UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~July 2, 2021~~April 1, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number 0-16255

JOHNSON OUTDOORS INC.

(Exact name of Registrant as specified in its charter)


Wisconsin						39-1536083
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

555 Main Street, Racine, Wisconsin 53403

(Address of principal executive offices)

(262) 631-6600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, $.05 par value per share	JOUT	NASDAQ Global Select MarketSM

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act: Large accelerated filer ☐☒Accelerated filer ☒☐Non-accelerated filer ☐Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August 2, 2021, 8,915,636~~April 29, 2022, 8,960,188 shares of Class A and ~~1,211,564~~1,207,798 shares of Class B common stock of the Registrant were outstanding.


			JOHNSON OUTDOORS INC.


Index			Page No.

PART I	FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Condensed Consolidated Statements of Operations - Three and six ni ne months ended JApril 1, 2022 ~~uly~~ ~~2, 2021~~ and ~~June 26~~April 2 , ~~2020~~2021	- 1

		Condensed Consolidated Statements of Comprehensive Income - Three and six ~~nine~~months ended JApril 1, 2022 ~~uly~~ ~~2, 2021~~ and ~~June 26~~April 2 , ~~2020~~2021	- 2

		Condensed Consolidated Balance Sheets - ~~July~~April 1, 2022 2,, October 1, 2021, ~~October 2, 2020,~~ and ~~June 26~~A pril 2 , ~~2020~~2021	- 3

		Condensed Consolidated Statements of Shareholders' Equity - Three ~~and~~ ~~nine~~an d six months ended ~~July~~April 1, 2022 ~~2, 2021~~ and ~~June 26~~April 2,~~, 2020~~ 2021	- 4

		Condensed Consolidated Statements of Cash Flows - ~~Nine~~Six months ended ~~July~~April 1, 2022 and A pril 2 ~~2021 and~~ ~~June 26~~, ~~2020~~2021	- 65

		Notes to Condensed Consolidated Financial Statements	- 76

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	- 2220

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	- 2827

	Item 4.	Controls and Procedures	- 2928

PART II	OTHER INFORMATION

	Item 1.	Legal Proceedings	- 3028

	Item 1A.	Risk Factors	- 3028

	Item 6.	Exhibits	- 3129

		Signatures	- 3129

		Exhibit Index	- 3230


Index			JOHNSON OUTDOORS INC.

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
(thousands, except per share data)	(thousands, except per share data)	July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020		(thousands, except per share data)	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Net sales	Net sales	$	213,568	$	138,390	$	585,391	$	429,528	Net sales	$	189,623	$	206,156	$	343,147	$	371,823
Cost of sales	Cost of sales	116,057		75,828		319,596		238,222		Cost of sales	121,038		112,902		213,931		203,539
Gross profit	Gross profit	97,511		62,562		265,795		191,306		Gross profit	68,585		93,254		129,216		168,284
Operating expenses:	Operating expenses:									Operating expenses:
Marketing and selling	Marketing and selling	37,604		27,863		106,205		90,874		Marketing and selling	35,691		36,068		63,923		68,601
Administrative management, finance and information systems	Administrative management, finance and information systems	15,646		14,867		42,848		31,032		Administrative management, finance and information systems	10,249		14,311		22,479		27,202

Research and development	Research and development	6,162		6,903		19,050		17,876		Research and development	7,216		6,839		13,625		12,888
Total operating expenses	Total operating expenses	59,412		49,633		168,103		139,782		Total operating expenses	53,156		57,218		100,027		108,691
Operating profit	Operating profit	38,099		12,929		97,692		51,524		Operating profit	15,429		36,036		29,189		59,593
Interest income	Interest income	(76)		(170)		(238)		(1,309)		Interest income	(102)		(80)		(195)		(162)
Interest expense	Interest expense	35		35		102		105		Interest expense	49		35		87		67
Other (income) expense, net		(934)		(2,493)		(4,567)		205
Other expense (income), net										Other expense (income), net	2,272		(1,229)		1,498		(3,633)
Profit before income taxes	Profit before income taxes	39,074		15,557		102,395		52,523		Profit before income taxes	13,210		37,310		27,799		63,321
Income tax expense	Income tax expense	10,300		2,688		25,940		12,837		Income tax expense	3,310		9,476		7,043		15,640
Net income	Net income	$	28,774	$	12,869	$	76,455	$	39,686	Net income	$	9,900	$	27,834	$	20,756	$	47,681

Weighted average common shares - Basic:	Weighted average common shares - Basic:									Weighted average common shares - Basic:
Class A	Class A	8,875		8,831		8,859		8,818		Class A	8,914		8,863		8,902		8,852
Class B	Class B	1,212		1,212		1,212		1,212		Class B	1,208		1,212		1,208		1,212
Participating securities	Participating securities	49		31		42		25		Participating securities	28		45		32		37
Weighted average common shares - Dilutive	Weighted average common shares - Dilutive	10,136		10,074		10,113		10,055		Weighted average common shares - Dilutive	10,150		10,120		10,142		10,101
Net income per common share - Basic:	Net income per common share - Basic:									Net income per common share - Basic:
Class A	Class A	$	2.87	$	1.29	$	7.65	$	3.99	Class A	$	0.99	$	2.78	$	2.07	$	4.77
Class B	Class B	$	2.61	$	1.17	$	6.94	$	3.62	Class B	$	0.90	$	2.53	$	1.88	$	4.33
Net income per common share - Diluted:	Net income per common share - Diluted:									Net income per common share - Diluted:
Class A	Class A	$	2.83	$	1.27	$	7.53	$	3.93	Class A	$	0.97	$	2.74	$	2.04	$	4.70
Class B	Class B	$	2.83	$	1.27	$	7.53	$	3.93	Class B	$	0.97	$	2.74	$	2.04	$	4.70

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

- 1 -


Index			JOHNSON OUTDOORS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
(thousands)	(thousands)	July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020		(thousands)	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Net income	Net income	$	28,774	$	12,869	$	76,455	$	39,686	Net income	$	9,900	$	27,834	$	20,756	$	47,681
Other comprehensive income:
Other comprehensive income (loss):										Other comprehensive income (loss):
Foreign currency translation	Foreign currency translation	742		1,537		1,672		630		Foreign currency translation	168		(1,512)		(255)		930

Defined benefit pension plan:	Defined benefit pension plan:									Defined benefit pension plan:
Change in pension plans, net of tax of $41, $60, $108, and $101, respectively		123		180		325		303
Total other comprehensive income		865		1,717		1,997		933
Change in pension plans, net of tax of $6, $33, $11, and $67 respectively										Change in pension plans, net of tax of $6, $33, $11, and $67 respectively	16		101		32		202
Total other comprehensive income (loss)										Total other comprehensive income (loss)	184		(1,411)		(223)		1,132
Total comprehensive income	Total comprehensive income	$	29,639	$	14,586	$	78,452	$	40,619	Total comprehensive income	$	10,084	$	26,423	$	20,533	$	48,813

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)	(thousands, except share data)	July 2, 2021		October 2, 2020		June 26, 2020		(thousands, except share data)	April 1, 2022		October 1, 2021		April 2, 2021
ASSETS	ASSETS							ASSETS
Current assets:	Current assets:							Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	249,016	$	212,437	$	181,445	Cash and cash equivalents	$	113,186	$	240,448	$	186,921

Accounts receivable, net	Accounts receivable, net	94,750		67,292		82,577		Accounts receivable, net	119,517		71,321		130,139
Inventories	Inventories	130,742		97,437		94,218		Inventories	235,220		166,615		124,538
Other current assets	Other current assets	12,056		11,372		7,641		Other current assets	11,232		12,880		9,171
Total current assets	Total current assets	486,564		388,538		365,881		Total current assets	479,155		491,264		450,769
Property, plant and equipment, net of accumulated depreciation of $165,017, $156,541 and $152,646, respectively		68,296		63,037		61,373
Property, plant and equipment, net of accumulated depreciation of $170,277, $163,891 and $162,934, respectively								Property, plant and equipment, net of accumulated depreciation of $170,277, $163,891 and $162,934, respectively	80,155		71,510		65,749
Right of use assets	Right of use assets	43,741		40,666		37,669		Right of use assets	47,225		49,032		43,489
Deferred income taxes	Deferred income taxes	11,526		10,679		11,482		Deferred income taxes	13,142		13,129		11,334
Goodwill	Goodwill	11,242		11,184		11,163		Goodwill	11,235		11,221		11,231
Other intangible assets, net	Other intangible assets, net	8,699		9,052		9,196		Other intangible assets, net	8,504		8,633		8,753
Other assets	Other assets	29,327		22,870		20,845		Other assets	29,373		29,498		27,655
Total assets	Total assets	$	659,395	$	546,026	$	517,609	Total assets	$	668,789	$	674,287	$	618,980
LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY							LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:	Current liabilities:							Current liabilities:
Accounts payable	Accounts payable	$	54,991	$	37,327	$	31,026	Accounts payable	$	56,720	$	56,744	$	50,609
Current lease liability	Current lease liability	5,281		6,587		5,900		Current lease liability	6,080		5,938		5,715
Accrued liabilities:	Accrued liabilities:							Accrued liabilities:
Salaries, wages and benefits	Salaries, wages and benefits	23,380		23,275		15,395		Salaries, wages and benefits	18,712		26,820		18,221
Accrued warranty	Accrued warranty	13,773		10,849		10,913		Accrued warranty	12,083		14,073		12,791
Income taxes payable	Income taxes payable	12,641		6,681		16,032		Income taxes payable	4,027		9,436		11,277
Accrued discounts and returns	Accrued discounts and returns	6,224		5,113		5,751		Accrued discounts and returns	6,768		6,633		9,406
Accrued customer programs	Accrued customer programs	7,033		4,426		5,409		Accrued customer programs	4,871		6,874		5,741
Other	Other	9,392		11,349		8,373		Other	9,848		11,052		9,743
Total current liabilities	Total current liabilities	132,715		105,607		98,799		Total current liabilities	119,109		137,570		123,503
Non-current lease liability	Non-current lease liability	39,382		34,931		32,474		Non-current lease liability	42,233		44,056		38,670
Deferred income taxes	Deferred income taxes	1,411		1,418		1,642		Deferred income taxes	1,653		1,599		1,384
Retirement benefits	Retirement benefits	954		853		1,042		Retirement benefits	1,482		1,389		747
Deferred compensation liability	Deferred compensation liability	27,881		21,585		19,525		Deferred compensation liability	27,790		27,885		26,222
Other liabilities	Other liabilities	4,728		3,532		2,593		Other liabilities	1,936		3,283		4,718
Total liabilities	Total liabilities	207,071		167,926		156,075		Total liabilities	194,203		215,782		195,244
Shareholders’ equity:	Shareholders’ equity:							Shareholders’ equity:
Common stock:	Common stock:							Common stock:
Class A shares issued and outstanding: 8,915,636, 8,873,235 and 8,873,197, respectively		448		443		443
Class B shares issued and outstanding: 1,211,564, 1,211,564 and 1,211,602, respectively		61		61		61
Class A shares issued and outstanding: 8,960,104, 8,915,636 and 8,906,624, respectively								Class A shares issued and outstanding: 8,960,104, 8,915,636 and 8,906,624, respectively	450		448		447
Class B shares issued and outstanding: 1,207,882, 1,211,564 and 1,211,564, respectively								Class B shares issued and outstanding: 1,207,882, 1,211,564 and 1,211,564, respectively	61		61		61
Capital in excess of par value	Capital in excess of par value	81,309		78,668		77,780		Capital in excess of par value	84,978		82,899		80,183
Retained earnings	Retained earnings	366,582		296,431		282,980		Retained earnings	385,229		370,501		339,911
Accumulated other comprehensive income	Accumulated other comprehensive income	6,714		4,717		2,491		Accumulated other comprehensive income	7,163		7,386		5,849
Treasury stock at cost, shares of Class A common stock: 42,598, 36,316 and 36,354, respectively		(2,790)		(2,220)		(2,221)
Treasury stock at cost, shares of Class A common stock: 46,045, 42,598 and 41,977, respectively								Treasury stock at cost, shares of Class A common stock: 46,045, 42,598 and 41,977, respectively	(3,295)		(2,790)		(2,715)
Total shareholders’ equity	Total shareholders’ equity	452,324		378,100		361,534		Total shareholders’ equity	474,586		458,505		423,736
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	659,395	$	546,026	$	517,609	Total liabilities and shareholders’ equity	$	668,789	$	674,287	$	618,980

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

- 3 -


Index			JOHNSON OUTDOORS INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited)


Nine Months Ended July 2, 2021
Six Months Ended April 1, 2022													Six Months Ended April 1, 2022
(thousands except for shares)	(thousands except for shares)	Shares	Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		(thousands except for shares)	Shares	Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
BALANCE AT OCTOBER 2, 2020		10,084,799	$	504	$	78,668	$	296,431	$	4,717	$	(2,220)
BALANCE AT OCTOBER 1, 2021													BALANCE AT OCTOBER 1, 2021	10,127,200	$	509	$	82,899	$	370,501	$	7,386	$	(2,790)
Net income													Net income	—	—		—		10,856		—		—
Dividends declared													Dividends declared	—	—		—		(3,005)		—		—

Award of non-vested shares													Award of non-vested shares	34,422	1		(2)		—		—		—
B to A conversion													B to A conversion	—	—		(154)		—		—		154
Stock-based compensation													Stock-based compensation	—	—		1,126		—		—		—

Currency translation adjustment													Currency translation adjustment	—	—		—		—		(423)		—

Change in pension plans, net of tax of $5													Change in pension plans, net of tax of $5	—	—		—		—		16		—

Purchase of treasury stock at cost													Purchase of treasury stock at cost	(4,577)	—		—		—		—		(461)

BALANCE AT DECEMBER 31, 2021													BALANCE AT DECEMBER 31, 2021	10,157,045	$	510	$	83,869	$	378,352	$	6,979	$	(3,097)
Net income	Net income	—	—		—		19,847		—		—		Net income	—	—		—		9,900		—		—
Dividends declared	Dividends declared	—	—		—		(2,094)		—		—		Dividends declared	—	—		—		(3,023)		—		—

Award of non-vested shares	Award of non-vested shares	33,034	—		—		—		—		—		Award of non-vested shares	13,493	1		—		—		—		—
Stock-based compensation	Stock-based compensation	—	—		711		—		—		—		Stock-based compensation	—	—		959		—		—		—

Tax effects on stock based awards													Tax effects on stock based awards	—	—		—		—		—		—
Currency translation adjustment	Currency translation adjustment	—	—		—		—		2,442		—		Currency translation adjustment	—	—		—		—		168		—

Change in pension plans, net of tax of $34		—	—		—		—		101		—

Change in pension plans, net of tax of $6													Change in pension plans, net of tax of $6	—	—		—		—		16		—
Non-vested stock forfeitures													Non-vested stock forfeitures	(2,040)	—		150		—		—		(150)
Purchase of treasury stock at cost	Purchase of treasury stock at cost	(5,661)	—		—		—		—		(495)		Purchase of treasury stock at cost	(512)	—		—		—		—		(48)

BALANCE AT JANUARY 1, 2021		10,112,172	$	504	$	79,379	$	314,184	$	7,260	$	(2,715)
Net income		—	—		—		27,834		—		—
Dividends declared		—	—		—		(2,107)		—		—

Award of non-vested shares		6,016	4		(4)		—		—		—
Stock-based compensation		—	—		808		—		—		—

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

Change in pension plans, net of tax of $33		—	—		—		—		101		—
BALANCE AT APRIL 1, 2022													BALANCE AT APRIL 1, 2022	10,167,986	$	511	$	84,978	$	385,229	$	7,163	$	(3,295)

BALANCE AT APRIL 2, 2021		10,118,188	$	508	$	80,183	$	339,911	$	5,849	$	(2,715)
Net income		—	—		—		28,774		—		—
Dividends declared		—	—		—		(2,103)		—		—

Award of non-vested shares		9,633	1		(1)		—		—		—
Stock-based compensation		—	—		1,052		—		—		—

Restricted stock forfeitures		(621)	—		75		—		—		(75)
Currency translation adjustment		—	—		—		—		742		—

Change in pension plans, net of tax of $41			—		—		—		123		—
BALANCE AT JULY 2, 2021		10,127,200	$	509	$	81,309	$	366,582	$	6,714	$	(2,790)

~~- 4 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

Nine Months Ended June 26, 2020
(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, 2019 10,045,771 $ 504 $ 75,856 $ 248,377 $ 1,558 $ (1,761)
Net income — — — 6,430 — —
Dividends declared — — — (1,693) — —
Award of non-vested shares 31,571 — — — — —
Stock-based compensation — — 667 — — —
Currency translation adjustment — — — — 700 —
Change in pension plans, net of tax of $21 — — — — 61 —
Purchase of treasury stock at cost (7,129) — — — — (460)
BALANCE AT DECEMBER 27, 2019 10,070,213 $ 504 $ 76,523 $ 253,114 $ 2,319 $ (2,221)
Net income — — — 20,387 — —
Dividends declared — — — (1,693) — —
Award of non-vested shares 12,396 — — — — —
Stock-based compensation — — (286) — — —
Currency translation adjustment — — — — (1,607) —
Change in pension plans, net of tax of $20 — — — — 62 —
BALANCE AT MARCH 27, 2020 10,082,609 $ 504 $ 76,237 $ 271,808 $ 774 $ (2,221)
Net income — — — 12,869 — —
Dividends declared — — — (1,697) — —
Issuance of stock under employee stock purchase plan 2,190 — 126 — — —
Stock-based compensation — — 1,417 — — —
Currency translation adjustment — — — — 1,537 —
Change in pension plans, net of tax of $60 — — — — 180 —
BALANCE AT JUNE 26, 2020 10,084,799 $ 504 $ 77,780 $ 282,980 $ 2,491 $ (2,221)


Six Months Ended April 2, 2021
(thousands except for shares)	Shares	Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
BALANCE AT OCTOBER 2, 2020	10,084,799	$	504	$	78,668	$	296,431	$	4,717	$	(2,220)
Net income	—	—		—		19,847		—		—
Dividends declared	—	—		—		(2,094)		—		—

Award of non-vested shares	33,034	—		—		—		—		—
Stock-based compensation	—	—		711		—		—		—

Currency translation adjustment	—	—		—		—		2,442		—

Change in pension plans, net of tax of $34	—	—		—		—		101		—

Purchase of treasury stock at cost	(5,661)	—		—		—		—		(495)

BALANCE AT JANUARY 1, 2021	10,112,172	$	504	$	79,379	$	314,184	$	7,260	$	(2,715)
Net income	—	—		—		27,834		—		—
Dividends declared	—	—		—		(2,107)		—		—

Award of non-vested shares	6,016	4		(4)		—		—		—
Stock-based compensation	—	—		808		—		—		—

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

Change in pension plans, net of tax of $33	—	—		—		—		101		—



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

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

- 54 -


Index			JOHNSON OUTDOORS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


		Nine Months Ended					Six Months Ended
(thousands)	(thousands)	July 2, 2021		June 26, 2020		(thousands)	April 1, 2022		April 2, 2021
CASH PROVIDED BY OPERATING ACTIVITIES
CASH USED FOR OPERATING ACTIVITIES						CASH USED FOR OPERATING ACTIVITIES
Net income	Net income	$	76,455	$	39,686	Net income	$	20,756	$	47,681
Adjustments to reconcile net income to net cash used for operating activities:	Adjustments to reconcile net income to net cash used for operating activities:					Adjustments to reconcile net income to net cash used for operating activities:
Depreciation	Depreciation	9,660		9,303		Depreciation	6,785		6,467
Amortization of intangible assets	Amortization of intangible assets	355		2,186		Amortization of intangible assets	129		284
Amortization of deferred financing costs	Amortization of deferred financing costs	20		20		Amortization of deferred financing costs	17		13

Stock based compensation	Stock based compensation	2,571		1,798		Stock based compensation	2,085		1,519
Loss on disposal of productive assets		44		149
(Gain) loss on disposal of productive assets						(Gain) loss on disposal of productive assets	(1)		99

Deferred income taxes	Deferred income taxes	(860)		(65)		Deferred income taxes	(4)		(663)
Change in operating assets and liabilities:	Change in operating assets and liabilities:					Change in operating assets and liabilities:
Accounts receivable, net	Accounts receivable, net	(26,789)		(38,209)		Accounts receivable, net	(48,241)		(62,441)
Inventories, net	Inventories, net	(32,905)		417		Inventories, net	(68,853)		(26,918)
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	26,502		5,613		Accounts payable and accrued liabilities	(16,579)		19,366
Other current assets	Other current assets	(659)		3,710		Other current assets	1,613		2,240
Other non-current assets	Other non-current assets	(6,077)		(55)		Other non-current assets	—		(166)
Other long-term liabilities	Other long-term liabilities	9,970		752		Other long-term liabilities	(2,558)		1,245
Other, net	Other, net	(676)		255		Other, net	203		(681)
		57,611		25,560			(104,648)		(11,955)
CASH USED FOR INVESTING ACTIVITIES	CASH USED FOR INVESTING ACTIVITIES					CASH USED FOR INVESTING ACTIVITIES

Proceeds from sale of productive assets	Proceeds from sale of productive assets	13		10		Proceeds from sale of productive assets	2		6
Capital expenditures	Capital expenditures	(15,481)		(11,350)		Capital expenditures	(15,724)		(9,828)
		(15,468)		(11,340)			(15,722)		(9,822)
CASH USED FOR FINANCING ACTIVITIES	CASH USED FOR FINANCING ACTIVITIES					CASH USED FOR FINANCING ACTIVITIES

Common stock transactions		0		126

Dividends paid	Dividends paid	(6,297)		(5,078)		Dividends paid	(6,019)		(4,195)
Purchases of treasury stock	Purchases of treasury stock	(495)		(460)		Purchases of treasury stock	(509)		(495)
		(6,792)		(5,412)			(6,528)		(4,690)
Effect of foreign currency rate changes on cash	Effect of foreign currency rate changes on cash	1,228		255		Effect of foreign currency rate changes on cash	(364)		951
Increase in cash and cash equivalents		36,579		9,063
Decrease in cash and cash equivalents						Decrease in cash and cash equivalents	(127,262)		(25,516)
CASH AND CASH EQUIVALENTS	CASH AND CASH EQUIVALENTS					CASH AND CASH EQUIVALENTS
Beginning of period	Beginning of period	212,437		172,382		Beginning of period	240,448		212,437
End of period	End of period	$	249,016	$	181,445	End of period	$	113,186	$	186,921

Supplemental Disclosure:	Supplemental Disclosure:					Supplemental Disclosure:
Non-cash treasury stock activity		$	75	$	0
Non-cash dividends		7		5

Cash paid for taxes	Cash paid for taxes	18,828		4,418		Cash paid for taxes	$	9,569	$	9,669
Cash paid for interest	Cash paid for interest	86		86		Cash paid for interest	59		86

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

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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 ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ and their results of operations for the three and ~~nine~~six month periods then ended and cash flows for the ~~nine~~six month periods then ended. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October ~~2, 2020~~1, 2021 which was filed with the Securities and Exchange Commission on December ~~11, 2020.~~10, 2021.

Due to seasonal variations and other factors, some of which are described herein, including related to the ongoing coronavirus (COVID-19) outbreak and resulting pandemic and the continued disruption to the global supply chain and logistics infrastructure, the results of operations for the three and ~~nine~~six months ended ~~July 2, 2021~~April 1, 2022 are not necessarily indicative of the results to be expected for the Company’s full ~~2021~~2022 fiscal year. See "Coronavirus (COVID-19)" below and “Seasonality” and "Coronavirus (COVID-19)" in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere herein for additional information.

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 equivalent to cash. Cash equivalents are stated at cost which approximates market value.

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

Coronavirus (COVID-19)

In March 2020, the World Health Organization recognized the ~~current~~ coronavirus (COVID-19) outbreak as a global pandemic. In response to the COVID-19 outbreak, the governments of many countries, states, cities and other geographic regions imposed varying degrees of restrictions on social and commercial activity, including ~~imposing~~ travel restrictions, ~~issuing~~ quarantine ~~shelter-in-place and stay at home orders and~~ guidelines, and related actions. These actions ~~mandating mask wearing, limiting business capacity and generally restricting freedom of movement, in order to promote~~promoted social distancing, and subsequently resulted in adopting programs and taking actions to encourage and promote vaccination and implementing other similar programs all in an effort to slow the spread of the ~~illness.~~virus. These measures have had significant adverse impacts upon many sectors of the economy, including manufacturing and retail commerce.

While ~~some~~ government mandates eased in the latter half of fiscal 2020, these mandates continued to emphasize social distancing measures to the general public. As a result, because we sell products that are used in a safe and socially distant manner in the ~~latter part~~great outdoors, the COVID-19 pandemic has had an overall favorable effect on our sales levels and the demand for our products starting at the end of our fiscal 2020 ~~we saw~~and continuing into fiscal 2022. Specifically, the Company has seen increased participation in fishing, camping and watercraft recreation and ~~the related~~consumer demand for our products in these business ~~segments, largely driven by consumer desire to engage in socially distant and safe activities in~~segments. Nonetheless, the ~~great outdoors. This trend in increased demand for our outdoor recreation products~~ continued ~~into fiscal 2021.~~

~~Despite the availability of vaccines, and the overall reduction in restrictions on economic and social activities that were implemented at the start~~evolution of the pandemic ~~COVID-19 continues~~has resulted in disruptions to ~~be a serious~~the global ~~health concern and has a significant impact on macroeconomic and societal developments, including on economic activity and~~ supply chain ~~continuity, in various key regions~~and the logistics infrastructure (including with respect to the sourcing, timing, availability and cost of ~~the world and related to certain~~ raw materials and ~~components. As a~~components that are necessary to manufacture our products). The lingering impact of these disruptions is not fully known as they, along with certain inflationary pressures in the economy, may result in economic slowdowns and ultimately lower demand for discretionary goods like our outdoor recreational products. Furthermore, the ~~Company cannot reasonably estimate the full~~continued impact of the ~~COVID-19~~ pandemic on ~~Company operations~~the global supply chain (including with respect to impacting the sourcing, timing, availability and ~~profitability for the remainder~~cost of ~~fiscal 2021~~raw materials and components that are necessary to manufacture our products) is beyond ~~as the situation is dynamic~~our control and ~~constantly changing. The Company will continue to monitor evolving economic~~remains highly uncertain and ~~general business conditions stemming from the COVID-19 pandemic and the actual and potential impacts on our financial position, results of operations and cash flows.~~cannot be predicted at his time.

2 ACCOUNTS RECEIVABLE

Accounts receivable are stated net of allowances for doubtful accounts of ~~$1,446, $2,697~~$1,504, $2,494 and ~~$2,834~~$2,463 as of ~~July~~April 1, 2022, October 1, 2021 and April 2, 2021, ~~October 2, 2020 and June 26, 2020,~~ respectively. The increase in net accounts receivable to ~~$94,750~~$119,517 as of ~~July 2, 2021~~April 1, 2022 from ~~$67,292~~$71,321 as of October ~~2, 2020~~1, 2021 is attributable to the seasonal nature of the Company’s business and the ~~resulting~~impact COVID-19 has had on generating heightened interest in outdoor activities which has resulted in increases in sales volumes between periods. The determination of the allowance for doubtful accounts is based on a combination of factors. In circumstances where specific collection concerns about a receivable exist, a reserve is established to value the affected account receivable at an amount the Company believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on historical experience of bad debts as a percent of ~~accounts receivable outstanding for each business segment. Uncollectible accounts are~~

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Index			JOHNSON OUTDOORS INC.

accounts receivable outstanding for each business segment. Uncollectible accounts are written off against the allowance for doubtful accounts after collection efforts have been exhausted. The Company typically does not require collateral on its accounts receivable.

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 ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ basic income per share for the Class A and Class B shares has been presented using the two class method and reflects the allocation of undistributed income described above.

Diluted EPS

Diluted net income per share is computed by dividing allocated net income by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options, restricted stock units (“stock units” or “units”) and non-vested restricted stock. Anti-dilutive stock options, units and non-vested stock are excluded from the calculation of diluted EPS. The computation of diluted net income per share of Class A common stock assumes that Class B common stock is converted into Class A common stock. Therefore, diluted net income per share is the same for both Class A and Class B common shares. In periods where the Company reports a net loss, the effect of anti-dilutive stock options and units is excluded and diluted loss per share is equal to basic loss per share for both classes of stock.

For the three and ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ diluted net income per share reflects the effect of dilutive stock units and assumes the conversion of Class B common stock into Class A common stock.

Shares of non-vested stock that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive totaled ~~40,743~~39,163 and ~~41,390~~40,024 for the three months ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively, and ~~40,471~~38,540 and ~~40,260~~40,336 for the ~~nine~~six months ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ 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 ~~20,277~~37,904 and ~~36,495~~24,894 for the three month periods ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively, and ~~27,411~~33,966 and ~~42,368~~32,917 for the ~~nine months~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively.

Dividends per share

Dividends per share for the three and ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021 ~~and June 26, 2020~~ were as follows:

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Index			JOHNSON OUTDOORS INC.


		Three Months Ended				Nine months ended					Three Months Ended				Six months ended
		July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020			April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Dividends declared per common share:	Dividends declared per common share:									Dividends declared per common share:
Class A	Class A	$	0.21	$	0.17	$	0.63	$	0.51	Class A	$	0.30	$	0.21	$	0.60	$	0.42
Class B	Class B	$	0.19	$	0.15	$	0.57	$	0.46	Class B	$	0.27	$	0.19	$	0.55	$	0.38

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 2012 Non-Employee Director Stock Ownership Plan and the 2020 Long-Term Incentive Plan (the only plans where shares currently remain available for future equity incentive awards) there were a total of ~~501,314~~466,598 shares of the Company’s Class A common stock available for future grant to non-employee directors and key executives at ~~July 2, 2021.~~April 1, 2022. Share awards previously made under the Company's 2010 Long-Term Stock Incentive Plan, which no longer allows for additional share grants, also remain outstanding.

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

A summary of non-vested stock activity for the ~~nine~~six months ended ~~July 2, 2021~~April 1, 2022 related to the Company’s stock ownership plans is as follows:


		Shares	Weighted Average Grant Price			Shares	Weighted Average Grant Price
Non-vested stock at October 2, 2020		40,492	$	62.15
Non-vested stock at October 1, 2021					Non-vested stock at October 1, 2021	37,591	$	80.86
Non-vested stock grants	Non-vested stock grants	14,954	101.97		Non-vested stock grants	14,958	90.58
Restricted stock vested	Restricted stock vested	(17,234)	53.79		Restricted stock vested	(10,098)	92.08
Forfeitures	Forfeitures	(621)	120.77		Forfeitures	(2,040)	73.52
Non-vested stock at July 2, 2021		37,591	80.86
Non-vested stock at April 1, 2022					Non-vested stock at April 1, 2022	40,411	82.02

Non-vested stock grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of shares by tendering a portion of the vested shares back to the Company. Shares tendered back to the Company were ~~2,341~~1,778 and ~~4,054~~2,341 during the ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively.

Stock compensation expense, net of forfeitures, related to non-vested stock was ~~$286~~$266 and ~~$270~~$297 for the three month periods ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively, and ~~$862~~$561 and ~~$762~~$576 for the ~~nine months~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively. Unrecognized compensation cost related to non-vested stock as of ~~July 2, 2021~~April 1, 2022 was ~~$1,764,~~$2,072, which amount will be amortized to expense through November ~~2024~~2025 or adjusted for changes in future estimated or actual forfeitures.

The fair value of restricted stock vested during the ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021 was $1,053 and ~~June 26, 2020 was $1,950 and $1,329,~~$1,258, respectively.

Restricted Stock Units

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Index			JOHNSON OUTDOORS INC.

All restricted stock units (RSUs) awarded by the Company have been granted in the form of units payable in shares of Class A common stock upon vesting. The units are valued at the fair market value of a share of Class A common stock on the date of grant and vest within one year from the date of grant for RSUs granted to directors and three years from the date of grant for RSUs granted to employees. The fair value at the date of grant is based on the number of units granted and the average of the Company’s high and low Class A common stock trading price on the date of grant or, if the Company’s Class A shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock trading price on the last preceding date on which the Company’s Class A shares traded.

A summary of RSU activity for the ~~nine~~six months ended ~~July 2, 2021~~April 1, 2022 follows:


		Number of RSUs	Weighted Average Grant Price			Number of RSUs	Weighted Average Grant Price
RSUs at October 2, 2020		67,821	$	68.34
RSUs at October 1, 2021					RSUs at October 1, 2021	69,768	$	73.60
RSUs granted	RSUs granted	20,059	88.49		RSUs granted	19,758	101.22
RSUs vested	RSUs vested	(18,112)	43.49		RSUs vested	(22,192)	71.42
RSUs at July 2, 2021		69,768	80.58
RSU's forfeited					RSU's forfeited	(1,340)	74.62
RSUs at April 1, 2022					RSUs at April 1, 2022	65,994	82.58

Stock compensation expense, net of forfeitures, related to RSUs was ~~$735~~$597 and ~~$1,678~~$511 for the three month periods ended April 1, 2022 and ~~nine months ended July~~April 2, 2021, ~~respectively. For~~respectively, and $1,325 and $943 for the ~~three~~six month periods ended April 1, 2022 and ~~nine months ended June 26, 2020, the Company recognized expense of $1,161 and $992,~~April 2, 2021, respectively. Unrecognized compensation cost related to non-vested RSUs as of ~~July 2, 2021~~April 1, 2022 was ~~$3,111,~~$3,577, which amount will be amortized to expense through September ~~2023~~2024 or adjusted for changes in future estimated or actual forfeitures.

RSU grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of units and issuance of unrestricted shares of Class A common stock by tendering a portion of such unrestricted shares back to the Company. Shares tendered back to the Company for this purpose were ~~3,320~~2,799 and ~~3,075~~3,320 during the ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively.

The fair value of restricted stock units recognized as a tax deduction during the ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021 was $2,849 and ~~June 26, 2020 was $3,353 and $1,426,~~$2,148, respectively.

Compensation expense related to units earned by employees (as opposed to grants to outside directors) is based upon the attainment of certain Company financial goals related to cumulative net sales and cumulative operating profit over a three-year performance period. Awards are only paid if at least 80% of the target levels are met and maximum payouts are made if 120% or more of target levels are achieved. The payouts for achievement at the threshold levels of performance are equal to 50% of the target award amount. The payouts for achievement at maximum levels of performance are equal to 150% of the target award amount. To the extent earned, awards are issued in shares of Company Class A common stock after the end of the three-year performance period.

Employees’ Stock Purchase Plan

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

During the three month period ended ~~July~~April 1, 2022, the Company issued 0 shares of Class A common stock and recognized $96 of expense in connection with the Employees' Stock Purchase Plan. During the six month period ended April 1, 2022, the Company issued 0 shares of Class A common stock and recognized $199 of expense in connection with the Employees' Stock Purchase Plan. During the three month period ended April 2, 2021, the Company issued 0 shares of Class A common stock and recognized ~~$31~~$0 of expense in connection with the ~~Employees' Stock Purchase~~ Plan. During the ~~nine~~six month period ended ~~July~~April 2, 2021, the Company issued 0 shares of Class A common stock and recognized $31 of expense in connection with the Plan. During the three month period ended June 26, 2020, the Company issued 2,190 shares of Class A common stock and recognized $14 of income in connection with the Plan. During the nine month period ended June 26, 2020, the Company issued 2,190 shares of Class A common stock and recognized $44$0 of expense in connection with the Plan.

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Index			JOHNSON OUTDOORS INC.

5 PENSION PLANS

The Company has 2 non-contributory defined benefit pension plans covering certain of its U.S. employees. Retirement benefits are generally provided based on the employees’ years of service and average earnings. Normal retirement age is 65, with provisions for earlier retirement.

During the fourth quarter of fiscal 2021, the Company terminated its Johnson Outdoors Inc. Mankato Operations Pension Plan and Old Town Canoe Company Pension Plan (collectively, "the Terminated Plans"), both of which were frozen defined benefit pension plans at the time of termination. In connection with the plan terminations, the Company settled all future obligations under the Terminated Plans through a combination of lump-sum payments to eligible participants who elected to receive them, and the transfer of any remaining benefit obligations under the Terminated Plans to a third-party insurance company under a group annuity contract.

The Company still maintains the Johnson Outdoors Inc. Supplemental Executive Retirement Plan ("SERP"), and all future benefit payments to participants under this plan are made from the Company's general assets.

The Company made contributions of ~~$42~~$25 and $44 to its pension plans for the three months ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively, and contributions of ~~$130~~$50 and ~~$132~~$88 for the ~~nine~~six months ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively.

During the first quarter of fiscal 2021, Company management commenced actions to terminate both of the pension plans. As part of the termination of these plans, plan participants that are not currently in pay status will have the option of taking a lump sum payment or receiving payout pursuant to an annuity contract. When the termination and related payouts occur, which is subject to numerous conditions under the plan document and applicable law, they are estimated to unfavorably impact net income by approximately $4 to $5 million.

The components of net periodic benefit cost related to Company sponsored defined benefit plans for the three and ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021 ~~and June 26, 2020~~ were as follows:


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020			April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Components of net periodic benefit cost:	Components of net periodic benefit cost:									Components of net periodic benefit cost:
Service cost	Service cost	$	0	$	0	$	0	$	0	Service cost	$	—	$	—	$	—	$	—
Interest on projected benefit obligation	Interest on projected benefit obligation	163		423		629		698		Interest on projected benefit obligation	7		233		14		466
Less estimated return on plan assets	Less estimated return on plan assets	6		267		327		481		Less estimated return on plan assets	—		160		—		321
Amortization of unrecognized losses (gains)		163		321		432		403
Amortization of unrecognized losses										Amortization of unrecognized losses	21		134		42		269
Net periodic benefit cost	Net periodic benefit cost	$	320	$	477	$	734	$	620	Net periodic benefit cost	$	28	$	207	$	56	$	414

6 INCOME TAXES

For the three and ~~nine~~six months ended ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:


		Three Months Ended						Nine Months Ended							Three Months Ended						Six Months Ended
(thousands, except tax rate data)	(thousands, except tax rate data)	July 2, 2021			June 26, 2020			July 2, 2021			June 26, 2020			(thousands, except tax rate data)	April 1, 2022			April 2, 2021			April 1, 2022			April 2, 2021
Profit before income taxes	Profit before income taxes	$	39,074		$	15,557		$	102,395		$	52,523		Profit before income taxes	$	13,210		$	37,310		$	27,799		$	63,321
Income tax expense	Income tax expense	10,300			2,688			25,940			12,837			Income tax expense	3,310			9,476			7,043			15,640
Effective income tax rate	Effective income tax rate	26.4		%	17.3		%	25.3		%	24.4		%	Effective income tax rate	25.1		%	25.4		%	25.3		%	24.7		%

The effective tax rate for the three months ended April 1, 2022 and the prior year quarter were consistent with no primary factors materially impacting the rate.The effective tax rate was higher for the ~~three and nine~~six months ended ~~July 2, 2021~~April 1, 2022 compared to the prior year ~~periods~~period mainly due to the favorable impact from ~~a decrease in reserves for unrecognized tax benefits reported~~an intra-entity transfer of an asset other than inventory recorded in the prior ~~year periods.~~year.

The impact of the Company’s operations in jurisdictions where a valuation allowance is assessed is removed from the overall effective tax rate methodology and recorded directly based on year to date results for the year for which no tax expense or benefit can be recognized. The significant tax jurisdictions that have a valuation allowance for the periods ended ~~July~~April 1, 2022 and April 2, 2021 ~~and June 26, 2020~~ were:


~~July 2, 2021~~			~~June 26, 2020~~
~~France~~			~~France~~
~~Indonesia~~			~~Indonesia~~
~~Switzerland~~			~~Switzerland~~

- 1110 -


Index			JOHNSON OUTDOORS INC.


April 1, 2022			April 2, 2021
France			France
Indonesia			Indonesia
Switzerland			Switzerland

The Company regularly assesses the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes. As a result, the Company may adjust the reserves for unrecognized tax benefits due to the impact of changes in its assumptions or as a result of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities and lapses of statutes of limitation. The Company’s ~~2021~~2022 fiscal year tax expense is anticipated to be unchanged related to uncertain income tax positions.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized benefits as a component of income tax expense. The Company is projecting accrued interest of ~~$300~~$100 related to uncertain income tax positions for the fiscal year ending ~~October 1, 2021.~~September 30, 2022.

The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. As of the date of this report, the following tax years remain open to examination by the respective significant tax jurisdictions:


Jurisdiction			Fiscal Years
United States			~~2017-2020~~2018-2021
Canada			~~2017-2020~~2018-2021
France			~~2017-2020~~2018-2021
Germany			~~2017-2020~~2019-2021
Italy			~~2018-2020~~2019-2021
Switzerland			~~2010-2020~~2011-2021

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:


		July 2, 2021		October 2, 2020		June 26, 2020			April 1, 2022		October 1, 2021		April 2, 2021
Raw materials	Raw materials	$	82,648	$	48,874	$	46,232	Raw materials	$	163,390	$	110,974	$	74,780
Work in process	Work in process	87		39		153		Work in process	214		116		126
Finished goods	Finished goods	48,007		48,524		47,833		Finished goods	71,616		55,525		49,632
		$	130,742	$	97,437	$	94,218		$	235,220	$	166,615	$	124,538

8 GOODWILL

The changes in goodwill during the ~~nine~~six months ended ~~July~~April 1, 2022 and April 2, 2021 ~~and June 26, 2020~~ were as follows:


		July 2, 2021		June 26, 2020			April 1, 2022		April 2, 2021
Balance at beginning of period	Balance at beginning of period	$	11,184	$	11,186	Balance at beginning of period	$	11,221	$	11,184

Amount attributable to movements in foreign currency rates	Amount attributable to movements in foreign currency rates	58		(23)		Amount attributable to movements in foreign currency rates	14		47
Balance at end of period	Balance at end of period	$	11,242	$	11,163	Balance at end of period	$	11,235	$	11,231

- 11 -


Index			JOHNSON OUTDOORS INC.

The Company evaluates the carrying value of goodwill for a reporting unit on an annual basis or more frequently when events and circumstances warrant such an evaluation. In conducting this analysis, the Company uses the income approach to compare the reporting unit's carrying value to its indicated fair value. Fair value is determined primarily by using a discounted cash flow methodology that requires considerable management judgment and long-term assumptions and is considered a Level 3 (unobservable) fair value determination in the fair value hierarchy (see Note 13) below.

~~- 12 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

9 WARRANTIES

The Company provides warranties on certain of its products as they are sold. The following table summarizes the Company’s warranty activity for the ~~nine~~six months ended ~~July~~April 1, 2022 and April 2, ~~2021 and June 26, 2020.~~2021.


		July 2, 2021		June 26, 2020			April 1, 2022		April 2, 2021
Balance at beginning of period	Balance at beginning of period	$	10,849	$	9,190	Balance at beginning of period	$	14,073	$	10,849
Expense accruals for warranties issued during the period	Expense accruals for warranties issued during the period	9,776		8,252		Expense accruals for warranties issued during the period	1,816		6,028
Less current period warranty claims paid	Less current period warranty claims paid	6,852		6,529		Less current period warranty claims paid	3,806		4,086
Balance at end of period	Balance at end of period	$	13,773	$	10,913	Balance at end of period	$	12,083	$	12,791

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 0no debt outstanding at ~~July~~April 1, 2022, October 1, 2021, or April 2, ~~2021, October 2, 2020, or June 26, 2020.~~2021.

Revolvers

The Company and certain of its subsidiaries have entered into an unsecured credit facility with PNC Bank National Association and Associated Bank, N.A. ("the Lending Group"). This credit facility consists of a $75 million Revolving Credit Facility among the Company, certain of the Company’s subsidiaries, PNC Bank National Association, as lender and as administrative agent, and the other lender named therein (as amended, the “Credit Agreement” or “Revolver”). The Revolver provides for borrowing of up to an aggregate principal amount not to exceed $75,000 with a $50,000 accordion feature that gives the Company the option to increase the maximum financing availability (i.e., an aggregate borrowing amount of $125,000) subject to the conditions of the Credit Agreement and subject to the approval of the lenders. On July 15, 2021, the Company entered into a First Amendment to this credit facility that extended its expiration date from November 15, 2022, to July 15, 2026. Other key provisions of the credit facility remained as outlined above and the description herein is qualified in its entirety by the terms and conditions of the original Debt Agreement (a copy of which was filed as Exhibit 99.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on November 20, 2017) and the Amendment, (a copy of which was filed as Exhibit 10.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on July 16, 2021).

The interest rate on the Revolver is based on LIBOR plus an applicable margin, which margin resets each quarter. 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 ~~July~~both April 1, 2022 and April 2, 2021 ~~and June 26, 2020~~ were approximately ~~1.1%~~1.4% and ~~1.2%~~1.1%, respectively.

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

Other Borrowings

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Index			JOHNSON OUTDOORS INC.

The Company had 0no unsecured revolving credit facilities at its foreign subsidiaries as of ~~July~~April 1, 2022 or April 2, ~~2021 or June 26, 2020.~~2021. The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance, which totaled approximately $181 and $181 as of ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively.

~~- 13 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

12 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The following disclosures describe the Company’s objectives in using derivative instruments, the business purpose or context for using derivative instruments, and how the Company believes the use of derivative instruments helps achieve the stated objectives. In addition, the following disclosures describe the effects of the Company’s use of derivative instruments and hedging activities on its financial statements.

Foreign Exchange Risk

The Company has significant foreign operations, for which the functional currencies are denominated primarily in euros, Swiss francs, Hong Kong dollars and Canadian dollars. As the values of the currencies of the foreign countries in which the Company has operations increase or decrease relative to the U.S. dollar, the sales, expenses, profits, losses, assets and liabilities of the Company’s foreign operations, as reported in the Company’s consolidated financial statements, increase or decrease, accordingly. Approximately 12% of the Company’s revenues for the ~~nine~~six month period ended ~~July 2, 2021~~April 1, 2022 were denominated in currencies other than the U.S. dollar. Approximately 4% were denominated in euros, approximately 7%6% were denominated in Canadian dollars and approximately 1% were denominated in Hong Kong dollars, with the remaining revenues denominated in various other foreign currencies. Changes in foreign currency exchange rates can cause the Company to experience unexpected financial losses or cash flow needs.

The Company may mitigate a portion of the fluctuations in certain foreign currencies through the use of foreign currency forward contracts. Foreign currency forward contracts enable the Company to lock in the foreign currency exchange rate to be paid or received for a fixed amount of currency at a specified date in the future. The Company may use such foreign currency forward contracts to mitigate the risk associated with changes in foreign currency exchange rates on financial instruments and known commitments, including commitments for inventory purchases, denominated in foreign currencies. As of ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ the Company held 0no foreign currency forward contracts.

13 FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable.

•Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets or liabilities.

•Level 2 - Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments.

•Level 3 - Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

The carrying amounts of cash, cash equivalents, short term investments, accounts receivable, and accounts payable approximated their fair values at ~~July~~April 1, 2022, October 1, 2021 and April 2, 2021 ~~October 2, 2020 and June 26, 2020~~ due to the short term maturities of these instruments. When indicators of impairment are present, the Company may be required to value certain long-lived assets such as property, plant, and equipment, and other intangibles at their fair value.

Valuation Techniques

Rabbi Trust Assets

- 13 -


Index			JOHNSON OUTDOORS INC.

Rabbi trust assets are classified as trading securities and are comprised of marketable debt and equity securities that are marked to fair value based on unadjusted quoted prices in active markets. The rabbi trust assets are used to fund amounts the Company owes to certain officers and other employees under the Company’s non-qualified deferred compensation plan. These assets are included in "Other assets" in the accompanying Company's Condensed Consolidated Balance Sheets, and the mark to market adjustments on the assets are recorded in “Other income, net” in the accompanying Condensed Consolidated Statements of Operations. The offsetting deferred compensation liability

~~- 14 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

is also reported at fair value as "Deferred compensation liability" in the Company's accompanying Condensed Consolidated Balance Sheets. Changes in the liability are recorded in "Administrative management, finance and information systems" expense in the accompanying Condensed Consolidated Statements of Operations.

The following table summarizes the Company’s financial assets measured at fair value as of ~~July 2, 2021:~~April 1, 2022:


		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:
Rabbi trust assets	Rabbi trust assets	$	27,879	$	0	$	0	$	27,879	Rabbi trust assets	$	27,758	$	—	$	—	$	27,758

The following table summarizes the Company’s financial assets measured at fair value as of October ~~2, 2020:~~1, 2021:


		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:
Rabbi trust assets	Rabbi trust assets	$	21,550	$	0	$	0	$	21,550	Rabbi trust assets	$	27,851	$	—	$	—	$	27,851

The following table summarizes the Company’s financial assets measured at fair value as of ~~June 26, 2020:~~April 2, 2021:


		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:
Rabbi trust assets	Rabbi trust assets	$	19,493	$	0	$	0	$	19,493	Rabbi trust assets	$	26,186	$	—	$	—	$	26,186

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three and ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, 2021 ~~and June 26, 2020~~ was:

Three Months Ended Nine months ended
Location of (income) loss recognized in Statement of Operations July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020
Rabbi trust assets Other (income) expense, net $ (1,351) $ (2,732) $ (5,151) $ (398)


		Three Months Ended				Six months ended
	Location of (expense) income recognized in Statement of Operations	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021

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

There were 0no assets or liabilities measured at fair value on a non-recurring basis in periods subsequent to their initial recognition for either of the ~~nine~~six month periods ended ~~July~~April 1, 2022 or April 2, ~~2021 or June 26, 2020.~~2021.

14 NEW ACCOUNTING PRONOUNCEMENTS

Recently adopted accounting pronouncements

~~In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02,~~ ~~Leases (Topic 842). In July 2018, the FASB also issued ASU 2018-10~~ ~~Codification Improvements to Topic 842, Leases~~ ~~and ASU 2018-11~~ ~~Leases (Topic 842) Targeted Improvements.~~ ~~In February 2019, the FASB also issued ASU 2019-01~~ ~~Leases (Topic 842): Codification Improvements.~~ This ASU and the updates to this ASU require organizations to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. This guidance was effective for the Company in the first quarter of fiscal year 2020, and may be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements with certain practical expedients available. The Company adopted the provisions of these ASU's using the modified retrospective approach at the beginning of the first quarter of fiscal 2020, coinciding with the standard's effective date. The additional disclosures required by the ASU and its updates are included in Note 18 "Leases" of these Notes to the Condensed Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326)” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively Topic 326). Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at

~~- 15 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. This guidance was effective for the Company in the first quarter of fiscal year 2021, and must be adopted by applying a cumulative effect adjustment to retained earnings. The Company adopted the provisions of this ASU at the beginning of the first quarter of fiscal 2021, however the ASU did not have a significant impact on its financial statements, and therefore no adjustment to retained earnings was necessary.

~~Recently issued accounting pronouncements~~

- 14 -


Index			JOHNSON OUTDOORS INC.

In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans (Topic 715), which modifies the disclosure requirements for employers that sponsor defined pension or postretirement plans. The amendments in this guidance are effective for fiscal years ending after December 15, 2020, with early adoption permitted. The Company ~~is currently evaluating~~adopted the ~~potential impact~~provisions of this ~~guidance~~ASU in fiscal 2021, however, the ASU did not have a significant impact on its disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company ~~does~~adopted the provisions of this ASU in the first quarter of fiscal 2022, however, the ASU did not ~~expect adoption of the new guidance to~~ have a significant impact on its financial statements.

Recently issued accounting pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 is intended to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The amendments in this guidance were effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company ~~is currently evaluating the potential impact of~~does not expect this guidance to have a significant impact 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 ~~July 2, 2021,~~April 1, 2022, the right to returns asset was $~~1,105~~827 and the accrued returns liability was ~~$3,043.~~$2,283. At ~~June 26, 2020,~~April 2, 2021, the right to returns asset was ~~$1,082~~$1,487 and the accrued returns liability was ~~$3,207.~~$4,030. The Company also offers assurance-type warranties relating to its products sold to end customers that continue to be accounted for under ASC 460 Guarantees.

The Company generally accounts for shipping and handling activities as a fulfillment activity, consistent with the timing of revenue recognition; that is, when a customer takes control of the transferred goods. In the event that a

~~- 16 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

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.

- 15 -


Index			JOHNSON OUTDOORS INC.

The Company has a wide variety of seasonal, outdoor recreation products used primarily for fishing from a boat, diving, paddling, hiking and camping, that are sold to a variety of customers in multiple end markets. Nonetheless, the revenue recognition policies are similar among all the various products sold by the Company.

See Note 16 for required disclosures of disaggregated revenue.

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. During the three and ~~nine~~six month periods ended ~~July 2, 2021,~~April 1, 2022, combined net sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately ~~$25,138~~$21,616 and ~~$88,649,~~$48,921, respectively, of the Company's consolidated revenues. During the three and ~~nine~~six month periods ended ~~June 26, 2020,~~April 2, 2021, combined net sales to ~~one customer~~two customers of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately ~~$20,433~~$45,735 and ~~$70,269,~~$99,308, respectively, of the Company's consolidated revenues.

Net sales and operating profit include both sales to customers, as reported in the Company’s accompanying Condensed Consolidated Statements of Operations, and interunit transfers, which are priced to recover cost plus an appropriate profit margin. Total assets represent assets that are used in the Company’s operations in each business segment at the end of the periods presented.

- 1716 -


Index			JOHNSON OUTDOORS INC.

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


		Three Months Ended				Nine Months Ended							Three Months Ended				Six Months Ended
		July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020		October 2, 2020			April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021		October 1, 2021
Net sales:	Net sales:											Net sales:
Fishing:	Fishing:											Fishing:
Unaffiliated customers	Unaffiliated customers	$	155,098	$	102,542	$	441,727	$	335,445			Unaffiliated customers	$	129,134	$	159,770	$	237,315	$	286,629
Interunit transfers	Interunit transfers	250		199		636		529				Interunit transfers	189		246		364		386
Camping:	Camping:											Camping:
Unaffiliated customers	Unaffiliated customers	17,744		9,653		44,160		25,999				Unaffiliated customers	19,155		14,231		33,273		26,416
Interunit transfers	Interunit transfers	13		12		35		29				Interunit transfers	12		13		28		22
Watercraft Recreation:	Watercraft Recreation:											Watercraft Recreation:
Unaffiliated customers	Unaffiliated customers	19,783		15,238		49,948		26,104				Unaffiliated customers	23,008		17,768		37,606		30,165
Interunit transfers	Interunit transfers	90		29		146		36				Interunit transfers	1		10		3		56
Diving	Diving											Diving
Unaffiliated customers	Unaffiliated customers	20,678		10,694		48,973		41,405				Unaffiliated customers	18,192		14,205		34,682		28,295
Interunit transfers	Interunit transfers	2		2		8		11				Interunit transfers	2		3		3		6
Other / Corporate	Other / Corporate	265		263		583		575				Other / Corporate	134		182		271		318
Eliminations	Eliminations	(355)		(242)		(825)		(605)				Eliminations	(204)		(272)		(398)		(470)
Total	Total	$	213,568	$	138,390	$	585,391	$	429,528			Total	$	189,623	$	206,156	$	343,147	$	371,823
Operating profit (loss):	Operating profit (loss):											Operating profit (loss):
Fishing	Fishing	$	39,390	$	23,273	$	107,553	$	71,208			Fishing	$	11,321	$	40,400	$	27,613	$	68,163
Camping	Camping	4,305		828		10,075		1,603				Camping	5,119		2,962		7,869		5,770
Watercraft Recreation	Watercraft Recreation	3,446		1,181		7,329		(2,021)				Watercraft Recreation	3,164		2,814		4,695		3,883
Diving	Diving	1,978		(2,595)		384		(3,202)				Diving	1,209		(1,253)		1,662		(1,594)
Other / Corporate	Other / Corporate	(11,020)		(9,758)		(27,649)		(16,064)				Other / Corporate	(5,384)		(8,887)		(12,650)		(16,629)
		$	38,099	$	12,929	$	97,692	$	51,524				$	15,429	$	36,036	$	29,189	$	59,593
Total assets (end of period):	Total assets (end of period):											Total assets (end of period):
Fishing	Fishing					$	264,364	$	204,406	$	206,244	Fishing					$	375,637	$	288,924	$	285,321
Camping	Camping					48,352		35,670		37,514		Camping					58,574		41,592		54,276
Watercraft Recreation	Watercraft Recreation					29,519		24,003		21,038		Watercraft Recreation					44,613		30,147		27,530
Diving	Diving					67,927		63,079		67,393		Diving					72,070		65,556		67,069
Other / Corporate	Other / Corporate					249,233		190,451		213,837		Other / Corporate					117,895		192,761		240,091
						$	659,395	$	517,609	$	546,026		$	—	$	—	$	668,789	$	618,980	$	674,287

17 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

- 17 -


Index			JOHNSON OUTDOORS INC.


	Foreign Currency Translation Adjustment		Unamortized Loss on Defined Benefit Pension Plans		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2021	$	7,183	$	(204)	$	6,979
Other comprehensive income before reclassifications	168		—		168
Amounts reclassified from accumulated other comprehensive income	—		22		22
Tax effects	—		(6)		(6)
Balance at April 1, 2022	$	7,351	$	(188)	$	7,163

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


	Foreign Currency Translation Adjustment		Unamortized Loss on Defined Benefit Pension Plans		Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2021	$	9,765	$	(2,505)	$	7,260
Other comprehensive income before reclassifications	(1,512)		—		(1,512)
Amounts reclassified from accumulated other comprehensive income	—		134		134
Tax effects	—		(33)		(33)
Balance at April 2, 2021	$	8,253	$	(2,404)	$	5,849

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


	Foreign Currency Translation Adjustment		Unamortized Loss on Defined Benefit Pension Plans		Accumulated Other Comprehensive Income (Loss)
Balance at October 1, 2021	$	7,606	$	(220)	$	7,386
Other comprehensive loss before reclassifications	(255)		—		(255)
Amounts reclassified from accumulated other comprehensive income	—		43		43
Tax effects	—		(11)		(11)
Balance at April 1, 2022	$	7,351	$	(188)	$	7,163

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


	Foreign Currency Translation Adjustment		Unamortized Loss on Defined Benefit Pension Plans		Accumulated Other Comprehensive Income (Loss)
Balance at October 2, 2020	$	7,323	$	(2,606)	$	4,717
Other comprehensive loss before reclassifications	930		—		930
Amounts reclassified from accumulated other comprehensive income	—		269		269
Tax effects	—		(67)		(67)
Balance at April 2, 2021	$	8,253	$	(2,404)	$	5,849

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

- 18 -


Index			JOHNSON OUTDOORS INC.

Foreign
Currency
Translation
Adjustment Unamortized
Loss on Defined
Benefit Pension
Plans Accumulated
Other
Comprehensive
Income (Loss)
Balance at April 2, 2021 $ 8,253 $ (2,404) $ 5,849
Other comprehensive income before reclassifications 742 0 742
Amounts reclassified from accumulated other comprehensive income 0 164 164
Tax effects 0 (41) (41)
Balance at July 2, 2021 $ 8,995 $ (2,281) $ 6,714

~~The changes in AOCI by component, net of tax, for the three months ended June 26, 2020 were as follows:~~

Foreign
Currency
Translation
Adjustment Unamortized
Loss on Defined
Benefit Pension
Plans Accumulated
Other
Comprehensive
Income (Loss)
Balance at March 27, 2020 $ 3,883 $ (3,109) $ 774
Other comprehensive income before reclassifications 1,537 0 1,537
Amounts reclassified from accumulated other comprehensive income 0 240 240
Tax effects 0 (60) (60)
Balance at June 26, 2020 $ 5,420 $ (2,929) $ 2,491

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

Foreign
Currency
Translation
Adjustment Unamortized
Loss on Defined
Benefit Pension
Plans Accumulated
Other
Comprehensive
Income (Loss)
Balance at October 2, 2020 $ 7,323 $ (2,606) $ 4,717
Other comprehensive loss before reclassifications 1,672 0 1,672
Amounts reclassified from accumulated other comprehensive income 0 433 433
Tax effects 0 (108) (108)
Balance at July 2, 2021 $ 8,995 $ (2,281) $ 6,714

~~The changes in AOCI by component, net of tax, for the nine months ended June 26, 2020 were as follows:~~

Foreign
Currency
Translation
Adjustment Unamortized
Loss on Defined
Benefit Pension
Plans Accumulated
Other
Comprehensive
Income (Loss)
September 27, 2019 $ 4,790 $ (3,232) $ 1,558
Other comprehensive loss before reclassifications 630 0 630
Amounts reclassified from accumulated other comprehensive income 0 404 404
Tax effects 0 (101) (101)
Balance at June 26, 2020 $ 5,420 $ (2,929) $ 2,491

~~The reclassifications out of AOCI for the three months ended July 2, 2021 and June 26, 2020 were as follows:~~

~~- 19 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

Three Months Ended
July 2, 2021 June 26, 2020 Statement of Operations
Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss $ 164 $ 240 Other income and expense
Tax effects (41) (60) Income tax expense
Total reclassifications for the period $ 123 $ 180

~~The reclassifications out of AOCI for the nine months ended July 2, 2021 and June 26, 2020 were as follows:~~

Nine Months Ended
July 2, 2021 June 26, 2020 Statement of Operations
Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss $ 433 $ 404 Other income and expense
Tax effects (108) (101) Income tax expense
Total reclassifications for the period $ 325 $ 303


	Three Months Ended				Six Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021		Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	22	$	134	$	32	$	269	Other income and expense
Tax effects	(6)		(33)		(11)		(67)		Income tax expense


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

18 LEASES

~~Adoption of Topic 842~~

At the beginning of fiscal year 2020, the Company adopted ASU 2016-02 and all subsequent ASUs that modified accounting standards Topic 842 using a modified retrospective adoption method, in which right-of-use ("ROU") assets and lease liabilities are recognized in the condensed consolidated balance sheets. Under the effective date transition method, financial results reported in periods prior to fiscal year 2020 are unchanged. The Company also elected the package of practical expedients permitted under the standard, which does not require reassessment of prior conclusions related to contracts containing a lease, lease classification and initial direct lease costs. As an ongoing accounting policy election, the Company will exclude short-term leases (terms of 12 months or less) from the balance sheet presentation and will account for non-lease and lease components in a contract as a single lease component for most asset classes. All leases in which the Company is the lessee are classified as operating leases, and the Company does not have any finance leases or sublease agreements. Additionally, the Company does not have any leases in which it is the lessor.

The adoption of the new standard had a significant impact on the Company's condensed consolidated balance sheet in fiscal year 2020 due to the initial recognition of approximately $41 million of lease liabilities with corresponding ROU assets for operating leases. The new standard did not have a significant impact on the condensed consolidated statements of operations or cash flows, and did not impact our debt covenant compliance under our current credit agreements.

~~The Company determines if an arrangement is a lease at inception.~~ The Company leases certain facilities and machinery and equipment under long-term, non-cancelable operating leases. The Company determines if an arrangement is a lease at inception.

As of ~~July 2, 2021,~~April 1, 2022, the Company had approximately 200 leases, with remaining terms ranging from less than one year to 18 years. Some of the leases contain variable payment terms, such as payments based on fluctuations in the Consumer Price Index (CPI). 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 ~~ROU~~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 ~~new~~applicable definition, and the determination of the discount rate, which is assumed to be the incremental borrowing rate. The incremental borrowing rate is derived from information available to the Company at the lease commencement date based on lease length and location.

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


	Three months ended				Six months ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Lease Cost
Operating lease costs	$	2,111	$	2,290	$	4,218	$	4,077
Short-term lease costs	545		329		959		803
Variable lease costs	43		49		88		92
Total lease cost	$	2,699	$	2,668	$	5,265	$	4,972

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

As of April 1, 2022, the Company did not have any finance leases or sublease agreements. Additionally, the Company does not have any leases in which it is the lessor. While the Company extended or renewed various existing leases during the quarter, there were no significant new leases entered into during the quarter ended April 1, 2022. Supplemental balance sheet, cash flow, and other information related to operating leases was as follows:

- 2019 -


Index			JOHNSON OUTDOORS INC.

~~The components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations for the three and nine months ended July 2, 2021 and June 26, 2020 were as follows:~~

Three months ended Nine months ended
July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020
Lease Cost
Operating lease costs $ 2,107 $ 1,792 $ 6,184 $ 5,355
Short-term lease costs 403 478 1,206 1,435
Variable lease costs 46 42 138 129
Total lease cost $ 2,556 $ 2,312 $ 7,528 $ 6,919

Included in the amounts in the table above were rent expense to related parties of $262 and $778 for the three and nine months ended July 2, 2021, respectively, and $246 and $739 for the three and nine months ended June 26, 2020, respectively.

As of July 2, 2021, the Company did not have any finance leases. There were no significant new leases entered into during the quarter ended July 2, 2021. Supplemental balance sheet, cash flow, and other information related to operating leases was as follows:


		Nine months ended							Six months ended
		July 2, 2021			June 26, 2020				April 1, 2022			April 2, 2021
Operating leases:	Operating leases:							Operating leases:

Operating lease ROU assets	Operating lease ROU assets	$	43,741		$	37,669		Operating lease ROU assets	$	47,225		$	43,489

Current operating lease liabilities	Current operating lease liabilities	5,281			5,900			Current operating lease liabilities	6,080			5,715
Non-current operating lease liabilities	Non-current operating lease liabilities	39,382			32,474			Non-current operating lease liabilities	42,233			38,670
Total operating lease liabilities	Total operating lease liabilities	$	44,663		$	38,374		Total operating lease liabilities	$	48,313		$	44,385

Weighted average remaining lease term (in years)	Weighted average remaining lease term (in years)	13.24			10.50			Weighted average remaining lease term (in years)	11.86			13.53

Weighted average discount rate	Weighted average discount rate	3.15		%	2.86		%	Weighted average discount rate	3.09		%	3.16		%

Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities	$	5,680		$	4,726		Cash paid for amounts included in the measurement of lease liabilities	$	3,739		$	3,757

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at ~~July 2, 2021~~April 1, 2022 were as follows:


Year	Year	Related parties included in total		Total		Year	Related parties included in total		Total
Remainder of 2021		$	289	$	2,428
2022		193		6,631
Remainder of 2022						Remainder of 2022	$	594	$	4,106
2023	2023	0		5,825		2023	1,233		7,577
2024	2024	0		5,263		2024	1,270		6,795
2025	2025	0		3,927		2025	1,307		6,211
2026						2026	1,347		4,609
Thereafter	Thereafter	0		32,563		Thereafter	226		29,767
Total undiscounted lease payments	Total undiscounted lease payments	482		56,637		Total undiscounted lease payments	5,977		59,065
Less: Imputed interest	Less: Imputed interest	(2)		(11,974)		Less: Imputed interest	(229)		(10,752)
Total net lease liability	Total net lease liability	$	480	$	44,663	Total net lease liability	$	5,748	$	48,313

~~- 21 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

During the second quarter of fiscal 2021, the Company amended its agreement with the landlord on an existing leased facility. Payments under the amended agreement are expected to begin in fiscal year 2022 and go through June 2039, and total estimated rental payments, not included in the amounts above, will be approximately $14 million over the course of the lease as amended. As of ~~July 2, 2021,~~April 1, 2022, the Company did not have any other additional significant operating lease commitments that have not yet commenced.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes comments and analysis relating to the results of operations and financial condition of Johnson Outdoors Inc. and its subsidiaries (collectively, the “Company”) as of and for the three and ~~nine~~six month periods ended ~~July~~April 1, 2022 and April 2, ~~2021 and June 26, 2020.~~2021. All monetary amounts, other than share and per share amounts, are stated in thousands.

Our MD&A is presented in the following sections:

•Forward Looking Statements

•Trademarks

•Overview

•Results of Operations

•Liquidity and Financial Condition

•Contractual Obligations and Off Balance Sheet Arrangements

•Critical Accounting Policies and Estimates

- 20 -


Index			JOHNSON OUTDOORS INC.

This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related notes that immediately precede this section, as well as the Company’s Annual Report on Form 10-K for the fiscal year ended October ~~2, 2020~~1, 2021 which was filed with the Securities and Exchange Commission on December ~~11, 2020.~~10, 2021.

Forward Looking Statements

Certain matters discussed in this Form 10-Q are “forward-looking statements,” and the Company intends these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of those safe harbor provisions. These forward-looking statements can generally be identified as such because they include phrases such as the Company “expects,” “believes,” “anticipates,” “intends,” use of words such as “confident,” “could,” “may,” “planned,” “potential,” “should,” “will,” “would” or the negative of such words or other words of similar meaning. Similarly, statements that describe the Company’s future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results or outcomes to differ materially from those currently anticipated.

Factors that could affect actual results or outcomes include the matters described under the caption “Risk Factors” in Item 1A of the Company’s Form 10-K which was filed with the Securities and Exchange Commission on December ~~11, 2020, the update to such "Risk Factors" section in Part II, Item 1A in this Form 10-Q~~10, 2021 and the following: changes in economic conditions, consumer confidence levels and discretionary spending patterns in key markets; uncertainties stemming from changes in U.S. trade policies, tariffs, and the reaction of other countries to such changes; the global outbreaks of disease, such as the COVID-19 pandemic which has affected, and may continue to affect, market and economic conditions, and the timing, pricing and continued availability of raw materials and components from our supply chain, along with wide-ranging impacts on employees, customers and various aspects of our operations; the Company’s success in implementing its strategic plan, including its targeted sales growth platforms, innovation focus and its increasing digital presence; litigation costs related to actions of and disputes with third parties, including competitors; the Company’s continued success in its working capital management and cost-structure reductions; the Company’s success in integrating strategic acquisitions; the risk of future writedowns of goodwill or other long-lived assets; the ability of the Company’s customers to meet payment obligations; the impact of actions of the Company's competitors with respect to product development or enhancement or the introduction of new products into the Company's markets; movements in foreign currencies, interest rates or commodity costs; fluctuations in the prices of raw materials or the availability of raw materials or components used by the Company; any disruptions in the Company's supply chain as a result of material fluctuations in the Company's order volumes and requirements for ~~(as well as limitations on the availability of)~~ raw materials and other components, or the demand for those same raw materials and components by third parties, necessary to manufacture and produce the Company's products; the success of the Company’s suppliers and customers and the impact of any consolidation in the industries of the Company's suppliers and customers; the ability of the Company to deploy its capital successfully; unanticipated outcomes related to outsourcing certain manufacturing processes; unanticipated outcomes related to litigation matters; and adverse weather ~~conditions.~~conditions and other factors impacting climate change legislation. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made

~~- 22 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

as of the date of this filing. The Company assumes no obligation, and disclaims any obligation, to update such forward-looking statements to reflect subsequent events or circumstances.

Trademarks

We have registered the following trademarks, among others, which may be used in this report: Minn Kota®, Cannon®, Humminbird®, Eureka!®, Jetboil®, Old Town®, Ocean Kayak®, Carlisle®, and SCUBAPRO®.

Overview

The Company is a leading global manufacturer and marketer of branded seasonal outdoor recreation products used primarily for fishing, diving, paddling and camping. The Company’s portfolio of well-known consumer brands has attained leading market positions due to continuous innovation, marketing excellence, product performance and quality. The Company’s values and culture support innovation in all areas, promoting and leveraging best practices and synergies within and across its subsidiaries to advance the Company’s strategic vision set by executive management and approved by the Company’s Board of Directors. The Company is controlled by Helen P. Johnson-Leipold, the Company’s Chairman and Chief Executive Officer, members of her family and related entities.

Coronavirus (COVID-19)

~~In March 2020,~~Due to the ~~World Health Organization announced~~timing of the COVID-19 outbreak, ~~had become a world-wide pandemic. Various government mandates resulted in travel limitations~~the Company's traditional seasonal pacing, where our heaviest sales volumes typically occurred during our second and business and government shutdowns which had significant negative economic impacts around the world. The Company temporarily halted certain production operations at the end of the second fiscal quarter and beginning of the third fiscal ~~quarter of~~quarters, shifted during fiscal 2020 and ~~saw~~fiscal 2021. Increased

- 21 -


Index			JOHNSON OUTDOORS INC.

participation in fishing, camping, watercraft recreation and diving and related demand for our products, largely driven by consumer desire to engage in socially distant and safe activities outdoors as a ~~significant decline in demand and~~reaction to the COVID-19 pandemic led to increased sales volumes across all Company segments during ~~that time.~~fiscal 2021. This strong demand continued into the first two quarters of fiscal 2022.

~~Although later during our 2020 third fiscal quarter, stay-at-home orders were lifted, government prescriptions for the general public~~In addition to maintain social distancing and avoid activities involving large crowds or being in confined spaces with others to mitigate the spread of the virus continued and, as a result, the outdoor recreation industry has benefited from increased participation. As consumers took advantage of being outdoors, the Company saw anthis significant increase in demand for ~~many of its warm weather outdoor recreational~~Company products and each of our Fishing, Camping and Watercraft Recreation segments began to experience increased sales volumes toward the end of fiscal 2020. As a result, our customers’ inventory levels were drawn down, and accordingly, we continued to experience strong orders from our customers during ~~the first three quarters of~~ fiscal 2021 and fiscal 2022 to ~~satisfy strong consumer demand for our products across these segments. Nonetheless,~~date, COVID-19 has also caused widely-documented supply chain and logistics disruptions across industries, including those in which we operate, which have been exacerbated ~~due to~~by the ~~recent~~ higher demand for our outdoor recreation products and associated inventory replenishment actions of our customers. These adverse supply chain and logistics constraints and disruptions have impacted the timing, sourcing, availability and cost of raw materials and components that are necessary to manufacture our outdoor recreation products. Certain of the Company's component suppliers and logistical service providers experienced disruptions, resulting in supply shortages across all of our segments for certain materials and components that are necessary to produce our products. Moreover, during the first two quarters of fiscal 2022, the Fishing segment was significantly impacted by these supply chain and logistical infrastructure disruptions, resulting in decreased sales volumes in that segment over the same periods in the prior year. As a result of these disruptions, the Company ~~is focused on managing its supply chain~~has taken certain actions to attempt to meet the continued strong consumer ~~demand; however, such~~demand for its products to continue to fulfill product orders. These actions include building and procuring numerous categories of inventory (in some cases at significantly higher price points than what was historically paid) to mitigate against potential shortages during fiscal 2022 in certain of its materials and components that are necessary to manufacture Company products. These buying actions have subsequently resulted in decreased margins and the Company carrying significantly higher levels of inventory for a number of its materials, components and products at the end of each of the first two fiscal quarters of 2022.

Because the Company expects that these same supply chain and logistics disruptions ~~may affect our~~will continue throughout fiscal 2022, the Company remains focused on evaluating and pursuing additional options (beyond building inventory) to meet the continued strong consumer demand for its products. Nonetheless, these supply chain and logistics disruptions remain fluid and will likely adversely impact the cost of goods sold for future sales of product for the remainder of fiscal 2022 and/or adversely impact the Company’s ability to fill ~~such~~all customer demand ~~across our segments.~~for its products, especially given the volatility and changing circumstances brought on by the COVID-19 pandemic and its impact on the global supply chain and logistics infrastructure.

Highlights

Net sales of ~~$213,568~~$189,623 for the ~~third~~second quarter of fiscal ~~2021 increased $75,178,~~2022 decreased $16,533, or ~~54%~~8%, from the same period in the prior year. ~~The prior year third quarter was heavily~~While consumer demand remains strong, sales volumes have been negatively impacted by ~~COVID-19 related shutdowns, resulting~~product availability and supply chain disruptions, particularly in ~~unusually low sales volumes for~~Fishing, the quarter. Due to this, as well as increased participation in outdoor recreation activities in the current fiscal year as a result of social distancing and other indoor activity restrictions related to the ongoing COVID-19 pandemic, there was a significant increase in third quarter sales volumes across all businesses over the prior year quarter.Company's largest segment. This sales volume ~~increase was~~decrease and lower gross margins resulting from higher costs of sales were the primary ~~driver~~drivers of the ~~increase of $25,170~~$20,607 decrease in operating profit over the prior year quarter.

Seasonality

The Company’s business is seasonal in nature. The ~~third~~second fiscal quarter traditionally falls within the Company’s primary selling season for its warm-weather outdoor recreation products. The table below sets forth a historical view of the Company’s seasonality during the last three fiscal years. See “Coronavirus (COVID-19)” above for additional information of the impact of COVID-19 on changes to the Company’s seasonality for fiscal 2020 ~~which changes have continued into fiscal~~and 2021 ~~and~~ which changes are expected to continue to evolve over the remainder of fiscal ~~2021.~~2022.


	Fiscal Year
	2021				2020				2019
Quarter Ended	Net Sales		Operating Profit		Net Sales		Operating Profit		Net Sales		Operating Profit
December	22	%	22	%	22	%	10	%	19	%	9	%
March	27	%	32	%	27	%	45	%	32	%	43	%
June	29	%	34	%	23	%	17	%	31	%	43	%
September	22	%	12	%	28	%	28	%	18	%	5	%
	100	%	100	%	100	%	100	%	100	%	100	%

Results of Operations

- 2322 -


Index			JOHNSON OUTDOORS INC.

Fiscal Year
2020 2019 2018
Quarter Ended Net
Sales Operating
Profit Net
Sales Operating
Profit Net
Sales Operating
Profit
December 22 % 10 % 19 % 9 % 21 % 11 %
March 27 % 45 % 32 % 43 % 31 % 41 %
June 23 % 17 % 31 % 43 % 31 % 51 %
September 28 % 28 % 18 % 5 % 17 % -3 %
100 % 100 % 100 % 100 % 100 % 100 %

~~Results of Operations~~

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


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020			April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Net sales:	Net sales:									Net sales:
Fishing	Fishing	$	155,348	$	102,741	$	442,363	$	335,974	Fishing	$	129,323	$	160,016	$	237,679	$	287,015
Camping	Camping	17,757		9,665		44,195		26,028		Camping	19,167		14,244		33,301		26,438
Watercraft Recreation	Watercraft Recreation	19,873		15,267		50,094		26,140		Watercraft Recreation	23,009		17,778		37,609		30,221
Diving	Diving	20,680		10,696		48,981		41,416		Diving	18,194		14,208		34,685		28,301
Other / Eliminations	Other / Eliminations	(90)		21		(242)		(30)		Other / Eliminations	(70)		(90)		(127)		(152)
Total	Total	$	213,568	$	138,390	$	585,391	$	429,528	Total	$	189,623	$	206,156	$	343,147	$	371,823
Operating profit (loss):	Operating profit (loss):									Operating profit (loss):
Fishing	Fishing	$	39,390	$	23,273	$	107,553	$	71,208	Fishing	$	11,321	$	40,400	$	27,613	$	68,163
Camping	Camping	4,305		828		10,075		1,603		Camping	5,119		2,962		7,869		5,770
Watercraft Recreation	Watercraft Recreation	3,446		1,181		7,329		(2,021)		Watercraft Recreation	3,164		2,814		4,695		3,883
Diving	Diving	1,978		(2,595)		384		(3,202)		Diving	1,209		(1,253)		1,662		(1,594)
Other / Eliminations	Other / Eliminations	(11,020)		(9,758)		(27,649)		(16,064)		Other / Eliminations	(5,384)		(8,887)		(12,650)		(16,629)
Total	Total	$	38,099	$	12,929	$	97,692	$	51,524	Total	$	15,429	$	36,036	$	29,189	$	59,593

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

Net Sales

Consolidated net sales for the three months ended ~~July 2, 2021~~April 1, 2022 were ~~$213,568, an increase~~$189,623, a decrease of ~~$75,178,~~$16,533, or ~~54%~~8%, compared to ~~$138,390~~$206,156 for the three months ended June 26, 2020. As described above, the prior year third quarter was impacted negatively by COVID-19 related shutdowns. However, the current year quarter has seen strong sales volumes due to increased participation in outdoor recreation, as consumers continue to take advantage of being outdoors.April 2, 2021. Foreign currency translation had ~~a favorable~~virtually no impact ~~of approximately 1%~~ on current year ~~third~~second quarter net sales compared to the prior year's ~~third~~second quarter net sales.

Net sales for the three months ended ~~July 2, 2021~~April 1, 2022 for the Fishing business were ~~$155,348, an increase~~$129,323, a decrease of ~~$52,607,~~$30,693, or ~~51%~~19%, from ~~$102,741~~$160,016 during the ~~third~~second fiscal quarter of the prior year. ~~The increase~~While product demand remains strong, the decrease in Fishing was driven by ~~favorable comparison to~~significant supply chain disruptions and the ~~prior year quarter as explained above and due to COVID-19 related shutdowns~~resulting unavailability of components experienced in the ~~prior~~current year quarter, as well as increased participation in outdoor recreation, principally as a result of the effect of COVID-19 on consumer recreation and leisure choices which resulted in a significant increase in demand for our fishing products between quarters.quarter.

Net sales for the Camping business were ~~$17,757~~$19,167 for the ~~third~~second quarter of the current fiscal year, an increase of ~~$8,092,~~$4,923, or ~~84%~~35%, from the prior year net sales during the same period of ~~$9,665. COVID-19 related shutdowns unfavorably impacted both production~~$14,244 due to increased sales of Jetboil and ~~demand~~Eureka! consumer camping products due to continued strong participation in outdoor recreation activities.

Net sales for the second quarter of fiscal 2022 for the Watercraft Recreation business were $23,009, an increase of $5,231, or 29%, compared to $17,778 in the prior year ~~period~~same period. Continued strong demand for the segment's Sportsman line and successful pedal and motorized product offerings drove the increase over the prior year quarter.

Net sales for Diving, our most global business, for the second quarter of fiscal 2022 were $18,194, an increase of $3,986 or 28% versus $14,208 for the three months ended April 2, 2021. In the prior year second quarter, demand was deflated due to the effects of COVID-19 which caused the closure of destination travel locations and resulted in lower tourism activities that tend to generate demand for our products in this segment. InAs several regions around the world have re-opened, sales volumes have increased. Foreign currency translation had an unfavorable impact on sales in this segment of approximately 2% versus the prior year quarter.

For the six months ended April 1, 2022, consolidated net sales of $343,147 decreased $28,676 or 8% compared to $371,823 for the six months ended April 2, 2021. Foreign currency translation had virtually no impact on net sales of the current ~~fiscal~~ year ~~third quarter, increased~~to date period versus the prior year to date period.

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

- 2423 -


Index			JOHNSON OUTDOORS INC.

~~Jetboil~~previously discussed logistics and ~~Eureka! consumer camping products as a result of increased participation in outdoor recreation activities described above were the primary drivers of the increase.~~

~~Net sales~~supply chain disruptions which adversely impacted our ability to satisfy demand for the third quarter of fiscal 2021 for the Watercraft Recreation business were $19,873, an increase of $4,606, or 30%, compared to $15,267 in the prior year same period. COVID-19 related shutdowns unfavorably impacted both production and demand in the prior year period for this segment. During the current fiscal year third quarter, increased participation in outdoor recreation activities and successful offerings of new products further drove the significant increase over the prior year quarter.

Net sales for Diving, our most global business, for the third quarter of fiscal 2021were $20,680, an increase of $9,984 or 93% versus $10,696 for the three months ended June 26, 2020. In the prior year third quarter, demand was severely deflated due to the effects of COVID-19 which caused the closure of destination travel locations and resulted in lower tourism activities. As several regions around the world have started to re-open, sales volumes have begun increasing. Additionally, there was a favorable foreign currency translation impact on sales in this segment of approximately 5% versus the prior year quarter.

For the nine months ended July 2, 2021, consolidated net sales of $585,391 increased $155,863 or 36% compared to $429,528 for the nine months ended June 26, 2020. Foreign currency translation had a favorable impact of less than 1% on net sales of the current year to date period versus the prior year to date period. Similar to the results for the fiscal third quarter as noted above, the prior year-to-date period experienced low sales volumes as a result of COVID-19 related shutdowns. Due to increased participation in outdoor recreation, the current fiscal 2021 year-to-date period has resulted in significant increased demand and sales volumes.

Net sales for the nine months ended July 2, 2021 for the Fishing business were $442,363, an increase of $106,389, or 32% from $335,974 during the same period of the prior year. The increase over the prior year to date period was driven by increased participation in outdoor recreation, principally as a result of the effect of COVID-19 on consumer recreation and leisure choices, resulting in higher demand across all product ~~lines in this segment.~~orders.

Net sales for the Camping business were ~~$44,195~~$33,301 for the ~~nine~~six months ended ~~July 2, 2021,~~April 1, 2022, an increase of ~~$18,167,~~$6,863, or ~~70%~~26%, from the prior year net sales during the same period of ~~$26,028.~~$26,438. Increased sales of Jetboil and Eureka! consumer camping products as a result of increased participation in outdoor recreation activities were the primary driver of the increase.

Net sales for the ~~nine~~six months ended ~~July 2, 2021~~April 1, 2022 for the Watercraft Recreation business were ~~$50,094,~~$37,609, an increase of ~~$23,954,~~$7,388, or ~~92%~~24%, compared to ~~$26,140~~$30,221 in the prior year same period. Increased demand as a result of increased participation in watercraft recreation during the COVID-19 pandemic drove the overall increase over the prior year to date period.

Diving net sales were ~~$48,981~~$34,685 for the ~~nine~~six months ended ~~July~~April 1, 2022 versus $28,301 for the six months ended April 2, 2021, ~~versus $41,416 for the nine months ended June 26, 2020,~~ an increase of ~~$7,565,~~$6,384, or ~~18%~~23%. ~~As explained earlier, this segment~~The sales increase was ~~heavily impacted by COVID-19 shutdowns and restrictions in the prior year-to-date period,~~largely due to ~~disruptions to~~increased demand for our products as the global tourism ~~industry. As~~industry has started to recover. The impact of increased sales volumes was offset in part by the ~~industry slowly begins to recover, increased demand in the current fiscal year-to-date period drove the increase in sales over the prior year period. There was a favorable~~unfavorable effect of foreign currency translation of ~~approximately 5%~~3% versus the prior year to date period.

Cost of Sales

Cost of sales for the three months ended ~~July 2, 2021~~April 1, 2022 was ~~$116,057~~$121,038 compared to ~~$75,828~~$112,902 for the three months ended ~~June 26, 2020.~~April 2, 2021. The increase year over year was driven primarily by increases in ~~variable~~ costs, ~~due to the higher sales volume in the current year quarter over the prior year quarter. Furthermore, the Company incurred $2,600 of additional tariff~~specifically increased materials costs ~~versus the prior year quarter~~ and ~~experienced~~ increased inbound ~~air~~ freight costs, as the Company continues to manage disruptions in its supply chain to ensure the availability of necessary components, parts and other raw materials across our segments to try to meet sales demand for our products.

For the ~~nine~~six months ended ~~July 2, 2021,~~April 1, 2022, cost of sales was ~~$319,596~~$213,931 compared to ~~$238,222~~$203,539 in the same period of the prior year. The increase year over year was primarily driven by increased ~~sales volumes~~costs in the current year versus the prior year ~~as described above. The Company also incurred $4,600 of additional tariff costs and experienced increased inbound air freight costs versus the prior year quarter all~~ as described above.

Gross Profit Margin

For the three months ended ~~July 2, 2021,~~April 1, 2022, gross profit as a percentage of net sales was ~~45.7%~~36.2% compared to 45.2% in the three month period ended ~~June 26, 2020. The~~April 2, 2021. While the Company has implemented price increases across product lines, they were not enough to offset the negative gross profit impact of cost increases noted above as well as reduced overhead absorption.

For the six months ended April 1, 2022, gross profit as a percentage of net sales was ~~more than~~37.7% compared to 45.3% in the prior six month period. As noted above, the Company has implemented price increases across product lines, but they have not been significant enough to offset the negative gross profit impact of cost increases and reduced overhead absorption noted above.

Operating Expenses

Operating expenses were $53,156 for the three months ended April 1, 2022, compared to $57,218 for the three months ended April 2, 2021. The decrease of $4,062 was primarily due to the impact of lower sales volume-driven expenses, as well as lower variable and deferred compensation expense, between quarters. Unfavorable market conditions on the Company's deferred compensation plan assets resulted in approximately $3,300 of lower deferred compensation expense in the current year quarter as compared to the prior year quarter, which was entirely offset by a loss in Other Expense (Income), net related to marking these deferred compensation plan assets to market.

Operating expenses were $100,027 for the six months ended April 2, 2021, compared to $108,691 for the six months ended April 2, 2021. The decrease of $8,664 was primarily due to the impact of lower sales volume-driven expenses, as well as lower variable and deferred compensation expense, between periods. Unfavorable market conditions on the Company's deferred compensation plan assets resulted in approximately $4,700 of lower deferred compensation expense in the current year to date period as compared to the prior year to date period, which was entirely offset by a loss in Other Expense (Income), net related to marking these deferred compensation plan assets to market.

Operating Profit

Operating profit on a consolidated basis for the three month period ended April 1, 2022 was $15,429, compared to an operating profit of $36,036 in the second quarter of the prior fiscal year. Lower sales volumes and reduced gross margins as discussed above were the primary drivers of the decrease in operating profit between quarters.

Operating profit on a consolidated basis for the six months ended April 1, 2022 was $29,189, compared to an operating profit of $59,593 in the prior year to date period. The decrease year over year was driven primarily by lower sales volumes and reduced gross margins as discussed above.

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Index			JOHNSON OUTDOORS INC.

Interest

Interest expense was $49 and $35 for the three months ended April 1, 2022 and April 2, 2021, respectively. Interest expense was $87 for the six months ended April 1, 2022 compared to $67 for the six months ended April 2, 2021.

Interest income for the three month periods ended April 1, 2022 and April 2, 2021 was $102 and $80, respectively. Interest income was $195 for the six months ended April 1, 2022 compared to $162 for the six months ended April 2, 2021.

Other Expense (Income), net

Other expense was $2,272 for the three months ended April 1, 2022 compared to other income of $1,229 in the prior year period. Net investment losses on the assets related to the Company’s non-qualified deferred compensation plan were $2,046 in the three month period ended April 1, 2022 compared to net investment gains and earnings of $1,257 in the three month period ended April 2, 2021. The change year over year in the investment value of these assets was offset by the decrease in deferred compensation expense included in the Company's Operating expenses during the same periods. For the three months ended April 1, 2022, foreign currency exchange losses were $146 compared to gains of $217 for the three months ended April 2, 2021.

For the six months ended April 1, 2022, other expense was $1,498 compared to other income of $3,633 in the six months ended April 2, 2021. Net investment losses on the assets related to the Company’s non-qualified deferred compensation plan in the six months ended April 1, 2022 were $702, compared to net investment gains and earnings of $3,994 in the six months ended April 2, 2021. Foreign currency exchange losses were $513 for the six months ended April 1, 2022, compared to gains of $121 for the six months ended April 2, 2021.

Income Tax Expense

The Company’s provision for income taxes is based upon estimated annual effective tax rates in the tax jurisdictions in which the Company operates. The effective tax rate for the three and six month periods ended April 1, 2022 were 25.1% and 25.3%, respectively, compared to 25.4% and 24.7% in the corresponding periods of the prior year. A key factor impacting the effective tax rate for the six months ended April 2, 2021 was the favorable impact from an intra-entity transfer of assets other than inventory reported in the prior year period.

Net Income

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

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

Liquidity and Financial Condition

Cash and cash equivalents totaled $113,186 as of April 1, 2022, compared to cash and cash equivalents of $186,921 as of April 2, 2021. The decrease in cash year over year was due primarily to the Company's decision to build and procure numerous categories of inventory (in some cases at significantly higher prices than was historically paid) in an attempt to mitigate against potential shortages during this fiscal year. The Company’s debt to total capitalization ratio was 0% as of April 1, 2022 and April 2, 2021. The Company’s total debt balance was $0 as of each of April 1, 2022 and April 2, 2021. See “Note 11 – Indebtedness” in the notes to the Company’s accompanying condensed consolidated financial statements for further discussion.

Accounts receivable, net of allowance for doubtful accounts, were $119,517 as of April 1, 2022, a decrease of $10,622 compared to $130,139 as of April 2, 2021. The decrease is consistent with decreased sales volumes year over year. Inventories were $235,220 as of April 1, 2022, an increase of $110,682, compared to $124,538 as of April 2, 2021. As noted above, the increase in our inventory balances over the prior year period is due to increased ~~sales volume-related efficiencies.~~raw material and other component purchases, at higher costs, in an effort to meet increased demand for products in the current year period. Accounts payable were $56,720 at April 1, 2022 compared to $50,609 as of April 2, 2021, which increase corresponded with the increase in inventory balances between periods.

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Index			JOHNSON OUTDOORS INC.

For the nine months ended July 2, 2021, gross profit as a percentage of net sales was 45.4% compared to 44.5% in the prior nine month period, mainly due to increased sales volume efficiencies and favorable product mix, which more than offset the increase in tariffs and inbound air freight costs over the prior year to date period noted above.

At current expected rates, the Company anticipates an aggregate negative impact of Section 301 tariffs on China sourced goods, net of mitigation actions, on the Company's full fiscal 2021 gross profit of approximately $9 million, compared to approximately $3.5 million during the full previous fiscal year. The expiration of tariff exclusions that the Company secured in prior periods, combined with the application of tariffs on a broader assortment of goods, as well as additional purchase volume are driving the expected year over year increase in tariff costs.

~~Operating Expenses~~

Operating expenses were $59,412 for the three months ended July 2, 2021, compared to $49,633 for the three months ended June 26, 2020. The increase of $9,779 was primarily due to the impact of higher sales volume-driven expenses and approximately $2,000 of higher health insurance claims expense in the current year quarter.

Operating expenses were $168,103 for the nine months ended July 2, 2021, compared to $139,782 for the nine months ended June 26, 2020. The increase of $28,321 was primarily due to the impact of higher sales volume-driven expenses, as well as higher variable and deferred compensation expense and higher health benefit costs between periods. Furthermore, favorable market conditions on the Company's deferred compensation plan assets resulted in approximately $4,900 of higher deferred compensation expense in the current year to date period as compared to the prior year to date period, which was entirely offset by a gain in Other (Income) Expense, net related to marking these deferred compensation plan assets to market.

~~Operating Profit~~

Operating profit on a consolidated basis for the three month period ended July 2, 2021 was $38,099, compared to an operating profit of $12,929 in the third quarter of the prior fiscal year. Higher sales volumes and the other factors discussed above were the primary drivers of the increase in operating profit between quarters.

Operating profit on a consolidated basis for the nine months ended July 2, 2021 was $97,692, compared to an operating profit of $51,524 in the prior year to date period. The improvement year over year was driven primarily by increased sales volumes as well as the other factors discussed above.

~~Interest~~

Interest expense remained flat at $35 for each of the three months ended July 2, 2021 and June 26, 2020. Interest expense was $102 for the nine months ended July 2, 2021 compared to $105 for the nine months ended June 26, 2020.

Interest income for the three month periods ended July 2, 2021 and June 26, 2020 was $76 and $170, respectively. For the nine months ended July 2, 2021, interest income was $238, compared to $1,309 for the nine months ended June 26, 2020. The decrease in interest income year over year was mainly driven by the decrease in interest rates in fiscal 2021 versus the corresponding period of fiscal 2020.

~~Other Income, net~~

Other income was $934 for the three months ended July 2, 2021 compared to $2,493 in the prior year period. Investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan were $1,550 in the three month period ended July 2, 2021 compared to $2,791 in the three month period ended June 26, 2020. The change year over year in the investment value of these assets was offset by the deferred compensation expense included in the Company's Operating expenses during the same periods. For the three months ended July 2, 2021, foreign currency exchange losses were $220 compared to gains of $74 for the three months ended June 26, 2020.

For the nine months ended July 2, 2021, other income was $4,567 compared to expense of $205 in the nine months ended June 26, 2020. Net investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan in the nine months ended July 2, 2021 were $5,554, compared to $648 in the nine months ended June 26, 2020. Foreign currency exchange losses were $99 for the nine months ended July 2, 2021, compared to losses of $224 for the nine months ended June 26, 2020.

~~Income Tax Expense~~

~~- 26 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

The Company’s provision for income taxes is based upon estimated annual effective tax rates in the tax jurisdictions in which the Company operates. The effective tax rate for the three and nine month periods ended July 2, 2021 were 26.4% and 25.3%, respectively, compared to 17.3% and 24.4% in the corresponding periods of the prior year. The key factor impacting the effective tax rate for the three and nine months ended July 2, 2021 was the favorable impact from a decrease in reserves for unrecognized tax benefits reported in the prior year periods.

~~Net Income~~

Net income for the three months ended July 2, 2021 was $28,774, or $2.83 per diluted common class A and B share, compared to net income of $12,869, or $1.27 per diluted common class A and B share, for the third quarter of the prior fiscal year.

Net income for the nine months ended July 2, 2021 was $76,455, or $7.53 per diluted common class A and B share, compared to net income of $39,686, or $3.93 per diluted common class A and B share, for the nine months ended June 26, 2020.

~~Liquidity and Financial Condition~~

Cash and cash equivalents totaled $249,016 as of July 2, 2021, compared to cash and cash equivalents of $181,445 as of June 26, 2020. The increase in cash year over year was due primarily to increased operating profits earned over the prior year period. The Company’s debt to total capitalization ratio was 0% as of July 2, 2021 and June 26, 2020. The Company’s total debt balance was $0 as of each of July 2, 2021 and June 26, 2020. See “Note 11 – Indebtedness” in the notes to the Company’s accompanying condensed consolidated financial statements for further discussion.

Accounts receivable, net of allowance for doubtful accounts, were $94,750 as of July 2, 2021, an increase of $12,173 compared to $82,577 as of June 26, 2020. The increase is consistent with increased sales volumes year over year. Inventories were $130,742 as of July 2, 2021, an increase of $36,524, compared to $94,218 as of June 26, 2020. The increase in our inventory balances over the prior year period is due to increased raw material and other component purchases in an effort to meet increased demand for products in the current year period. Accounts payable were $54,991 at July 2, 2021 compared to $31,026 as of June 26, 2020, which increase corresponded with the increase in inventory balances between periods.

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


		Nine months ended					Six months ended
(thousands)	(thousands)	July 2, 2021		June 26, 2020		(thousands)	April 1, 2022		April 2, 2021
Cash provided by (used for):
Cash used for:						Cash used for:
Operating activities	Operating activities	$	57,611	$	25,560	Operating activities	$	(104,648)	$	(11,955)
Investing activities	Investing activities	(15,468)		(11,340)		Investing activities	(15,722)		(9,822)
Financing activities	Financing activities	(6,792)		(5,412)		Financing activities	(6,528)		(4,690)
Effect of foreign currency rate changes on cash	Effect of foreign currency rate changes on cash	1,228		255		Effect of foreign currency rate changes on cash	(364)		951
Increase in cash and cash equivalents		$	36,579	$	9,063
Decrease in cash and cash equivalents						Decrease in cash and cash equivalents	$	(127,262)	$	(25,516)

Operating Activities

Cash ~~provided by~~used for operations totaled ~~$57,611~~$104,648 for the ~~nine~~six months ended ~~July 2, 2021~~April 1, 2022 compared to ~~$25,560~~$11,955 during the corresponding period of the prior fiscal year. The increase in cash ~~provided by~~used for operations over the prior year ~~nine~~six month period was due primarily to ~~increased~~the Company's decision to build and procure inventory in its attempt to mitigate against shortages in meeting product demand. Lower net income ~~between periods, offset~~ in ~~part by changes in working capital balances~~the current year to date period also contributed to increased use of cash between periods. Depreciation and amortization charges were ~~$10,015~~$6,914 for the ~~nine~~six month period ended ~~July 2, 2021~~April 1, 2022 compared to ~~$11,489~~$6,751 for the corresponding period of the prior year.

Investing Activities

Cash used for investing activities totaled ~~$15,468~~$15,722 for the ~~nine~~six months ended ~~July 2, 2021~~April 1, 2022 compared to ~~cash used for investing activities of $11,340~~$9,822 for the corresponding period of the prior fiscal year. Cash usage for capital expenditures totaled ~~$15,481~~$15,724 for the current year ~~nine~~six month period and ~~$11,350~~$9,828 for the prior year period. The increase in capital expenditures in the current year period is primarily related to the expansion of the Fishing facility to accommodate additional production. Any additional capital expenditures in fiscal ~~2021~~2022 are expected to be funded by working capital.

~~- 27 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

Financing Activities

Cash used for financing activities totaled ~~$6,792~~$6,528 for the ~~nine~~six months ended ~~July 2, 2021~~April 1, 2022 compared to ~~$5,412~~$4,690 for the ~~nine~~six month period ended ~~June 26, 2020~~April 2, 2021 and represents the payment of dividends and purchase of treasury stock. The Company had no debt during either quarter ended ~~July~~April 1, 2022 and April 2, ~~2021 and June 26, 2020.~~2021. See Note 11 "Indebtedness" to the accompanying Condensed Consolidated Financial Statements for additional information on our credit facilities.

As of ~~July 2, 2021~~April 1, 2022 the Company held approximately ~~$54,656~~$52,895 of cash and cash equivalents in bank accounts in foreign taxing jurisdictions.

Contractual Obligations and Off Balance Sheet Arrangements

The Company has contractual obligations and commitments to make future payments including under operating leases and open purchase orders. There have been no changes outside of the ordinary course of business in the specified contractual obligations during the quarter ended ~~July 2, 2021.~~April 1, 2022.

The Company utilizes letters of credit primarily as security for the payment of future claims under its workers compensation insurance. Letters of credit outstanding were approximately $181 and $181 as of ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ respectively.

The Company anticipates making contributions of ~~$41~~$46 to its defined benefit pension ~~plans~~plan during the remainder of fiscal ~~2021.~~2022.

The Company has no other off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The Company’s critical accounting policies and estimates are identified in the Company’s Annual Report on Form 10-K for the fiscal year ending October ~~2, 2020~~1, 2021 in Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Index			JOHNSON OUTDOORS INC.

under the heading “Critical Accounting Estimates”, which was filed with the Securities and Exchange Commission on December ~~11, 2020.~~10, 2021. There were no significant changes to the Company’s critical accounting policies and estimates during the ~~nine~~six months ended ~~July 2, 2021.~~April 1, 2022.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Except as noted below with respect to the COVID-19 outbreak, the Company’s exposure to market risk is limited to the availability of necessary raw materials and fluctuations in raw material commodity and other component prices, interest rate fluctuations on borrowings under our unsecured credit facilities and foreign currency exchange rate risk associated with our foreign operations. The Company does not utilize financial instruments for trading purposes.

Coronavirus outbreak

As disclosed in our prior filings with the Securities and Exchange Commission and elsewhere herein, in December 2019, a new strain of coronavirus ("COVID-19") began to spread globally, leaving no region or part of the world unaffected by the pandemic it has created. Governments and health authorities have been taking, and continue to take, measures to prevent the spread of this virus, and have approved the use of vaccines to help curb the spread of this virus, but it is presently unknown to what extent the vaccines and these other actions will be successful or the potential timing of completion of these measures and their outcome and any resulting impact on the Company's business in the future, including related to demand for the Company's products and any continued disruption in the supply of (or the costs associated with) necessary components and raw materials for the Company to produce products to meet sales demand. If COVID-19 is not contained, among other things, the ability of the Company’s suppliers to manufacture and deliver the products that it sells to the Company (at the quantities and pricing demanded by the Company), the ability of the Company to manufacture and deliver its products to its customers, the Company's ability to display its products at trade shows and similar events, the Company's ability to conduct meetings with its customers and prospective customers, and, if a significant number of its employees at a particular facility or location were to contract coronavirus, the Company’s ability to conduct its day-to-day operations could all be adversely impacted. The continued financial impact of the coronavirus pandemic on the Company (including with respect to the continued heightened demand for the Company’s outdoor recreation products and any continued disruption in its supply ~~chain)~~chain and global logistics infrastructure) will depend on future developments and cannot be reasonably predicted or estimated at this time, but could materially and adversely affect its results for an unknown but possibly extended period. See the section "Risk Factors" identified in Part I, Item 1A in our Form 10-K filed with the Securities and Exchange Commission on December ~~11, 2020~~10, 2021 for more information.

~~- 28 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

Foreign Exchange Risk

The Company has significant foreign operations, for which the functional currencies are denominated primarily in euros, Swiss francs, Hong Kong dollars, and Canadian dollars. As the values of the currencies of the foreign countries in which the Company has operations increase or decrease relative to the U.S. dollar, the sales, expenses, profits, losses, assets and liabilities of the Company’s foreign operations, as reported in the Company’s consolidated financial statements, increase or decrease, accordingly. Approximately 12% of the Company’s revenues for the ~~nine~~six month period ended ~~July 2, 2021~~April 1, 2022 were denominated in currencies other than the U.S. dollar. Approximately 4% were denominated in euros, approximately 7%6% in Canadian dollars and approximately 1% in Hong Kong dollars, with the remaining revenues denominated in various other foreign currencies. Changes in foreign currency exchange rates can cause unexpected financial losses or cash flow needs. The Company may mitigate a portion of the fluctuations in certain foreign currencies through the use of foreign currency forward contracts. Foreign currency forward contracts enable the Company to lock in the foreign currency exchange rate to be paid or received for a fixed amount of currency at a specified date in the future. The Company may use such foreign currency forward contracts to mitigate the risk associated with changes in foreign currency exchange rates on financial instruments and known commitments, including commitments for inventory purchases, denominated in foreign currencies. As of ~~July~~April 1, 2022 and April 2, 2021, ~~and June 26, 2020,~~ the Company held no foreign currency forward contracts.

Interest Rate Risk

The Company operates in a seasonal business and experiences significant fluctuations in operating cash flow as working capital needs increase in advance of the Company’s primary selling and cash generation season, and decline as accounts receivable are collected and cash is accumulated or debt is repaid. The Company is subject to interest rate risk on its seasonal working capital needs if such needs are funded with short term floating rate debt.

Commodities

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Index			JOHNSON OUTDOORS INC.

Certain components used in the Company’s products are exposed to commodity price changes. The Company manages this risk through instruments such as purchase orders and non-cancelable supply contracts. Primary commodity price exposures include costs associated with metals, resins and packaging materials.

Impact of Inflation

The Company anticipates that changing costs of basic raw materials may impact future operating costs and, accordingly, the prices of its products. The Company is involved in continuing programs to mitigate the impact of cost increases through changes in product design and identification of sourcing and manufacturing efficiencies. Price increases and, in certain situations, price decreases are implemented for individual products, when appropriate.

The Company’s results of operations and financial condition are presented based on historical cost. The Company does not believe that inflation has significantly affected its results of operations.

Supply Chain Sourcing Risk

As described elsewhere herein, the COVID-19 pandemic has disrupted the normal seasonal selling patterns for the Company’s warm-weather outdoor recreation products. As stay at home restrictions were lifted, the Company has seen an increase in demand for its products that has continued into fiscal ~~2021.~~2022. This higher than normal level of demand has (along with demand for certain raw materials and components used in our products from third parties in other industries unrelated to our products) placed strain on the Company’s supply chain and the global logistics infrastructure, which has resulted in, and may continue to result in, limited availability of key raw materials and components that may ultimately result in delays in fulfilling orders or higher purchase prices (including increased expediting costs) to get the raw material and other components needed for the Company to fulfill orders and meet demand. The Company is monitoring this risk and planning for alternative sources of supply of critical components where feasible.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is accumulated and communicated to its

~~- 29 -~~


~~Index~~			~~JOHNSON OUTDOORS INC.~~

management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective at reaching a level of reasonable assurance. It should be noted that in designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures. The Company has designed its disclosure controls and procedures to reach a level of reasonable assurance of achieving the desired control objectives.

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) under the Exchange Act) that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

In the normal course of business, the Company may be involved in various legal proceedings from time to time. We do not believe we are currently involved in any claim or action the ultimate disposition of which would have a material adverse effect on our financial statements.

Item 1A. Risk Factors

The following risk factor is in addition to the risk factors previously disclosed in our annual report on Form 10-K as filed with the Securities and Exchange Commission on December 11, 2020. The risk factor set forth below should be read in conjunction with the risk factors section and the Management's Discussion and Analysis section included in our annual report on Form 10-K as filed with the Securities and Exchange Commission on December 11, 2020.

~~Our stock price is volatile and our shareholders may not be able to resell shares of Class A Common Stock at or above the price they paid.~~

The trading price of our Class A Common Stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These factors include those discussed in this Report, those discussed under the “Risk Factors” section of our 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 11, 2020 and others such as:

•~~announcements relating to our earnings trends or with respect to any cost-cutting actions or other strategic transactions involving Johnson Outdoors;~~

•~~announcements relating to product development efforts of Johnson Outdoors or competitors;~~

•~~announcements relating to the receipt, modification or termination of customer or supplier contracts, including with respect to any government contracts or grants;~~

•~~prevailing economic conditions;~~

•~~business disruptions caused by weather events, pandemics, or other natural disasters;~~

•~~disputes concerning Johnson Outdoors's or its competitors' intellectual property or other proprietary rights;~~

•~~sales of our Class A Common Stock by our executive officers and directors or our significant shareholders in the future;~~

•~~the lack of an active, liquid, and orderly market in our Class A Common Stock;~~

•~~fluctuations in our quarterly operating results; and~~

•~~the issuance of new or change securities analysts' reports or recommendations regarding the shares of our Class A Common Stock~~

In addition, the stock markets in general, and the markets for equity securities in companies principally operating in the outdoor leisure or recreational product markets, have experienced periods of high volatility that have been often unrelated to the operating performance of the issuer. These broad market fluctuations may adversely affect the trading price or liquidity of our Class A Common Stock.

- 3028 -


Index			JOHNSON OUTDOORS INC.

~~Except as noted above, there~~

There have been no ~~other~~ material changes to the risk factors disclosed in our Form 10-K as filed with the Securities and Exchange Commission on December ~~11, 2020.~~

10, 2021.

Item 6. Exhibits

See Exhibit Index to this Form 10-Q report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			JOHNSON OUTDOORS INC.
Signatures Dated: ~~August~~May 9, ~~2021~~2022
			/s/ Helen P. Johnson-Leipold
			Helen P. Johnson-Leipold
			Chairman and Chief Executive Officer
			(Principal Executive Officer)

			/s/ David W. Johnson
			David W. Johnson
			Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer)

- 3129 -


Index			JOHNSON OUTDOORS INC.

Exhibit Index to Quarterly Report on Form 10-Q


Exhibit Number			Description

3.1			Articles of Incorporation of the Company as amended through February 17, 2000. (Filed as Exhibit 3.1(a) to the Company’s Form 10-Q for the quarter ended March 31, 2000 and incorporated herein by reference.)

3.2			Bylaws of the Company as amended and restated through December 6, 2010. (Filed as Exhibit 3.2 to the Company’s Form 10-K for the year ended October 1, 2010 and incorporated herein by reference.)

~~10.1~~			First Amendment dated July 15, 2021 to Amended and Restated Credit Agreement dated as of November 15, 2017 among the Company, certain of the Company’s subsidiaries named therein, PNC Bank, National Association, as lender and as administrative agent, PNC Capital Markets LLC, as sole lead arranger and bookrunner, and the other lender named therein. (Filed as Exhibit 10.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on July 16, 2021 and incorporated herein by reference.)

31.1			Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32(1)			Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101			The following materials from Johnson Outdoors Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended ~~July 2, 2021~~April 1, 2022 formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Income; (iv) Condensed Consolidated Statements of Cash Flows; (v) Condensed Consolidated Statements of Shareholders' Equity and (vi) Notes to Condensed Consolidated Financial Statements. XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

104			The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~July 2, 2021,~~April 1, 2022, formatted in Inline XBRL (included in Exhibit 101).

(1) This certification is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

- 3230 -


Nine Months Ended June 26, 2020
(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, 2019	10,045,771	$	504	$	75,856	$	248,377	$	1,558	$	(1,761)
Net income	—	—		—		6,430		—		—
Dividends declared	—	—		—		(1,693)		—		—


Award of non-vested shares	31,571	—		—		—		—		—
Stock-based compensation	—	—		667		—		—		—

Currency translation adjustment	—	—		—		—		700		—

Change in pension plans, net of tax of $21	—	—		—		—		61		—

Purchase of treasury stock at cost	(7,129)	—		—		—		—		(460)

BALANCE AT DECEMBER 27, 2019	10,070,213	$	504	$	76,523	$	253,114	$	2,319	$	(2,221)
Net income	—	—		—		20,387		—		—
Dividends declared	—	—		—		(1,693)		—		—

Award of non-vested shares	12,396	—		—		—		—		—
Stock-based compensation	—	—		(286)		—		—		—

Currency translation adjustment	—	—		—		—		(1,607)		—

Change in pension plans, net of tax of $20	—	—		—		—		62		—



BALANCE AT MARCH 27, 2020	10,082,609	$	504	$	76,237	$	271,808	$	774	$	(2,221)
Net income	—	—		—		12,869		—		—
Dividends declared	—	—		—		(1,697)		—		—
Issuance of stock under employee stock purchase plan	2,190	—		126		—		—		—

Stock-based compensation	—	—		1,417		—		—		—

Currency translation adjustment	—	—		—		—		1,537		—

Change in pension plans, net of tax of $60	—	—		—		—		180		—



BALANCE AT JUNE 26, 2020	10,084,799	$	504	$	77,780	$	282,980	$	2,491	$	(2,221)


		Three Months Ended				Nine months ended
	Location of (income) loss recognized in Statement of Operations	July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020

Rabbi trust assets	Other (income) expense, net	$	(1,351)	$	(2,732)	$	(5,151)	$	(398)