periodic benefit cost:

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Less estimated return on plan assets — 160 — 321

Amortization of unrecognized losses (gains) 21 134

Amortization of unrecognized losses 21 134 42 269

Net periodic benefit cost $ 28 $ 207 $ 56 $ 414

6 INCOME TAXES

For the three months ended December 31, 2021 and January 1, 2021, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:

Three Months Ended

For the three and six months ended April 1, 2022 and April 2, 2021, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:

Three Months Ended Six Months Ended

(thousands, except tax rate data)

December 31, 2021 January 1, 2021

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Profit before income taxes $ 13,210 $ 37,310 $ 27,799 $ 63,321

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Effective income tax rate 25.1 % 25.4 % 25.3 % 24.7 %

The effective tax rate was higher for the three months ended December 31, 2021 compared to the prior year period mainly due to the favorable impact from an intra-entity transfer of an asset other than inventory recorded in the prior year.

The effective tax rate for the three months ended April 1, 2022 and the prior year quarter were consistent with no primary factors materially impacting the rate.

The effective tax rate was higher for the six months ended April 1, 2022 compared to the prior year period mainly due to the favorable impact from an intra-entity transfer of an asset other than inventory recorded in the prior year.

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

The significant tax jurisdictions that have a valuation allowance for the periods ended December 31, 2021 and January 1, 2021 were:

December 31, 2021 January 1, 2021

The significant tax jurisdictions that have a valuation allowance for the periods ended April 1, 2022 and April 2, 2021 were:

JOHNSON OUTDOORS INC.

April 1, 2022 April 2, 2021

France France

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Switzerland Switzerland

JOHNSON OUTDOORS INC.

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

As a result, the Company may adjust the reserves for unrecognized tax benefits due to the impact of changes in its assumptions or as a result of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities and lapses of statutes of limitation.

The Company’s 2022 fiscal year tax expense is not anticipated to be materially impacted related to uncertain income tax positions.

The Company’s 2022 fiscal year tax expense is anticipated to be unchanged related to uncertain income tax positions.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized benefits as a component of income tax expense.

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2022 October 1,

2021 January 1,

2021 April 2,

Raw materials $ 163,390 $ 110,974 $ 74,780

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$ 235,220 $ 166,615 $ 124,538

The changes in goodwill during the three months ended December 31, 2021 and January 1, 2021 were as follows:

December 31, 2021 January 1, 2021

The changes in goodwill during the six months ended April 1, 2022 and April 2, 2021 were as follows:

April 1, 2022 April 2, 2021

Balance at beginning of period $ 11,221 $ 11,184

1 unchanged sentence

Balance at end of period $ 11,235 $ 11,231

JOHNSON OUTDOORS INC.

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

1 unchanged sentence

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

JOHNSON OUTDOORS INC.

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

The following table summarizes the Company’s warranty activity for the three months ended December 31, 2021 and January 1, 2021.

December 31, 2021 January 1, 2021

The following table summarizes the Company’s warranty activity for the six months ended April 1, 2022 and April 2, 2021.

April 1, 2022 April 2, 2021

Balance at beginning of period $ 14,073 $ 10,849

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11 INDEBTEDNESS

The Company had no debt outstanding at December 31, 2021, October 1, 2021, or January 1, 2021.

The Company had no debt outstanding at April 1, 2022, October 1, 2021, or April 2, 2021.

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

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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 rate on the Revolver at both December 31, 2021 and January 1, 2021 was approximately 1.1 %.

The interest rates on the Revolver at both April 1, 2022 and April 2, 2021 were approximately 1.4 % and 1.1 %, respectively.

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

Other Borrowings

The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of December 31, 2021 or January 1, 2021.

The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance, which totaled approximately $ 181 and $ 181 as of December 31, 2021 and January 1, 2021, respectively.

JOHNSON OUTDOORS INC.

The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of April 1, 2022 or April 2, 2021.

12 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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

Approximately 13 % of the Company’s revenues for the three month period ended December 31, 2021 were denominated in currencies other than the U.S.

Approximately 12 % of the Company’s revenues for the six month period ended April 1, 2022 were denominated in currencies other than the U.S.

Approximately 4 % were denominated in euros, approximately 6 % were denominated in Canadian dollars and approximately 1 % were denominated in Hong Kong dollars, with the remaining revenues denominated in various other foreign currencies.

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

As of December 31, 2021 and January 1, 2021, the Company held no foreign currency forward contracts.

As of April 1, 2022 and April 2, 2021, the Company held no foreign currency forward contracts.

13 FAIR VALUE MEASUREMENTS

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

The carrying amounts of cash, cash equivalents, short term investments, accounts receivable, and accounts payable approximated their fair values at December 31, 2021, October 1, 2021 and January 1, 2021 due to the short term maturities of these instruments.

The carrying amounts of cash, cash equivalents, short term investments, accounts receivable, and accounts payable approximated their fair values at April 1, 2022, October 1, 2021 and April 2, 2021 due to the short term maturities of these instruments.

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

1 unchanged sentence

Rabbi Trust Assets

JOHNSON OUTDOORS INC.

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

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

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the accompanying Condensed Consolidated Statements of Operations.

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

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

The following table summarizes the Company’s financial assets measured at fair value as of December 31, 2021:

The following table summarizes the Company’s financial assets measured at fair value as of April 1, 2022:

Level 1 Level 2 Level 3 Total

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

The following table summarizes the Company’s financial assets measured at fair value as of January 1, 2021:

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

Level 1 Level 2 Level 3 Total

Rabbi trust assets $ 26,186 $ — $ — $ 26,186

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three month periods ended December 31, 2021 and January 1, 2021 was:

Three Months Ended

Location of income recognized in Statement of Operations December 31, 2021 January 1, 2021

Rabbi trust assets Other income, net $ 1,095 $ 2,596

There were no assets or liabilities measured at fair value on a non-recurring basis in periods subsequent to their initial recognition for either of the three month periods ended December 31, 2021 or January 1, 2021.

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three and six month periods ended April 1, 2022 and April 2, 2021 was:

Three Months Ended Six months ended

Location of (expense) income recognized in Statement of Operations April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Rabbi trust assets Other (expense) income, net $ ( 2,144 ) $ 1,204 $ ( 1,049 ) $ 3,800

There were no assets or liabilities measured at fair value on a non-recurring basis in periods subsequent to their initial recognition for either of the six month periods ended April 1, 2022 or April 2, 2021.

14 NEW ACCOUNTING PRONOUNCEMENTS

5 unchanged sentences

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.

JOHNSON OUTDOORS INC.

In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans (Topic 715) , which modifies the disclosure requirements for employers that sponsor defined pension or postretirement plans.

1 unchanged sentence

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

JOHNSON OUTDOORS INC.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes.

2 unchanged sentences

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 adopted the provisions of this ASU in the first quarter of fiscal 2022, however, the ASU did not have a significant impact on its financial statements or disclosures.

The Company adopted the provisions of this ASU in the first quarter of fiscal 2022, however, the ASU did not have a significant impact on its financial statements.

Recently issued accounting pronouncements

2 unchanged sentences

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

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

The Company does not expect this guidance to have a significant impact on its financial statements and disclosures.

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied;

14 unchanged sentences

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

At December 31, 2021, the right to returns asset was $ 780 and the accrued returns liability was $ 2,092 .

At January 1, 2021, the right to returns asset was $ 1,367 and the accrued returns liability was $ 3,621 .

At April 1, 2022, the right to returns asset was $ 827 and the accrued returns liability was $ 2,283 .

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

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.

3 unchanged sentences

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.

JOHNSON OUTDOORS INC.

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.

1 unchanged sentence

See Note 16 for required disclosures of disaggregated revenue.

JOHNSON OUTDOORS INC.

16 SEGMENTS OF BUSINESS

1 unchanged sentence

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

During the three month period ended December 31, 2021, combined net sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 27,305 of the Company's consolidated revenues.

During the three month period ended January 1, 2021, combined net sales to two customers of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 53,573 of the Company's consolidated revenues.

During the three and six month periods ended April 1, 2022, combined net sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 21,616 and $ 48,921 , respectively, of the Company's consolidated revenues.

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

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

Total assets represent assets that are used in the Company’s operations in each business segment at the end of the periods presented.

JOHNSON OUTDOORS INC.

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

Three Months Ended

December 31, 2021 January 1, 2021 October 1, 2021

Three Months Ended Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021 October 1, 2021

Unaffiliated customers $ 129,134 $ 159,770 $ 237,315 $ 286,629

24 unchanged sentences

$ — $ — $ 668,789 $ 618,980 $ 674,287

JOHNSON OUTDOORS INC.

17 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in Accumulated Other Comprehensive Income (“AOCI”) by component, net of tax, for the three months ended December 31, 2021 were as follows:

The changes in Accumulated Other Comprehensive Income (“AOCI”) by component, net of tax, for the three months ended April 1, 2022 were as follows:

JOHNSON OUTDOORS INC.

Adjustment Unamortized

4 unchanged sentences

Income (Loss)

Balance at December 31, 2021 $ 7,183 $ ( 204 ) $ 6,979

Other comprehensive income before reclassifications 168 — 168

Amounts reclassified from accumulated other comprehensive income — 22 22

Tax effects — ( 6 ) ( 6 )

Balance at April 1, 2022 $ 7,351 $ ( 188 ) $ 7,163

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

Adjustment Unamortized

Loss on Defined

Benefit Pension

Plans Accumulated

Comprehensive

Income (Loss)

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

Other comprehensive income before reclassifications ( 1,512 ) — ( 1,512 )

Amounts reclassified from accumulated other comprehensive income — 134 134

Tax effects — ( 33 ) ( 33 )

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

The changes in AOCI by component, net of tax, for the six months ended April 1, 2022 were as follows:

Adjustment Unamortized

Loss on Defined

Benefit Pension

Plans Accumulated

Comprehensive

Income (Loss)

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

2 unchanged sentences

Tax effects — ( 11 ) ( 11 )

Balance at December 31, 2021 $ 7,183 $ ( 204 ) $ 6,979

The changes in AOCI by component, net of tax, for the three months ended January 1, 2021 were as follows:

Balance at April 1, 2022 $ 7,351 $ ( 188 ) $ 7,163

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

Adjustment Unamortized

5 unchanged sentences

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

Other comprehensive income before reclassifications 2,442 — 2,442

Other comprehensive loss before reclassifications 930 — 930

Amounts reclassified from accumulated other comprehensive income — 269 269

Tax effects — ( 67 ) ( 67 )

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

The reclassifications out of AOCI for the three months ended December 31, 2021 and January 1, 2021 were as follows:

Three Months Ended

December 31, 2021 January 1, 2021 Statement of Operations

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

The reclassifications out of AOCI for the three and six months ended April 1, 2022 and April 2, 2021 were as follows:

JOHNSON OUTDOORS INC.

Three Months Ended Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021 Statement of Operations

Unamortized loss on defined benefit pension plans:

2 unchanged sentences

Total reclassifications for the period $ 16 $ 101 $ 21 $ 202

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 December 31, 2021, the Company had approximately 200 leases, with remaining terms ranging from less than one year to 18 years.

The Company determines if an arrangement is a lease at inception.

As of April 1, 2022, the Company had approximately 200 leases, with remaining terms ranging from less than one year to 18 years.

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

2 unchanged sentences

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 definition of a lease, and the determination of the discount rate, which is assumed to be the incremental borrowing rate.

The incremental borrowing

JOHNSON OUTDOORS INC.

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

The components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations for the three months ended December 31, 2021 and January 1, 2021 were as follows:

Three months ended

December 31, 2021 January 1, 2021

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 applicable 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.

The components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended April 1, 2022 and April 2, 2021 were as follows:

Three months ended Six months ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Operating lease costs $ 2,111 $ 2,290 $ 4,218 $ 4,077

2 unchanged sentences

Total lease cost $ 2,699 $ 2,668 $ 5,265 $ 4,972

Included in the amounts in the table above were rent expense to related parties of $ 291 and $ 255 for the three months ended December 31, 2021 and January 1, 2021, respectively.

As of December 31, 2021, the Company did not have any finance leases or sublease agreements.

Included in the amounts in the table above were rent expense to related parties of $ 290 and $ 581 for the three and six months ended April 1, 2022, respectively, and $ 261 and $ 516 for the three and six months ended April 2, 2021, respectively.

As of April 1, 2022, the Company did not have any finance leases or sublease agreements.

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

While the Company extended or renewed various existing leases during the quarter, there were no significant new leases entered into during the quarter ended December 31, 2021.

While the Company extended or renewed various existing leases during the quarter, there were no significant new leases entered into during the quarter ended April 1, 2022.

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

Three months ended

December 31, 2021 January 1, 2021

JOHNSON OUTDOORS INC.

Six months ended

April 1, 2022 April 2, 2021

Operating leases:

6 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities $ 3,739 $ 3,757

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at December 31, 2021 were as follows:

JOHNSON OUTDOORS INC.

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at April 1, 2022 were as follows:

Year Related parties included

11 unchanged sentences

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 December 31, 2021, the Company did not have any other additional significant operating lease commitments that have not yet commenced.

As of April 1, 2022, the Company did not have any other additional significant operating lease commitments that have not yet commenced.

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

What changed 10-Q

Item 1. Financial Statements