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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 9, 2002
Date of Report (Date of earliest event reported)
JOHNSON OUTDOORS INC.
(Exact name of Registrant as specified in its charter)
Wisconsin 0-16255 39-1536083
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) file number) Identification No.)
555 Main Street, Racine, Wisconsin 53403
(Address of principal executive offices)
(262) 631-6600
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
On September 9, 2002, Johnson Outdoors Inc. (the "Company") consummated the
previously announced sale of its Jack Wolfskin business (a designer and marketer
of outdoor clothing, backpacks, sleeping bags and other apparel), which was
operated by Jack Wolfskin Ausrustung fur Draussen GmbH ("JW") and its subsidiary
Jack Wolfskin Scheiz GmbH, Switzerland (the "Business"), to an affiliate of Bain
Capital Fund VII-E (UK), Limited Partnership ("Bain") through the sale of all of
the issued and outstanding shares of capital stock of JW, pursuant to a Share
Purchase and Transfer Agreement, dated as of August 28, 2002 (the "Purchase
Agreement"). The Company's sale of the Business as well as the consummation of
the transactions related thereto is referred to herein as the "Sale."
Pursuant to the Purchase Agreement: (1) the outstanding capital stock of JW was
sold to Bain for 64.0 million Euros in cash at the closing of the Sale, subject
to potential adjustments based on the net working capital of the Business as
finally determined; (2) the Company agreed to a three-year covenant not to
compete with the Business (subject to certain exceptions); (3) Bain agreed to
support and supply products to the U.S and Canadian-based Jack Wolfskin dealers
for at least two years; and (4) the Company agreed to indemnify Bain against any
breach by the Company of the Company's representations, warranties or covenants
contained therein. The Company's obligation to indemnify Bain under the Purchase
Agreement for breaches of representations, warranties and certain covenants is
subject to December 31, 2003, 2005 or 2008 time limitations (depending on the
representaton, warranty or covenant), an individual basket of 50,000 Euros, an
aggregate basket of 1.0 million Euros and an aggregate maximum cap of 12.8
million Euros (or, for a limited number of representations, the full purchase
price). The purchase price paid by Bain for the Business was determined on the
basis of arms' length negotiations between the parties. The Company has paid or
accrued approximately $3.3 million of direct Sale costs.
Proceeds from the Sale, net of adjustments, will be used to pay direct Sale
costs, reduce short-term debt of the Company and fund future growth
opportunities.
As a result of the Sale, the Company recorded a gain of $24.8 million.
The Company's U.S. and Canadian Jack Wolfskin operations were not included in
the Sale to Bain. The Company plans to exit these operations over the next year.
Severance and other related exit costs will be approximately $0.8 million.
The Purchase Agreement is filed as an exhibit to this Current Report on Form 8-K
and is incorporated herein by reference. The brief summary of the material
provisions of the Purchase Agreement set forth above is qualified in its
entirety by reference to the Purchase Agreement filed as an exhibit hereto.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
Not applicable
2
(b) Pro Forma Financial Information
JOHNSON OUTDOORS INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma financial information relates to the sale
(such sale as well as the consummation of the transactions related thereto is
referred to herein as the "Sale") by Johnson Outdoors Inc. (the "Company") of
its Jack Wolfskin business (a designer and marketer of outdoor clothing,
backpacks, sleeping bags and other apparel), which was operated by Jack Wolfskin
Ausrustung fur Draussen GmbH ("JW") and its subsidiary Jack Wolfskin Scheiz
GmbH, Switzerland (the "Business"), to an affiliate of Bain Capital Fund VII-E
(UK), Limited Partnership through the sale of all of the issued and outstanding
shares of capital stock of JW, pursuant to a Share Purchase and Transfer
Agreement, dated as of August 28, 2002. The Sale was consummated on September 9,
2002. The pro forma amounts have been prepared based on certain pro forma
adjustments (as described in the accompanying notes) to the historical financial
statements of the Company.
The unaudited pro forma condensed consolidated balance sheet reflects the
historical financial position of the Company, with pro forma adjustments as if
the Sale had occurred on June 28, 2002. The pro forma adjustments to the
unaudited pro forma condensed consolidated balance sheet are described in the
accompanying notes and give effect to events that are (a) directly attributable
to the Sale and (b) factually supportable regardless of whether they have a
continuing impact or are nonrecurring.
The unaudited pro forma condensed consolidated statements of operations reflect
the historical results of operations of the Company for the fiscal year ended
September 28, 2001 and the nine months ended June 28, 2002. The unaudited pro
forma condensed consolidated statements of operations reflect the Sale, which
occurred on September 9, 2002, as if such Sale occurred as of the beginning of
the respective periods. The gain of $24.8 million that the Company recorded in
the fourth quarter as a result of the Sale was not considered in the unaudited
pro forma condensed consolidated statements of operations. The pro forma
adjustments are described in the accompanying notes and give effect to events
that are (a) directly attributable to the Sale; (b) factually supportable; and
(c) in the case of certain statement of operations adjustments, expected to have
a continuing impact on the Company.
The unaudited pro forma condensed consolidated financial statements should be
read in connection with the Company's Annual Report on Form 10-K for the fiscal
year ended September 28, 2001 and Quarterly Report on Form 10-Q for the nine
months ended June 28, 2002.
The unaudited pro forma financial information presented is for informational
purposes only and does not purport to represent what the Company's financial
position or results of operations for the periods presented would have been had
the Sale in fact occurred on such date or at the beginning of the periods
indicted or to project the Company's financial position or results of operations
for any future date or period.
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JOHNSON OUTDOORS INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 28, 2002
(unaudited)
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Johnson Disposed Pro Forma
(thousands) Outdoors Inc. Business Adjustments Pro Forma
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ASSETS
Current assets:
Cash and temporary cash investments $ 27,297 $ 38 $ 41,264 $ 68,523
Accounts receivable, less allowance
for doubtful accounts 74,678 7,812 - 66,866
Inventories 60,718 14,575 - 46,143
Deferred income taxes 4,972 (655) - 5,627
Other current assets 4,588 512 (590) 3,486
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Total current assets 172,253 22,282 40,674 190,645
Property, plant and equipment 29,345 1,634 - 27,711
Deferred income taxes 21,647 - (2,217) 19,430
Intangible assets 33,698 6,270 - 27,428
Other assets 1,154 12 - 1,142
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Total assets $ 258,097 $ 30,198 $ 38,457 $ 266,356
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current maturities
of long-term debt $ 23,233 $ (106) $ (15,331) $ 8,008
Accounts payable 17,350 1,160 - 16,190
Salaries and wages 8,507 782 - 7,725
Other accrued liabilities 24,351 3,711 250 20,890
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Total current liabilities 73,441 5,547 (15,081) 52,813
Long-term debt, less current maturities 78,496 - - 78,496
Deferred income taxes - 1,183 1,183 -
Other liabilities 4,851 - - 4,851
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Total liabilities 156,788 6,730 (13,898) 136,160
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Shareholders' equity:
Preferred stock: none issued -- - - --
Common stock 421 359 359 421
Capital in excess of par value 46,281 20,311 20,311 46,281
Retained earnings 67,706 5,601 31,685 93,790
Contingent compensation (37) - - (37)
Other comprehensive income - cumulative
foreign currency translation adjustment (13,062) (2,803) - (10,259)
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Total shareholders' equity 101,309 23,468 52,355 130,196
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Total liabilities and shareholders' equity $ 258,097 $ 30,198 $ 38,457 $ 266,356
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The accompanying notes are an integral part of the pro forma condensed consolidated financial
statements.
4
JOHNSON OUTDOORS INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended September 28, 2001
(unaudited)
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(thousands, except share Johnson Disposed Pro Forma
and per share amounts) Outdoors Inc. Business Adjustments Pro Forma
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Net sales $ 345,637 $ 47,066 $ - $ 298,571
Cost of sales 206,856 28,707 - 178,149
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Gross profit 138,781 18,359 - 120,422
Operating expenses 123,063 12,601 54 110,516
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Operating profit 15,718 5,758 (54) 9,906
Interest expense net 8,537 156 (3,633) 4,748
Other expenses 1,091 185 - 906
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Income from continuing operations before
income taxes 6,090 5,417 3,579 4,252
Income tax expense 2,480 2,139 1,217 1,558
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Income from continuing operations $ 3,610 $ 3,278 $ 2,362 $ 2,694
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Earnings per common share from continuing
operations:
Basic $ 0.44 $ 0.33
Diluted 0.44 0.32
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Average common shares:
Basic 8,146,462 8,146,462
Diluted 8,169,739 8,169,739
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The accompanying notes are an integral part of the pro forma condensed consolidated financial
statements.
5
JOHNSON OUTDOORS INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Nine Months Ended June 28, 2002
(unaudited)
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(thousands, except share Johnson Disposed Pro Forma
and per share amounts) Outdoors Inc. Business Adjustments Pro Forma
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Net sales $ 274,155 $ 39,107 $ - $ 235,048
Cost of sales 158,742 23,210 - 135,532
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Gross profit 115,413 15,897 - 99,516
Operating expenses 93,190 10,824 45 82,411
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Operating profit 22,223 5,073 (45) 17,105
Interest expense, net 4,700 (46) (1,311) 3,435
Other expenses 1,209 884 - 325
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Income (loss) from continuing operations
before income taxes 16,314 4,235 1,266 13,345
Income tax expense (benefit) 6,388 1,578 431 5,241
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Income (loss) from continuing operations $ 9,926 $ 2,657 $ 835 $ 8,104
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Earnings per common share from continuing
operations:
Basic $ 1.21 $ 0.99
Diluted 1.18 0.97
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Average common shares:
Basic 8,182,659 8,182,659
Diluted 8,383,863 8,383,863
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The accompanying notes are an integral part of the pro forma condensed consolidated financial
statements.
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JOHNSON OUTDOORS INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. The pro forma condensed consolidated balance sheet has been prepared to
reflect the Sale by the Company of the Business to an affiliate of Bain
Capital Fund VII-E (UK), Limited Partnership through the sale of all of the
issued and outstanding shares of capital stock of JW, pursuant to a Share
Purchase and Transfer Agreement, dated as of August 28, 2002. The pro forma
adjustments as of June 28, 2002 reflect the following:
(a) Cash balance remaining from proceeds of the Sale after payment of
short-term debt, costs directly related to the Sale and income taxes.
(b) Reduction of other current assets to reflect prepaid Sale cost
recognized in the gain on sale calculation.
(c) Adjustment to deferred income taxes for the disposed business and the
deferred tax from the gain on the sale of the Business.
(d) The reduction of short-term debt from the proceeds of the Sale.
(e) The recording of additional accrued liabilities for Sale costs not
paid at the time of closing.
(f) The recording of the gain on sale of the disposed Business
2. The pro forma condensed consolidated statements of operations for the year
ended September 28, 2001 and the nine months ended June 28, 2002 are based
on the financial statements of the Company and the Business after giving
effect to the following pro forma adjustments:
(a) Retain certain functional expenses, which are fixed in nature to the
Company and were previously allocated to the Business.
(b) Reduction of interest expense resulting from the reduction of
short-term debt from the proceeds of the Sale at rates in effect at
the beginning of, or during the respective periods, as appropriate.
(c) Provision for income tax expense resulting from the pro forma
adjustments using statutory rates.
3. The pro forma condensed consolidated statements of operations for the year
ended September 28, 2001 and the nine months ended June 28, 2002, as
historically reported, reflected the results of operations of the Business
as a continuing operation. Accordingly adjustments are necessary to remove
those results.
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4. Quarterly Financial Summary
The following summarizes quarterly operating results of the global Jack
Wolfskin business (including the U.S. and Canadian operations).
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Quarter Ended
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December 28 March 29 June 28
(thousands) 2001 2002 2002
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Net Sales $12,320 $15,977 $12,224
Gross Profit 4,659 6,752 4,881
Operating Profit 1,412 2,654 996
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Quarter Ended
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December 29 March 30 June 29 September 28
(thousands) 2000 2001 2001 2001
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Net Sales 9,755 14,276 11,645 13,974
Gross Profit 3,759 5,636 4,425 5,226
Operating Profit 901 1,841 1,086 1,513
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(c) Exhibits
The exhibits listed in the accompanying Exhibit Index are filed as part of
this Current Report on Form 8-K.
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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.
Date: September 13, 2002
JOHNSON OUTDOORS INC.
/s/ Paul A. Lehmann
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Paul A. Lehmann
Vice President and Chief Financial
Officer, Secretary
(Principal Financial and Accounting
Officer)
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JOHNSON OUTDOORS INC.
EXHIBIT INDEX TO FORM 8-K
REPORT DATED SEPTEMBER 9, 2002
Exhibit Description
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2.1 Share Purchase and Transfer Agreement, dated as of August 28,
2002, by and between, among others, Johnson Outdoors Inc. and an
affiliate of Bain Capital Fund VII-E (UK), Limited Partnership.*
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* The schedules and annexes to this document are not being filed herewith.
The Registrant agrees to furnish supplementally a copy of any such schedule
or annex to the Securities and Exchange Commission upon request.
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