JOHNSON OUTDOORS INC

Previous wording

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 six month periods ended March 28, 2025 and March 29, 2024. All monetary amounts, other than share and per share amounts, are stated in thousands.

Current wording

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 month periods ended June 27, 2025 and June 28, 2024. All monetary amounts, other than share and per share amounts, are stated in thousands.

Previous wording

As disclosed in Part I, Item 1A: Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended September 27 2024, the Company’s business is subject to risks related to, among other factors, tariffs put in the place by the United States or other countries. During the second fiscal quarter of 2025, the United States government announced additional tariffs on goods imported into the U.S. from numerous countries. These tariffs may result in an increase in product or component costs, which may ultimately negatively impact demand for our products and/or reduce the Company's overall profitability. The Company continues to analyze the potential impacts of the tariffs and actions that can be taken to mitigate their effects, including, among other options, adjusting our supply chain strategy, evaluating potential operational changes to improve efficiencies, and considering potential adjustments to our pricing strategy.

Current wording

As disclosed in Part I, Item 1A: Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended September 27, 2024, the Company’s business is subject to risks related to, among other factors, tariffs put in the place by the United States or other countries, including ongoing negotiations on tariffs by the United States with foreign nations and trading partners. During the nine months ended June 27, 2025, the United States government has announced additional tariffs on goods imported into the U.S. from numerous countries. These tariffs may result in an increase costs to the Company, which may ultimately negatively impact demand for our products and/or reduce the Company's overall profitability. The Company continues to analyze the potential impacts of the tariffs and actions that can be taken to mitigate their effects, including, among other options, adjusting our supply chain strategy, evaluating potential operational changes to improve efficiencies, and considering potential adjustments to our pricing strategy.

Previous wording

The Company’s business is seasonal in nature. The 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.

Current wording

The Company’s business is seasonal in nature. The third 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.

Previous wording

Consolidated net sales for the three months ended March 28, 2025 were $168,349, a decrease of $7,507, or 4%, compared to $175,856 for the three months ended March 29, 2024. Foreign currency translation had a negligible impact on current year second quarter net sales compared to the prior year's second quarter net sales.

Current wording

Consolidated net sales for the three months ended June 27, 2025 were $180,655, an increase of $8,183, or 5%, compared to $172,472 for the three months ended June 28, 2024. Foreign currency translation had a negligible impact on current year third quarter net sales compared to the prior year's third quarter net sales.

Previous wording

Net sales for the three months ended March 28, 2025 for the Fishing business were $134,891, a decrease of $3,717, or 3%, from $138,608 during the second fiscal quarter of the prior year. The sales decline between quarters was due to continued challenging consumer and trade dynamics in this market.

Current wording

Net sales for the three months ended June 27, 2025 for the Fishing business were $140,679, an increase of $10,142, or 8%, from $130,537 during the third fiscal quarter of the prior year. The increase in sales in this segment between quarters was mainly due sales generated by the introduction of new products.

Previous wording

Net sales for the Camping & Watercraft Recreation business were $17,852 for the second quarter of the current fiscal year, a decrease of $2,396, or 12%, from the prior year net sales during the same period of $20,248. As previously announced, the Company exited the Eureka! brand in this segment and completed all sales of Eureka! inventory in the first fiscal quarter of 2025. There were no Eureka! sales in the current year second quarter, compared to approximately $2,950 of Eureka! sales in the prior year quarter. Excluding the impact of Eureka! sales in the prior year quarter, sales in this segment increased slightly over the prior year quarter due to success of new Jetboil products introduced into the market by the Company.

Current wording

Net sales for the Camping & Watercraft Recreation business were $18,908 for the third quarter of the current fiscal year, a decrease of $3,089, or 14%, from the prior year net sales during the same period of $21,997. As previously announced, the Company exited the Eureka! brand in this segment and completed all sales of Eureka! inventory in the first fiscal quarter of 2025. There were no Eureka! sales in the current year third quarter, compared to approximately $3,573 of Eureka! sales in the prior year third quarter. Excluding the impact of Eureka! sales in the prior year third quarter, sales in this segment increased slightly over the prior year third quarter due to success of new Jetboil products introduced into the market by the Company.

Previous wording

Net sales for Diving for the second quarter of fiscal 2025 were $15,820, which declined $1,104, or 7%, compared to net sales of $16,924 for the three months ended March 29, 2024. The sales decline compared to the prior year quarter was mainly due to continuing soft market demand for our Diving segment products across all geographic regions, driven by global economic uncertainty. Foreign currency translation had a favorable impact of less than 1% on sales in this segment versus the prior year quarter.

Current wording

Net sales for Diving for the third quarter of fiscal 2025 were $21,201, which increased $1,340, or 7%, compared to net sales of $19,861 for the three months ended June 28, 2024. The sales increase over the prior year third quarter was primarily driven by modest improvements in market conditions across certain regions, which led to slightly higher demand in those regions. Additionally, foreign currency translation had a favorable impact of approximately 2% on sales in this segment versus the prior year third quarter.

Previous wording

Consolidated net sales for the six months ended March 28, 2025 were $275,998, a decrease of $38,502, or 12%, compared to $314,500 for the six months ended March 29, 2024. Foreign currency translation had a negligible impact on net sales of the current year to date period compared to the prior year to date period.

Current wording

Consolidated net sales for the nine months ended June 27, 2025 were $456,653, a decrease of $30,319, or 6%, compared to $486,972 for the nine months ended June 28, 2024. Foreign currency translation had a negligible impact on net sales of the current year to date period compared to the prior year to date period.

Previous wording

prior year to date period is mainly attributable to Eureka! sales in the prior year to date period that were not repeated in the current fiscal year due to the exit of the brand.

Current wording

Net sales for the Camping & Watercraft Recreation business were $46,211 for the nine months ended June 27, 2025, a decrease of $6,760, or 13%, from the prior year net sales during the same period of $52,971. As discussed above, the decrease over the prior year to date period is mainly attributable to $7,577 of Eureka! sales in the prior year to date period that were not repeated in the current fiscal year due to the exit of the brand.

Previous wording

Diving net sales for the six months ended March 28, 2025 were $31,504, which declined $2,898, or 8%, compared to net sales of $34,402 for the six months ended March 29, 2024, due to continued soft market demand for our Diving segment products across all geographic regions. Foreign currency translation had an unfavorable impact of less than 2% on sales in this segment versus the prior year to date period.

Current wording

Diving net sales for the nine months ended June 27, 2025 were $52,705, which declined $1,558, or 3%, compared to net sales of $54,263 for the nine months ended June 28, 2024, due to continued soft market demand for our Diving segment products across most geographic regions during the first two fiscal quarters of 2025. Foreign currency translation had a favorable impact of less than 1% on sales in this segment versus the prior year to date period.

Previous wording

Cost of sales for the three months ended March 28, 2025 of $109,483 decreased $4,942 compared to $114,425 for the three months ended March 29, 2024, mainly due to a decrease in sales volumes over the prior year quarter.

Current wording

Cost of sales for the three months ended June 27, 2025 of $112,728 increased $2,078 compared to $110,650 for the three months ended June 28, 2024, due primarily to the increase in sales volumes over the prior year quarter.

Previous wording

Cost of sales for the six months ended March 28, 2025 of $184,949 decreased $15,266 compared to $200,215 for the six months ended March 29, 2024, mainly due to the decrease in sales volumes, partially offset by a shift in mix to higher cost products between year to date periods.

Current wording

Cost of sales for the nine months ended June 27, 2025 of $297,677 decreased $13,188 compared to $310,865 for the nine months ended June 28, 2024, mainly due to the decrease in sales volumes between year-to-date periods, partially offset by a shift in mix to higher cost products between year-to-date periods.

Previous wording

For the three months ended March 28, 2025, gross profit as a percentage of net sales remained flat at 35.0% compared to 34.9% in the three month period ended March 29, 2024.

Current wording

For the three months ended June 27, 2025, gross profit as a percentage of net sales increased to 37.6% compared to 35.8% in the three month period ended June 28, 2024, mainly as a result of improved overhead absorption driven by higher sales volumes between periods.

Previous wording

For the six months ended March 28, 2025, gross profit as a percentage of net sales was 33.0% compared to 36.3% in the six month period ended March 29, 2024. The decline in gross profit percentage over the prior year-to-date period was primarily due to promotional pricing on end-of-life products and changes in product mix toward lower margin products between year-to-date periods.

Current wording

For the nine months ended June 27, 2025, gross profit as a percentage of net sales was 34.8% compared to 36.2% in the nine month period ended June 28, 2024. The decrease in gross profit percentage over the prior year-to-date period was primarily due to promotional pricing on end-of-life products and a shift in mix to higher cost products between year-to-date periods.

Previous wording

Operating expenses were $53,965 for the three months ended March 28, 2025, compared to $61,684 for the three months ended March 29, 2024, for a decrease of $7,719 between quarters. The main drivers of the decrease were lower sales volume-driven expenses compared to the prior year quarter, as well as a decrease in promotions expense and a $3,370 decrease in expense related to the Company's deferred compensation plan between periods.

Current wording

Operating expenses were $60,597 for the three months ended June 27, 2025, compared to $62,328 for the three months ended June 28, 2024, for a decrease of $1,731 between quarters. The main drivers of the decrease were lower commission rates, reduced promotional expenses, and lower professional services expenses, partially offset by a $2,012 increase in expense related to the Company's deferred compensation plan between quarters. The deferred compensation expense is entirely offset in Other Income, as discussed below.

Previous wording

Operating expenses were $106,387 for the six months ended March 28, 2025, compared to $114,492 for the six months ended March 29, 2024, for a decrease of $8,105 between year-to-date periods. Decreased sales volume-driven expenses and a $5,961 decrease in expense related to the Company's deferred compensation plan contributed to the decrease compared to the prior year to date period.

Current wording

Operating expenses were $166,984 for the nine months ended June 27, 2025, compared to $176,820 for the nine months ended June 28, 2024, for a decrease of $9,836 between year-to-date periods. Decreased sales volume-driven expenses and a $3,948 decrease in expense related to the Company's deferred compensation plan contributed to the variance versus the prior year-to-date period. The decrease in deferred compensation expense is entirely offset in Other Income, as discussed below.

Previous wording

Operating profit on a consolidated basis for the three month period ended March 28, 2025 was $4,901, compared to operating loss of $253 in the second quarter of the prior fiscal year. As discussed above, the increase in operating profit between quarters was driven by a reduction in operating expenses that more than offset the decrease in gross profit caused by lower sales volumes between periods.

Current wording

Operating profit on a consolidated basis for the three month period ended June 27, 2025 was $7,330, compared to operating loss of $506 in the third quarter of the prior fiscal year. As discussed above, the increase in operating profit between quarters was driven by an increase in sales, gross margin improvements and a reduction in operating expenses between periods.

Previous wording

Operating loss on a consolidated basis for the six month period ended March 28, 2025 was $15,338, compared to $207 in the prior year to date period. As discussed above, the increase in operating loss between periods was driven primarily by lower sales volumes, promotional pricing and changes in product mix toward lower margin products between year-to-date periods.

Current wording

Operating loss on a consolidated basis for the nine month period ended June 27, 2025 was $8,008, compared to an operating loss of $713 in the prior year to date period. As discussed above, the increase in operating loss between periods was driven primarily by lower sales volumes, promotional pricing and a shift in product mix toward lower margin products between year-to-date periods.

Previous wording

Interest expense was $68 and $40 for the three months ended March 28, 2025 and March 29, 2024, respectively, and $115 and $78 for the six months ended March 28, 2025 and March 29, 2024, respectively.

Current wording

Interest expense was $49 and $37 for the three months ended June 27, 2025 and June 28, 2024, respectively, and $164 and $115 for the nine months ended June 27, 2025 and June 28, 2024, respectively.

Previous wording

Interest income was $625 and $857 for the three months ended March 28, 2025 and March 29, 2024, respectively, and $1,658 and $2,055 for the six months ended March 28, 2025 and March 29, 2024, respectively.

Current wording

Interest income was $927 and $1,123 for the three months ended June 27, 2025 and June 28, 2024, respectively, and $2,585 and $3,178 for the nine months ended June 27, 2025 and June 28, 2024, respectively.

Previous wording

Other expense was $1,300 for the three months ended March 28, 2025 compared to other income of $2,448 in the prior year period. The main driver of the $3,748 decrease over the prior year quarter was a $3,370 decrease in net investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan in the current year quarter over the prior year quarter, entirely offset as a reduction to operating expense as noted above. For the three months ended March 28, 2025, foreign currency exchange losses were $20 compared to gains of $46 for the three months ended March 29, 2024.

Current wording

Other income was $2,292 for the three months ended June 27, 2025 compared to $327 in the prior year period. The main driver of the $1,965 increase over the prior year quarter was a $2,012 increase in net investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan in the current year quarter over the prior year quarter, entirely offset in operating expenses as noted above. For the three months ended June 27, 2025, foreign currency exchange losses were $456 compared to $28 for the three months ended June 28, 2024.

Previous wording

For the six months ended March 28, 2025, other expense was $974, compared to other income of $7,141 in the six months ended March 29, 2024. The $8,115 decrease was mostly attributable to a $5,961 decrease in net investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan in the current year to date period over the prior year to date period, entirely offset as a reduction to operating expense as noted above. Additionally, the prior year to date period included a gain on the sale of a building of approximately $1,900. For the six months ended March 28, 2025, foreign currency exchange gains were $183 compared to losses of $145 for the six months ended March 29, 2024.

Current wording

For the nine months ended June 27, 2025, other income was $1,318, compared to $7,468 in the nine months ended June 28, 2024. The $6,150 decrease between year-to-date periods was mostly attributable to a $3,948 decrease in net investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan in the current year to date period over the prior year to date period, entirely offset as a reduction to operating expense as noted above. Additionally, the prior year to date period included a gain on the sale of a building of approximately $1,900. For the nine months ended June 27, 2025, foreign currency exchange losses were $274 compared to $173 for the nine months ended June 28, 2024.

Previous wording

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 rates for the three and six month periods ended March 28, 2025 were an expense of 44.6% and a benefit of 12.1%, respectively, compared to expense of 28.4% and 31.4% in the corresponding periods of the prior year.

Current wording

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 rates for the three and nine month periods ended June 27, 2025 were an expense of 26.3% and a benefit of 22.8%, respectively, compared to a benefit of 78.8% and an expense of 21.2% in the corresponding periods of the prior year.

Previous wording

Net income for the three months ended March 28, 2025 was $2,304, or $0.22 per diluted common class A and B share, compared to $2,156, or $0.21 per diluted common class A and B share, for the second quarter of the prior fiscal year.

Current wording

Net income for the three months ended June 27, 2025 was $7,742, or $0.75 per diluted common class A and B share, compared to $1,622, or $0.16 per diluted common class A and B share, for the third quarter of the prior fiscal year.

Previous wording

Net loss for the six months ended March 28, 2025 was $12,986, or $1.26 per diluted common class A and B share, compared to net income of $6,111, or $0.59 per diluted common class A and B share, for the second quarter of the prior fiscal year.

Current wording

Net loss for the nine months ended June 27, 2025 was $5,244, or $0.52 per diluted common class A and B share, compared to net income of $7,733, or $0.75 per diluted common class A and B share, for the third quarter of the prior fiscal year.

Previous wording

Cash and cash equivalents and short term investments totaled $93,951 as of March 28, 2025, compared to $84,270 as of March 29, 2024. The Company’s debt to total capitalization ratio was 0% as of March 28, 2025 and March 29, 2024. The Company’s total debt balance was $0 as of each of March 28, 2025 and March 29, 2024. See “Note 11 – Indebtedness” in the notes to the Company’s accompanying condensed consolidated financial statements for further discussion.

Current wording

Cash and cash equivalents and short term investments totaled $161,022 as of June 27, 2025, compared to $148,369 as of June 28, 2024. The Company’s debt to total capitalization ratio was 0% as of June 27, 2025 and June 28, 2024. The Company’s total debt balance was $0 as of each of June 27, 2025 and June 28, 2024. See “Note 11 – Indebtedness” in the notes to the Company’s accompanying condensed consolidated financial statements for further discussion.

Previous wording

Accounts receivable, net of allowance for credit losses, were $116,776 as of March 28, 2025, a decrease of $12,569 compared to $129,345 as of March 29, 2024. The decrease is consistent with the decreased sales volumes year over year. Inventories were $180,057 as of March 28, 2025, a decrease of $69,144, compared to $249,201 as of March 29, 2024. The decrease is consistent with the Company's ongoing efforts to reduce inventory balances. Accounts payable were $44,323 at March 28, 2025 compared to $50,374 as of March 29, 2024.

Current wording

Accounts receivable, net of allowance for credit losses, were $81,993 as of June 27, 2025, an increase of $2,400 compared to $79,593 as of June 28, 2024. The increase is consistent with the increased sales volumes over the prior year quarter. Inventories were $163,732 as of June 27, 2025, a decrease of $59,428, compared to $223,160 as of June 28, 2024. The decrease is consistent with the Company's ongoing efforts to reduce inventory balances. Accounts payable were $43,478 at June 27, 2025 compared to $43,153 as of June 28, 2024.

Previous wording

Cash used for operations totaled $38,566 for the six months ended March 28, 2025 compared to $51,764 during the corresponding period of the prior fiscal year. The decrease in cash used for operations over the prior year six month period was due primarily to cash provided by working capital reductions between quarters, partially offset by lower income on decreased sales volumes between periods. Depreciation and amortization charges were $10,041 for the six month period ended March 28, 2025 compared to $9,949 for the corresponding period of the prior year.

Current wording

Cash provided by operations totaled $32,810 for the nine months ended June 27, 2025 compared to $21,899 during the corresponding period of the prior fiscal year. The increase in cash provided by operations over the prior year nine month period was due primarily to cash provided by working capital reductions between quarters, partially offset by lower income on decreased sales volumes between year-to-date periods. Depreciation and amortization charges were $15,299 for the nine month period ended June 27, 2025 compared to $14,799 for the corresponding period of the prior year.

Previous wording

Cash used for investing activities totaled $7,749 for the six months ended March 28, 2025 compared to cash provided by investing activities of $7,031 for the corresponding period of the prior fiscal year. Current year cash used for investing activities reflects $12,197 paid to acquire a business, partially offset by the maturity of investments of $11,826. The prior year period included proceeds from maturity of investments of $15,000, as well as proceeds from the sale of a building of $2,234. Capital expenditures were $7,378 in the six months ended March 28, 2025, compared to $10,203 in the prior year to date period which included investments in expansion of Fishing facilities to accommodate additional production. Any additional capital expenditures in fiscal 2025 are expected to be funded by working capital.

Current wording

Cash used for investing activities totaled $10,002 for the nine months ended June 27, 2025 compared to cash provided by investing activities of $3,225 for the corresponding period of the prior fiscal year. Current year cash used for investing activities reflects $12,197 paid to acquire a business, partially offset by the maturity of investments of $14,021. The prior year period included proceeds from maturity of investments of $19,650, as well as proceeds from the sale of a building of $2,244. Capital expenditures were $11,826 in the nine months ended June 27, 2025, compared to $16,449 in the prior year to date period which included investments in expansion of Fishing facilities to accommodate additional production. Any additional capital expenditures in fiscal 2025 are expected to be funded by working capital.

Previous wording

Cash used for financing activities totaled $6,879 for the six months ended March 28, 2025 compared to $6,945 for the six month period ended March 29, 2024 and, for both periods, represents the payment of dividends and purchase of treasury stock. The Company had no debt during either six month period ended March 28, 2025 and March 29, 2024. See Note 11 "Indebtedness" to the accompanying Condensed Consolidated Financial Statements for additional information on our credit facilities.

Current wording

Cash used for financing activities totaled $10,142 for the nine months ended June 27, 2025 compared to $10,136 for the nine month period ended June 28, 2024 and, for both periods, represents the payment of dividends and purchase of treasury stock. The Company had no debt during either nine month period ended June 27, 2025 and June 28, 2024. See Note 11 "Indebtedness" to the accompanying Condensed Consolidated Financial Statements for additional information on our credit facilities.

Previous wording

As of March 28, 2025 the Company held approximately $56,367 of cash, cash equivalents and short-term investments in bank accounts in foreign taxing jurisdictions.

Current wording

As of June 27, 2025 the Company held approximately $66,152 of cash, cash equivalents and short-term investments in bank accounts in foreign taxing jurisdictions.

Previous wording

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 September 27, 2024 in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “Critical Accounting Estimates”, which was filed with the Securities and Exchange Commission on December 11, 2024. There were no significant changes to the Company’s critical accounting policies and estimates during the six months ended March 28, 2025.

Current wording

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 September 27, 2024 in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “Critical Accounting Estimates”, which was filed with the Securities and Exchange Commission on December 11, 2024. There were no significant changes to the Company’s critical accounting policies and estimates during the nine months ended June 27, 2025.