JOHNSON OUTDOORS INC 10-Q

Item 1. Financial Statements CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended Six Months Ended (thousands, except per share data) March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024 Net sales $ 168,349 $ 175,856 $ 275,998 $ 314,500 Cost of sales 109,483 114,425 184,949 200,215 Gross profit 58,866 61,431 91,049 114,285 Operating expenses: Marketing and selling 34,644 39,589 65,028 69,931 Administrative management, finance and information systems 11,235 13,966 25,711 28,367 Research and development 8,086 8,129 15,648 16,194 Total operating expenses 53,965 61,684 106,387 114,492 Operating profit (loss) 4,901 ( 253 ) ( 15,338 ) ( 207 ) Interest income ( 625 ) ( 857 ) ( 1,658 ) ( 2,055 ) Interest expense 68 40 115 78 Other expense (income), net 1,300 ( 2,448 ) 974 ( 7,141 ) Profit (loss) before income taxes 4,158 3,012 ( 14,769 ) 8,911 Income tax expense (benefit) 1,854 856 ( 1,783 ) 2,800 Net income (loss) $ 2,304 $ 2,156 $ ( 12,986 ) $ 6,111 Weighted average common shares - Basic: Class A 9,049 9,010 9,044 8,999 Class B 1,208 1,208 1,208 1,208 Participating securities 15 16 20 18 Weighted average common shares - Dilutive 10,272 10,234 10,272 10,225 Net income (loss) per common share - Basic: Class A $ 0.22 $ 0.21 $ ( 1.26 ) $ 0.59 Class B $ 0.22 $ 0.21 $ ( 1.26 ) $ 0.59 Net income (loss) per common share - Diluted: Class A $ 0.22 $ 0.21 $ ( 1.26 ) $ 0.59 Class B $ 0.22 $ 0.21 $ ( 1.26 ) $ 0.59 The accompanying notes are an integral part of the condensed consolidated financial statements. - 1 - Index JOHNSON OUTDOORS INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) Three Months Ended Six Months Ended (thousands) March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024 Net income (loss) $ 2,304 $ 2,156 $ ( 12,986 ) $ 6,111 Other comprehensive income (loss): Foreign currency translation 1,133 2,379 ( 3,782 ) 680 Unrealized (loss) gain on available-for-sale securities, net of tax ( 4 ) ( 18 ) ( 5 ) 84 Change in pension plans, net of tax 7 8 16 15 Total other comprehensive income (loss) 1,136 2,369 ( 3,771 ) 779 Total comprehensive income (loss) $ 3,440 $ 4,525 $ ( 16,757 ) $ 6,890 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) March 28, 2025 September 27, 2024 March 29, 2024 ASSETS Current assets: Cash and cash equivalents $ 89,636 $ 145,498 $ 60,356 Short term investments 4,315 16,541 23,914 Accounts receivable, net 116,776 40,649 129,345 Inventories 180,057 209,788 249,201 Other current assets 16,295 16,252 14,513 Total current assets 407,079 428,728 477,329 Investments — — 2,157 Property, plant and equipment, net of accumulated depreciation of $ 198,416 , $ 192,890 and $ 184,519 , respectively 94,956 96,922 94,604 Right of use assets 46,978 47,547 50,880 Deferred income taxes 27,252 23,420 18,682 Goodwill 9,890 — 11,167 Other intangible assets, net 9,682 8,320 8,377 Other assets 28,637 30,275 28,482 Total assets $ 624,474 $ 635,212 $ 691,678 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 44,323 $ 36,077 $ 50,374 Current lease liability 8,130 7,528 7,682 Accrued liabilities: Salaries, wages and benefits 14,282 12,408 14,904 Accrued warranty 12,066 10,211 10,985 Income taxes payable 1,287 2,109 — Accrued discounts and returns 9,521 7,430 8,727 Accrued customer programs 4,563 4,200 3,848 Other 10,661 10,481 12,012 Total current liabilities 104,833 90,444 108,532 Non-current lease liability 40,695 41,806 44,915 Deferred income taxes 1,838 1,913 1,867 Retirement benefits 1,600 1,645 1,601 Deferred compensation liability 27,425 29,092 27,183 Other liabilities 6,981 6,888 7,491 Total liabilities 183,372 171,788 191,589 Shareholders’ equity: Common stock: Class A shares issued and outstanding: 9,158,300 , 9,093,978 and 9,093,582 , respectively 460 456 456 Class B shares issued and outstanding: 1,207,760 , 1,207,760 and 1,207,760 , respectively 61 61 61 Capital in excess of par value 91,599 90,146 88,990 Retained earnings 349,872 369,592 408,970 Accumulated other comprehensive income 2,193 5,964 4,102 Treasury stock at cost, shares of Class A common stock: 49,001 , 42,654 and 35,353 , respectively ( 3,083 ) ( 2,795 ) ( 2,490 ) Total shareholders’ equity 441,102 463,424 500,089 Total liabilities and shareholders’ equity $ 624,474 $ 635,212 $ 691,678 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) Six Months Ended March 28, 2025 (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 27, 2024 10,301,738 $ 517 $ 90,146 $ 369,592 $ 5,964 $ ( 2,795 ) Net loss — — — ( 15,290 ) — — Dividends declared — — — ( 3,362 ) — — Award of non-vested shares 32,121 1 ( 1 ) — — Stock-based compensation — — 507 — — — Currency translation adjustment — — — — ( 4,915 ) — Unrealized loss on available-for-sale securities, net of tax — — — — ( 1 ) — Change in pension plans, net of tax of $ 3 — — — — 9 — Non-vested stock forfeitures ( 3,690 ) — 200 — — ( 200 ) Purchase of treasury stock at cost ( 2,657 ) — — — — ( 88 ) BALANCE AT December 27, 2024 10,327,512 $ 518 $ 90,852 $ 350,940 $ 1,057 $ ( 3,083 ) Net income — — — 2,304 — — Dividends declared — — — ( 3,372 ) — — Award of non-vested shares 38,548 3 ( 3 ) — — — Stock-based compensation — — 750 — — — Currency translation adjustment — — — — 1,133 — Unrealized loss on available-for-sale securities, net of tax — — — — ( 4 ) — Change in pension plans, net of tax of $ 3 — — — — 7 — BALANCE AT MARCH 28, 2025 10,366,060 $ 521 $ 91,599 $ 349,872 $ 2,193 $ ( 3,083 ) - 4 - Index JOHNSON OUTDOORS INC. Six Months Ended March 29, 2024 (thousands except for shares) Shares Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income 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 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 ) — — — Tax effects on stock based awards — — — — — — Currency translation adjustment — — — — ( 2,379 ) — Unrealized loss on available-for-sales securities, net of tax — — — — ( 18 ) — Change in pension plans, net of tax of $ 3 — — — — 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 ) 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) Six Months Ended (thousands) March 28, 2025 March 29, 2024 CASH USED FOR OPERATING ACTIVITIES Net (loss) income $ ( 12,986 ) $ 6,111 Adjustments to reconcile net (loss) income to net cash used for operating activities: Depreciation 9,765 9,782 Amortization of intangible assets 276 167 Amortization of deferred financing costs 23 17 Stock based compensation 1,257 418 Loss (Gain) on disposal of productive assets 81 ( 1,963 ) Deferred income taxes ( 3,652 ) ( 317 ) Change in operating assets and liabilities: Accounts receivable, net ( 76,242 ) ( 86,126 ) Inventories, net 30,768 12,816 Accounts payable and accrued liabilities 12,417 3,655 Other current assets ( 69 ) 892 Other long-term liabilities ( 990 ) 2,985 Other, net 786 ( 201 ) ( 38,566 ) ( 51,764 ) CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES Payments for purchase of businesses ( 12,197 ) — Proceeds from maturity of short-term investments 11,826 15,000 Proceeds from sale of productive assets — 2,234 Capital expenditures ( 7,378 ) ( 10,203 ) ( 7,749 ) 7,031 CASH USED FOR FINANCING ACTIVITIES Debt issuance costs paid ( 55 ) — Dividends paid ( 6,736 ) ( 6,704 ) Purchases of treasury stock ( 88 ) ( 241 ) ( 6,879 ) ( 6,945 ) Effect of foreign currency rate changes on cash ( 2,668 ) 180 Decrease in cash and cash equivalents ( 55,862 ) ( 51,498 ) CASH AND CASH EQUIVALENTS Beginning of period 145,498 111,854 End of period $ 89,636 $ 60,356 Supplemental Disclosure: Cash paid for taxes $ 1,583 $ 1,721 Accrued dividends ( 2 ) 11 Cash paid for interest 88 59 Non-cash treasury stock activity 200 341 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 March 28, 2025 and March 29, 2024, and their results of operations for the three and six month periods then ended and cash flows for the six month periods then ended. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 27, 2024 which was filed with the Securities and Exchange Commission on December 11, 2024. 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 $ 692 , $ 3,543 and $ 749 as of March 28, 2025, September 27, 2024 and March 29, 2024, 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. For the three and six month periods ended March 28, 2025 and March 29, 2024, basic net income (loss) per share for Class A and Class B shares was the same because there were no cumulative undistributed earnings and basic income (loss) per share for Class A and Class B shares has been presented using the two class method 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 - 7 - Index JOHNSON OUTDOORS INC. 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 six month periods ended March 28, 2025 and March 29, 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. 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 69,486 and 70,182 for the three months ended March 28, 2025 and March 29, 2024, respectively, and 64,525 and 66,622 for the six months ended March 28, 2025 and March 29, 2024, 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 105,840 and 72,554 for the three months ended March 28, 2025 and March 29, 2024, respectively, and 101,625 and 70,531 for the six months ended March 28, 2025 and March 29, 2024, respectively Dividends per share Dividends per share for the three and six month periods ended March 28, 2025 and March 29, 2024 were as follows: Three Months Ended Six months ended March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024 Dividends declared per common share: Class A $ 0.33 $ 0.33 $ 0.66 $ 0.66 Class B $ 0.30 $ 0.30 $ 0.60 $ 0.60 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 284,109 shares of the Company’s Class A common stock available for future grant to non-employee directors and key executives at March 28, 2025. Share awards previously made under the Company's 2012 Non-Employee Director Stock Ownership Plan, which no longer allow for additional share grants, also remain outstanding. Non-vested Stock 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 within a period ranging from one to four years from the date of grant for stock granted to officers and employees, based on the terms of the agreement with such officer or employee. 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. - 8 - Index JOHNSON OUTDOORS INC. A summary of non-vested stock activity for the six months ended March 28, 2025 related to the Company’s stock ownership plans is as follows: Shares Weighted Average Grant Price Non-vested stock at September 27, 2024 56,389 $ 59.69 Non-vested stock grants 67,312 30.20 Restricted stock vested ( 24,357 ) 54.60 Forfeitures ( 3,690 ) 54.20 Non-vested stock at March 28, 2025 95,654 40.44 Non-vested stock grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of shares by tendering a portion of the vested shares back to the Company. Shares tendered back to the Company were 1,609 and 2,330 during the six month periods ended March 28, 2025 and March 29, 2024, respectively. Stock compensation expense, net of forfeitures, related to non-vested stock was $ 462 and $ 322 for the three month periods ended March 28, 2025 and March 29, 2024, respectively, and $ 816 and $ 750 for the six month periods ended March 28, 2025 and March 29, 2024, respectively. Unrecognized compensation cost related to non-vested stock as of March 28, 2025 was $ 2,369 , 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 six month periods ended March 28, 2025 and March 29, 2024 was $ 690 and $ 919 , 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 six months ended March 28, 2025 follows: Number of RSUs Weighted Average Grant Price RSUs at September 27, 2024 84,192 $ 64.58 RSUs granted 57,792 33.14 RSUs vested and canceled due to performance targets not being met ( 17,041 ) 101.22 RSU's forfeited ( 3,690 ) 54.20 RSUs at March 28, 2025 121,253 44.76 Stock compensation expense, net of forfeitures, related to RSUs was $ 160 and $ 276 for the three and six month periods ended March 28, 2025, respectively. The Company recognized income related to RSUs of $ 579 and $ 440 for the three and six month periods ended March 29, 2024, respectively, as a result of reversing compensation expense previously recognized, due to an expectation that performance conditions wouldn't be met for certain awards. Unrecognized compensation cost related to non-vested RSUs as of March 28, 2025 was $ 1,596 , which amount will be amortized to expense through September 2027 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. Because performance criteria was not met, the RSUs expiring in the six month period ended March 28, - 9 - Index JOHNSON OUTDOORS INC. 2025 were canceled so shares tendered back to the Company for this purpose were 0 during the six month period ended March 28, 2025. Shares tendered back to the Company for the reimbursement of withholding taxes were 2,331 during the six month period ended March 29, 2024. The fair value of restricted stock units recognized as a tax deduction during the six month periods ended March 28, 2025 and March 29, 2024 was $ 0 and $ 1,015 , 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, which payout level was increased to 200 % of the target award amount for the RSU awards issued to employees for the fiscal 2025 – 2027 performance period. 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 March 28, 2025, the Company issued 0 shares of Class A common stock and recognized $ 128 of expense in connection with the Employees' Stock Purchase Plan. During the six month period ended March 28, 2025, the Company issued 0 shares of Class A common stock and recognized $ 165 of expense in connection with the Employees' Stock Purchase Plan. During the three month period ended March 29, 2024, the Company issued 0 shares of Class A common stock and recognized $ 77 of expense in connection with the Plan. During the six month period ended March 29, 2024, the Company issued 0 shares of Class A common stock and recognized $ 108 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 March 28, 2025, the Company had approximately 150 leases, with remaining terms ranging from less than one year to 14 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 six months ended March 28, 2025 and March 29, 2024 were as follows: - 10 - Index JOHNSON OUTDOORS INC. Three months ended Six months ended March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024 Lease Cost Operating lease costs $ 2,647 $ 2,476 $ 5,271 $ 4,941 Short-term lease costs 561 599 1,128 1,226 Variable lease costs 50 43 99 86 Total lease cost $ 3,258 $ 3,118 $ 6,498 $ 6,253 Included in the amounts in the table above was rent expense to related parties of $ 313 and $ 627 for the three and six months ended March 28, 2025, respectively, and $ 313 and $ 627 for the three and six months ended March 29, 2024, respectively. As of March 28, 2025, 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 March 28, 2025. As of March 28, 2025, the Company did not have any significant operating lease commitments that have not yet commenced. Supplemental balance sheet, cash flow, and other information related to operating leases was as follows: Six months ended March 28, 2025 March 29, 2024 Operating leases: Operating lease ROU assets $ 46,978 $ 50,880 Current operating lease liabilities 8,130 7,682 Non-current operating lease liabilities 40,695 44,915 Total operating lease liabilities $ 48,825 $ 52,597 Weighted average remaining lease term (in years) 10.59 11.28 Weighted average discount rate 3.4 % 3.2 % Cash paid for amounts included in the measurement of lease liabilities $ 5,028 $ 4,569 ROU assets obtained in exchange for lease liabilities $ 4,032 $ 3,276 Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at March 28, 2025 were as follows: - 11 - Index JOHNSON OUTDOORS INC. Year Related parties included in total Total Remainder of 2025 $ 657 $ 5,229 2026 1,348 9,177 2027 226 7,362 2028 — 4,799 2029 — 3,505 Thereafter — 29,763 Total undiscounted lease payments 2,231 59,835 Less: Imputed interest ( 29 ) ( 11,010 ) Total net lease liability $ 2,202 $ 48,825 6 INCOME TAXES For the three and six months ended March 28, 2025 and March 29, 2024, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows: Three Months Ended Six Months Ended (thousands, except tax rate data) March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024 Profit (loss) before income taxes $ 4,158 $ 3,012 $ ( 14,769 ) $ 8,911 Income tax (benefit) expense 1,854 856 ( 1,783 ) 2,800 Effective income tax rate 44.6 % 28.4 % 12.1 % 31.4 % The change in the effective tax rate for the three and six months ended March 28, 2025 compared to the three and six months ended March 29, 2024 was primarily due to the recording of an unrecognized tax benefit and the change in the geographic mix of profits or losses from a tax perspective in the current year. 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 Company maintains valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, the Company considers such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. Due to recent operating losses in the U.S., the Company has evaluated the realizability of U.S. net deferred tax assets. The evaluation concluded that the Company's U.S. deferred tax assets are realizable. The Company will continue to monitor the need for a valuation allowance on its U.S. deferred tax assets. 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 March 28, 2025 and March 29, 2024 were: March 28, 2025 March 29, 2024 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 - 12 - Index JOHNSON OUTDOORS INC. 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 recorded a $ 650 unrecognized tax benefit in the current period and estimates that reductions to unrecognized tax benefits for the remainder of fiscal 2025 will total $ 700 due mainly to lapses in statutes of limitations. In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized benefits as a component of income tax expense. 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: March 28, 2025 September 27, 2024 March 29, 2024 Raw materials $ 96,172 $ 103,780 $ 119,981 Finished goods 83,885 106,008 129,220 $ 180,057 $ 209,788 $ 249,201 8 GOODWILL The changes in goodwill during the six months ended March 28, 2025 and March 29, 2024 were as follows: March 28, 2025 March 29, 2024 Balance at beginning of period $ — $ 11,172 Acquisitions 10,231 — Amount attributable to movements in foreign currency rates ( 341 ) ( 5 ) Balance at end of period $ 9,890 $ 11,167 The goodwill at March 28, 2025 relates to the acquisition of Endless Summer Technologies Proprietary, Ltd. See Note 18 below for additional information on the acquisition. 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 12) below. During the fourth quarter of fiscal 2024, the Company's annual goodwill impairment test indicated the carrying value of the Fishing reporting unit exceeded its estimated fair value as of the measurement date of August 30, 2024. As a result, the Company recognized a goodwill impairment charge in the fourth quarter of fiscal 2024, which reduced the carrying value of the balance of goodwill reported as of March 29, 2024 of $ 11,167 to $ 0 as of September 27, 2024. This non-cash impairment was primarily driven by reduced cash flow projections in the Fishing reporting unit, prompted by ongoing market challenges and competitive pressure occurring in this segment. 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 six months ended March 28, 2025 and March 29, 2024. - 13 - Index JOHNSON OUTDOORS INC. March 28, 2025 March 29, 2024 Balance at beginning of period $ 10,211 $ 11,741 Expense accruals for warranties issued during the period 5,793 3,431 Less current period warranty claims paid ( 3,938 ) ( 4,187 ) Balance at end of period $ 12,066 $ 10,985 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. 11 INDEBTEDNESS The Company had no debt outstanding at March 28, 2025, September 27, 2024, or March 29, 2024. 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 request an increase of 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. On January 29, 2025, the Company entered into a Second Amendment to this credit facility that reduced the Revolver to $ 50,000 (but maintained the accordion feature) and modified the terms of the Credit Agreement as disclosed below for the period from the amendment date until the earlier of (1) the Company’s compliance with both a 3.00 x maximum leverage ratio and a 3.50 x minimum interest coverage ratio for the trailing twelve month period or (2) delivery of the Company’s fiscal 2025 financial statements and compliance certificate (the “Second Amendment Period”): • suspension of application of the maximum leverage and minimum interest coverage ratios during the Second Amendment Period; • the Company and its subsidiaries must maintain a $ 50,000 minimum cash balance; • acquisition, dividends, repurchases and distributions permitted, provided the Company and its subsidiaries maintain a $ 50,000 minimum cash balance; • monthly financial reporting if the facility availability is less than or equal to 95 %; and • the granting of a security interest in the Company’s personal property assets if the facility availability is less than or equal to 95 %. 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 Credit 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), the First 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), and the aforementioned Second Amendment (a copy of which was filed as Exhibit 10.1 to the quarterly report on Form 10-Q dated and filed with the Securities and Exchange Commission on February 3, 2025). 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 March 28, 2025 and March 29, 2024 were - 14 - Index JOHNSON OUTDOORS INC. approximately 5.4 % and 6.5 %, respectively. During the Second Amendment Period, the interest rate on borrowings under the Revolver will equal SOFR plus a 1.75 % applicable margin. 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, except as noted above during the Second Amendment Period. Other Borrowings The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of March 28, 2025 or March 29, 2024. 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 $ 67 as of March 28, 2025 and March 29, 2024, respectively. 12 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, accounts payable and accrued expenses approximated their fair values at March 28, 2025, September 27, 2024 and March 29, 2024 due to the short term maturities of these instruments. See Note 13 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. 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. Marketable Securities Marketable securities are classified as available-for-sale, 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 financial assets measured at fair value as of March 28, 2025: - 15 - Index JOHNSON OUTDOORS INC. Level 1 Level 2 Level 3 Total Assets: Rabbi trust assets $ 27,396 $ — $ — $ 27,396 Marketable securities — 4,315 — 4,315 Total $ 27,396 $ 4,315 $ — $ 31,711 The following table summarizes the Company’s financial assets measured at fair value as of September 27, 2024: Level 1 Level 2 Level 3 Total Assets: Rabbi trust assets $ 29,059 $ — $ — $ 29,059 Marketable securities — 16,541 — 16,541 Total $ 29,059 $ 16,541 $ — $ 45,600 The following table summarizes the Company’s financial assets measured at fair value as of March 29, 2024: Level 1 Level 2 Level 3 Total Assets: Rabbi trust assets $ 27,139 $ — $ — $ 27,139 Marketable securities — 26,071 — 26,071 Total $ 27,139 $ 26,071 $ — $ 53,210 The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three and six month periods ended March 28, 2025 and March 29, 2024 was: Three Months Ended Six months ended Location of income recognized in Statement of Operations March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024 Rabbi trust assets Other (expense) income, net $ ( 1,277 ) $ 2,100 $ ( 2,765 ) $ 4,772 There were no assets or liabilities measured at fair value on a non-recurring basis in periods subsequent to their initial recognition for either of the six month periods ended March 28, 2025 or March 29, 2024. 13 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. 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 March 28, 2025, 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 March 28, 2025: - 16 - Index JOHNSON OUTDOORS INC. Amortized Cost Fair Value Gross unrealized gains Gross unrealized losses Fixed rate Canadian Government Bonds $ 4,298 $ 4,315 $ 17 $ — Total $ 4,298 $ 4,315 $ 17 $ — The following table summarizes the Company’s marketable securities measured at fair value as of September 27, 2024: Amortized Cost Fair Value Gross unrealized gains Gross unrealized losses Fixed rate US Government Bonds $ 7,493 $ 7,496 $ 3 $ — Fixed rate Canadian Government Bonds 9,025 9,045 20 — Total $ 16,518 $ 16,541 $ 23 $ — The following table summarizes the Company’s marketable securities measured at fair value as of March 29, 2024: Amortized Cost Fair Value Gross unrealized gains Gross unrealized losses Fixed rate US Government Bonds $ 14,938 $ 14,921 $ — $ 17 Fixed rate Canadian Government Bonds 11,184 11,150 — 34 Total $ 26,122 $ 26,071 $ — $ 51 Proceeds from the maturities of available for sale securities were $ 11,826 and $ 15,000 for the six month periods ended March 28, 2025 and March 29, 2024, respectively. There were no sales or purchases of available-for-sale securities for the six month periods ended March 28, 2025 or March 29, 2024. 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 March 28, 2025 are as follows: $ 4,315 within one year, classified as Short-Term Investments on the Condensed Consolidated Balance Sheets, and $ 0 greater than one year, but less than five years, classified as Investments on the Condensed Consolidated Balance Sheets. 14 NEW ACCOUNTING PRONOUNCEMENTS Recently issued accounting pronouncements In November 2024, the Financial Account Standards Board (FASB), issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 is intended to improve disclosures and provide more detailed information about a public entity’s expenses, specifically amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses, along with qualitative descriptions of certain other types of expenses. This guidance in this ASU is effective in fiscal 2028, and interim periods in fiscal 2029, with early adoption permitted. The Company is currently reviewing this ASU and its potential impact on its financial statements and disclosures. 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 - 17 - Index JOHNSON OUTDOORS INC. 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 FASB, issued 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 financial statements and 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, and interim periods in fiscal 2026, 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. 15 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 March 28, 2025, the right to returns asset was $ 1,615 and the accrued returns liability was $ 4,283 . At March 29, 2024, the right to returns asset was $ 1,266 and the accrued returns liability was $ 3,362 . 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 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. The revenue recognition policies are similar among all the various products sold by the Company. See Note 16 for required disclosures of disaggregated revenue. - 18 - Index JOHNSON OUTDOORS INC. 16 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. The Company has historically reported "Camping" and "Watercraft Recreation" segments separately. As of December 27, 2024, the Company combined these two segments into one segment, "Camping & Watercraft Recreation", consistent with the manner in which its chief operating decision maker ("CODM") assesses performance and makes resource allocations. The operating segment change was for financial reporting purposes only and did not impact or result in changes to operations of the business segments, nor did it impact the Company's consolidated financial statements, but it did impact our previous segment footnote disclosure and the table below, including the corresponding items of segment information disclosed in the prior year. 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 Six Months Ended March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024 September 27, 2024 Net sales: Fishing: Unaffiliated customers $ 134,462 $ 138,466 $ 216,895 $ 248,827 Interunit transfers 429 142 468 273 Camping & Watercraft Recreation: Unaffiliated customers 17,826 20,232 27,269 30,915 Interunit transfers 26 16 34 59 Diving Unaffiliated customers 15,814 16,918 31,494 34,392 Interunit transfers 6 6 10 10 Other / Corporate 247 240 340 366 Eliminations ( 461 ) ( 164 ) ( 512 ) ( 342 ) Total $ 168,349 $ 175,856 $ 275,998 $ 314,500 Operating profit (loss): Fishing $ 9,469 $ 7,427 $ 1,208 $ 18,956 Camping & Watercraft Recreation: 1,246 1,223 600 ( 497 ) Diving ( 413 ) ( 298 ) ( 1,321 ) ( 876 ) Other / Corporate ( 5,401 ) ( 8,605 ) ( 15,825 ) ( 17,790 ) $ 4,901 $ ( 253 ) $ ( 15,338 ) $ ( 207 ) Total assets (end of period): Fishing $ 359,016 $ 432,108 $ 325,882 Camping & Watercraft Recreation: 73,171 75,584 69,516 Diving 90,137 82,088 77,465 Other / Corporate 102,150 101,898 162,349 $ 624,474 $ 691,678 $ 635,212 Other Segment Information - 19 - Index JOHNSON OUTDOORS INC. During the three and six month periods ended March 28, 2025, two customers of the Company's Fishing and Camping & Watercraft Recreation segments each accounted for more than 10% of the Company's consolidated revenues, which amounted to combined net sales of approximately $ 63,291 and $ 87,549 , respectively, of the Company's consolidated revenues. During the three and six month periods ended March 29, 2024, two customers of the Company's Fishing and Camping & Watercraft Recreation segments each accounted for more than 10% of the Company's consolidated revenues, which amounted to combined net sales of approximately $ 54,746 and $ 108,893 , respectively, of the Company's consolidated revenues. 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. 17 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in Accumulated Other Comprehensive Income (“AOCI”) by component, net of tax, for the six months ended March 28, 2025 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 27, 2024 $ 6,056 $ 17 $ ( 109 ) $ 5,964 Other comprehensive loss before reclassifications ( 4,915 ) ( 1 ) — ( 4,916 ) Amounts reclassified from accumulated other comprehensive income — — 11 11 Tax effects — — ( 2 ) ( 2 ) Balance at December 27, 2024 $ 1,141 $ 16 $ ( 100 ) $ 1,057 Other comprehensive loss before reclassifications 1,133 ( 4 ) — 1,129 Amounts reclassified from accumulated other comprehensive income — — 10 10 Tax effects — ( 3 ) ( 3 ) Balance at March 28, 2025 $ 2,274 $ 12 $ ( 93 ) $ 2,193 The changes in AOCI by component, net of tax, for the six months ended March 29, 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 income 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 The reclassifications out of AOCI for the three and six months ended March 28, 2025 and March 29, 2024 were as follows: - 20 - Index JOHNSON OUTDOORS INC. Three Months Ended Six Months Ended March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024 Statement of Operations Presentation Unamortized loss on defined benefit pension plans: Amortization of loss $ 10 $ 10 $ 21 $ 20 Other income and expense Tax effects ( 3 ) ( 2 ) ( 5 ) ( 5 ) Income tax expense Total reclassifications for the period $ 7 $ 8 $ 16 $ 15 18 ACQUISITIONS On October 25, 2024, the Company acquired all the outstanding common stock of Endless Summer Technologies Proprietary, Ltd ("EST") and related patents and other assets used in EST's business and operations in a purchase transaction with EST's sole shareholder (the "Seller"). EST, based in Durban, South Africa, has been a long term supplier of products to the Company and it specializes in the design, development and manufacturing of scuba equipment through unique application of existing, new and emerging technologies. The EST acquisition is included in the Company's Diving segment, and is expected to provide new innovative products, unlock synergies and enhance operating efficiencies for the Diving segment. The approximately $ 12,197 acquisition cost was funded with existing cash. Approximately $ 1,650 of the purchase price was paid into segregated escrow accounts which were set aside to fund (1) any potential downward purchase price adjustment tied to cash, debt and net working capital levels as of the closing or (2) potential indemnity claims that may be made by the Company against the Seller in connection with the inaccuracy of certain representations and warranties made by the Seller or related to the breach or nonperformance of certain other actions, agreements or conditions related to the acquisition, for a period of 24 months from the acquisition date. The Company cannot estimate the probability or likelihood of bringing such an indemnity claim against the Seller or any related costs at this time. The remaining escrow balance, if any, net of any indemnity claim then pending, will be released to the Seller once the 24 month period has lapsed. The Company is currently in the process of determining the fair value of the assets acquired and the liabilities assumed in this acquisition and anticipates completing the valuation of intangibles and other assets, including any final cash, debt, net working capital adjustments and the related tax effects, within this fiscal year. The following table summarizes the provisional fair values of the assets acquired and liabilities assumed, and the resulting goodwill acquired at the date of acquisition: Recognized amounts of identifiable assets acquired and liabilities assumed Accounts receivable $ 245 Inventories 2,261 Other current assets 72 Property, plant and equipment 502 Identifiable intangible assets 1,439 Deferred tax asset 237 Less, accounts payable and accruals ( 1,044 ) Less, other current liabilities ( 636 ) Less, long term liabilities ( 1,110 ) Total identifiable net assets 1,966 Goodwill 10,231 Net assets acquired $ 12,197 Pro forma financial information has not been presented because such amounts are not material to the unaudited condensed consolidated financial statements. - 21 - Index JOHNSON OUTDOORS INC. Transaction costs incurred for the acquisition to date were approximately $ 635 , of which approximately $ 135 was recognized during the six months ended March 28, 2025, and which are included in Administrative management, finance and information systems expenses in the accompanying Condensed Consolidated Statements of Operations.