What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-12-12 compared with 2024-12-11 · 100 added, 129 removed, 156 unchanged (59% of the section changed)

5 unchanged sentences

Its subsidiaries operate as a network that promotes innovation and leverages best practices and synergies in the design, production and marketing of their recreational products, following the strategic vision set by executive management and approved by the Company’s Board of Directors.

The Company’s fiscal 2024 full-year revenues decreased by 11% from the prior year as market challenges continued, and competitive pressures increased, resulting in weaker demand and sales across all segments.

Unfavorable overhead absorption due to the lower sales volumes, combined with adverse changes in product mix contributed to a 2.9 point decrease in gross margin year over year.

In addition to the sales and gross margin declines, a 5% increase in operating expenses between years, driven mainly by a $11,173 write-off of goodwill, contributed to a $55,262 decrease in operating profit in fiscal 2024 from fiscal 2023.

The Company’s fiscal 2025 full-year revenues remained essentially flat to the prior year.

New product successes in the Fishing segment helped to offset sales declines resulting from the exit of the Company's Eureka!

brand in the prior year.

Favorable overhead absorption and lower inventory reserve adjustments in the current year contributed to a 1.2 point increase in gross margin year over year.

An 8% decrease in operating expenses between years, driven mainly by the $11,173 write-off of goodwill in the prior year, as well as a decrease in promotional spending year over year, contributed to a $27,331 improvement in operating loss in fiscal 2025 from fiscal 2024.

Results of Operations

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Interest income, net (3,559) (4,692) (4,391)

Other (income) expense, net (8,968) (9,693) 8,076

Income tax (benefit) expense

Other income, net (3,353) (8,968) (9,693)

Income tax expense (benefit)

25,015 (3,329) 6,290

4 unchanged sentences

Fishing $ 459,162 $ 452,341 $ 492,927

Camping 37,835 45,322 70,355

Watercraft Recreation 28,816 40,768 67,940

Camping & Watercraft Recreation 58,071 66,635 86,087

Diving 75,458 73,628 85,069

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Fishing $ 19,570 $ (6,598) $ 41,325

Camping 3,848 457 13,415

Watercraft Recreation (4,336) (1,777) 6,173

Camping & Watercraft Recreation 918 (488) (1,320)

Diving 1,667 (1,244) 6,092

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Fiscal 2025 vs.

Net sales in fiscal 2024 decreased by 11% to $592,846 compared to $663,844 in fiscal 2023.

Net sales in fiscal 2025 were $592,415 compared to $592,846 in fiscal 2024.

Foreign currency exchange had a negligible impact on the current year’s sales versus the prior year.

Net sales for the Fishing business decreased by $40,586, or 8% during fiscal 2024 from fiscal 2023.

Softer overall consumer demand and increased competitive pressure in the Fishing market contributed to the decline between years.

Camping net sales decreased $7,487, or 17%, in 2024 from 2023.

Approximately $4,500 of the decrease in net sales from the prior year period was related to the previously disclosed sale of the Military and Commercial Tents product lines during the second fiscal quarter of 2023, with the remainder due primarily to general declines in market demand for camping products.

Net sales in the Watercraft Recreation business decreased $11,952, or 29% from the prior year.

Sales in this segment were negatively affected by continuing decreased demand in the overall watercraft market compared to the prior year.

Diving net sales decreased $11,441, or 13%, year over year.

The sales decrease was due to softening market demand across all geographic regions, partially offset by a favorable foreign currency translation impact on sales in this segment of approximately 1% in 2024 versus the prior year period.

Net sales for the Fishing business increased by $6,821, or 2% during fiscal 2025 from fiscal 2024.

The increase in sales in this segment year over year was mainly due to sales generated by the introduction of new products, particularly in the last half of the current fiscal year.

Camping & Watercraft Recreation net sales decreased $8,564, or 13%, in 2025 from 2024.

As previously announced, the Company exited the Eureka!

brand in this segment, and completed all remaining sales of Eureka!

inventory in the first fiscal quarter of 2025.

Excluding the impact of Eureka!

sales in the prior year, which accounts for a decrease of approximately $9,432 year over year, sales in this segment increased slightly over the prior year due to success of new Jetboil products introduced into the market by the Company during the year.

Diving net sales increased $1,830, or 2%, year over year.

The sales increase was primarily driven by modest improvements in market conditions across certain regions, as well as a favorable foreign currency translation impact on sales in this segment of approximately 1% in 2025 versus the prior year period.

Cost of Sales

Cost of sales was $384,322, or 64.9% of net sales, on a consolidated basis for fiscal 2025 compared to $391,866, or 66.1% of net sales, in the prior year.

The decrease in total cost of sales dollars was consistent with the decrease in sales year over year.

As a percentage of net sales, the increase cost of sales between years was driven primarily by the unfavorable absorption of fixed overhead costs as a result of lower sales volumes between periods.

Gross profit of $200,980 was 33.9% of net sales on a consolidated basis for the year ended September 27, 2024 compared to $244,087, or 36.8% of net sales in the prior year.

Gross profit in the Fishing business decreased by $28,766 from the prior year due primarily to the 8% decrease in net sales year over year.

While certain material and overhead costs improved year over year as a result of cost savings efforts, it was not enough to overcome unfavorable overhead absorption as a result of the reduced sales volumes between periods, and a product mix that contained lower margin products in the current year.

Camping gross profit decreased by $1,778 from 2023, mainly due to lower sales volumes than the prior year.

Gross profit in the Watercraft Recreation segment decreased by $5,531 from 2023, due primarily to lower sales volumes than the prior year and the lower absorption of fixed overhead related to such sales decrease.

The $6,935 decrease in gross profit in the Diving segment was largely due to sales volume decreases during fiscal 2024 as compared to the prior year.

Incremental tariffs incurred during the current year were, in large part, capitalized on the balance sheet at October 3, 2025.

The decrease in cost of sales as a percent of net sales year over year was driven primarily by the sell-off of remaining Eureka!

branded product in the prior year at very low margins.

Gross profit of $208,093 was 35.1% of net sales on a consolidated basis for the year ended October 3, 2025 compared to $200,980, or 33.9% of net sales in the prior year.

Gross profit in the Fishing business increased by $3,451 from the prior year due primarily to the 2% increase in net sales year over year.

Material and labor cost increases were largely offset by lower inventory reserves and improved absorption of fixed overhead costs between the periods.

Camping & Watercraft Recreation gross profit decreased by $788 from 2024, where the impact of lower sales volumes was partially offset by an improved product mix in fiscal 2025 after fully exiting the Eureka!

brand in early 2025.

The $4,494 increase in gross profit in the Diving segment was largely due to increased sales as well as reduced inventory reserves and selected pricing actions taken in the current year.

Operating Expenses

Operating expenses increased from the prior year by $12,155 despite the decrease in sales volumes.

Key drivers of the expense change are an $11,173 write off of goodwill in the current year, approximately $3,800 of higher deferred compensation costs between years, partially offset by lower incentive compensation and professional services expenses between years.

Operating expenses for the Fishing segment increased by $19,156 from fiscal 2023 levels.

The increase was due primarily to the $11,173 write off of goodwill in the current year, as well as approximately $11,000 higher advertising and promotional spend between years offset in part by lower warranty expense and lower sales volume related costs.

Camping operating expenses decreased by $5,169 from the prior year.

In addition to decreased sales volume related costs between years, the prior year included expenses related to the Eureka!

product exit of approximately $2,500.

In the Watercraft Recreation segment, operating expenses decreased $2,973 from their levels in fiscal 2023 due primarily to decreased sales volume related expenses in 2024.

Operating expenses for the Diving business increased by $401 year over year due primarily to severance expense and professional services expenses, partially offset by decreased sales volume related expenses between periods.

Operating expenses decreased from the prior year by $20,218.

Key drivers of the expense change were an $11,173 write off of goodwill in the prior year, approximately $3,600 of lower deferred compensation costs between years, and a decrease in promotional spending versus the prior year period.

Operating expenses for the Fishing segment decreased by $22,717 from fiscal 2024 levels.

This decrease was due primarily to the $11,173 write off of goodwill in the prior year, as well as approximately $10,000 of lower advertising and promotional spend between years.

Camping & Watercraft Recreation operating expenses decreased by $2,194 from the prior year, mainly due to decreased sales volume related costs between years.

Operating expenses for the Diving business increased by $1,583 year over year due primarily to increased variable compensation costs between periods.

The Company's fiscal 2025 general corporate expenses of $38,612 increased $3,110 from $35,502 in fiscal 2024.

More favorable market conditions on the Company's deferred compensation plan assets resulted in approximately $3,800 of higher deferred

compensation expense during fiscal 2024 over the prior year, partially offset by lower incentive compensation and professional services expenses year over year.

The deferred compensation expenses are entirely offset by a gain in "Other (income) expense, net" related to marking the plan assets to market.

Higher variable compensation and health insurance costs over the prior year were partially offset by approximately $3,600 of lower deferred compensation costs due to less favorable market conditions on the Company's deferred compensation plan assets during fiscal 2025.

The deferred compensation expenses are entirely offset in "Other (income) expense, net" related to marking the plan assets to market.

Operating Results

The Company’s operating loss was $43,522 in fiscal 2024 compared to an operating profit of $11,740 in fiscal 2023.

Fishing operating profit decreased by $47,923 to a loss of $6,598 from the prior year due primarily to lower sales volumes between years, as well as increased operating expenses, as discussed above.

The operating profit for Camping was $3,848 compared to $457 in 2023 which increase was primarily a result of the lower operating expenses between periods.

The operating loss for the Watercraft Recreation business was $4,336 in fiscal 2024 compared to an operating loss of $1,777 in fiscal 2023 due to the changes in sales volumes between periods noted above.

The operating loss for the Diving business was $1,244 in fiscal 2024, down from an operating profit of $6,092 in fiscal 2023, due primarily to decreased sales volumes between periods.

The Company’s operating loss was $16,191 in fiscal 2025 compared to an operating loss of $43,522 in fiscal 2024.

Fishing operating profit increased by $26,168 from the prior year to a profit of $19,570 due primarily to a goodwill impairment charge in the prior year and increased sales volumes between years, as discussed above.

The operating profit for Camping & Watercraft Recreation was $918 compared to a loss of $488 in 2024 which increase was primarily a result of an improved sales mix of products between periods.

The operating profit for the Diving business was $1,667 in fiscal 2025, up from an operating loss of $1,244 in fiscal 2024, due primarily to decreased materials costs and a favorable product mix between years.

Other Income and Expenses

Interest expense of $152 was flat as compared to the prior year expense of $152.

Interest income of $4,844 increased slightly from prior year interest income of $4,543 due to the increase in deposit interest rates year over year, as well as increased cash and investment balances over the prior year.

Interest expense of $224 increased slightly compared to the prior year expense of $152.

Interest income of $3,783 decreased from prior year interest income of $4,844 due to the decreased investment balances over the prior year.

Net other income of $3,353 in fiscal 2025 decreased from $8,968 in fiscal 2024.

The current year net other income included the gain on the sale of a building of approximately $1,900 and market earnings and dividend income of $7,049 on deferred compensation plan assets, partially offset by currency losses of $385.

In the prior year, net other income included the gain on the sale of the Military and Commercial Tents product lines of approximately $6,560, and market earnings and dividends on the deferred compensation plan assets of $3,200, partially offset by $114 of currency losses.

The current year net other income included market earnings and dividend income on deferred compensation plan assets of $3,415, partially offset by currency losses of $126.

The prior year net other income included the gain on the sale of a building of approximately $1,900 and market earnings and dividend income of $7,049 on deferred compensation plan assets, partially offset by currency losses of $385.

The dividends and market gains and losses on deferred compensation plan assets recognized in the Consolidated Statement of Operations in “Other (income) expense, net” are offset as compensation expense in “Operating expenses.”

Pretax Income and Income Taxes

The Company realized a pretax loss of $29,862 in fiscal 2024 compared to income of $25,824 in fiscal 2023.

The Company recorded income tax benefit of $3,329 in 2024, which equated to an effective tax rate of 11.1%, compared to tax expense of $6,290 in 2023, which equated to an effective tax rate of 24.4%.

The Company realized a pretax loss of $9,279 in fiscal 2025 compared to a pretax loss of $29,862 in fiscal 2024.

The Company recorded income tax expense of $25,015 in 2025, which equated to an effective tax rate of (269.6)%, compared to a tax benefit of $3,329 in 2024, which equated to an effective tax rate of 11.1%.

In fiscal 2025, based on projections for the U.S.

tax jurisdictions, the Company determined that it was more likely than not that certain deferred tax assets will not be realized and a valuation allowance balance of $25,880 was reported against the net deferred tax assets for the U.S, resulting in the increase in tax expense over the prior year.

Net Income (Loss)

The Company recognized net loss of $26,533, or $2.60 per diluted common share, in fiscal 2024 compared to net income of $19,534, or $1.90 per diluted common share, in fiscal 2023 based on the factors discussed above.

The Company recognized net loss of $34,294, or $3.35 per diluted common share, in fiscal 2025 compared to net loss of $26,533, or $2.60 per diluted common share, in fiscal 2024 based on the factors discussed above.

Fiscal 2024 vs.

Net sales in fiscal 2024 decreased by 11% to $592,846 compared to $663,844 in fiscal 2023.

Foreign currency exchange had an unfavorable impact of less than 1% on 2023 sales versus fiscal 2022.

Foreign currency exchange had a negligible impact on sales year over year.

Net sales for the Fishing business decreased by $40,586, or 8% during fiscal 2024 from fiscal 2023.

The decrease from fiscal 2022 was primarily due to the following key factors:

moderating demand during fiscal 2023 from record highs in the prior two fiscal years fueled by the impact of the pandemic;

and the effect of customers more tightly managing their inventory levels as the Company transitioned its bow-mount trolling motor product lines.

Camping net sales decreased $25,033, or 36%, in 2023 from 2022, as demand significantly declined from the increased levels seen during the pandemic.

Additionally, approximately $6,600 of the decrease in net sales from fiscal 2022 was related to the sale of the Military and Commercial Tents product lines during the second fiscal quarter of 2023.

The Company sold these product lines to a third party in an asset sale for a purchase price of $14,990 which closed on March 17, 2023.

The net book value of the assets and liabilities sold was approximately $8,350, resulting in a gain on sale of approximately $6,640, which was recorded in Other (income) expense, net in the Company’s accompanying Consolidated Statements of Operations.

The purchase price and the net proceeds received by the Company related to this sale were subject to customary purchase price adjustment provisions and Company indemnity obligations set forth in the definitive purchase agreement.

Accordingly, during the third and fourth fiscal quarter of fiscal 2023, working capital true-up and purchase price adjustments reduced the purchase price and the final net gain to approximately $6,560.

Net sales in the Watercraft Recreation business decreased $27,172, or 40% as the overall market significantly declined from the elevated levels seen during the pandemic.

Diving net sales increased $6,195, or 8%, year over year.

The sales increase was due to increased demand for our products as the global tourism industry continued to recover from the pandemic, as well as the impact of price increases, which were partially offset by an unfavorable foreign currency translation impact on sales in this segment of approximately 1% in 2023 versus fiscal 2022.

Softer overall consumer demand and increased competitive pressure in the Fishing market contributed to the decline between years.

Camping & Watercraft Recreation net sales decreased $19,439 in fiscal 2024 from 2023.

Approximately $4,500 of the decrease in net sales from the 2023 period was related to the previously disclosed sale of the Military and Commercial Tents product lines during the second fiscal quarter of 2023, with the remainder due primarily to general declines in market demand for camping and watercraft products.

Diving net sales decreased $11,441, or 13%, year over year.

Cost of Sales

Cost of sales was $391,866, or 66.1% of net sales, on a consolidated basis for fiscal 2024 compared to $419,757, or 63.2% of net sales, in fiscal 2023.

The decrease in cost of sales was relatively consistent with the decrease in sales year over year and improved slightly as a percentage of net sales as supply chain conditions improved and costs of materials and freight both came down.

The decrease in total cost of sales dollars was consistent with the decrease in sales year over year.

As a percentage of net sales, the increase cost of sales between years was driven primarily by the unfavorable absorption of fixed overhead costs as a result of lower sales volumes between periods.

Gross profit of $200,980 was 33.9% of net sales on a consolidated basis for the year ended September 27, 2024 compared to $244,087, or 36.8% of net sales in fiscal 2023.

Gross profit in the Fishing business decreased by $7,685 from fiscal 2022 due primarily to the 6% decrease in net sales year over year.

Although we experienced improved freight and materials costs over fiscal 2022, those cost savings were nearly offset by unfavorable overhead absorption on reduced sales volumes between periods.

Camping gross profit decreased by $12,120 from 2022, which was mainly attributable to decreased sales volumes as compared to 2022.

Additionally, approximately $2,300 of increases in reserves for excess Eureka!

tent inventory further brought down gross profit.

Gross profit in the Watercraft Recreation segment decreased by $11,388 from 2022, due primarily to lower sales volumes between years.

The $3,846 increase in gross profit in the Diving segment was due primarily to sales volume increases and pricing actions during fiscal 2023 as compared to fiscal 2022.

Gross profit in fiscal 2024 in the Fishing business decreased by $28,766 from fiscal 2023 due primarily to the 8% decrease in net sales year over year.

Camping & Watercraft Recreation gross profit in fiscal 2024 decreased by $7,309 from 2023, mainly due to lower sales volumes between years, as well as lower absorption of fixed overhead related to such sales decrease.

The $6,935 decrease in gross profit in the Diving segment was largely due to sales volume decreases during fiscal 2024 as compared to fiscal 2023.

Operating Expenses

Operating expenses increased from fiscal 2022 by $27,325 despite the decrease in sales volumes due to investments in marketing and research & development and higher headcount and deferred compensation costs.

Operating expenses increased in fiscal 2024 from fiscal 2023 levels by $12,155 despite the decrease in sales volumes.

Key drivers of the expense change were an $11,173 write off of goodwill in fiscal 2024, approximately $3,800 of higher deferred compensation costs between years, partially offset by lower incentive compensation and professional services expenses between years.

Operating expenses for the Fishing segment increased by $19,156 from fiscal 2023 levels.

The increase was due primarily to higher warranty expense and marketing spend between years, as well as strategic investments in additional research and development headcount in fiscal 2023, offset in part by lower sales volume-driven expenses.

Camping operating expenses increased by $838 from fiscal 2022 where increased expenses related to the Eureka!

exit more than offset the decline in operating expenses resulting from decreased sales volume-driven expenses between years.

During the fourth quarter of 2023, the Company decided to fully exit the Eureka!

consumer product lines of the Camping business segment and focus solely on the Jetboil product line.

As part of this exit, the Company committed to donating approximately $2,000 in excess Eureka!

inventory to a non-profit organization and recognized the contribution expense in the fourth quarter of fiscal 2023.

Additionally, the Company incurred costs related to the wind down of this Eureka!

branded business which included accruing approximately $500 of exit costs.

In the Watercraft Recreation segment, operating expenses decreased $3,438 from their levels in fiscal 2022 due primarily to decreased sales volume related expenses in 2023.

Operating expenses for the Diving business increased by $2,460 year over year due primarily to increased sales volume related expenses and increased headcount and personnel-related costs between periods.

The increase was due primarily to the $11,173 write off of goodwill in fiscal 2024, as well as approximately $11,000 higher advertising and promotional spend between years offset in part by lower warranty expense and lower sales volume related costs.

Camping & Watercraft Recreation operating expenses decreased in fiscal 2024 by $8,142 from fiscal 2023.

In addition to decreased sales volume related costs between years, fiscal 2023 included expenses related to the Eureka!

product exit of approximately $2,500.

The Company's fiscal 2024 general corporate expenses of $35,503 increased $739 from $34,765 in fiscal 2023.

More favorable market conditions on the Company's deferred compensation plan assets resulted in approximately $9,100 of higher

deferred compensation expense during fiscal 2023 over fiscal 2022.

The deferred compensation expenses were entirely offset by a gain in "Other (income) expense, net" related to marking the plan assets to market.

Additionally, professional services costs increased approximately $2,800 year over year.

More favorable market conditions on the Company's deferred compensation plan assets resulted in approximately $3,800 of higher deferred compensation expense during fiscal 2024 over fiscal 2023, partially offset by lower incentive compensation and professional services expenses year over year.

The deferred compensation expenses are entirely offset by a gain in "Other (income) expense, net" related to marking the plan assets to market.

Operating Results

The Company’s operating profit was $11,740 in fiscal 2023 compared to an operating profit of $66,310 in fiscal 2022.

Fishing operating profit decreased by $24,108 to $41,325 from $65,433 in fiscal 2022 due primarily to lower sales volumes between years, as well as increased operating expenses, as discussed above.

The operating profit for Camping was $457 compared to $13,415 in 2022 which decrease was primarily a result of the lower sales volumes between periods.

The operating loss for the Watercraft Recreation business was $1,777 in fiscal 2023 compared to operating profit of $6,173 in fiscal 2022 due to the changes in sales volumes noted above.

Operating profit for the Diving business increased by $1,387 in fiscal 2023 from fiscal 2022, due primarily to increased sales volumes and improved margins.

The Company’s operating loss was $43,522 in fiscal 2024 compared to an operating profit of $11,740 in fiscal 2023.

Fishing operating profit decreased by $47,923 in fiscal 2024 to a loss of $6,598 from fiscal 2023 due primarily to lower sales volumes between years, as well as increased operating expenses, as discussed above.

The operating loss for Camping & Watercraft was $488 in fiscal 2024 compared to a loss $1,320 in fiscal 2023 which improvement was primarily a result of the lower operating expenses between periods.

The operating loss for the Diving business was $1,244 in fiscal 2024, down from an operating profit of $6,092 in fiscal 2023, due primarily to decreased sales volumes between periods.

Other Income and Expenses

Interest expense of $152 was flat as compared to the prior year expense of $153.

Interest income of $4,543 increased from fiscal 2022 interest income of $807 due to the increase in deposit interest rates year over year, as well as increased cash and investment balances year over year.

Net other income of $9,693 in fiscal 2023 increased from net other expense of $8,076 in fiscal 2022.

Fiscal 2023 net other income included the gain on the sale of the Military and Commercial Tents product lines of approximately $6,560, and market earnings and dividend income of $3,200 on deferred compensation plan assets, partially offset by currency losses of $114.

In fiscal 2022, net other expense included $5,878 of market losses net of dividends on the deferred compensation plan assets, as well as $1,741 of currency losses.

Interest expense of $152 in fiscal 2024 was flat as compared to fiscal 2023 expense of $152.

Interest income of $4,844 in fiscal 2024 increased slightly from fiscal 2023 interest income of $4,543 due to the increase in deposit interest rates year over year, as well as increased cash and investment balances year over year.

Net other income of $8,968 in fiscal 2024 decreased from $9,693 in fiscal 2023.

Fiscal 2024 net other income included the gain on the sale of a building of approximately $1,900 and market earnings and dividend income of $7,049 on deferred compensation plan assets, partially offset by currency losses of $385.

In fiscal 2023, net other income included the gain on the sale of the Military and Commercial Tents product lines of approximately $6,560, and market earnings and dividends on the deferred compensation plan assets of $3,200, partially offset by $114 of currency losses.

Pretax Income and Income Taxes

The Company realized pretax income of $25,824 in fiscal 2023 compared to $58,888 in fiscal 2022.

The Company recorded income tax expense of $6,290 in 2023, which equated to an effective tax rate of 24.4%, compared to $14,397 in 2022, which equated to an effective tax rate of 24.4%.

The Company recognized net income of $19,534, or $1.90 per diluted common share, in fiscal 2023 compared to $44,491, or $4.37 per diluted common share, in fiscal 2022 based on the factors discussed above.

The Company realized a pretax loss of $29,862 in fiscal 2024 compared to pretax income of $25,824 in fiscal 2023.

The Company recorded an income tax benefit of $3,329 in 2024, which equated to an effective tax rate of 11.1%, compared to tax expense of $6,290 in 2023, which equated to an effective tax rate of 24.4%.

Net Income (Loss)

Financial Condition, Liquidity and Capital Resources

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

(thousands) September 27

(thousands) October 3

2025 September 27

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The following table sets forth the Company’s working capital position at the end of each of the years shown:

(thousands, except share data) September 27

(thousands, except share data) October 3

2025 September 27

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Current ratio 3.9:1 4.7:1

Cash flows provided by operations in fiscal 2024 totaled $40,984, compared to $41,713 in fiscal 2023, and cash used for operations totaled $62,144 in fiscal 2022.

Despite the net loss in fiscal 2024, cash flows provided by operations remained relatively consistent with fiscal 2023, as a result of managing inventory levels and reducing the inventory balance year over year.

The substantial improvement in cash flows from operating activities between fiscal 2022 and 2023 was due to the Company's ability to fill more customer orders, as a result of improved supply chain conditions, which generated substantially more customer payments during fiscal 2023 versus fiscal 2022.

Cash flows provided by operations in fiscal 2025 totaled $56,206, compared to $40,984 in fiscal 2024, and $41,713 in fiscal 2023.

While the net loss in fiscal 2025 was larger than fiscal 2024, a significant portion of the current year's loss was driven by non-cash tax expense.

Depreciation and amortization charges were $20,627, $19,608 and $16,295 in fiscal 2025, 2024 and 2023, respectively.

Investing Activities

Cash flows provided by investing activities were $5,034 in fiscal 2024, and cash flows used for investing activities were $48,374, and $31,678 in fiscal 2023 and 2022, respectively.

Cash flows used for investing activities were $11,856 in fiscal 2025, cash flows provided by investing activities were $5,034 in fiscal 2024, and cash flows used for investing activities were $48,374 in fiscal 2023.

Fiscal 2025 cash usage reflects the acquisition of the business of Endless Summer Technologies Proprietary Limited (See Note 17 to the consolidated financial statements included elsewhere in this report for a discussion of the acquisition) for cash of $12,197 in the Company's Diving

segment offset by proceeds from the maturity of investments of $16,316.

During fiscal 2024, the Company received proceeds from maturities of investments of $27,025, as well as proceeds of approximately $1,900 related to the sale of a building.

During fiscal 2023, the Company purchased investments of $40,700.

There were no sales or purchases of investments in fiscal 2022.

In fiscal 2023, there was $14,990 of proceeds from selling the Military and Commercial Tent product lines.

During fiscal 2023, the Company purchased investments of approximately $40,700 which was offset in part by $14,990 of proceeds from selling the Military and Commercial Tent product lines.

Expenditures for property, plant and equipment were $15,975, $22,018 and $22,668 in fiscal 2025, 2024 and 2023, respectively.

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Cash flows used for financing activities totaled $13,563 in fiscal 2025 compared to $13,695 and $12,732 in 2024 and 2023, respectively, and were primarily for the payment of dividends of $13,507, $13,431 and $12,554 in 2025, 2024, and 2023, respectively.

In 2022, dividend payments totaled $12,056.

Contractual Obligations and Off Balance Sheet Arrangements

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

There have been no changes outside of the ordinary course of business in the specified contractual obligations during the year ended September 27, 2024.

There have been no changes outside of the ordinary course of business in the specified contractual obligations during the year ended October 3, 2025.

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

Letters of credit outstanding at September 27, 2024 and September 29, 2023 were $67 and $67, respectively, and were included in the Company’s total loan availability.

The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of September 27, 2024 or September 29, 2023.

Letters of credit outstanding at October 3, 2025 and September 27, 2024 were $67 and $67, respectively, and were included in the Company’s total loan availability.

The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of October 3, 2025 or September 27, 2024.

The Company has no other off-balance sheet arrangements.

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

Approximately 14% of the Company’s revenues for the fiscal year ended September 27, 2024 were denominated in currencies other than the U.S.

Approximately 13% of the Company’s revenues for the fiscal year ended October 3, 2025 were denominated in currencies other than the U.S.

Approximately 6% were denominated in euros and approximately 5% were denominated in Canadian dollars, with the remaining 2% denominated in various other foreign currencies.

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Management has discussed these policies with the Audit Committee of the Company’s Board of Directors.

Allowance for Credit Losses

Allowances for credit losses are estimated by the individual operating companies based on estimates of losses related to customer accounts receivable balances.

Estimates are developed by using standard quantitative measures based on historical losses, adjusting for current economic conditions and, in some cases, evaluating specific customer accounts for risk of loss.

The establishment of reserves requires the use of judgment and assumptions regarding the potential for losses on receivable

Though the Company considers these balances adequate and proper, changes in economic conditions in specific markets in which the Company operates and any specific customer collection issues the Company identifies could have a favorable or unfavorable effect on required reserve balances.

The Company values inventory at the lower of cost (determined using the first-in first-out method) or net realizable value.

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Likewise, should the Company determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made.

The Company recorded a reserve on US deferred tax assets in fiscal 2025.

See Note 6, Income Taxes , to the consolidated financial statements included elsewhere in this report for additional information.

Goodwill and Other Intangible Assets Impairment

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The Company estimates the future cash flows of the reporting units based on historical and forecasted revenues and operating costs and applies a discount rate to the estimated future cash flows for purposes of the valuation.

This discount rate is based on the estimated weighted average cost of capital, which includes certain assumptions made by management such as market capital structure, market betas, the risk-free rate of return and the estimated costs of borrowing.

This discount rate is based on the estimated weighted average cost of capital, which includes certain assumptions made by management such

as market capital structure, market betas, the risk-free rate of return and the estimated costs of borrowing.

Changes in these key estimates and assumptions, or in other assumptions used in this process, could materially affect our impairment analysis in a given year.

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a prolonged global economic crisis, a significant decrease in demand for the Company’s products, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator and successful efforts by the Company’s competitors to gain market share.

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances, such as unplanned negative cash flow indicate that the carrying amount of an asset group may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future undiscounted cash flows expected to be generated by the asset group.

If such assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Application of alternative assumptions, such as changes in the estimate of future cash flows, could produce significantly different results.

Because of the significance of the judgments and estimation processes, it is likely that materially different amounts could be recorded if we used different assumptions or if the underlying circumstances were to change.

During the fourth quarter of fiscal 2024, the Company determined that indicators of potential impairment of long-lived assets were present in the Watercraft and Fishing segments, and performed an analysis of future undiscounted cash flows, which exceeded the carrying value of the respective asset groups.

Therefore, it was determined there was no impairment of any long-lived assets during fiscal 2024.

The Company accrues a warranty reserve for estimated costs to provide warranty services.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis