# Johnson Outdoors Inc: Form 10-Q for the period ended Dec 27, 2024

- Company: [Johnson Outdoors Inc](/companies/jout.md) (CIK 788329)
- Form: 10-Q
- Filed: 2025-02-03
- Accepted by EDGAR: Feb 3, 2025, 13:52 ET
- Period: 2024-12-27
- Accession: 0001140361-25-002853
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/788329/000114036125002853/jout-20241227.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/788329/000114036125002853/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-12-27.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-09-28 to 2024-12-27 | $107.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-09-28 to 2024-12-27 | $75.5m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-09-28 to 2024-12-27 | $32.2m | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-09-28 to 2024-12-27 | $7.6m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-09-28 to 2024-12-27 | −$20.2m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-09-28 to 2024-12-27 | $47.0k | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2024-09-28 to 2024-12-27 | −$3.6m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-09-28 to 2024-12-27 | −$15.3m | us-gaap:NetIncomeLoss |
| Diluted shares (weighted) | 3 months, 2024-09-28 to 2024-12-27 | 10,270,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-09-28 to 2024-12-27 | −$36.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-09-28 to 2024-12-27 | $4.1m | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 3 months, 2024-09-28 to 2024-12-27 | $3.4m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 3 months, 2024-09-28 to 2024-12-27 | $88.0k | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-12-27 | $95.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-12-27 | $388.1m | us-gaap:AssetsCurrent |
| Total assets | at 2024-12-27 | $612.9m | us-gaap:Assets |
| Current liabilities | at 2024-12-27 | $91.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-12-27 | $172.6m | us-gaap:Liabilities |
| Long-term debt | at 2024-12-27 | $0 | us-gaap:LongTermDebt |
| Shareholders' equity | at 2024-12-27 | $440.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 18,736 characters.

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 month periods ended December 27, 2024 and December 29, 2023. All monetary amounts, other than share and per share amounts, are stated in thousands.

Our MD&A is presented in the following sections:

- Forward Looking Statements
- Trademarks
- Overview
- Results of Operations
- Liquidity and Financial Condition
- Contractual Obligations and Off Balance Sheet Arrangements
- Critical Accounting Policies and Estimates

This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related notes that immediately precede this section, as well as the Company’s Annual Report on Form 10-K for the fiscal year ended September 27, 2024 which was filed with the Securities and Exchange Commission on December 11, 2024.

### Forward Looking Statements

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

Factors that could affect actual results or outcomes include the matters described under the caption “Risk Factors” in Item 1A of the Company’s Form 10-K for the fiscal year ended September 27, 2024 which was filed with the Securities and Exchange Commission on December 11, 2024 and the following: changes in economic conditions, consumer confidence levels and discretionary spending patterns in key markets; uncertainties stemming from political instability (and its impact on the economies in jurisdictions where the Company has operations); uncertainties stemming from changes in U.S. trade policies, tariffs, and the reaction of other countries to such changes; the global outbreaks of disease, such as the COVID-19 pandemic which has affected, and may continue to affect, market and economic conditions, along with wide-ranging impacts on employees, customers and various aspects of our operations; the Company’s success in implementing its strategic plan, including its targeted sales growth platforms, innovation focus and its increasing digital presence; litigation costs related to actions of and disputes with third parties, including competitors; the Company’s continued success in its working capital management and cost-structure reductions; the Company’s success in integrating strategic acquisitions; the risk of future writedowns of goodwill or other long-lived assets; the ability of the Company’s customers to meet payment obligations; the impact of actions of the Company's competitors with respect to product development or enhancement or the introduction of new products into the Company's markets; movements in foreign currencies, interest rates or commodity costs; fluctuations in the prices of raw materials or the availability of raw materials or components used by the Company; any disruptions in the Company's supply chain as a result of material fluctuations in the Company's order volumes and requirements for raw materials and other components, or the demand for those same raw materials and components by third parties, necessary to manufacture and produce the Company's products including related to shortages in procuring necessary raw materials and components to manufacture and produce such products; the success of the Company’s suppliers and customers and the impact of any consolidation in the industries of the Company's suppliers and customers; the ability of the Company to deploy its capital successfully; unanticipated outcomes related to outsourcing certain manufacturing processes; unanticipated outcomes related to litigation matters; and adverse weather conditions and other factors impacting climate change legislation. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this filing. The Company assumes no obligation, and disclaims any obligation, to update such forward-looking statements to reflect subsequent events or circumstances.

### Trademarks

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

### Overview

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

#### Highlights

Net sales of $107,649 for the first quarter of fiscal 2025 decreased $30,995, or 22%, from the same period in the prior year. The decrease between quarterly periods was primarily due to ongoing market challenges in many of the Company's product categories, a cautious retail and trade environment, as well as increasing competitive pressure, which resulted in weaker demand and revenue across all segments of the Company's outdoor recreation products. Unfavorable overhead absorption due to the lower sales volumes and unfavorable product mix more than offset the Company's cost saving initiatives and contributed to an 8.2 point decline in gross margin, as well as a $20,285 decrease in operating profit in the current year quarter versus the prior year quarter.

As of December 27, 2024, the Company has combined the previously reported "Camping" and "Watercraft Recreation" segments into one segment, referred to as "Camping & Watercraft Recreation".

During the first quarter of fiscal 2025, the Company's Diving segment acquired a scuba equipment manufacturer for $12,180, which is expected to provide new innovative products, unlock synergies and enhance operating efficiencies for this segment.

See “Note 18 – Acquisitions” of the notes to the accompanying Condensed Consolidated Financial Statements for additional information.

#### Seasonality

The Company’s business is seasonal in nature. The first fiscal quarter traditionally falls prior to 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.

| Quarter Ended | Fiscal Year 2024 Net Sales | Operating Loss | 2023 Net Sales | Operating Profit (Loss) | 2022 Net Sales | Operating Profit |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| December | 23% | —% | 27% | 47% | 21% | 21% |
| March | 30% | 1% | 30% | 97% | 26% | 23% |
| June | 29% | 1% | 28% | 149% | 27% | 36% |
| September | 18% | 98% | 15% | (193)% | 26% | 20% |
|  | 100% | 100% | 100% | 100% | 100% | 100% |

### Results of Operations

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

| Net sales: | Three Months Ended December 27, 2024 | December 29, 2023 |
| --- | ---: | ---: |
| Fishing | $82,472 | $110,492 |
| Camping & Watercraft Recreation | 9,451 | 10,726 |
| Diving | 15,684 | 17,478 |
| Other / Corporate / Eliminations | 42 | (52) |
| Total | $107,649 | $138,644 |
| Operating (loss) profit: |  |  |
| Fishing | $(8,261) | $11,529 |
| Camping & Watercraft Recreation | (646) | (1,720) |
| Diving | (908) | (578) |
| Other / Corporate / Eliminations | (10,424) | (9,185) |
| Total | $(20,239) | $46 |

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

#### Net Sales

Consolidated net sales for the three months ended December 27, 2024 were $107,649, a decrease of $30,995, or 22%, compared to $138,644 for the three months ended December 29, 2023. Foreign currency translation had a negligible impact on current year first quarter net sales compared to the prior year's first quarter net sales.

Net sales for the three months ended December 27, 2024 for the Fishing business were $82,472, a decrease of $28,020, or 25%, from $110,492 during the first fiscal quarter of the prior year. Challenging consumer and trade dynamics, increased competitive pressure, and strong sell-in of new products in last year's quarter all contributed to the sales decline between quarters.

Net sales for the Camping & Watercraft Recreation business were $9,451 for the first quarter of the current fiscal year, a decrease of $1,275, or 12%, from the prior year net sales during the same period of $10,726. The decrease is mainly attributable to declines in overall consumer demand for products in this market, primarily in the overall kayak industry.

Net sales for Diving for the first quarter of fiscal 2025 were $15,684, which declined $1,794, or 10%, compared to net sales of $17,478 for the three months ended December 29, 2023. The decline in sales over the prior year quarter was driven primarily by continued soft market demand across all geographic regions. Foreign currency translation had a favorable impact of less than 1% on sales in this segment versus the prior year quarter.

#### Cost of Sales

Cost of sales for the three months ended December 27, 2024 of $75,466 decreased $10,324 compared to $85,790 for the three months ended December 29, 2023, mainly due to the decrease in sales volumes, and the unfavorable mix of higher cost product between quarters.

#### Gross Profit Margin

For the three months ended December 27, 2024, gross profit as a percentage of net sales was 29.9% compared to 38.1% in the three month period ended December 29, 2023. The decline in gross profit percentage over the prior year quarter was primarily due to unfavorable overhead absorption as a result of lower sales volumes, promotional pricing on end-of-life products and changes in product mix toward lower margin products between quarters.

#### Operating Expenses

Operating expenses were $52,422 for the three months ended December 27, 2024, compared to $52,808 for the three months ended December 29, 2023, for a decrease of $386 between quarters. Decreased sales volumes and a $2,590 decrease in expense related to the Company's deferred compensation plan were nearly offset by increased professional services and warranty expenses between periods.

#### Operating Loss/Profit

Operating loss on a consolidated basis for the three month period ended December 27, 2024 was $20,239, compared to operating profit of $46 in the first quarter of the prior fiscal year. As discussed above, the decrease in operating profit between quarters is driven by lower sales volumes.

#### Interest

Interest expense was $47 and $38 for the three months ended December 27, 2024 and December 29, 2023, respectively.

Interest income was $1,033 and $1,198 for the three months ended December 27, 2024 and December 29, 2023, respectively.

#### Other Expense (Income), net

Other income was $326 for the three months ended December 27, 2024 compared to $4,693 in the prior year period. The main driver of the $4,367 decrease over the prior year quarter was a $2,590 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. Additionally, the prior year included a gain on the sale of building of approximately $1,900. For the three months ended December 27, 2024, foreign currency exchange gains were $203 compared to losses of $191 for the three months ended December 29, 2023.

#### Income Tax Expense

The Company’s provision for income taxes is based upon estimated annual effective tax rates in the tax jurisdictions in which the Company operates. The effective tax rate for the three month period ended June 28, 2024 was a tax benefit of 19.2%, due to the decline in profit before taxes, as well as geographic mix of profits and losses.

#### Net Loss/Income

Net loss for the three months ended December 27, 2024 was $15,290, or $1.49 per diluted common class A and B share, compared to net income of $3,955, or $0.38 per diluted common class A and B share, for the first quarter of the prior fiscal year.

### Liquidity and Financial Condition

Cash and cash equivalents and short term investments totaled $101,617 as of December 27, 2024, compared to $109,555 as of December 29, 2023. The Company’s debt to total capitalization ratio was 0% as of December 27, 2024 and December 29, 2023. The Company’s total debt balance was $0 as of each of December 27, 2024 and December 29, 2023. See “Note 11 – Indebtedness” in the notes to the Company’s accompanying condensed consolidated financial statements for further discussion.

Accounts receivable, net of allowance for credit losses, were $68,297 as of December 27, 2024, a decrease of $14,746 compared to $83,043 as of December 29, 2023. The decrease is consistent with the decreased sales volumes year over year. Inventories were $201,606 as of December 27, 2024, a decrease of $65,715, compared to $267,321 as of December 29, 2023. The decrease is consistent with the Company's ongoing efforts to reduce inventory balances. Accounts payable were $33,491 at December 27, 2024 compared to $43,403 as of December 29, 2023.

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

| (thousands) Cash (used for) provided by: | Three months ended December 27, 2024 | December 29, 2023 |
| --- | ---: | ---: |
| Operating activities | $(36,909) | $(33,687) |
| Investing activities | (6,500) | 4,685 |
| Financing activities | (3,450) | (3,588) |
| Effect of foreign currency rate changes on cash | (3,369) | 1,197 |
| Decrease in cash and cash equivalents | $(50,228) | $(31,393) |

#### Operating Activities

Cash used for operations totaled $36,909 for the three months ended December 27, 2024 compared to $33,687 during the corresponding period of the prior fiscal year. The decrease in cash provided by operations over the prior year three month period was due primarily to lower income on decreased sales volumes between quarters, offset in part by cash provided by working capital reductions between quarters. Depreciation and amortization charges were $4,803 for the three month period ended December 27, 2024 compared to $5,027 for the corresponding period of the prior year.

#### Investing Activities

Cash used for investing activities totaled $6,500 for the three months ended December 27, 2024 compared to cash provided by investing activities of $4,685 for the corresponding period of the prior fiscal year. Current year cash used for investing activities reflects $12,180 paid to acquire a business, partially offset by maturity of investments of $9,764. The prior year period included proceeds from maturity of investments of $7,500, as well as proceeds from the sale of a building of $2,189. Capital expenditures were $4,084 in the three months ended December 27, 2024, compared to $5,004 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.

#### Financing Activities

Cash used for financing activities totaled $3,450 for the three months ended December 27, 2024 compared to $3,588 for the three month period ended December 29, 2023 and, for both periods, represents the payment of dividends and purchase of treasury stock. The Company had no debt during either three month period ended December 27, 2024 and December 29, 2023. See Note 11 "Indebtedness" to the accompanying Condensed Consolidated Financial Statements for additional information on our credit facilities.

As of December 27, 2024 the Company held approximately $58,043 of cash, cash equivalents and short-term investments in bank accounts in foreign taxing jurisdictions.

### Contractual Obligations and Off Balance Sheet Arrangements

The Company has contractual obligations and commitments to make future payments including under operating leases and open purchase orders. There have been no changes outside of the ordinary course of business in the specified contractual obligations during the quarter ended December 27, 2024.

The Company utilizes letters of credit primarily as security for the payment of future claims under its workers compensation insurance. Letters of credit outstanding were approximately $67 and $67 as of December 27, 2024 and December 29, 2023, respectively.

The Company has no other off-balance sheet arrangements.

### Critical Accounting Policies and Estimates

The Company’s critical accounting policies and estimates are identified in the Company’s Annual Report on Form 10-K for the fiscal year ending 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 three months ended December 27, 2024.

## Market risk

As filed, 583 characters.

The Company is exposed to market risk in foreign currency exchange rates, interest rates, commodity prices and inflation. For a discussion of exposure to market risk, refer to 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 “Market Risk Management”, which was filed with the Securities and Exchange Commission on December 11, 2024. There have been no significant changes to our market risk in the three months ended December 27, 2024.

## Controls and procedures

As filed, 2,254 characters.

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective at reaching a level of reasonable assurance. It should be noted that in designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures. The Company has designed its disclosure controls and procedures to reach a level of reasonable assurance of achieving the desired control objectives.

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

## Risk factors

As filed, 203 characters.

There have been no material changes to the risk factors disclosed in our Form 10-K for the fiscal year ending September 27, 2024 as filed with the Securities and Exchange Commission on December 11, 2024.

Filed Feb 3, 2025.
Source: SEC EDGAR, the filing index for accession 0001140361-25-002853. Last ingested by Listed: Oct 27, 2026, 17:32 ET. No prices; not investment advice.