Johnson Outdoors Inc. (NASDAQ:JOUT) Q3 2023 Earnings Conference Call August 3, 2023 11:00 AM ET Company Participants Pat Penman - Vice President of Marketing Services & Global Communication Helen Johnson-Leipold - Chairman and Chief Executive Officer David Johnson - Vice President and Chief Financial Officer Conference Call Participants Anthony Lebiedzinski - Sidoti Anna Glaessgen - B. Riley Operator Hello, everyone, and welcome to the Johnson Outdoors Third Quarter 2023 Earnings Conference Call. Today's ca ...

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This part presents the company's unaudited financial statements and management's analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section contains the unaudited condensed consolidated financial statements and accompanying notes for the reporting period [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (Three Months Ended) | (thousands, except per share data) | June 30, 2023 | July 1, 2022 | | :--------------------------------- | :------------ | :----------- | | Net sales | $187,047 | $203,819 | | Gross profit | $77,587 | $73,509 | | Operating profit | $17,443 | $23,799 | | Profit before income taxes | $19,822 | $19,244 | | Net income | $14,801 | $14,082 | | Net income per common share - Diluted: Class A | $1.44 | $1.38 | | Net income per common share - Diluted: Class B | $1.44 | $1.38 | Condensed Consolidated Statements of Operations (Nine Months Ended) | (thousands, except per share data) | June 30, 2023 | July 1, 2022 | | :--------------------------------- | :------------ | :----------- | | Net sales | $567,499 | $546,966 | | Gross profit | $215,701 | $202,725 | | Operating profit | $34,305 | $52,988 | | Profit before income taxes | $47,936 | $47,043 | | Net income | $35,541 | $34,838 | | Net income per common share - Diluted: Class A | $3.47 | $3.42 | | Net income per common share - Diluted: Class B | $3.47 | $3.42 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income (Three Months Ended) | (thousands) | June 30, 2023 | July 1, 2022 | | :---------------------------- | :------------ | :----------- | | Net income | $14,801 | $14,082 | | Foreign currency translation | $1,018 | $(2,770) | | Unrealized gain (loss) on available-for-sale securities, net of tax | $(126) | — | | Change in pension plans, net of tax | $9 | $(7) | | Total other comprehensive income (loss) | $901 | $(2,777) | | Total comprehensive income | $15,702 | $11,305 | Condensed Consolidated Statements of Comprehensive Income (Nine Months Ended) | (thousands) | June 30, 2023 | July 1, 2022 | | :---------------------------- | :------------ | :----------- | | Net income | $35,541 | $34,838 | | Foreign currency translation | $4,462 | $(3,025) | | Unrealized gain (loss) on available-for-sale securities, net of tax | $(126) | — | | Change in pension plans, net of tax | $25 | $25 | | Total other comprehensive income (loss) | $4,361 | $(3,000) | | Total comprehensive income | $39,902 | $31,838 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (Key Figures) | (thousands) | June 30, 2023 | September 30, 2022 | July 1, 2022 | | :------------------------------ | :------------ | :----------------- | :----------- | | Cash and cash equivalents | $122,596 | $129,803 | $117,567 | | Short term investments | $26,651 | — | — | | Accounts receivable, net | $94,644 | $91,919 | $103,244 | | Inventories | $235,069 | $248,649 | $250,956 | | Total current assets | $485,305 | $480,316 | $481,214 | | Total assets | $705,484 | $679,931 | $675,842 | | Total current liabilities | $106,670 | $114,713 | $117,028 | | Total liabilities | $185,040 | $191,917 | $191,576 | | Total shareholders' equity | $520,444 | $488,014 | $484,266 | [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Changes in Shareholders' Equity (Nine Months Ended June 30, 2023) | (thousands except for shares) | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | | :---------------------------- | :----------- | :----------------------------- | :---------------- | :-------------------------------------------- | :------------- | | Balance at September 30, 2022 | $512 | $87,351 | $402,821 | $620 | $(3,290) | | Net income | — | — | $35,541 | — | — | | Dividends declared | — | — | $(9,435) | — | — | | Award of non-vested shares | $2 | $(1,557) | — | — | $2,123 | | Stock-based compensation | — | $2,142 | — | — | — | | Currency translation adjustment | — | — | — | $4,462 | — | | Change in pension plans, net of tax | — | — | — | $25 | — | | Purchase of treasury stock at cost | — | — | — | — | $(444) | | Non-vested stock forfeitures | — | — | — | — | — | | Balance at June 30, 2023 | $514 | $87,932 | $428,927 | $4,981 | $(1,910) | Changes in Shareholders' Equity (Nine Months Ended July 1, 2022) | (thousands except for shares) | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | | :---------------------------- | :----------- | :----------------------------- | :---------------- | :-------------------------------------------- | :------------- | | Balance at October 1, 2021 | $509 | $82,899 | $370,501 | $7,386 | $(2,790) | | Net income | — | — | $34,838 | — | — | | Dividends declared | — | — | $(9,049) | — | — | | Award of non-vested shares | $2 | $(2) | — | — | — | | Stock-based compensation | — | $3,146 | — | — | — | | Currency translation adjustment | — | — | — | $(3,025) | — | | Change in pension plans, net of tax | — | — | — | $25 | — | | Purchase of treasury stock at cost | — | — | — | — | $(509) | | Non-vested stock forfeitures | — | $120 | — | — | $(150) | | Balance at July 1, 2022 | $512 | $86,369 | $396,290 | $4,386 | $(3,290) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Nine Months Ended) | (thousands) | June 30, 2023 | July 1, 2022 | | :-------------------------------- | :------------ | :----------- | | Cash provided by (used for) operating activities | $45,210 | $(86,413) | | Cash used for investing activities | $(45,133) | $(25,150) | | Cash used for financing activities | $(9,591) | $(9,214) | | Effect of foreign currency rate changes on cash | $2,307 | $(2,104) | | Decrease in cash and cash equivalents | $(7,207) | $(122,881) | | Cash and cash equivalents - End of period | $122,596 | $117,567 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Basis of Presentation](index=10&type=section&id=1%20BASIS%20OF%20PRESENTATION) - The condensed consolidated financial statements are unaudited and include normal recurring adjustments and should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2022[27](index=27&type=chunk) - Results for the three and nine months ended June 30, 2023, are not necessarily indicative of the full 2023 fiscal year due to seasonal variations and uncertain economic conditions[28](index=28&type=chunk) [2. Accounts Receivable](index=10&type=section&id=2%20ACCOUNTS%20RECEIVABLE) - Accounts receivable are reported net of allowances for doubtful accounts, which is determined based on specific collection concerns and historical bad debt experience[30](index=30&type=chunk) Allowances for Doubtful Accounts | Date | Allowance for Doubtful Accounts (thousands) | | :-------------- | :------------------------------------------ | | June 30, 2023 | $902 | | September 30, 2022 | $1,037 | | July 1, 2022 | $1,208 | [3. Earnings Per Share ("EPS")](index=10&type=section&id=3%20EARNINGS%20PER%20SHARE%20(%22EPS%22)) - EPS is computed using the two-class method, with Class A holders entitled to **110% of Class B dividends**[31](index=31&type=chunk)[32](index=32&type=chunk) - Diluted EPS assumes conversion of Class B to Class A and includes dilutive stock options and restricted stock units[36](index=36&type=chunk) Dividends Declared Per Common Share | Dividends declared per common share | June 30, 2023 (3 Months) | July 1, 2022 (3 Months) | June 30, 2023 (9 Months) | July 1, 2022 (9 Months) | | :---------------------------------- | :----------------------- | :---------------------- | :----------------------- | :---------------------- | | Class A | $0.31 | $0.30 | $0.93 | $0.90 | | Class B | $0.28 | $0.27 | $0.85 | $0.82 | [4. Stock-Based Compensation and Stock Ownership Plans](index=11&type=section&id=4%20STOCK-BASED%20COMPENSATION%20AND%20STOCK%20OWNERSHIP%20PLANS) - The Company has stock ownership plans for key executives and non-employee directors, allowing for issuance of stock options, restricted stock, restricted stock units (RSUs), or stock appreciation rights[40](index=40&type=chunk) - As of June 30, 2023, **468,066 shares of Class A common stock** were available for future grants under the 2023 Non-Employee Director Stock Ownership Plan and the 2020 Long-Term Incentive Plan[41](index=41&type=chunk) Non-vested Stock Activity (Nine Months Ended June 30, 2023) | Activity | Shares | Weighted Average Grant Price | | :---------------------------- | :------- | :--------------------------- | | Non-vested stock at Sep 30, 2022 | 58,136 | $73.37 | | Non-vested stock grants | 28,528 | $59.25 | | Restricted stock vested | (14,790) | $76.07 | | Forfeitures | (10,632) | $71.41 | | Non-vested stock at Jun 30, 2023 | 61,242 | $66.48 | Stock Compensation Expense (Non-vested Stock & RSUs) | (thousands) | 3 Months Ended Jun 30, 2023 | 3 Months Ended Jul 1, 2022 | 9 Months Ended Jun 30, 2023 | 9 Months Ended Jul 1, 2022 | | :---------------------------- | :-------------------------- | :------------------------- | :-------------------------- | :------------------------- | | Non-vested stock expense | $172 | $335 | $1,117 | $896 | | RSU expense | $28 | $636 | $953 | $1,961 | [5. Leases](index=13&type=section&id=5%20LEASES) - The Company leases facilities and equipment under long-term operating leases, with approximately **200 leases outstanding** as of June 30, 2023, ranging from less than one year to 16 years[57](index=57&type=chunk)[58](index=58&type=chunk) Total Lease Cost | (thousands) | Three months ended June 30, 2023 | Three months ended July 1, 2022 | Nine months ended June 30, 2023 | Nine months ended July 1, 2022 | | :-------------- | :------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | | Total lease cost | $3,195 | $2,797 | $9,346 | $8,062 | Operating Lease Information (Nine Months Ended) | Operating leases: | June 30, 2023 | July 1, 2022 | | :-------------------------------- | :------------ | :----------- | | Operating lease ROU assets | $53,104 | $50,284 | | Total operating lease liabilities | $54,676 | $51,459 | | Weighted average remaining lease term (in years) | 11.93 | 12.10 | | Weighted average discount rate | 3.18 % | 3.11 % | [6. Income Taxes](index=14&type=section&id=6%20INCOME%20TAXES) - The decrease in the effective tax rate for the three months ended June 30, 2023, was due to a favorable impact from a change in estimate after filing prior year tax returns[64](index=64&type=chunk) - The Company has valuation allowances for significant tax jurisdictions including Indonesia and Switzerland, where no tax expense or benefit can be recognized[65](index=65&type=chunk) Income Tax Expense and Effective Tax Rate | (thousands, except tax rate data) | June 30, 2023 (3 Months) | July 1, 2022 (3 Months) | June 30, 2023 (9 Months) | July 1, 2022 (9 Months) | | :-------------------------------- | :----------------------- | :---------------------- | :----------------------- | :---------------------- | | Profit before income taxes | $19,822 | $19,244 | $47,936 | $47,043 | | Income tax expense | $5,021 | $5,162 | $12,395 | $12,205 | | Effective income tax rate | 25.3 % | 26.8 % | 25.9 % | 25.9 % | [7. Inventories](index=15&type=section&id=7%20INVENTORIES) - Inventory is valued at the lower of cost (FIFO method) or net realizable value[67](index=67&type=chunk) Inventories by Category (thousands) | Category | June 30, 2023 | September 30, 2022 | July 1, 2022 | | :-------------- | :------------ | :----------------- | :----------- | | Raw materials | $107,899 | $166,443 | $175,261 | | Work in process | — | $230 | $258 | | Finished goods | $127,170 | $81,976 | $75,437 | | Total | $235,069 | $248,649 | $250,956 | [8. Goodwill](index=15&type=section&id=8%20GOODWILL) - Goodwill is evaluated annually or more frequently for impairment using the income approach (discounted cash flow methodology), which is considered a **Level 3 fair value determination**[69](index=69&type=chunk) Changes in Goodwill (Nine Months Ended) | (thousands) | June 30, 2023 | July 1, 2022 | | :-------------------------------- | :------------ | :----------- | | Balance at beginning of period | $11,160 | $11,221 | | Amount attributable to movements in foreign currency rates | $26 | $(12) | | Balance at end of period | $11,186 | $11,209 | [9. Warranties](index=16&type=section&id=9%20WARRANTIES) Warranty Activity (Nine Months Ended) | (thousands) | June 30, 2023 | July 1, 2022 | | :------------------------------------ | :------------ | :----------- | | Balance at beginning of period | $9,639 | $14,073 | | Expense accruals for warranties issued during the period | $8,991 | $3,007 | | Less current period warranty claims paid | $6,381 | $6,217 | | Balance at end of period | $12,249 | $10,863 | [10. Contingencies](index=16&type=section&id=10%20CONTINGENCIES) - The Company is involved in various legal actions in the normal course of business, but management believes the final outcome will not have a material adverse effect on its financial condition or operations[72](index=72&type=chunk) [11. Indebtedness](index=16&type=section&id=11%20INDEBTEDNESS) - The Company had **no debt outstanding** as of June 30, 2023, September 30, 2022, or July 1, 2022[73](index=73&type=chunk) - The Company has an unsecured **$75 million Revolving Credit Facility** with a $50 million accordion feature, expiring July 15, 2026, with interest based on LIBOR (transitioning to SOFR)[74](index=74&type=chunk)[75](index=75&type=chunk) - Interest rates on the Revolver were approximately **6.2% at June 30, 2023**, and **2.8% at July 1, 2022**[75](index=75&type=chunk) [12. Derivative Instruments and Hedging Activities](index=17&type=section&id=12%20DERIVATIVE%20INSTRUMENTS%20AND%20HEDGING%20ACTIVITIES) - The Company is exposed to foreign exchange risk, with approximately **13% of revenues** for the nine months ended June 30, 2023, denominated in non-U.S. dollar currencies[80](index=80&type=chunk) - The Company may use foreign currency forward contracts to mitigate risk but held no such contracts as of June 30, 2023, and July 1, 2022[81](index=81&type=chunk) [13. Fair Value Measurements](index=17&type=section&id=13%20FAIR%20VALUE%20MEASUREMENTS) - Fair value is defined as the exit price in an orderly transaction, categorized into a three-level hierarchy based on input observability[82](index=82&type=chunk)[84](index=84&type=chunk) - Rabbi trust assets, classified as trading securities, are measured at fair value (**Level 1**) and are used to fund deferred compensation plan liabilities[85](index=85&type=chunk)[86](index=86&type=chunk) Rabbi Trust Assets Measured at Fair Value (Level 1) | Assets: | June 30, 2023 (thousands) | September 30, 2022 (thousands) | July 1, 2022 (thousands) | | :---------------- | :------------------------ | :----------------------------- | :----------------------- | | Rabbi trust assets | $25,304 | $21,436 | $24,238 | [14. Cash, Cash Equivalents, and Marketable Securities](index=19&type=section&id=14%20CASH,%20CASH%20EQUIVALENTS,%20AND%20MARKETABLE%20SECURITIES) - The Company considers short-term investments and securities with original maturities of three months or less as cash equivalents, stated at cost approximating market value[87](index=87&type=chunk) - During Q3 fiscal 2023, the Company invested in marketable securities, classified as **available-for-sale** and reported at estimated fair value[88](index=88&type=chunk) Marketable Securities Measured at Fair Value (June 30, 2023) | Category | Amortized Cost (thousands) | Fair Value (thousands) | Gross unrealized gains (thousands) | Gross unrealized losses (thousands) | | :---------------------------- | :------------------------- | :--------------------- | :--------------------------------- | :---------------------------------- | | Fixed rate US Government Bonds | $29,614 | $29,526 | — | $87 | | Fixed rate Canadian Government Bonds | $11,251 | $11,170 | — | $82 | | Total | $40,865 | $40,696 | — | $169 | [15. New Accounting Pronouncements](index=20&type=section&id=15%20NEW%20ACCOUNTING%20PRONOUNCEMENTS) - The Company plans to adopt ASU 2020-04, Reference Rate Reform (Topic 848), in the fourth fiscal quarter of 2023, with **no significant impact expected** on its financial statements[95](index=95&type=chunk) [16. Revenues](index=20&type=section&id=16%20REVENUES) - Revenue is recognized when control of goods is transferred to the customer, typically at the point of shipment, and is adjusted for variable consideration like incentives or rebates[96](index=96&type=chunk) - The Company accrues estimated costs of returns, allowances, and discounts as a reduction to sales based on historical experience[98](index=98&type=chunk) - Shipping and handling fees billed to customers are included in 'Net Sales,' while costs are recognized within 'Marketing and selling expenses'[99](index=99&type=chunk) [17. Segments of Business](index=21&type=section&id=17%20SEGMENTS%20OF%20BUSINESS) - The Company operates through four business segments: **Fishing, Camping, Watercraft Recreation, and Diving**[102](index=102&type=chunk) - During the second fiscal quarter of 2023, the Company sold its Military and Commercial Tent product lines from the Camping segment for **$14,990 thousand**, resulting in a net gain on sale of approximately **$6,560 thousand**[106](index=106&type=chunk) Net Sales by Business Segment (Three Months Ended) | Segment | June 30, 2023 (thousands) | July 1, 2022 (thousands) | | :------------------ | :------------------------ | :----------------------- | | Fishing | $137,161 | $136,026 | | Camping | $11,621 | $23,468 | | Watercraft Recreation | $15,664 | $21,821 | | Diving | $22,216 | $22,197 | | Total | $187,047 | $203,819 | Operating Profit (Loss) by Business Segment (Three Months Ended) | Segment | June 30, 2023 (thousands) | July 1, 2022 (thousands) | | :------------------ | :------------------------ | :----------------------- | | Fishing | $18,665 | $16,553 | | Camping | $2,039 | $4,998 | | Watercraft Recreation | $1,483 | $2,893 | | Diving | $2,733 | $2,412 | | Other / Corporate | $(7,477) | $(3,057) | | Total | $17,443 | $23,799 | [18. Accumulated Other Comprehensive Income (Loss)](index=22&type=section&id=18%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) Changes in Accumulated Other Comprehensive Income (AOCI) (Nine Months Ended June 30, 2023) | Component | Balance at Sep 30, 2022 | Other comprehensive loss before reclassifications | Amounts reclassified from AOCI | Tax effects | Balance at Jun 30, 2023 | | :-------------------------------------- | :---------------------- | :------------------------------------------------ | :----------------------------- | :---------- | :---------------------- | | Foreign Currency Translation Adjustment | $791 | $4,346 | — | — | $5,127 | | Unamortized Loss on Defined Benefit Pension Plans | $(171) | — | $34 | $(9) | $(146) | | Accumulated Other Comprehensive Income (Loss) | $620 | $4,346 | $34 | $(9) | $4,981 | Reclassifications out of AOCI (Nine Months Ended) | Component | June 30, 2023 (thousands) | July 1, 2022 (thousands) | Statement of Operations Presentation | | :-------------------------------------- | :------------------------ | :----------------------- | :----------------------------------- | | Unamortized loss on defined benefit pension plans: Amortization of loss | $34 | $34 | Other income and expense | | Tax effects | $(9) | $(9) | Income tax expense | | Total reclassifications for the period | $25 | $25 | | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and key operational drivers [Forward Looking Statements](index=24&type=section&id=Forward%20Looking%20Statements) - The report contains forward-looking statements subject to risks and uncertainties, including economic conditions, consumer confidence, and supply chain disruptions[114](index=114&type=chunk)[115](index=115&type=chunk) - Factors that could affect actual results include success in implementing strategic plans, litigation costs, working capital management, and raw material fluctuations[115](index=115&type=chunk)[120](index=120&type=chunk) [Trademarks](index=26&type=section&id=Trademarks) - The Company lists its registered trademarks, including Minn Kota®, Cannon®, Humminbird®, Eureka!®, Jetboil®, Old Town®, Ocean Kayak®, Carlisle®, and SCUBAPRO®[121](index=121&type=chunk) [Overview](index=26&type=section&id=Overview) - Johnson Outdoors Inc. is a global manufacturer and marketer of branded seasonal outdoor recreation products for fishing, diving, paddling, and camping[122](index=122&type=chunk) - Post-pandemic, participation in some outdoor recreation segments has declined, leading to lower demand and higher inventory levels[123](index=123&type=chunk)[124](index=124&type=chunk) - The Company's business is seasonal, with the **third fiscal quarter** traditionally being the primary selling season for warm-weather outdoor recreation products[128](index=128&type=chunk) Key Financial Highlights (Three Months Ended June 30, 2023 vs. Prior Year) | Metric | Change (YoY) | | :----------------- | :----------- | | Net sales | -8% | | Gross margin | +5.4 points | | Gross profit | +$4,078 | | Operating expenses | +21% | | Operating profit | -$6,356 | | Profit before income taxes | Slight increase | [Results of Operations](index=27&type=section&id=Results%20of%20Operations) - **Gross profit margin improved to 41.5%** for the three months ended June 30, 2023 (vs. 36.1% prior year) and to **38.0%** for the nine months (vs. 37.1% prior year), driven by price increases and reduced costs[144](index=144&type=chunk)[145](index=145&type=chunk) - Operating expenses increased primarily due to higher warranty expense, marketing spend, increased compensation costs, professional services, and deferred compensation expense[146](index=146&type=chunk)[150](index=150&type=chunk) - Other income, net, saw a significant increase, primarily due to a **$6,560 thousand gain** on the sale of Military and Commercial Tents product lines and net investment gains[155](index=155&type=chunk)[156](index=156&type=chunk) Consolidated Net Sales and Operating Profit (Three Months Ended) | Metric / Period | June 30, 2023 (thousands) | July 1, 2022 (thousands) | YoY Change (thousands) | YoY Change (%) | | :---------------- | :------------------------ | :----------------------- | :--------------------- | :------------- | | Net Sales | $187,047 | $203,819 | $(16,772) | -8% | | Operating Profit | $17,443 | $23,799 | $(6,356) | -26.7% | Consolidated Net Sales and Operating Profit (Nine Months Ended) | Metric / Period | June 30, 2023 (thousands) | July 1, 2022 (thousands) | YoY Change (thousands) | YoY Change (%) | | :---------------- | :------------------------ | :----------------------- | :--------------------- | :------------- | | Net Sales | $567,499 | $546,966 | $20,533 | +4% | | Operating Profit | $34,305 | $52,988 | $(18,683) | -35.3% | Net Sales by Segment (YoY Change - Three Months Ended June 30, 2023) | Segment | Net Sales (Jun 30, 2023) | Net Sales (Jul 1, 2022) | Change (thousands) | Change (%) | | :------------------ | :----------------------- | :---------------------- | :----------------- | :--------- | | Fishing | $137,460 | $136,565 | $895 | +1% | | Camping | $11,658 | $23,479 | $(11,821) | -50% | | Watercraft Recreation | $15,726 | $21,872 | $(6,146) | -28% | | Diving | $22,227 | $22,201 | $26 | +0.1% | Net Sales by Segment (YoY Change - Nine Months Ended June 30, 2023) | Segment | Net Sales (Jun 30, 2023) | Net Sales (Jul 1, 2022) | Change (thousands) | Change (%) | | :------------------ | :----------------------- | :---------------------- | :----------------- | :--------- | | Fishing | $430,842 | $374,244 | $56,598 | +15% | | Camping | $36,996 | $56,780 | $(19,784) | -35% | | Watercraft Recreation | $38,274 | $59,481 | $(21,207) | -36% | | Diving | $61,594 | $56,886 | $4,708 | +8% | Net Income and Diluted EPS (Three and Nine Months Ended) | Metric / Period | June 30, 2023 (3 Months) | July 1, 2022 (3 Months) | June 30, 2023 (9 Months) | July 1, 2022 (9 Months) | | :---------------- | :----------------------- | :---------------------- | :----------------------- | :---------------------- | | Net Income | $14,801 | $14,082 | $35,541 | $34,838 | | Diluted EPS (Class A & B) | $1.44 | $1.38 | $3.47 | $3.42 | [Liquidity and Financial Condition](index=31&type=section&id=Liquidity%20and%20Financial%20Condition) - Cash, cash equivalents, and short-term investments totaled **$149,247 thousand** as of June 30, 2023, with **no debt outstanding**[161](index=161&type=chunk) - Accounts receivable decreased by **$8,600 thousand**, and inventories decreased by **$15,887 thousand**, consistent with lower sales volumes[162](index=162&type=chunk) - Cash provided by operations significantly increased due to lower inventory purchases compared to the prior year[164](index=164&type=chunk) - Investing activities included **$40,696 thousand** in new investments and **$14,990 thousand** in proceeds from the sale of the Military and Commercial Tents product lines[165](index=165&type=chunk) - Financing activities primarily consisted of dividend payments and treasury stock purchases[166](index=166&type=chunk) Cash Flow Summary (Nine Months Ended) | (thousands) | June 30, 2023 | July 1, 2022 | | :-------------------------------- | :------------ | :----------- | | Cash provided by (used for) operating activities | $45,210 | $(86,413) | | Cash used for investing activities | $(45,133) | $(25,150) | | Cash used for financing activities | $(9,591) | $(9,214) | [Contractual Obligations and Off Balance Sheet Arrangements](index=32&type=section&id=Contractual%20Obligations%20and%20Off%20Balance%20Sheet%20Arrangements) - There have been no changes outside the ordinary course of business in contractual obligations during the quarter[168](index=168&type=chunk) - The Company utilizes letters of credit, primarily for workers' compensation insurance, totaling approximately **$78,000** as of June 30, 2023[169](index=169&type=chunk) - The Company has no other off-balance sheet arrangements[170](index=170&type=chunk) [Critical Accounting Policies and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There were no significant changes to the Company's critical accounting policies and estimates during the nine months ended June 30, 2023[171](index=171&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section addresses the company's exposure to market risks, noting no material changes since the last annual report - The Company is exposed to market risks related to foreign currency exchange rates, interest rates, commodity prices, and inflation[172](index=172&type=chunk) - There have been **no significant changes** to the Company's market risk profile in the nine months ended June 30, 2023, compared to its Form 10-K[172](index=172&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and reports no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were **effective** at a reasonable assurance level as of June 30, 2023[173](index=173&type=chunk) - **No changes** in internal control over financial reporting occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[174](index=174&type=chunk) [PART II OTHER INFORMATION](index=32&type=section&id=PART%20II%20OTHER%20INFORMATION) This part provides supplementary information regarding legal proceedings, risk factors, and other corporate matters [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company anticipates no material adverse effects from the ultimate disposition of various legal proceedings arising in the normal course of business - The Company is involved in various legal proceedings in the normal course of business, including commercial, product liability, and intellectual property matters[175](index=175&type=chunk) - Management does not believe the final outcome of any pending litigation will have a **material adverse effect** on the Company's financial condition or operations[175](index=175&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - **No material changes** to the risk factors disclosed in the Company's Form 10-K filed on December 9, 2022, have occurred[177](index=177&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or officers adopted or terminated specified trading arrangements during the quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three-month period ended June 30, 2023[178](index=178&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q report, including certifications and XBRL financial data - The Exhibit Index includes the Company's Articles of Incorporation, Bylaws, CEO and CFO Certifications, and XBRL formatted financial statements[183](index=183&type=chunk)

Johnson Outdoors Inc. (NASDAQ:JOUT) Q1 2023 Earnings Conference Call May 5, 2023 11:00 AM ET Company Participants Patricia Penman - Vice President of Marketing Services & Global Communication Helen Johnson-Leipold - Chairman and Chief Executive Officer David Johnson - Vice President and Chief Financial Officer Conference Call Participants Anthony Lebiedzinski - Sidoti & Company Operator Hello, everyone, and welcome to the Johnson Outdoors' Second Quarter 2023 Earnings Conference Call. Today's call will be l ...

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 March 31, 2023 OR ☐ 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 j ...

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Johnson Outdoors Inc. for the three months ended December 30, 2022, and December 31, 2021, including statements of operations, comprehensive income, balance sheets, shareholders' equity, and cash flows, along with detailed notes explaining accounting policies and specific financial line items [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations (Three Months Ended) | (thousands, except per share data) | December 30, 2022 | December 31, 2021 | | :--------------------------------- | :------------------ | :------------------ | | Net sales | $ 178,337 | $ 153,524 | | Gross profit | $ 62,779 | $ 60,631 | | Operating profit | $ 5,472 | $ 13,760 | | Profit before income taxes | $ 8,166 | $ 14,589 | | Net income | $ 5,879 | $ 10,856 | | Net income per common share - Diluted: Class A | $ 0.57 | $ 1.07 | | Net income per common share - Diluted: Class B | $ 0.57 | $ 1.07 | - Net sales increased by **$24,813 (16.16%)** from $153,524 in Q1 FY2022 to **$178,337** in Q1 FY2023[8](index=8&type=chunk) - Operating profit decreased by **$8,288 (60.23%)** from $13,760 in Q1 FY2022 to **$5,472** in Q1 FY2023[8](index=8&type=chunk) - Net income decreased by **$4,977 (45.85%)** from $10,856 in Q1 FY2022 to **$5,879** in Q1 FY2023[8](index=8&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Statements of Comprehensive Income (Three Months Ended) | (thousands) | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Net income | $ 5,879 | $ 10,856 | | Foreign currency translation | $ 2,937 | $ (423) | | Change in pension plans, net of tax | $ 8 | $ 16 | | Total comprehensive income | $ 8,824 | $ 10,449 | - Total comprehensive income decreased by **$1,625 (15.55%)** from $10,449 in Q1 FY2022 to **$8,824** in Q1 FY2023[12](index=12&type=chunk) - Foreign currency translation shifted from a **loss of $423 thousand** in Q1 FY2022 to a **gain of $2,937 thousand** in Q1 FY2023[12](index=12&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (as of) | (thousands) | December 30, 2022 | September 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------- | :------------------ | | Cash and cash equivalents | $ 103,422 | $ 129,803 | $ 167,473 | | Accounts receivable, net | $ 120,553 | $ 91,919 | $ 86,689 | | Inventories | $ 251,525 | $ 248,649 | $ 217,431 | | Total current assets | $ 486,524 | $ 480,316 | $ 486,408 | | Total assets | $ 689,096 | $ 679,931 | $ 672,354 | | Total current liabilities | $ 117,438 | $ 114,713 | $ 128,002 | | Total liabilities | $ 194,875 | $ 191,917 | $ 205,741 | | Total shareholders' equity | $ 494,221 | $ 488,014 | $ 466,613 | - Cash and cash equivalents decreased by **$64,051 (38.25%)** from $167,473 as of December 31, 2021, to **$103,422** as of December 30, 2022[15](index=15&type=chunk) - Inventories increased by **$34,094 (15.68%)** from $217,431 as of December 31, 2021, to **$251,525** as of December 30, 2022[15](index=15&type=chunk) - Total shareholders' equity increased by **$27,608 (5.92%)** from $466,613 as of December 31, 2021, to **$494,221** as of December 30, 2022[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Changes in Shareholders' Equity (Three Months Ended) | (thousands) | Dec 30, 2022 (Balance at Sep 30, 2022) | Dec 30, 2022 (Balance at Dec 30, 2022) | Dec 31, 2021 (Balance at Oct 1, 2021) | Dec 31, 2021 (Balance at Dec 31, 2021) | | :---------- | :------------------------------------- | :------------------------------------- | :------------------------------------ | :------------------------------------- | | Common Stock | $ 512 | $ 514 | $ 509 | $ 510 | | Capital in Excess of Par Value | $ 87,351 | $ 86,923 | $ 82,899 | $ 83,869 | | Retained Earnings | $ 402,821 | $ 405,574 | $ 370,501 | $ 378,352 | | Accumulated Other Comprehensive Income (Loss) | $ 620 | $ 3,565 | $ 7,386 | $ 6,979 | | Treasury Stock | $ (3,290) | $ (2,355) | $ (2,790) | $ (3,097) | | **Total Equity** | **$ 488,014** | **$ 494,221** | **$ 466,613** | **$ 466,613** | - Retained earnings increased by **$2,753 thousand** during the three months ended December 30, 2022, primarily due to net income of **$5,879 thousand**, partially offset by dividends declared of **$3,126 thousand**[18](index=18&type=chunk) - Accumulated Other Comprehensive Income (Loss) increased significantly from **$620 thousand** to **$3,565 thousand**, driven by a positive currency translation adjustment of **$2,937 thousand**[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (Three Months Ended) | (thousands) | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Cash used for operating activities | $ (17,570) | $ (62,773) | | Cash used for investing activities | $ (6,649) | $ (6,244) | | Cash used for financing activities | $ (3,570) | $ (3,466) | | Effect of foreign currency rate changes on cash | $ 1,408 | $ (492) | | Decrease in cash and cash equivalents | $ (26,381) | $ (72,975) | | Cash and cash equivalents, End of period | $ 103,422 | $ 167,473 | - Cash used for operating activities significantly decreased from **$62,773 thousand** in Q1 FY2022 to **$17,570 thousand** in Q1 FY2023, primarily due to lower inventory purchases in the current period[20](index=20&type=chunk)[137](index=137&type=chunk) - The company experienced a decrease in cash and cash equivalents of **$26,381 thousand** in Q1 FY2023, compared to a decrease of **$72,975 thousand** in Q1 FY2022[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, specific financial line items, and other relevant information for the periods presented [1 BASIS OF PRESENTATION](index=9&type=section&id=1%20BASIS%20OF%20PRESENTATION) - The unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for fair presentation[22](index=22&type=chunk) - Results for the three months ended December 30, 2022, are not indicative of the full fiscal year due to seasonality, COVID-19 aftereffects, global supply chain disruptions, and inflationary pressures[23](index=23&type=chunk) [2 ACCOUNTS RECEIVABLE](index=9&type=section&id=2%20ACCOUNTS%20RECEIVABLE) - Net accounts receivable increased to **$120,553 thousand** as of December 30, 2022, from $91,919 thousand as of September 30, 2022, primarily due to the seasonal nature of the Company's business[26](index=26&type=chunk) Accounts Receivable, Net of Allowances | (thousands) | December 30, 2022 | September 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------- | :------------------ | | Accounts receivable, net | $ 120,553 | $ 91,919 | $ 86,689 | | Allowances for doubtful accounts | $ 1,151 | $ 1,037 | $ 2,662 | [3 EARNINGS PER SHARE ("EPS")](index=9&type=section&id=3%20EARNINGS%20PER%20SHARE%20%28%22EPS%22%29) - EPS is computed using the two-class method, with Class A common stock holders entitled to **110%** of dividends declared on Class B common stock[27](index=27&type=chunk)[28](index=28&type=chunk) Dividends Declared Per Common Share (Three Months Ended) | | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Class A | $ 0.31 | $ 0.30 | | Class B | $ 0.28 | $ 0.27 | [4 STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS](index=10&type=section&id=4%20STOCK-BASED%20COMPENSATION%20AND%20STOCK%20OWNERSHIP%20PLANS) - The Company has **395,018 shares** of Class A common stock available for future grant under its 2012 Non-Employee Director Stock Ownership Plan and 2020 Long-Term Incentive Plan as of December 30, 2022[37](index=37&type=chunk) Stock Compensation Expense (Three Months Ended) | (thousands) | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Non-vested stock compensation expense | $ 456 | $ 295 | | RSU compensation expense | $ 476 | $ 727 | | Employees' Stock Purchase Plan expense | $ 21 | $ 104 | - Unrecognized compensation cost for non-vested stock was **$2,938 thousand** and for RSUs was **$3,175 thousand** as of December 30, 2022[43](index=43&type=chunk)[46](index=46&type=chunk) [5 LEASES](index=12&type=section&id=5%20LEASES) - The Company has approximately **200 operating leases** with remaining terms up to **16 years**, and no finance leases or sublease agreements[56](index=56&type=chunk)[59](index=59&type=chunk) Total Lease Cost (Three Months Ended) | (thousands) | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Operating lease costs | $ 2,430 | $ 2,107 | | Short-term lease costs | $ 529 | $ 414 | | Variable lease costs | $ 41 | $ 45 | | Total lease cost | $ 3,000 | $ 2,566 | - Total lease cost increased by **$434 thousand (16.91%)** from $2,566 thousand in Q1 FY2022 to **$3,000 thousand** in Q1 FY2023[57](index=57&type=chunk) [6 INCOME TAXES](index=13&type=section&id=6%20INCOME%20TAXES) Income Tax Data (Three Months Ended) | (thousands, except tax rate data) | December 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------------ | :------------------ | | Profit before income taxes | $ 8,166 | $ 14,589 | | Income tax expense | $ 2,287 | $ 3,733 | | Effective income tax rate | 28.0 % | 25.6 % | - The effective income tax rate increased to **28.0%** for Q1 FY2023 from 25.6% in Q1 FY2022, primarily due to the unfavorable tax expense impact of stock-based compensation awards[61](index=61&type=chunk) [7 INVENTORIES](index=14&type=section&id=7%20INVENTORIES) Inventories (as of) | (thousands) | December 30, 2022 | September 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------- | :------------------ | | Raw materials | $ 149,986 | $ 166,443 | $ 150,064 | | Work in process | $ 229 | $ 230 | $ 142 | | Finished goods | $ 101,310 | $ 81,976 | $ 67,225 | | Total | $ 251,525 | $ 248,649 | $ 217,431 | - Total inventories increased by **$34,094 thousand (15.68%)** from $217,431 thousand as of December 31, 2021, to **$251,525 thousand** as of December 30, 2022[64](index=64&type=chunk) - Finished goods inventory saw a significant increase of **$34,085 thousand (50.70%)** year-over-year[64](index=64&type=chunk) [8 GOODWILL](index=14&type=section&id=8%20GOODWILL) Goodwill Changes (Three Months Ended) | (thousands) | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Balance at beginning of period | $ 11,160 | $ 11,221 | | Amount attributable to movements in foreign currency rates | $ 7 | $ (4) | | Balance at end of period | $ 11,167 | $ 11,217 | - Goodwill balance remained relatively stable, with minor adjustments due to foreign currency rate movements[65](index=65&type=chunk) [9 WARRANTIES](index=15&type=section&id=9%20WARRANTIES) Warranty Activity (Three Months Ended) | (thousands) | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Balance at beginning of period | $ 9,639 | $ 14,073 | | Expense accruals for warranties issued | $ 1,852 | $ 767 | | Current period warranty claims paid | $ 1,793 | $ 2,095 | | Balance at end of period | $ 9,698 | $ 12,745 | - Warranty expense accruals increased significantly from **$767 thousand** in Q1 FY2022 to **$1,852 thousand** in Q1 FY2023[68](index=68&type=chunk) [10 CONTINGENCIES](index=15&type=section&id=10%20CONTINGENCIES) - Management does not believe the final outcome of any pending litigation will have a material adverse effect on the Company's financial condition, results of operations, liquidity, or cash flows[69](index=69&type=chunk) [11 INDEBTEDNESS](index=15&type=section&id=11%20INDEBTEDNESS) - The Company had **no debt outstanding** at December 30, 2022, September 30, 2022, or December 31, 2021[70](index=70&type=chunk) - The Company has an unsecured credit facility (Revolver) of **$75 million** with a **$50 million** accordion feature, expiring July 15, 2026[71](index=71&type=chunk) - The interest rate on the Revolver increased significantly from approximately **1.1%** at December 31, 2021, to **5.4%** at December 30, 2022[72](index=72&type=chunk) [12 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES](index=16&type=section&id=12%20DERIVATIVE%20INSTRUMENTS%20AND%20HEDGING%20ACTIVITIES) - Approximately **12%** of the Company's revenues for Q1 FY2023 were denominated in currencies other than the U.S. dollar, primarily euros (**5%**), Canadian dollars (**5%**), and Hong Kong dollars (**1%**)[80](index=80&type=chunk) - The Company held **no foreign currency forward contracts** as of December 30, 2022, or December 31, 2021[81](index=81&type=chunk) [13 FAIR VALUE MEASUREMENTS](index=16&type=section&id=13%20FAIR%20VALUE%20MEASUREMENTS) - Rabbi trust assets, classified as trading securities, are measured at fair value based on unadjusted quoted prices in active markets (Level 1 inputs)[85](index=85&type=chunk)[86](index=86&type=chunk) Rabbi Trust Assets Measured at Fair Value (as of) | (thousands) | December 30, 2022 | September 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------- | :------------------ | | Rabbi trust assets (Level 1) | $ 22,684 | $ 21,436 | $ 29,835 | - Net investment gains and earnings on rabbi trust assets were **$1,383 thousand** for Q1 FY2023, compared to **$1,095 thousand** for Q1 FY2022[86](index=86&type=chunk) [14 NEW ACCOUNTING PRONOUNCEMENTS](index=17&type=section&id=14%20NEW%20ACCOUNTING%20PRONOUNCEMENTS) - The Company does not expect ASU 2020-04 (Reference Rate Reform), as deferred by ASU 2022-06 to December 31, 2024, to have a significant impact on its financial statements[87](index=87&type=chunk) [15 REVENUES](index=18&type=section&id=15%20REVENUES) - Revenue is recognized when control of goods is transferred to the customer, typically at the point of shipment, with consideration for variable elements like incentives and rebates[90](index=90&type=chunk) - Estimated costs of returns, allowances, and discounts are accrued as a reduction to sales when revenue is recognized[92](index=92&type=chunk) Returns Asset and Accrued Returns Liability (as of) | (thousands) | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Right to returns asset | $ 834 | $ 780 | | Accrued returns liability | $ 2,317 | $ 2,092 | [16 SEGMENTS OF BUSINESS](index=18&type=section&id=16%20SEGMENTS%20OF%20BUSINESS) Net Sales by Business Segment (Three Months Ended) | (thousands) | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Fishing | $ 137,821 | $ 108,181 | | Camping | $ 11,607 | $ 14,118 | | Watercraft Recreation | $ 9,633 | $ 14,598 | | Diving | $ 19,042 | $ 16,490 | | Total | $ 178,337 | $ 153,524 | Operating Profit (Loss) by Business Segment (Three Months Ended) | (thousands) | December 30, 2022 | December 31, 2021 | | :---------- | :------------------ | :------------------ | | Fishing | $ 15,572 | $ 16,292 | | Camping | $ 753 | $ 2,750 | | Watercraft Recreation | $ (415) | $ 1,531 | | Diving | $ 13 | $ 453 | | Other / Corporate | $ (10,451) | $ (7,266) | | Total | $ 5,472 | $ 13,760 | - Fishing segment sales increased by **$29,640 thousand (27.40%)** year-over-year, while Camping and Watercraft Recreation sales decreased by **17.78%** and **34.01%** respectively[99](index=99&type=chunk) - Operating profit declined across all segments except for 'Other / Corporate' which saw a larger loss, with Watercraft Recreation shifting from a profit of **$1,531 thousand** to a **loss of $415 thousand**[99](index=99&type=chunk) [17 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)](index=19&type=section&id=17%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20%28LOSS%29) Changes in Accumulated Other Comprehensive Income (AOCI) (Three Months Ended) | (thousands) | Balance at Sep 30, 2022 | Other comprehensive loss before reclassifications | Amounts reclassified from AOCI | Tax effects | Balance at Dec 30, 2022 | | :---------- | :---------------------- | :---------------------------------------------- | :----------------------------- | :---------- | :---------------------- | | Foreign Currency Translation Adjustment | $ 791 | $ 2,937 | $ — | $ — | $ 3,728 | | Unamortized Loss on Defined Benefit Pension Plans | $ (171) | $ — | $ 11 | $ (3) | $ (163) |\ | **Accumulated Other Comprehensive Income (Loss)** | **$ 620** | **$ 2,937** | **$ 11** | **$ (3)** | **$ 3,565** | - AOCI increased from **$620 thousand** at September 30, 2022, to **$3,565 thousand** at December 30, 2022, primarily due to a positive foreign currency translation adjustment of **$2,937 thousand**[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition for the three months ended December 30, 2022, discussing net sales, operating profit, liquidity, and the impact of external factors like COVID-19 and inflation [Overview](index=21&type=section&id=Overview) - Johnson Outdoors Inc. is a global manufacturer of branded seasonal outdoor recreation products for fishing, diving, paddling, and camping[108](index=108&type=chunk) - The COVID-19 pandemic initially increased demand for outdoor recreation products but is now showing a reduction in consumer demand across some segments in fiscal 2023[109](index=109&type=chunk) - Supply chain disruptions and inflationary pressures continue to impact raw material costs, component availability, and margins, leading to lower gross margins despite increased sales[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) [Seasonality](index=22&type=section&id=Seasonality) - The first fiscal quarter traditionally precedes the Company's primary selling season for warm-weather outdoor recreation products[114](index=114&type=chunk) - COVID-19 shifted traditional seasonal sales pacing, which typically saw heaviest sales volumes in the second and third fiscal quarters[114](index=114&type=chunk) Historical Quarterly Net Sales and Operating Profit Seasonality | Quarter Ended | 2022 Net Sales | 2022 Operating Profit | 2021 Net Sales | 2021 Operating Profit | 2020 Net Sales | 2020 Operating Profit | | :------------ | :------------- | :-------------------- | :------------- | :-------------------- | :------------- | :-------------------- | | December | 21 % | 21 % | 22 % | 22 % | 22 % | 10 % | | March | 26 % | 23 % | 27 % | 32 % | 27 % | 45 % | | June | 27 % | 36 % | 29 % | 34 % | 23 % | 17 % | | September | 26 % | 20 % | 22 % | 12 % | 28 % | 28 % | [Results of Operations](index=22&type=section&id=Results%20of%20Operations) [Net Sales](index=23&type=section&id=Net%20Sales) - Consolidated net sales increased by **16%** to **$178,337 thousand** for Q1 FY2023, with an unfavorable foreign currency translation impact of approximately **1%**[119](index=119&type=chunk) - Fishing segment sales increased by **27%** due to increased supply and component availability and price increases[120](index=120&type=chunk) - Camping and Watercraft Recreation sales decreased by **18%** and **34%** respectively, driven by reduced consumer demand post-pandemic[121](index=121&type=chunk)[122](index=122&type=chunk) - Diving sales increased by **16%** due to a rebound in destination travel and tourism, partially offset by a **6%** unfavorable foreign currency translation impact[123](index=123&type=chunk) [Cost of Sales](index=23&type=section&id=Cost%20of%20Sales) - Cost of sales increased by **$22,665 thousand**, driven by higher sales volumes and increased costs of components, parts, and raw materials in inventory[124](index=124&type=chunk) [Gross Profit Margin](index=23&type=section&id=Gross%20Profit%20Margin) - Gross profit margin decreased to **35.2%** for Q1 FY2023 from 39.5% in Q1 FY2022, as increased sales and price increases were insufficient to offset higher inventory costs[127](index=127&type=chunk) [Operating Expenses](index=24&type=section&id=Operating%20Expenses) - Operating expenses increased by **$10,436 thousand** to **$57,307 thousand**, primarily due to higher sales volume-driven expenses, compensation, health insurance, and professional services costs[128](index=128&type=chunk) [Operating Profit](index=24&type=section&id=Operating%20Profit) - Consolidated operating profit decreased to **$5,472 thousand** for Q1 FY2023 from $13,760 thousand in Q1 FY2022, driven by higher operating expenses and lower gross profit[129](index=129&type=chunk) [Interest](index=24&type=section&id=Interest) - Interest income increased significantly to **$827 thousand** for Q1 FY2023 from $93 thousand in Q1 FY2022, due to an increase in interest rates[130](index=130&type=chunk) [Other Expense (Income), net](index=24&type=section&id=Other%20Expense%20%28Income%29%2C%20net) - Other income, net, increased to **$1,904 thousand** for Q1 FY2023 from $774 thousand in Q1 FY2022[131](index=131&type=chunk) - Foreign currency exchange gains were **$276 thousand** in Q1 FY2023, a positive shift from losses of $366 thousand in Q1 FY2022[131](index=131&type=chunk) [Income Tax Expense](index=24&type=section&id=Income%20Tax%20Expense) - The effective tax rate increased to **28.0%** for Q1 FY2023 from 25.6% in Q1 FY2022, primarily due to the unfavorable tax impact of stock-based compensation awards[132](index=132&type=chunk) [Net Income](index=24&type=section&id=Net%20Income) - Net income decreased to **$5,879 thousand ($0.57 diluted EPS)** for Q1 FY2023 from $10,856 thousand ($1.07 diluted EPS) in Q1 FY2022[133](index=133&type=chunk) [Liquidity and Financial Condition](index=24&type=section&id=Liquidity%20and%20Financial%20Condition) - Cash and cash equivalents decreased to **$103,422 thousand** as of December 30, 2022, from $167,473 thousand as of December 31, 2021, primarily due to increased inventory purchases[134](index=134&type=chunk) - The Company maintained a **0% debt to total capitalization ratio** as of December 30, 2022, and December 31, 2021, with no outstanding debt[134](index=134&type=chunk) - Inventories increased by **$34,094 thousand** to **$251,525 thousand**, reflecting strategic purchases to mitigate supply chain disruptions[135](index=135&type=chunk) [Contractual Obligations and Off Balance Sheet Arrangements](index=25&type=section&id=Contractual%20Obligations%20and%20Off%20Balance%20Sheet%20Arrangements) - No significant changes in contractual obligations during the quarter, which include operating leases and open purchase orders[141](index=141&type=chunk) - Letters of credit outstanding for workers' compensation insurance were approximately **$173 thousand** as of December 30, 2022[142](index=142&type=chunk) - The Company has no other off-balance sheet arrangements[143](index=143&type=chunk) [Critical Accounting Policies and Estimates](index=25&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - No significant changes to the Company's critical accounting policies and estimates during the three months ended December 30, 2022[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses the Company's exposure to market risks, including foreign currency exchange rates, interest rates, commodity prices, and inflation, noting no significant changes during the quarter - The Company is exposed to market risks in foreign currency exchange rates, interest rates, commodity prices, and inflation[146](index=146&type=chunk) - There have been no significant changes to the Company's market risk profile during the three months ended December 30, 2022[146](index=146&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter - The Company's disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of December 30, 2022[147](index=147&type=chunk) - No material changes occurred in the Company's internal control over financial reporting during the last fiscal quarter[148](index=148&type=chunk) [PART II OTHER INFORMATION](index=27&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the Company is involved in various legal proceedings in the normal course of business but does not anticipate any material adverse effects on its financial statements - The Company is subject to various legal actions and proceedings in the normal course of business[149](index=149&type=chunk) - Management does not believe any pending litigation will have a material adverse effect on the Company's financial condition, results of operations, liquidity, or cash flows[149](index=149&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the Company's Form 10-K - No material changes to the risk factors disclosed in the Company's Form 10-K filed on December 9, 2022[150](index=150&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section refers to the Exhibit Index for a list of documents filed as exhibits to the Form 10-Q report - The Exhibit Index provides a list of documents filed as exhibits to this Form 10-Q report[151](index=151&type=chunk) [Signatures](index=28&type=section&id=Signatures) This section contains the required signatures of the Company's Chairman and Chief Executive Officer and Vice President and Chief Financial Officer, certifying the report - The report is signed by Helen P. Johnson-Leipold, Chairman and Chief Executive Officer, and David W. Johnson, Vice President and Chief Financial Officer[155](index=155&type=chunk) [Exhibit Index](index=29&type=section&id=Exhibit%20Index) This index lists all exhibits accompanying the Quarterly Report on Form 10-Q, including articles of incorporation, bylaws, certifications, and XBRL formatted financial statements Key Exhibits Listed | Exhibit Number | Description | | :------------- | :---------- | | 3.1 | Articles of Incorporation | | 3.2 | Bylaws | | 31.1 | Certification by CEO (Section 302) | | 31.2 | Certification by CFO (Section 302) | | 32 | Certification of Periodic Financial Report (Section 906) | | 101 | XBRL Formatted Financial Statements | | 104 | Inline XBRL Cover Page |

Johnson Outdoors Inc. (NASDAQ:JOUT) Q4 2022 Earnings Conference Call December 9, 2022 11:00 AM ET Company Participants Patricia Penman - Vice President of Marketing Services and Global Communication Helen Johnson-Leipold - Chairman and Chief Executive Officer David Johnson - Vice President and Chief Financial Officer Conference Call Participants Anthony Lebiedzinski - Sidoti & Company, LLC Operator Hello, everyone, and welcome to the Johnson Outdoors Fourth Quarter 2022 Earnings Conference Call. Today's cal ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2022 OR ☐ 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) (262) 631-6600 (Registrant's telephone number, i ...

Johnson Outdoors Inc. (NASDAQ:JOUT) Q3 2022 Earnings Conference Call August 5, 2022 11:00 AM ET Company Participants Patricia Penman - Vice President of Marketing Services and Global Communication Helen Johnson-Leipold - Chairman and Chief Executive Officer David Johnson - Vice President and Chief Financial Officer Conference Call Participants Anthony Lebiedzinski - Sidoti & Company, LLC Operator Hello, everyone, and welcome to Johnson Outdoors Third Quarter 2022 Earning Conference Call. Today's call will b ...

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 1, 2022 OR ☐ 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 jur ...

Johnson Outdoors Inc. (NASDAQ:JOUT) Q2 2022 Earnings Conference Call May 9, 2022 11:00 AM ET Company Participants Patricia Penman - VP Marketing Services & Global Communication Helen Johnson-Leipold - Chairman and CEO David Johnson - VP and CFO Conference Call Participants Anthony Lebiedzinski - Sidoti & Company Operator Hello and welcome to the Johnson Outdoors Second Quarter 2022 Earning Conference Call. Today's call will be led by Helen Johnson-Leipold, Johnson Outdoors' Chairman and Chief Executive Offi ...