JOHNSON OUTDOORS INC 10-Q

Item 1. Financial Statements CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended Nine Months Ended (thousands, except per share data) June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Net sales $ 172,472 $ 187,047 $ 486,972 $ 567,499 Cost of sales 110,650 109,460 310,865 351,798 Gross profit 61,822 77,587 176,107 215,701 Operating expenses: Marketing and selling 41,109 39,504 111,040 113,585 Administrative management, finance and information systems 13,935 12,638 42,302 43,944 Research and development 7,284 8,002 23,478 23,867 Total operating expenses 62,328 60,144 176,820 181,396 Operating (loss) profit ( 506 ) 17,443 ( 713 ) 34,305 Interest income ( 1,123 ) ( 1,244 ) ( 3,178 ) ( 2,806 ) Interest expense 37 39 115 114 Other income, net ( 327 ) ( 1,174 ) ( 7,468 ) ( 10,939 ) Profit before income taxes 907 19,822 9,818 47,936 Income tax (benefit) expense ( 715 ) 5,021 2,085 12,395 Net income $ 1,622 $ 14,801 $ 7,733 $ 35,541 Weighted average common shares - Basic: Class A 9,024 8,980 9,007 8,963 Class B 1,208 1,208 1,208 1,208 Participating securities 17 22 17 16 Weighted average common shares - Dilutive 10,249 10,210 10,232 10,187 Net income per common share - Basic: Class A $ 0.16 $ 1.46 $ 0.75 $ 3.51 Class B $ 0.16 $ 1.33 $ 0.75 $ 3.19 Net income per common share - Diluted: Class A $ 0.16 $ 1.44 $ 0.75 $ 3.47 Class B $ 0.16 $ 1.44 $ 0.75 $ 3.47 The accompanying notes are an integral part of the condensed consolidated financial statements. - 1 - Index JOHNSON OUTDOORS INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) Three Months Ended Nine Months Ended (thousands) June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Net income $ 1,622 $ 14,801 $ 7,733 $ 35,541 Other comprehensive income (loss): Foreign currency translation ( 439 ) 1,018 241 4,462 Unrealized gain (loss) on available-for-sale securities, net of tax 14 ( 126 ) 98 ( 126 ) Change in pension plans, net of tax 6 9 21 25 Total other comprehensive (loss) income ( 419 ) 901 360 4,361 Total comprehensive income $ 1,203 $ 15,702 $ 8,093 $ 39,902 The accompanying notes are an integral part of the condensed consolidated financial statements. - 2 - Index JOHNSON OUTDOORS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (thousands, except share data) June 28, 2024 September 29, 2023 June 30, 2023 ASSETS Current assets: Cash and cash equivalents $ 126,823 $ 111,854 $ 122,596 Short term investments 21,546 26,764 26,651 Accounts receivable, net 79,593 43,159 94,644 Inventories 223,160 261,474 235,069 Other current assets 9,883 15,405 6,345 Total current assets 461,005 458,656 485,305 Investments 2,237 13,943 14,045 Property, plant and equipment, net of accumulated depreciation of $ 187,350 , $ 177,426 and $ 175,820 , respectively 95,929 94,353 95,257 Right of use assets 49,017 50,746 53,104 Deferred income taxes 23,021 18,352 11,437 Goodwill 11,160 11,172 11,186 Other intangible assets, net 8,331 8,472 8,444 Other assets 29,125 25,912 26,706 Total assets $ 679,825 $ 681,606 $ 705,484 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 43,153 $ 42,744 $ 45,728 Current lease liability 7,648 7,009 6,985 Accrued liabilities: Salaries, wages and benefits 14,801 16,741 19,616 Accrued warranty 10,932 11,741 12,249 Accrued discounts and returns 7,231 8,176 6,713 Accrued customer programs 4,347 3,774 5,174 Other 11,181 13,821 10,205 Total current liabilities 99,293 104,006 106,670 Non-current lease liability 43,124 45,335 47,691 Deferred income taxes 1,880 1,838 1,928 Retirement benefits 1,588 1,588 1,627 Deferred compensation liability 27,795 24,607 25,314 Other liabilities 7,476 4,495 1,810 Total liabilities 181,156 181,869 185,040 Shareholders’ equity: Common stock: Class A shares issued and outstanding: 9,096,632 , 9,043,189 and 9,043,151 , respectively 456 453 453 Class B shares issued and outstanding: 1,207,760 , 1,207,760 and 1,207,798 , respectively 61 61 61 Capital in excess of par value 89,846 88,234 87,932 Retained earnings 407,223 409,574 428,927 Accumulated other comprehensive income 3,683 3,323 4,981 Treasury stock at cost, shares of Class A common stock: 37,240 , 25,342 and 25,380 , respectively ( 2,600 ) ( 1,908 ) ( 1,910 ) Total shareholders’ equity 498,669 499,737 520,444 Total liabilities and shareholders’ equity $ 679,825 $ 681,606 $ 705,484 The accompanying notes are an integral part of the condensed consolidated financial statements. - 3 - Index JOHNSON OUTDOORS INC. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) Nine Months Ended June 28, 2024 (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 29, 2023 10,250,949 $ 514 $ 88,234 $ 409,574 $ 3,323 $ ( 1,908 ) Net income — — — 3,955 — — Dividends declared — — — ( 3,347 ) — — Award of non-vested shares 37,712 2 ( 2 ) — — Stock-based compensation — — 598 — — — Currency translation adjustment — — — — 3,059 — Unrealized gain (loss) on available-for-sale securities, net of tax — — — — 102 — Change in pension plans, net of tax of $ 3 — — — — 7 — Purchase of treasury stock at cost ( 4,661 ) — — — — ( 241 ) BALANCE AT DECEMBER 29, 2023 10,284,000 $ 516 $ 88,830 $ 410,182 $ 6,491 $ ( 2,149 ) Net income — — — 2,156 — — Dividends declared — — — ( 3,368 ) — — Award of non-vested shares 22,692 1 ( 1 ) — — Stock-based compensation — — ( 180 ) — — — Currency translation adjustment — — — — ( 2,379 ) — Unrealized gain (loss) on available-for-sale securities, net of tax — — — — ( 18 ) — Change in pension plans, net of tax of $ 2 — — — — 8 — Non-vested stock forfeitures ( 5,350 ) — 341 — — ( 341 ) BALANCE AT MARCH 29, 2024 10,301,342 $ 517 $ 88,990 $ 408,970 $ 4,102 $ ( 2,490 ) Net income — — — 1,622 — — Dividends declared — — — ( 3,369 ) — — Issuance of stock under employee stock purchase plan 4,937 — 172 — — — Stock-based compensation — — 574 — — — Currency translation adjustment — — — — ( 439 ) — Unrealized gain (loss) on available-for-sale securities, net of tax — — — — 14 — Change in pension plans, net of tax — — — — 6 — Non-vested stock forfeitures ( 1,887 ) — 110 — — ( 110 ) BALANCE AT JUNE 28, 2024 10,304,392 $ 517 $ 89,846 $ 407,223 $ 3,683 $ ( 2,600 ) - 4 - Index JOHNSON OUTDOORS INC. Nine Months Ended June 30, 2023 (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 30, 2022 10,192,051 $ 512 $ 87,351 $ 402,821 $ 620 $ ( 3,290 ) Net income — — — 5,879 — — Dividends declared — — — ( 3,126 ) — — Award of non-vested shares 56,799 2 ( 1,381 ) — — 1,379 Stock-based compensation — — 953 — — — Currency translation adjustment — — — — 2,937 — Change in pension plans, net of tax of $ 3 — — — — 8 — Purchase of treasury stock at cost ( 7,613 ) — — — — ( 444 ) BALANCE AT DECEMBER 30, 2022 10,241,237 $ 514 $ 86,923 $ 405,574 $ 3,565 $ ( 2,355 ) Net income — — — 14,861 — — Dividends declared — — — ( 3,161 ) — — Award of non-vested shares 13,674 — ( 744 ) — — 744 Stock-based compensation — — 971 — — — Currency translation adjustment — — — — 507 — Change in pension plans, net of tax of $ 3 — — — — 8 — BALANCE AT March 31, 2023 10,254,911 $ 514 $ 87,150 $ 417,274 $ 4,080 $ ( 1,611 ) Net income — — — 14,801 — — Dividends declared — — — ( 3,148 ) — — Issuance of stock under employee stock purchase plan 6,670 — 564 — — ( 299 ) Stock-based compensation — — 218 — — — Tax effects on stock based awards — — — — — — Non-vested stock forfeitures ( 10,632 ) — — — — — Currency translation adjustment — — — — 1,018 — Unrealized gain (loss) on available-for-sale securities, net of tax — — — — ( 126 ) — Change in pension plans, net of tax of $ 3 — — — 9 — BALANCE AT JUNE 30, 2023 10,250,949 $ 514 $ 87,932 $ 428,927 $ 4,981 $ ( 1,910 ) The accompanying notes are an integral part of the condensed consolidated financial statements. - 5 - Index JOHNSON OUTDOORS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Nine Months Ended (thousands) June 28, 2024 June 30, 2023 CASH PROVIDED BY OPERATING ACTIVITIES Net income $ 7,733 $ 35,541 Adjustments to reconcile net income to net cash used for operating activities: Depreciation 14,548 11,605 Amortization of intangible assets 251 210 Amortization of deferred financing costs 26 26 Stock based compensation 992 2,142 Gain on disposal of productive assets ( 1,874 ) ( 6,488 ) Deferred income taxes ( 4,663 ) 58 Change in operating assets and liabilities: Accounts receivable, net ( 36,504 ) ( 2,804 ) Inventories, net 38,680 9,129 Accounts payable and accrued liabilities ( 5,435 ) ( 7,706 ) Other current assets 5,510 3,519 Other non-current assets — 99 Other long-term liabilities 2,935 ( 149 ) Other, net ( 300 ) 28 21,899 45,210 CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES Purchase of investments ( 2,220 ) ( 40,696 ) Proceeds from maturity of short-term investments 19,650 — Proceeds from sale of productive assets 2,244 14,990 Capital expenditures ( 16,449 ) ( 19,427 ) 3,225 ( 45,133 ) CASH USED FOR FINANCING ACTIVITIES Common stock transactions 172 761 Dividends paid ( 10,067 ) ( 9,411 ) Purchases of treasury stock ( 241 ) ( 941 ) ( 10,136 ) ( 9,591 ) Effect of foreign currency rate changes on cash ( 19 ) 2,307 Increase (Decrease) in cash and cash equivalents 14,969 ( 7,207 ) CASH AND CASH EQUIVALENTS Beginning of period 111,854 129,803 End of period $ 126,823 $ 122,596 Supplemental Disclosure: Cash paid for taxes $ 2,488 $ 16,253 Non-cash dividends 17 25 Cash paid for interest 88 86 Non-cash treasury stock activity 451 2,123 The accompanying notes are an integral part of the condensed consolidated financial statements. - 6 - Index JOHNSON OUTDOORS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1 BASIS OF PRESENTATION The condensed consolidated financial statements included herein are unaudited. 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 June 28, 2024 and June 30, 2023, and their results of operations for the three and nine month periods then ended and cash flows for the nine month periods then ended. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 29, 2023 which was filed with the Securities and Exchange Commission on December 8, 2023. Certain reclassifications have been made to prior year financial statements to conform to the current year financial statement presentation. These reclassifications had no effect on net earnings. Due to seasonal variations and other factors, some of which are described herein, the results of operations for the three and nine months ended June 28, 2024 are not necessarily indicative of the results to be expected for the Company’s full 2024 fiscal year. The current economic and business environment, including the level of demand in the consumer markets for outdoor recreation products, seasonality effects, enhancements or changes in competitor product offerings, and end consumer purchasing actions, all stemming therefrom, is beyond our control and remains highly uncertain and cannot be predicted at this time. All monetary amounts, other than share and per share amounts, are stated in thousands. 2 ACCOUNTS RECEIVABLE Accounts receivable are stated net of allowances for credit losses of $ 649 , $ 907 and $ 902 as of June 28, 2024, September 29, 2023 and June 30, 2023, respectively. The determination of the allowance for credit losses 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 credit losses based on historical experience of bad debts as a percent of accounts receivable outstanding for each business segment. Uncollectible accounts are written off against the allowance for credit losses after collection efforts have been exhausted. The Company typically does not require collateral on its accounts receivable. 3 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 which receive non-forfeitable dividends are classified as participating securities and 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. - 7 - Index JOHNSON OUTDOORS INC. For the three and nine month periods ended June 28, 2024, basic net income per share for Class A and Class B shares was the same because there were no cumulative undistributed earnings and basic income per share for Class A and Class B shares has been presented using the two class method described above. For the three and nine month periods ended June 30, 2023, 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 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 (“stock units” or “units”) and non-vested restricted stock. Anti-dilutive stock options, 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 or no undistributed income because distributions through dividends exceed net income, the effect of anti-dilutive stock options and units is excluded and diluted loss per share is equal to basic loss per share for both classes of stock. For the three and nine month periods ended June 28, 2024, the effect of non-vested restricted stock units is excluded from the diluted income per share calculation as their inclusion would have been anti-dilutive. For the three and nine month periods ended June 30, 2023, 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 69,044 and 64,654 for the three months ended June 28, 2024 and June 30, 2023, respectively, and 67,429 and 64,258 for the nine months ended June 28, 2024 and June 30, 2023, 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 71,176 and 46,501 for the three months ended June 28, 2024 and June 30, 2023, respectively, and 71,776 and 51,813 for the nine months ended June 28, 2024 and June 30, 2023, respectively. Dividends per share Dividends per share for the three and nine month periods ended June 28, 2024 and June 30, 2023 were as follows: Three Months Ended Nine months ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Dividends declared per common share: Class A $ 0.33 $ 0.31 $ 0.99 $ 0.93 Class B $ 0.30 $ 0.28 $ 0.90 $ 0.85 4 STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS The Company’s current stock ownership plans allow for issuance of stock 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 stock options. Under the Company’s 2023 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 404,593 shares of the Company’s Class A common stock available for future grant to non-employee directors and key executives at June 28, 2024. Share awards previously made under the Company's 2012 Non-Employee Director Stock Ownership Plan and its 2010 Long-Term Stock Incentive Plan, which no longer allow for additional share grants, also remain outstanding. Non-vested Stock - 8 - Index JOHNSON OUTDOORS INC. All shares of non-vested restricted stock awarded by the Company have been granted in the form of shares of Class A common stock at their fair market value on the date of grant and vest within one year from the date of grant for stock granted to directors and four years from the date of grant for stock granted to officers and employees. 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 nine months ended June 28, 2024 related to the Company’s stock ownership plans is as follows: Shares Weighted Average Grant Price Non-vested stock at September 29, 2023 61,242 $ 66.48 Non-vested stock grants 36,108 49.65 Restricted stock vested ( 19,863 ) 63.20 Forfeitures ( 7,237 ) 62.36 Non-vested stock at June 28, 2024 70,250 59.18 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 2,330 and 2,289 during the nine month periods ended June 28, 2024 and June 30, 2023, respectively. Stock compensation expense, net of forfeitures, related to non-vested stock was $ 398 and $ 172 for the three month periods ended June 28, 2024 and June 30, 2023, respectively, and $ 1,148 and $ 1,117 for the nine month periods ended June 28, 2024 and June 30, 2023, respectively. Unrecognized compensation cost related to non-vested stock as of June 28, 2024 was $ 2,085 , which amount will be amortized to expense through December 2027 or adjusted for changes in future estimated or actual forfeitures. The fair value of restricted stock vested during the nine month periods ended June 28, 2024 and June 30, 2023 was $ 964 and $ 1,029 , 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 stock on the date of grant and vest within one year from the date of grant for RSUs granted to directors, and subject to satisfaction of applicable performance criteria, 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 nine months ended June 28, 2024 follows: Number of RSUs Weighted Average Grant Price RSUs at September 29, 2023 68,244 $ 76.38 RSUs granted 38,054 54.20 RSUs vested ( 17,516 ) 88.49 RSU's forfeited ( 3,452 ) 65.19 RSUs at June 28, 2024 85,330 64.46 For the three months ended June 28, 2024, the Company recognized expense of $ 201 related to RSUs. For the nine months ended June 28, 2024, the Company recognized income of $ 239 related to RSUs as a result of reversing - 9 - Index JOHNSON OUTDOORS INC. compensation expense previously recognized, due to an expectation that performance conditions won't be met for certain awards. Stock compensation expense, net of forfeitures, related to RSUs was $ 28 and $ 953 for the three and nine month periods ended June 30, 2023, respectively. Unrecognized compensation cost related to non-vested RSUs as of June 28, 2024 was $ 1,634 , which amount will be amortized to expense through September 2026 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 2,331 and 5,324 during the nine month periods ended June 28, 2024 and June 30, 2023, respectively. The fair value of restricted stock units recognized as a tax deduction during the nine month periods ended June 28, 2024 and June 30, 2023 was $ 1,171 and $ 2,555 , 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. Awards are only paid if at least 80 % of the target levels are met and maximum payouts are made if 120 % or more of target levels are achieved. The payouts for achievement at the 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 Class A common stock after the end of the three-year performance period. Employees’ Stock Purchase Plan The Company’s shareholders have adopted the Johnson Outdoors Inc. 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 June 28, 2024, the Company issued 4,937 shares of Class A common stock and recognized $ 25 of income in connection with the Employees' Stock Purchase Plan. During the nine month period ended June 28, 2024, the Company issued 4,937 shares of Class A common stock and recognized $ 83 of expense in connection with the Employees' Stock Purchase Plan. During the three month period ended June 30, 2023, the Company issued 5,401 shares of Class A common stock and recognized $ 18 of expense in connection with the Plan. During the nine month period ended June 30, 2023, the Company issued 5,401 shares of Class A common stock and recognized $ 72 of expense in connection with the Plan. 5 LEASES The Company leases certain facilities and machinery and equipment under long-term, non-cancelable operating leases. The Company determines if an arrangement is a lease at inception. As of June 28, 2024, the Company had approximately 150 leases, with remaining terms ranging from less than one year to 16 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 right-of-use ("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 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 nine months ended June 28, 2024 and June 30, 2023 were as follows: - 10 - Index JOHNSON OUTDOORS INC. Three months ended Nine months ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Lease Cost Operating lease costs $ 2,470 $ 2,541 $ 7,411 $ 7,480 Short-term lease costs 602 611 1,828 1,738 Variable lease costs 43 43 129 128 Total lease cost $ 3,115 $ 3,195 $ 9,368 $ 9,346 Included in the amounts in the table above was rent expense to related parties of $ 314 and $ 941 for the three and nine months ended June 28, 2024, respectively, and $ 314 and $ 942 for the three and nine months ended June 30, 2023, respectively. As of June 28, 2024, 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 June 28, 2024. During the second quarter of fiscal 2024, the Company entered into an agreement to obtain additional space at an existing lease site that will begin in fiscal 2025 and will result in additional estimated lease payments of approximately $ 2,000 over the remaining lease term, which are not included in the future minimum rental commitments below. As of June 28, 2024, the Company did not have any other significant operating lease commitments that have not yet commenced. Supplemental balance sheet, cash flow, and other information related to operating leases was as follows: Nine months ended June 28, 2024 June 30, 2023 Operating leases: Operating lease ROU assets $ 49,017 $ 53,104 Current operating lease liabilities 7,648 6,985 Non-current operating lease liabilities 43,124 47,691 Total operating lease liabilities $ 50,772 $ 54,676 Weighted average remaining lease term (in years) 11.21 11.93 Weighted average discount rate 3.22 % 3.18 % Cash paid for amounts included in the measurement of lease liabilities $ 6,884 $ 6,611 ROU assets obtained in exchange for lease liabilities $ 3,497 $ 3,421 Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at June 28, 2024 were as follows: - 11 - Index JOHNSON OUTDOORS INC. Year Related parties included in total Total Remainder of 2024 $ 319 $ 2,391 2025 1,308 9,180 2026 1,348 7,471 2027 226 5,771 2028 — 3,817 Thereafter — 32,575 Total undiscounted lease payments 3,201 61,205 Less: Imputed interest ( 61 ) ( 10,433 ) Total net lease liability $ 3,140 $ 50,772 6 INCOME TAXES For the three and nine months ended June 28, 2024 and June 30, 2023, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows: Three Months Ended Nine Months Ended (thousands, except tax rate data) June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Profit before income taxes $ 907 $ 19,822 $ 9,818 $ 47,936 Income tax (benefit) expense ( 715 ) 5,021 2,085 12,395 Effective income tax rate ( 78.8 ) % 25.3 % 21.2 % 25.9 % The decrease in the effective tax rate for the three and nine months ended June 28, 2024 compared to the three and nine months ended June 30, 2023 was primarily related to a change in the geographic mix of profits or losses from a tax perspective for the current year period, as compared to the prior year period. The Company's effective tax rate is impacted by valuation allowances in certain foreign tax jurisdictions and, as a result, changes in the geographic source of Company profits or losses between periods can, in certain instances, have varying impacts on the Company's effective tax rate during a particular period. 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 June 28, 2024 and June 30, 2023 were: June 28, 2024 June 30, 2023 Indonesia Indonesia Switzerland Switzerland 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 2024 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. - 12 - Index JOHNSON OUTDOORS INC. 7 INVENTORIES The Company values inventory at the lower of cost (determined using the first-in first-out method) or net realizable value. Inventories at the end of the respective periods consisted of the following: June 28, 2024 September 29, 2023 June 30, 2023 Raw materials $ 107,384 $ 114,467 $ 107,899 Finished goods 115,776 147,007 127,170 $ 223,160 $ 261,474 $ 235,069 The Company’s inventory levels have been significantly impacted over recent periods in connection with swings in demand for the Company’s products and supply chain availability of certain materials and components, especially as a result of the recent COVID-19 pandemic. See below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional discussion on the impact of recent fluctuations in the Company’s net sales, including changes in demand for the Company’s products, on the Company’s inventory balances. 8 GOODWILL The changes in goodwill during the nine months ended June 28, 2024 and June 30, 2023 were as follows: June 28, 2024 June 30, 2023 Balance at beginning of period $ 11,172 $ 11,160 Amount attributable to movements in foreign currency rates ( 12 ) 26 Balance at end of period $ 11,160 $ 11,186 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. In conducting this 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 13) below. 9 WARRANTIES The Company provides warranties on certain of its products as they are sold. The following table summarizes the Company’s warranty activity for the nine months ended June 28, 2024 and June 30, 2023. June 28, 2024 June 30, 2023 Balance at beginning of period $ 11,741 $ 9,639 Expense accruals for warranties issued during the period 6,359 8,991 Less current period warranty claims paid 7,168 6,381 Balance at end of period $ 10,932 $ 12,249 10 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 regulatory 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. - 13 - Index JOHNSON OUTDOORS INC. 11 INDEBTEDNESS The Company had no debt outstanding at June 28, 2024, September 29, 2023, or June 30, 2023. Revolver The Company and certain of its subsidiaries have entered into an unsecured credit facility with PNC Bank National Association and Associated Bank, N.A. ("the Lending Group"). This credit facility consists of a $ 75 million Revolving Credit Facility among the Company, certain of the Company’s subsidiaries, PNC Bank National Association, as lender and as administrative agent, and the other lender named therein (as amended, 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 herein and the description herein is qualified in its entirety by the terms and conditions of the original Debt Agreement (a copy of which was filed as Exhibit 99.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on November 20, 2017) and the Amendment, (a copy of which was filed as Exhibit 10.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on July 16, 2021). For the first three quarters of fiscal 2023, the interest rate on the Revolver was based on LIBOR plus an applicable margin. Beginning in the fourth quarter of fiscal 2023, upon adoption of Topic 848, the interest rate is based on the Secured Overnight Financing Rate ("SOFR") plus an applicable margin. The applicable margin ranges from 1.00 % to 1.75 % and is dependent on the Company’s leverage ratio for the trailing twelve month period. The interest rates on the Revolver at both June 28, 2024 and June 30, 2023 were approximately 6.5 % and 6.2 %, respectively. The Credit Agreement restricts the Company's ability to incur additional debt, includes maximum leverage ratio and minimum interest coverage ratio covenants and is unsecured. Other Borrowings The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of June 28, 2024 or June 30, 2023. The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance, which totaled approximately $ 67 and $ 78 as of June 28, 2024 and June 30, 2023, respectively. 12 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. 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 13 % of the Company’s revenues for the nine month period ended June 28, 2024 were denominated in currencies other than the U.S. dollar. Approximately 5 % were denominated in euros, approximately 6 % were denominated in Canadian dollars and approximately 2 % were denominated in Hong Kong dollars, with the remaining revenues denominated in various other foreign currencies. Changes in foreign currency exchange rates can cause the Company to experience unexpected financial losses or cash flow needs. The Company may mitigate 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 to be paid or received for a fixed amount of currency at 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 - 14 - Index JOHNSON OUTDOORS INC. rates on financial instruments and known commitments, including commitments for inventory purchases, denominated in foreign currencies. As of June 28, 2024 and June 30, 2023, the Company held no foreign currency forward contracts. 13 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 or liabilities. • 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 carrying amounts of accounts receivable and accounts payable approximated their fair values at June 28, 2024, September 29, 2023 and June 30, 2023 due to the short term maturities of these instruments. See Note 14 for discussion of fair value of cash and cash equivalents. 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. During the second quarter of fiscal 2024, the Company determined that indicators of potential impairment of long-lived assets were present in the Watercraft segment, and performed an analysis of future undiscounted cash flows, which exceeded carrying value of the asset group. Therefore, it was determined there was no impairment. Valuation Techniques Rabbi Trust Assets 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 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 June 28, 2024: Level 1 Level 2 Level 3 Total Assets: Rabbi trust assets $ 27,793 $ — $ — $ 27,793 The following table summarizes the Company’s financial assets measured at fair value as of September 29, 2023: Level 1 Level 2 Level 3 Total Assets: Rabbi trust assets $ 24,562 $ — $ — $ 24,562 - 15 - Index JOHNSON OUTDOORS INC. The following table summarizes the Company’s financial assets measured at fair value as of June 30, 2023: Level 1 Level 2 Level 3 Total Assets: Rabbi trust assets $ 25,304 $ — $ — $ 25,304 The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three and nine month periods ended June 28, 2024 and June 30, 2023 was: Three Months Ended Nine months ended Location of income recognized in Statement of Operations June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Rabbi trust assets Other income, net $ 403 $ 1,273 $ 5,175 $ 3,881 There were no assets or liabilities measured at fair value on a non-recurring basis in periods subsequent to their initial recognition for either of the nine month periods ended June 28, 2024 or June 30, 2023. 14 CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES The Company considers all short-term investments in interest bearing accounts and all securities and other instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents are stated at cost which approximates market value. During the third quarter of fiscal 2023, the Company invested in marketable securities. The Company has classified all marketable securities as available-for-sale which requires the securities to be reported at estimated fair value, with unrealized gains and losses, net of tax, reported as a separate component of accumulated other comprehensive income in the Condensed Consolidated Statements of Shareholders' Equity. At June 28, 2024, cost for marketable securities was determined using the specific identification method. A summary of the amortized costs and fair values of the Company’s marketable securities at the end of the period presented is shown in the following table. All of the Company’s marketable securities are classified as Level 2, as defined by FASB ASC 820, with fair values determined using significant other observable inputs, which include quoted prices in markets that are not active, quoted prices of similar securities, recently executed transactions, broker quotations, and other inputs that are observable. The following table summarizes the Company’s marketable securities measured at fair value as of June 28, 2024: Amortized Cost Fair Value Gross unrealized gains Gross unrealized losses Fixed rate US Government Bonds $ 14,984 $ 14,975 $ — $ 9 Fixed rate Canadian Government Bonds 8,830 8,808 — 22 Total $ 23,814 $ 23,783 $ — $ 31 The following table summarizes the Company’s marketable securities measured at fair value as of September 29, 2023: - 16 - Index JOHNSON OUTDOORS INC. Amortized Cost Fair Value Gross unrealized gains Gross unrealized losses Fixed rate US Government Bonds $ 29,749 $ 29,686 $ — $ 63 Fixed rate Canadian Government Bonds 11,121 11,021 — 100 Total $ 40,870 $ 40,707 $ — $ 163 The following table summarizes the Company’s marketable securities measured at fair value as of June 30, 2023: Amortized Cost Fair Value Gross unrealized gains Gross unrealized losses Fixed rate US Government Bonds $ 29,614 $ 29,526 $ — $ 87 Fixed rate Canadian Government Bonds 11,251 11,170 — 82 Total $ 40,865 $ 40,696 $ — $ 169 Proceeds from the maturities of available for sale securities were $ 19,650 and $ 0 for the nine month periods ended June 28, 2024 and June 30, 2023, respectively. During the third quarter of fiscal 2024, $ 2,220 of investments were purchased with proceeds from maturities. There were no other sales or purchases of available-for-sale securities for the nine month periods ended June 28, 2024 or June 30, 2023. No unrealized gains or losses were reclassified out of accumulated other comprehensive income during the same periods. The future contractual maturities of the marketable securities held at June 28, 2024 are as follows: $ 21,546 within one year, classified as Short-Term Investments on the Condensed Consolidated Balance Sheets, and $ 2,237 greater than one year, but less than five years, classified as Investments on the Condensed Consolidated Balance Sheets. 15 NEW ACCOUNTING PRONOUNCEMENTS Recently issued accounting pronouncements In March 2024, the United States Securities and Exchange Commission (SEC) issued Final Rulemaking Release No. 33-11275: The Enhancement and Standardization of Climate-Related Disclosures for Investors. This release is intended to improve consistency, completeness and transparency related to climate risks and events. The disclosure requirements related to this new rule will be phased in, and effective for the Company beginning in fiscal 2027 on a prospective basis. The Company is currently evaluating the potential impact of this release on its financial statements and disclosures. In December 2023, the Financial Account Standards Board (FASB), issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for the Company in fiscal 2026 on a prospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 is intended to improve the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The amendments in this ASU are effective in fiscal 2025, on a retrospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its financial statements and disclosures. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This ASU covers a variety of codification topics, and the effective date for each amendment will be the date on which the SEC‘s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is currently evaluating the potential impact of this guidance on its disclosures. - 17 - Index JOHNSON OUTDOORS INC. Recently adopted accounting pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 is intended to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. Subsequently in December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848)—Deferral of the Sunset Date of Topic 848, which delayed the effective date of Topic 848 to December 31, 2024. The Company adopted Topic 848 in the fourth fiscal quarter of 2023. The adoption of this pronouncement did not have a material impact on its disclosures. 16 REVENUES 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 June 28, 2024, the right to returns asset was $ 1,195 and the accrued returns liability was $ 2,981 . At June 30, 2023, the right to returns asset was $ 892 and the accrued returns liability was $ 2,263 . 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. Nonetheless, the revenue recognition policies are similar among all the various products sold by the Company. See Note 17 for required disclosures of disaggregated revenue. 17 SEGMENTS OF BUSINESS The Company conducts its worldwide operations through separate business segments, each of which represents major product lines. Operations are conducted in the United States and various foreign countries, primarily in Europe, Canada and the Pacific Basin. - 18 - Index JOHNSON OUTDOORS INC. 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. A summary of the Company’s operations by business segment is presented below: Three Months Ended Nine Months Ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 September 29, 2023 Net sales: Fishing: Unaffiliated customers $ 130,415 $ 137,161 $ 379,242 $ 429,991 Interunit transfers 122 299 395 851 Camping: Unaffiliated customers 10,909 11,621 27,325 36,940 Interunit transfers 18 37 35 56 Watercraft Recreation: Unaffiliated customers 11,037 15,664 25,536 38,121 Interunit transfers 33 62 75 153 Diving Unaffiliated customers 19,856 22,216 54,248 61,565 Interunit transfers 5 11 15 29 Other / Corporate 255 385 621 882 Eliminations ( 178 ) ( 409 ) ( 520 ) ( 1,089 ) Total $ 172,472 $ 187,047 $ 486,972 $ 567,499 Operating profit (loss): Fishing $ 5,258 $ 18,665 $ 24,214 $ 51,358 Camping 1,474 2,039 3,541 4,863 Watercraft Recreation 557 1,483 ( 2,007 ) 1,637 Diving 898 2,733 22 4,190 Other / Corporate ( 8,693 ) ( 7,477 ) ( 26,483 ) ( 27,743 ) $ ( 506 ) $ 17,443 $ ( 713 ) $ 34,305 Total assets (end of period): Fishing $ 365,842 $ 361,071 $ 363,463 Camping 48,217 61,896 53,003 Watercraft Recreation 29,604 35,294 26,953 Diving 81,818 84,205 83,555 Other / Corporate 154,344 163,018 154,632 $ 679,825 $ 705,484 $ 681,606 Other Segment Information During the three and nine month periods ended June 28, 2024, two customers of the Company's Fishing, Camping and Watercraft Recreation segments each accounted for more than 10% of the Company's consolidated revenues, which amounted to combined net sales of approximately $ 41,273 and $ 150,166 , respectively. During the three and nine month periods ended June 30, 2023, combined net sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $ 26,040 and $ 83,948 , respectively, of the Company's consolidated revenues. - 19 - Index JOHNSON OUTDOORS INC. During the second quarter of fiscal 2023, the Company sold the Military and Commercial Tent product lines of its Camping segment to a third party in an asset sale. The sale did not include the Eureka! brand name or the Eureka! consumer/recreational Camping business line. Subsequently, during the fourth quarter of fiscal 2023, the Company developed and approved plans to fully exit the Eureka! brand of the Camping segment, which includes liquidating all remaining consumer inventory of Eureka! branded products and winding down operations. The Company incurred expenses of approximately $ 4,800 in the fourth quarter of fiscal 2023 related to the wind down of the Eureka! branded business. Other costs incurred during fiscal 2024 will be expensed as incurred. During the first quarter of fiscal 2024, the Fishing segment of the Company sold a building, which resulted in a gain of approximately $ 1,900 , which was recorded in Other income, net in the accompanying Condensed Consolidated Statements of Operations. 18 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in Accumulated Other Comprehensive Income (“AOCI”) by component, net of tax, for the nine months ended June 28, 2024 were as follows: Foreign Currency Translation Adjustment Unrealized gain (loss) on available-for sale securities Unamortized Loss on Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance at September 29, 2023 $ 3,581 $ ( 121 ) $ ( 137 ) $ 3,323 Other comprehensive income before reclassifications 3,059 138 — 3,197 Amounts reclassified from accumulated other comprehensive income — — 10 10 Tax effects — ( 36 ) ( 3 ) ( 39 ) Balance at December 29, 2023 $ 6,640 $ ( 19 ) $ ( 130 ) $ 6,491 Other comprehensive loss before reclassifications ( 2,379 ) ( 24 ) — ( 2,403 ) Amounts reclassified from accumulated other comprehensive income — — 10 10 Tax effects — 6 ( 2 ) 4 Balance at March 29, 2024 $ 4,261 $ ( 37 ) $ ( 122 ) $ 4,102 Other comprehensive loss before reclassifications ( 439 ) 20 — ( 419 ) Amounts reclassified from accumulated other comprehensive income — — 9 9 Tax effects — (6) ( 3 ) ( 9 ) Balance at June 28, 2024 $ 3,822 $ (23) $ ( 116 ) $ 3,683 The changes in AOCI by component, net of tax, for the nine months ended June 30, 2023 were as follows: - 20 - Index JOHNSON OUTDOORS INC. Foreign Currency Translation Adjustment Unamortized Loss on Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance at September 30, 2022 $ 791 $ ( 171 ) $ 620 Other comprehensive income before reclassifications 2,937 — 2,937 Amounts reclassified from accumulated other comprehensive income — 11 11 Tax effects — ( 3 ) ( 3 ) Balance at December 30, 2022 $ 3,728 $ ( 163 ) $ 3,565 Other comprehensive income before reclassifications 507 — 507 Amounts reclassified from accumulated other comprehensive income — 11 11 Tax effects — ( 3 ) ( 3 ) Balance at March 31, 2023 $ 4,235 $ ( 155 ) $ 4,080 Other comprehensive income before reclassifications 892 — 892 Amounts reclassified from accumulated other comprehensive income — 12 12 Tax effects — ( 3 ) ( 3 ) Balance at June 30, 2023 $ 5,127 $ ( 146 ) $ 4,981 The reclassifications out of AOCI for the three and nine months ended June 28, 2024 and June 30, 2023 were as follows: Three Months Ended Nine Months Ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Statement of Operations Presentation Unamortized loss on defined benefit pension plans: Amortization of loss $ 9 $ 12 $ 29 $ 34 Other income and expense Tax effects ( 3 ) ( 3 ) ( 8 ) ( 9 ) Income tax expense Total reclassifications for the period $ 6 $ 9 $ 21 $ 25