What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-09 compared with 2022-02-04 · 109 added, 76 removed, 104 unchanged (64% of the section changed)

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This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes comments and analysis relating to the results of operations and financial condition of Johnson Outdoors Inc.

and its subsidiaries (collectively, the “Company”) as of and for the three month periods ended December 31, 2021 and January 1, 2021.

and its subsidiaries (collectively, the “Company”) as of and for the three and six month periods ended April 1, 2022 and April 2, 2021.

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

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• Critical Accounting Policies and Estimates

JOHNSON OUTDOORS INC.

This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related notes that immediately precede this section, as well as the Company’s Annual Report on Form 10-K for the fiscal year ended October 1, 2021 which was filed with the Securities and Exchange Commission on December 10, 2021.

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trade policies, tariffs, and the reaction of other countries to such changes;

the global outbreaks of disease, such as the COVID-19 pandemic which has affected, and may continue to affect, market and economic conditions, and the timing, pricing and continued availability of raw materials and components from our supply chain, along with wide-ranging impacts on employees, customers, suppliers and various aspects of our operations;

JOHNSON OUTDOORS INC.

Company’s success in implementing its strategic plan, including its targeted sales growth platforms, innovation focus and its increasing digital presence;

the Company’s success in implementing its strategic plan, including its targeted sales growth platforms, innovation focus and its increasing digital presence;

litigation costs related to actions of and disputes with third parties, including competitors;

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

any disruptions in the Company's supply chain as a result of material fluctuations in the Company's order volumes and requirements for raw materials and other components, or the demand for those same raw materials and components by third parties, that are necessary to manufacture and produce the Company's products;

any disruptions in the Company's supply chain as a result of material fluctuations in the Company's order volumes and requirements for raw materials and other components, or the demand for those same raw materials and components by third parties, necessary to manufacture and produce the Company's products;

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

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unanticipated outcomes related to litigation matters;

and adverse weather conditions.

and adverse weather conditions and other factors impacting climate change legislation.

Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.

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Due to the timing of the COVID-19 outbreak, the Company's traditional seasonal pacing, where our heaviest sales volumes typically occurred during our second and third fiscal quarters, shifted during fiscal 2020 and fiscal 2021.

During those years, increased participation in fishing, camping and watercraft recreation and related demand for our products, largely driven by consumer desire to engage in socially distant and safe activities outdoors as a reaction to the COVID-19 pandemic led to increased sales volumes across all Company segments.

This demand continued into the first quarter of fiscal 2022.

In addition to this significant increase in demand for Company products during fiscal 2021 and into the first quarter of fiscal 2022, COVID-19 has also caused widely-documented supply chain and logistics disruptions across industries, including those in which we operate, which have been exacerbated during the latter half of fiscal 2021 and into fiscal 2022 due to the higher demand for our outdoor recreation products and associated inventory replenishment actions of our customers.

JOHNSON OUTDOORS INC.

participation in fishing, camping, watercraft recreation and diving and related demand for our products, largely driven by consumer desire to engage in socially distant and safe activities outdoors as a reaction to the COVID-19 pandemic led to increased sales volumes across all Company segments during fiscal 2021.

This strong demand continued into the first two quarters of fiscal 2022.

In addition to this significant increase in demand for Company products during fiscal 2021 and fiscal 2022 to date, COVID-19 has also caused widely-documented supply chain and logistics disruptions across industries, including those in which we operate, which have been exacerbated by the higher demand for our outdoor recreation products and associated inventory replenishment actions of our customers.

These adverse supply chain and logistics constraints and disruptions have impacted the timing, sourcing, availability and cost of raw materials and components that are necessary to manufacture our outdoor recreation products.

During the fourth quarter of fiscal 2021, certain of the Company's component suppliers and logistical service providers experienced disruptions, resulting in supply shortages across all of our segments for certain materials and components that are necessary to produce our products.

Moreover, during the first quarter of fiscal 2022, the Fishing segment was significantly impacted by these supply chain and logistical infrastructure disruptions, resulting in decreased sales volumes in that segment over the same quarter in the prior year.

As a result of these disruptions, the Company has taken certain preliminary actions to attempt to meet the continued strong consumer demand for its products to continue to fulfill product orders.

Certain of the Company's component suppliers and logistical service providers experienced disruptions, resulting in supply shortages across all of our segments for certain materials and components that are necessary to produce our products.

Moreover, during the first two quarters of fiscal 2022, the Fishing segment was significantly impacted by these supply chain and logistical infrastructure disruptions, resulting in decreased sales volumes in that segment over the same periods in the prior year.

As a result of these disruptions, the Company has taken certain actions to attempt to meet the continued strong consumer demand for its products to continue to fulfill product orders.

These actions include building and procuring numerous categories of inventory (in some cases at significantly higher price points than what was historically paid) to mitigate against potential shortages during fiscal 2022 in certain of its materials and components that are necessary to manufacture Company products.

These buying actions have subsequently resulted in decreased margins and in the Company carrying significantly higher levels of inventory for a number of its materials, components and products at the end of the first fiscal quarter of 2022.

Because the Company expects that these same supply chain and logistics disruptions will continue throughout fiscal 2022, the Company remains focused on evaluating and pursuing additional options (beyond building inventory) to meet the continued

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strong consumer demand for its products.

Nonetheless, these supply chain and logistics disruptions remain fluid and will likely impact the cost of goods sold for future sales of product or the Company’s ability to fill all customer demand for its products, especially given the volatility and changing circumstances brought on by the COVID-19 pandemic and its impact on the global supply chain and logistics infrastructure.

Net sales of $153,524 for the first quarter of fiscal 2022 decreased $12,143, or 7%, from the same period in the prior year.

These buying actions have subsequently resulted in decreased margins and the Company carrying significantly higher levels of inventory for a number of its materials, components and products at the end of each of the first two fiscal quarters of 2022.

Nonetheless, these supply chain and logistics disruptions remain fluid and will likely adversely impact the cost of goods sold for future sales of product for the remainder of fiscal 2022 and/or adversely impact the Company’s ability to fill all customer demand for its products, especially given the volatility and changing circumstances brought on by the COVID-19 pandemic and its impact on the global supply chain and logistics infrastructure.

Net sales of $189,623 for the second quarter of fiscal 2022 decreased $16,533, or 8%, from the same period in the prior year.

While consumer demand remains strong, sales volumes have been negatively impacted by product availability and supply chain disruptions, particularly in Fishing, the Company's largest segment.

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The Company’s business is seasonal in nature.

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

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

The table below sets forth a historical view of the Company’s seasonality during the last three fiscal years.

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Results of Operations

JOHNSON OUTDOORS INC.

The Company’s net sales and operating profit (loss) by business segment for the periods shown below were as follows:

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

Fishing $ 129,323 $ 160,016 $ 237,679 $ 287,015

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Total $ 15,429 $ 36,036 $ 29,189 $ 59,593

JOHNSON OUTDOORS INC.

See “Note 16 – Segments of Business” of the notes to the accompanying Condensed Consolidated Financial Statements for the definition of segment net sales and operating profit.

Consolidated net sales for the three months ended December 31, 2021 were $153,524, a decrease of $12,143, or 7%, compared to $165,667 for the three months ended January 1, 2021.

Foreign currency translation had virtually no impact on current year first quarter net sales compared to the prior year's first quarter net sales.

Net sales for the three months ended December 31, 2021 for the Fishing business were $108,356, a decrease of $18,643, or 15%, from $126,999 during the first fiscal quarter of the prior year.

While demand remains strong, the decrease was driven by significant supply chain disruptions and the resulting unavailability of components experienced in the first fiscal quarter of 2022, which limited the Company's ability to fill all product orders.

Net sales for the Camping business were $14,134 for the first quarter of the current fiscal year, an increase of $1,940, or 16%, from the prior year net sales during the same period of $12,194 due to increased sales of military tents as well as for Jetboil and Eureka!

consumer camping products evidencing the continued strong participation in outdoor recreation activities by the public.

Net sales for the first quarter of fiscal 2022 for the Watercraft Recreation business were $14,600, an increase of $2,157, or 17%, compared to $12,443 in the prior year same period.

Consolidated net sales for the three months ended April 1, 2022 were $189,623, a decrease of $16,533, or 8%, compared to $206,156 for the three months ended April 2, 2021.

Foreign currency translation had virtually no impact on current year second quarter net sales compared to the prior year's second quarter net sales.

Net sales for the three months ended April 1, 2022 for the Fishing business were $129,323, a decrease of $30,693, or 19%, from $160,016 during the second fiscal quarter of the prior year.

While product demand remains strong, the decrease in Fishing was driven by significant supply chain disruptions and the resulting unavailability of components experienced in the current year quarter.

Net sales for the Camping business were $19,167 for the second quarter of the current fiscal year, an increase of $4,923, or 35%, from the prior year net sales during the same period of $14,244 due to increased sales of Jetboil and Eureka!

consumer camping products due to continued strong participation in outdoor recreation activities.

Net sales for the second quarter of fiscal 2022 for the Watercraft Recreation business were $23,009, an increase of $5,231, or 29%, compared to $17,778 in the prior year same period.

Continued strong demand for the segment's Sportsman line and successful pedal and motorized product offerings drove the increase over the prior year quarter.

Net sales for Diving, our most global business, for the first quarter of fiscal 2022 were $16,491, an increase of $2,398 or 17% versus $14,093 for the three months ended January 1, 2021.

In the prior year first quarter, demand was severely deflated due to the effects of COVID-19 which caused the closure of destination travel locations and resulted in lower tourism activities.

Sales volumes have increased in this segment as markets in several regions around the world have begun to recover.

The increase in sales volumes was partially offset by an unfavorable foreign currency translation impact on sales in this segment of approximately 2% versus the prior year quarter.

Net sales for Diving, our most global business, for the second quarter of fiscal 2022 were $18,194, an increase of $3,986 or 28% versus $14,208 for the three months ended April 2, 2021.

In the prior year second quarter, demand was deflated due to the effects of COVID-19 which caused the closure of destination travel locations and resulted in lower tourism activities that tend to generate demand for our products in this segment.

As several regions around the world have re-opened, sales volumes have increased.

Foreign currency translation had an unfavorable impact on sales in this segment of approximately 2% versus the prior year quarter.

For the six months ended April 1, 2022, consolidated net sales of $343,147 decreased $28,676 or 8% compared to $371,823 for the six months ended April 2, 2021.

Foreign currency translation had virtually no impact on net sales of the current year to date period versus the prior year to date period.

Net sales for the six months ended April 1, 2022 for the Fishing business were $237,679, a decrease of $49,336, or 17% from $287,015 during the same period of the prior year.

The decrease over the prior year to date period was driven mainly by the

JOHNSON OUTDOORS INC.

previously discussed logistics and supply chain disruptions which adversely impacted our ability to satisfy demand for product orders.

Net sales for the Camping business were $33,301 for the six months ended April 1, 2022, an increase of $6,863, or 26%, from the prior year net sales during the same period of $26,438.

Increased sales of Jetboil and Eureka!

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

Net sales for the six months ended April 1, 2022 for the Watercraft Recreation business were $37,609, an increase of $7,388, or 24%, compared to $30,221 in the prior year same period.

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

Diving net sales were $34,685 for the six months ended April 1, 2022 versus $28,301 for the six months ended April 2, 2021, an increase of $6,384, or 23%.

The sales increase was largely due to increased demand for our products as the global tourism industry has started to recover.

The impact of increased sales volumes was offset in part by the unfavorable effect of foreign currency translation of 3% versus the prior year to date period.

Cost of Sales

Cost of sales for the three months ended December 31, 2021 was $92,893 compared to $90,637 for the three months ended January 1, 2021.

Cost of sales for the three months ended April 1, 2022 was $121,038 compared to $112,902 for the three months ended April 2, 2021.

The increase year over year was driven primarily by increases in costs, specifically increased materials costs and increased inbound freight costs, as the Company continues to manage disruptions in its supply chain to ensure the availability of necessary components, parts and other raw materials across our segments to try to meet sales demand for our products.

For the six months ended April 1, 2022, cost of sales was $213,931 compared to $203,539 in the same period of the prior year.

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

Gross Profit Margin

For the three months ended December 31, 2021, gross profit as a percentage of net sales was 39.5% compared to 45.3% in the three month period ended January 1, 2021.

While the Company has taken price increases across its operating segments, they were not enough to offset the negative gross profit impact associated with the cost increases noted above.

For the three months ended April 1, 2022, gross profit as a percentage of net sales was 36.2% compared to 45.2% in the three month period ended April 2, 2021.

While the Company has implemented price increases across product lines, they were not enough to offset the negative gross profit impact of cost increases noted above as well as reduced overhead absorption.

For the six months ended April 1, 2022, gross profit as a percentage of net sales was 37.7% compared to 45.3% in the prior six month period.

As noted above, the Company has implemented price increases across product lines, but they have not been significant enough to offset the negative gross profit impact of cost increases and reduced overhead absorption noted above.

Operating Expenses

Operating expenses were $46,871 for the three months ended December 31, 2021, compared to $51,473 for the three months ended January 1, 2021.

The decrease of $4,602 was primarily due to the impact of lower sales volume-driven expenses as total expenses remained consistent as a percent of net sales year over year.

Operating expenses were $53,156 for the three months ended April 1, 2022, compared to $57,218 for the three months ended April 2, 2021.

The decrease of $4,062 was primarily due to the impact of lower sales volume-driven expenses, as well as lower variable and deferred compensation expense, between quarters.

Unfavorable market conditions on the Company's deferred compensation plan assets resulted in approximately $3,300 of lower deferred compensation expense in the current year quarter as compared to the prior year quarter, which was entirely offset by a loss in Other Expense (Income), net related to marking these deferred compensation plan assets to market.

Operating expenses were $100,027 for the six months ended April 2, 2021, compared to $108,691 for the six months ended April 2, 2021.

The decrease of $8,664 was primarily due to the impact of lower sales volume-driven expenses, as well as lower variable and deferred compensation expense, between periods.

Unfavorable market conditions on the Company's deferred compensation plan assets resulted in approximately $4,700 of lower deferred compensation expense in the current year to date period as compared to the prior year to date period, which was entirely offset by a loss in Other Expense (Income), net related to marking these deferred compensation plan assets to market.

Operating Profit

Operating profit on a consolidated basis for the three month period ended December 31, 2021 was $13,760, compared to an operating profit of $23,557 in the first quarter of the prior fiscal year.

Lower sales volumes and the other factors discussed above were the primary drivers of the decrease in operating profit between quarters.

Interest expense was $38 and $32 for the three months ended December 31, 2021 and January 1, 2021, respectively.

Interest income for the three month periods ended December 31, 2021 and January 1, 2021 was $93 and $82, respectively.

Operating profit on a consolidated basis for the three month period ended April 1, 2022 was $15,429, compared to an operating profit of $36,036 in the second quarter of the prior fiscal year.

Lower sales volumes and reduced gross margins as discussed above were the primary drivers of the decrease in operating profit between quarters.

Operating profit on a consolidated basis for the six months ended April 1, 2022 was $29,189, compared to an operating profit of $59,593 in the prior year to date period.

The decrease year over year was driven primarily by lower sales volumes and reduced gross margins as discussed above.

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Other Income, net

Other income was $774 for the three months ended December 31, 2021 compared to $2,404 in the prior year period.

Investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan were $1,344 in the three month period ended December 31, 2021 compared to $2,737 in the three month period ended January 1, 2021.

The change year over year in the investment value of these assets was offset by the deferred compensation expense included in the Company's Operating expenses during the same periods.

For the three months ended December 31, 2021, foreign currency exchange losses were $366 compared to $96 for the three months ended January 1, 2021.

Interest expense was $49 and $35 for the three months ended April 1, 2022 and April 2, 2021, respectively.

Interest expense was $87 for the six months ended April 1, 2022 compared to $67 for the six months ended April 2, 2021.

Interest income for the three month periods ended April 1, 2022 and April 2, 2021 was $102 and $80, respectively.

Interest income was $195 for the six months ended April 1, 2022 compared to $162 for the six months ended April 2, 2021.

Other Expense (Income), net

Other expense was $2,272 for the three months ended April 1, 2022 compared to other income of $1,229 in the prior year period.

Net investment losses on the assets related to the Company’s non-qualified deferred compensation plan were $2,046 in the three month period ended April 1, 2022 compared to net investment gains and earnings of $1,257 in the three month period ended April 2, 2021.

The change year over year in the investment value of these assets was offset by the decrease in deferred compensation expense included in the Company's Operating expenses during the same periods.

For the three months ended April 1, 2022, foreign currency exchange losses were $146 compared to gains of $217 for the three months ended April 2, 2021.

For the six months ended April 1, 2022, other expense was $1,498 compared to other income of $3,633 in the six months ended April 2, 2021.

Net investment losses on the assets related to the Company’s non-qualified deferred compensation plan in the six months ended April 1, 2022 were $702, compared to net investment gains and earnings of $3,994 in the six months ended April 2, 2021.

Foreign currency exchange losses were $513 for the six months ended April 1, 2022, compared to gains of $121 for the six months ended April 2, 2021.

Income Tax Expense

The Company’s provision for income taxes is based upon estimated annual effective tax rates in the tax jurisdictions in which the Company operates.

The effective tax rate for the three month period ended December 31, 2021 was 25.6% compared to 23.7% in the corresponding period of the prior year.

The key factor impacting the effective tax rate was the favorable impact from an intra-entity transfer of assets other than inventory reported in the prior year period.

Net income for the three months ended December 31, 2021 was $10,856, or $1.07 per diluted common class A and B share, compared to net income of $19,847, or $1.96 per diluted common class A and B share, for the first quarter of the prior fiscal year.

The effective tax rate for the three and six month periods ended April 1, 2022 were 25.1% and 25.3%, respectively, compared to 25.4% and 24.7% in the corresponding periods of the prior year.

A key factor impacting the effective tax rate for the six months ended April 2, 2021 was the favorable impact from an intra-entity transfer of assets other than inventory reported in the prior year period.

Net income for the three months ended April 1, 2022 was $9,900, or $0.97 per diluted common class A and B share, compared to net income of $27,834, or $2.74 per diluted common class A and B share, for the second quarter of the prior fiscal year.

Net income for the six months ended April 1, 2022 was $20,756, or $2.04 per diluted common class A and B share, compared to net income of $47,681, or $4.70 per diluted common class A and B share, for the six months ended April 2, 2021.

Liquidity and Financial Condition

Cash and cash equivalents totaled $167,473 as of December 31, 2021, compared to cash and cash equivalents of $195,923 as of January 1, 2021.

The decrease in cash year over year was due primarily to the Company's action to build and procure numerous categories of inventory (in some cases at significantly higher prices than was historically paid) in an attempt to mitigate against potential supply chain shortages during this fiscal year.

The Company’s debt to total capitalization ratio was 0% as of December 31, 2021 and January 1, 2021.

The Company’s total debt balance was $0 as of each of December 31, 2021 and January 1, 2021.

Cash and cash equivalents totaled $113,186 as of April 1, 2022, compared to cash and cash equivalents of $186,921 as of April 2, 2021.

The decrease in cash year over year was due primarily to the Company's decision to build and procure numerous categories of inventory (in some cases at significantly higher prices than was historically paid) in an attempt to mitigate against potential shortages during this fiscal year.

The Company’s debt to total capitalization ratio was 0% as of April 1, 2022 and April 2, 2021.

The Company’s total debt balance was $0 as of each of April 1, 2022 and April 2, 2021.

See “Note 11 – Indebtedness” in the notes to the Company’s accompanying condensed consolidated financial statements for further discussion.

Accounts receivable, net of allowance for doubtful accounts, were $86,689 as of December 31, 2021, a decrease of $10,697 compared to $97,386 as of January 1, 2021.

Accounts receivable, net of allowance for doubtful accounts, were $119,517 as of April 1, 2022, a decrease of $10,622 compared to $130,139 as of April 2, 2021.

The decrease is consistent with decreased sales volumes year over year.

Inventories were $217,431 as of December 31, 2021, an increase of $102,582, compared to $114,849 as of January 1, 2021.

As noted above, the increase in our inventory balances over the prior year period is due to increased raw material and other component purchases in an effort to meet increased demand for products in the current year period in the event that the current supply chain and logistics infrastructure disruptions continue as expected during fiscal 2022.

Accounts payable were $59,241 at December 31, 2021 compared to $44,908 as of January 1, 2021, which increase corresponded with the increase in inventory balances between periods.

Inventories were $235,220 as of April 1, 2022, an increase of $110,682, compared to $124,538 as of April 2, 2021.

As noted above, the increase in our inventory balances over the prior year period is due to increased raw material and other component purchases, at higher costs, in an effort to meet increased demand for products in the current year period.

Accounts payable were $56,720 at April 1, 2022 compared to $50,609 as of April 2, 2021, which increase corresponded with the increase in inventory balances between periods.

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The Company’s cash flows from operating, investing and financing activities, as presented in the Company’s accompanying Condensed Consolidated Statements of Cash Flows, are summarized in the following table:

Three months ended

(thousands) December 31,

2021 January 1,

Cash provided by (used for):

Six months ended

(thousands) April 1,

2022 April 2,

Cash used for:

Operating activities $ (104,648) $ (11,955)

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Operating Activities

JOHNSON OUTDOORS INC.

Cash used for operations totaled $62,773 for the three months ended December 31, 2021 compared to $11,238 during the corresponding period of the prior fiscal year.

The increase in cash used for operations over the prior year three month period was due primarily to the Company's decision to build and procure inventory in its attempt to mitigate against shortages, all as described in greater detail above.

Depreciation and amortization charges were $3,492 for the three month period ended December 31, 2021 compared to $3,493 for the corresponding period of the prior year.

Cash used for operations totaled $104,648 for the six months ended April 1, 2022 compared to $11,955 during the corresponding period of the prior fiscal year.

The increase in cash used for operations over the prior year six month period was due primarily to the Company's decision to build and procure inventory in its attempt to mitigate against shortages in meeting product demand.

Lower net income in the current year to date period also contributed to increased use of cash between periods.

Depreciation and amortization charges were $6,914 for the six month period ended April 1, 2022 compared to $6,751 for the corresponding period of the prior year.

Investing Activities

Cash used for investing activities totaled $6,244 for the three months ended December 31, 2021 compared to $4,388 for the corresponding period of the prior fiscal year.

Cash usage for capital expenditures totaled $6,244 for the current year three month period and $4,390 for the prior year period.

Cash used for investing activities totaled $15,722 for the six months ended April 1, 2022 compared to $9,822 for the corresponding period of the prior fiscal year.

Cash usage for capital expenditures totaled $15,724 for the current year six month period and $9,828 for the prior year period.

The increase in capital expenditures in the current year period is primarily related to the expansion of the Fishing facility to accommodate additional production.

Any additional capital expenditures in fiscal 2022 are expected to be funded by working capital.

Financing Activities

Cash used for financing activities totaled $3,466 for the three months ended December 31, 2021 compared to $2,589 for the three month period ended January 1, 2021 and represents the payment of dividends and purchase of treasury stock.

The Company had no debt during either quarter ended December 31, 2021 and January 1, 2021.

Cash used for financing activities totaled $6,528 for the six months ended April 1, 2022 compared to $4,690 for the six month period ended April 2, 2021 and represents the payment of dividends and purchase of treasury stock.

The Company had no debt during either quarter ended April 1, 2022 and April 2, 2021.

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

As of December 31, 2021 the Company held approximately $55,434 of cash and cash equivalents in bank accounts in foreign taxing jurisdictions.

As of April 1, 2022 the Company held approximately $52,895 of cash and cash equivalents in bank accounts in foreign taxing jurisdictions.

Contractual Obligations and Off Balance Sheet Arrangements

The Company has contractual obligations and commitments to make future payments including under operating leases and open purchase orders.

There have been no changes outside of the ordinary course of business in the specified contractual obligations during the quarter ended December 31, 2021.

There have been no changes outside of the ordinary course of business in the specified contractual obligations during the quarter ended April 1, 2022.

The Company utilizes letters of credit primarily as security for the payment of future claims under its workers compensation insurance.

Letters of credit outstanding were approximately $181 and $181 as of December 31, 2021 and January 1, 2021, respectively.

The Company anticipates making contributions of $71 to its defined benefit pension plans during the remainder of fiscal 2022.

Letters of credit outstanding were approximately $181 and $181 as of April 1, 2022 and April 2, 2021, respectively.

The Company anticipates making contributions of $46 to its defined benefit pension plan during the remainder of fiscal 2022.

The Company has no other off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The Company’s critical accounting policies and estimates are identified in the Company’s Annual Report on Form 10-K for the fiscal year ending October 1, 2021 in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “Critical Accounting Estimates”, which was filed with the Securities and Exchange Commission on December 10, 2021.

There were no significant changes to the Company’s critical accounting policies and estimates during the three months ended December 31, 2021.

JOHNSON OUTDOORS INC.

under the heading “Critical Accounting Estimates”, which was filed with the Securities and Exchange Commission on December 10, 2021.

There were no significant changes to the Company’s critical accounting policies and estimates during the six months ended April 1, 2022.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis