Wisconsin
(State
or other jurisdiction of
incorporation
or organization)
|
39-1536083
(I.R.S.
Employer Identification No.)
|
Index
|
Page
No.
|
|||
PART
I
|
FINANCIAL
INFORMATION
|
|||
Item
1.
|
Financial
Statements
|
|||
|
1
|
|||
|
2
|
|||
|
3
|
|||
|
4
|
|||
Item
2.
|
|
11
|
||
Item
3.
|
|
19
|
||
Item
4.
|
|
19
|
||
PART
II
|
OTHER
INFORMATION
|
|||
Item
6.
|
|
19
|
||
|
20
|
|||
|
21
|
|
|||||||
(thousands, except per share data) |
Three
Months Ended
|
||||||
|
December
29
2006
|
December
30
2005
|
|||||
Net
sales
|
$
|
71,701
|
$
|
72,563
|
|||
Cost
of sales
|
43,221
|
43,134
|
|||||
Gross
profit
|
28,480
|
29,429
|
|||||
Operating
expenses:
|
|||||||
Marketing
and selling
|
19,768
|
18,290
|
|||||
Administrative
management, finance and information systems
|
8,467
|
9,290
|
|||||
Research
and development
|
2,886
|
2,661
|
|||||
Total
operating expenses
|
31,121
|
30,241
|
|||||
Operating
loss
|
(2,641
|
)
|
(812
|
)
|
|||
Interest
income
|
(171
|
)
|
(88
|
)
|
|||
Interest
expense
|
1,023
|
991
|
|||||
Other
expenses, net
|
1
|
69
|
|||||
Loss
before income taxes
|
(3,494
|
)
|
(1,784
|
)
|
|||
Income
tax benefit
|
(1,382
|
)
|
(690
|
)
|
|||
Net
loss
|
$
|
(2,112
|
)
|
$
|
(1,094
|
)
|
|
Basic
and diluted loss per common share
|
$
|
(0.23
|
)
|
$
|
(0.12
|
)
|
(thousands,
except share data)
|
December
29
2006
(unaudited)
|
|
September
29
2006
(audited)
|
|
December
30
2005
(unaudited)
|
|
||||
ASSETS
|
||||||||||
Current
assets:
|
||||||||||
Cash
and temporary cash investments
|
$
|
48,548
|
$
|
51,689
|
$
|
45,206
|
||||
Accounts
receivable, less allowance for doubtful accounts of $2,526, $2,318
and
$2,931, respectively
|
56,865
|
52,844
|
62,465
|
|||||||
Inventories,
net
|
83,410
|
63,828
|
62,704
|
|||||||
Income
taxes refundable
|
741
|
--
|
1,509
|
|||||||
Deferred
income taxes
|
9,421
|
9,462
|
8,140
|
|||||||
Other
current assets
|
10,727
|
7,074
|
7,451
|
|||||||
Total
current assets
|
209,712
|
184,897
|
187,475
|
|||||||
Property,
plant and equipment, net
|
32,426
|
31,600
|
30,627
|
|||||||
Deferred
income taxes
|
14,546
|
14,576
|
19,670
|
|||||||
Goodwill
|
44,435
|
42,947
|
42,196
|
|||||||
Intangible
assets, net
|
4,572
|
4,590
|
3,980
|
|||||||
Other
assets
|
5,798
|
5,616
|
4,884
|
|||||||
Total
assets
|
$
|
311,489
|
$
|
284,226
|
$
|
288,832
|
||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||||
Current
liabilities:
|
||||||||||
Short-term
notes payable
|
$
|
48,000
|
$
|
--
|
$
|
28,000
|
||||
Current
maturities of long-term debt
|
10,801
|
17,000
|
17,000
|
|||||||
Accounts
payable
|
22,169
|
17,506
|
19,110
|
|||||||
Accrued
liabilities:
|
||||||||||
Salaries,
wages and benefits
|
10,319
|
16,577
|
11,594
|
|||||||
Accrued
discounts and returns
|
6,002
|
5,047
|
5,020
|
|||||||
Accrued
interest payable
|
437
|
1,118
|
777
|
|||||||
Income
taxes payable
|
--
|
1,258
|
--
|
|||||||
Other
|
14,008
|
16,144
|
12,798
|
|||||||
Total
current liabilities
|
111,736
|
74,650
|
94,299
|
|||||||
Long-term
debt, less current maturities
|
10,005
|
20,807
|
20,800
|
|||||||
Other
liabilities
|
8,296
|
7,888
|
9,815
|
|||||||
Total
liabilities
|
130,037
|
103,345
|
124,914
|
|||||||
Shareholders'
equity:
|
||||||||||
Preferred
stock: none issued
|
--
|
--
|
--
|
|||||||
Common
stock:
|
||||||||||
Class
A shares issued:
December
29, 2006, 7,903,932;
September
29, 2006, 7,858,800;
December
30, 2005, 7,859,567
|
395
|
393
|
393
|
|||||||
Class
B shares issued (convertible into Class A):
December
29, 2006, 1,217,977;
September
29, 2006, 1,217,977;
December
30, 2005, 1,219,667
|
61
|
61
|
61
|
|||||||
Capital
in excess of par value
|
55,747
|
55,459
|
54,791
|
|||||||
Retained
earnings
|
115,903
|
118,015
|
108,206
|
|||||||
Accumulated
other comprehensive income
|
9,346
|
6,953
|
468
|
|||||||
Total
shareholders' equity
|
181,452
|
180,881
|
163,918
|
|||||||
Total
liabilities and shareholders' equity
|
$
|
311,489
|
$
|
284,226
|
$
|
288,832
|
|
|||||||
(thousands)
|
Three
Months Ended
|
||||||
|
December
29
2006
|
December
30
2005
|
|||||
CASH
USED FOR OPERATING ACTIVITIES
|
|||||||
Net
loss
|
$
|
(2,112
|
)
|
$
|
(1,094
|
)
|
|
Adjustments
to reconcile net loss to net cash used for operating
activities:
|
|||||||
Depreciation
|
2,133
|
2,179
|
|||||
Amortization
of intangible assets
|
25
|
31
|
|||||
Amortization
of deferred financing costs
|
44
|
24
|
|||||
Stock
based compensation
|
142
|
181
|
|||||
Deferred
income taxes
|
71
|
(41
|
)
|
||||
Change
in operating assets and liabilities, net of effect of businesses
acquired
or sold:
|
|||||||
Accounts
receivable, net
|
(3,362
|
)
|
(13,350
|
)
|
|||
Inventories,
net
|
(18,578
|
)
|
(7,473
|
)
|
|||
Accounts
payable and accrued liabilities
|
(6,056
|
)
|
(7,598
|
)
|
|||
Other,
net
|
(3,149
|
)
|
(2,167
|
) | |||
(30,842
|
)
|
(29,308
|
)
|
||||
CASH
USED FOR INVESTING ACTIVITIES
|
|||||||
Payments
for purchase of business
|
(1,491
|
)
|
(10,400
|
)
|
|||
Additions
to property, plant and equipment
|
(2,657
|
)
|
(1,470
|
)
|
|||
(4,148
|
)
|
(11,870
|
)
|
||||
CASH
PROVIDED BY (USED FOR) FINANCING ACTIVITIES
|
|||||||
Net
borrowings from short-term notes payable
|
48,000
|
28,000
|
|||||
Principal
payments on senior notes and other long-term debt
|
(17,001
|
)
|
(13,000
|
)
|
|||
Excess
tax benefits from stock based compensation
|
4
|
1
|
|||||
Common
stock transactions
|
168
|
1
|
|||||
31,171
|
15,002
|
||||||
Effect
of foreign currency fluctuations on cash
|
678
|
(729
|
)
|
||||
Decrease
in cash and temporary cash investments
|
(3,141
|
)
|
(26,905
|
)
|
|||
CASH
AND TEMPORARY CASH INVESTMENTS
|
|||||||
Beginning
of period
|
51,689
|
72,111
|
|||||
End
of period
|
$
|
48,548
|
$
|
45,206
|
|
|||||||
Three Months Ended |
|
||||||
|
December
29
2006
|
December
30
2005
|
|||||
Net
loss
|
$
|
(2,112
|
)
|
$
|
(1,094
|
)
|
|
Weighted
average common shares - Basic and Diluted
|
9,005,615
|
8,977,317
|
|||||
Basic
and diluted loss per common share
|
$
|
(0.23
|
)
|
$
|
(0.12
|
)
|
|
|
|
|||||||||||
|
Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term (Years)
|
|
Aggregate
Intrinsic Value
|
||||||||
Outstanding
at September 29, 2006
|
332,533
|
$
|
9.03
|
||||||||||
Exercised
|
10,000
|
16.88
|
|||||||||||
Outstanding
and exercisable at December 29, 2006
|
322,533
|
$
|
8.78
|
3.5
|
$
|
3,174
|
|
|
||||||
|
Shares
|
Weighted
Average
Grant
Price
|
|||||
Unvested
restricted stock at September 29, 2006
|
76,120
|
$
|
16.88
|
||||
Restricted
stock grants
|
35,132
|
18.43
|
|||||
Unvested
restricted stock at December 29, 2006
|
111,252
|
$
|
17.36
|
|
|||||||
Three
Months Ended
|
|||||||
|
December
29
2006
|
December
30
2005
|
|||||
Components
of net periodic benefit cost:
|
|||||||
Service
cost
|
$
|
176
|
$
|
157
|
|||
Interest
on projected benefit obligation
|
231
|
235
|
|||||
Less
estimated return on plan assets
|
(218
|
)
|
(206
|
)
|
|||
Amortization
of unrecognized:
|
|||||||
Net
loss
|
67
|
28
|
|||||
Prior
service cost
|
2
|
6
|
|||||
Net
amount recognized
|
$
|
258
|
$
|
220
|
|
|
|
||||||||
|
December
29
2006
|
September
29
2006
|
December
30
2005
|
|||||||
Raw
materials
|
$
|
32,684
|
$
|
24,895
|
$
|
24,214
|
||||
Work
in process
|
3,400
|
4,194
|
2,683
|
|||||||
Finished
goods
|
50,873
|
38,185
|
38,543
|
|||||||
86,957
|
67,274
|
65,440
|
||||||||
Less
inventory reserves
|
3,547
|
3,446
|
2,736
|
|||||||
$
|
83,410
|
$
|
63,828
|
$
|
62,704
|
|
|
||||||
|
December
29
2006
|
December
30
2005
|
|||||
Balance
at beginning of quarter
|
$
|
3,844
|
$
|
3,287
|
|||
Expense
accruals for warranties issued during the period
|
1,166
|
481
|
|||||
Less
current period warranty claims paid
|
722
|
585
|
|||||
Balance
at end of quarter
|
$
|
4,288
|
$
|
3,183
|
|
|||||||
Three
Months Ended
|
|||||||
|
December
29
2006
|
December
30
2005
|
|||||
Net
loss
|
$
|
(2,112
|
)
|
$
|
(1,094
|
)
|
|
Translation
adjustments
|
2,393
|
(1,534
|
)
|
||||
Comprehensive
income (loss)
|
$
|
281
|
$
|
(2,628
|
)
|
|
|
||||||
Three
Months Ended
|
|||||||
|
December
29
2006
|
December
30
2005
|
|||||
Net
sales:
|
|||||||
Marine
electronics:
|
|||||||
Unaffiliated
customers
|
$
|
29,456
|
$
|
29,966
|
|||
Interunit
transfers
|
10
|
8
|
|||||
Outdoor
equipment:
|
|||||||
Unaffiliated
customers
|
13,683
|
14,517
|
|||||
Interunit
transfers
|
7
|
7
|
|||||
Watercraft:
|
|||||||
Unaffiliated
customers
|
11,729
|
12,261
|
|||||
Interunit
transfers
|
12
|
23
|
|||||
Diving:
|
|||||||
Unaffiliated
customers
|
16,777
|
15,742
|
|||||
Interunit
transfers
|
142
|
76
|
|||||
Other
|
56
|
77
|
|||||
Eliminations
|
(171
|
)
|
(114
|
)
|
|||
$
|
71,701
|
$
|
72,563
|
||||
Operating
profit (loss):
|
|||||||
Marine
electronics
|
$
|
204
|
$
|
2,416
|
|||
Outdoor
equipment
|
1,643
|
1,648
|
|||||
Watercraft
|
(2,393
|
)
|
(2,491
|
)
|
|||
Diving
|
631
|
66
|
|||||
Other
|
(2,726
|
)
|
(2,451
|
)
|
|||
$
|
(2,641
|
)
|
$
|
(812
|
)
|
||
Total
assets (end of period):
|
|||||||
Marine
electronics
|
$
|
90,176
|
$
|
75,600
|
|||
Outdoor
equipment
|
30,531
|
26,799
|
|||||
Watercraft
|
61,765
|
56,060
|
|||||
Diving
|
102,581
|
92,295
|
|||||
Other
|
26,436
|
35,493
|
|||||
$
|
311,489
|
$
|
286,247
|
§
|
Marine
Electronics revenues dipped 1.7% below last year due to delays in
shipments to customers which resulted from a temporary gap in product
component availability, as well as the transition to a new distribution
center and ERP system upgrade.
|
§
|
Watercraft
sales were 4.8% behind last year due largely to a shift in the pacing
of
orders from large national
retailers.
|
§
|
Diving
revenues increased 7.0% due to strong performance in key international
markets and favorable currency translation.
|
§
|
Outdoor
Equipment revenues were down 5.7% as the expected slowing of military
sales continued, declining 21.3% versus the prior year quarter, and
growth
in Consumer camping was offset by weaker Commercial tent
sales.
|
§
|
Lower
volume and higher commodity costs in the current quarter, together
with
the aforementioned ERP upgrade and distribution center move in Marine
Electronics, which had a significant impact on labor efficiency and
accounted for the year-over-year decline in total Company gross margins.
|
§
|
Lower
sales in Watercraft due to a shift in customer order
pacing.
|
§
|
Increased
spending in marketing and sales to support innovative new product
launches.
|
Year
Ended
|
|||||||||||||||||||
September 29, 2006 |
September
30, 2005
|
October
1, 2004
|
|||||||||||||||||
Quarter
Ended
|
Net
Sales
|
Operating
Profit
(Loss
|
)
|
Net
Sales
|
Operating
Profit
(Loss
|
)
|
Net
Sales
|
Operating
Profit
(Loss
|
)
|
||||||||||
December
|
19
|
%
|
(4
|
)%
|
20
|
%
|
--
|
%
|
18
|
%
|
7
|
%
|
|||||||
March
|
27
|
40
|
28
|
54
|
27
|
45
|
|||||||||||||
June
|
34
|
67
|
32
|
76
|
34
|
72
|
|||||||||||||
September
|
20
|
(3
|
)
|
20
|
(30
|
)
|
21
|
(24
|
)
|
||||||||||
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(millions)
|
Three
Months Ended
|
||||||
December
29
2006
|
December
30
2005
|
||||||
Net
sales:
|
|||||||
Marine
electronics
|
$
|
29.5
|
$
|
30.0
|
|||
Outdoor
equipment
|
13.7
|
14.5
|
|||||
Watercraft
|
11.7
|
12.3
|
|||||
Diving
|
16.9
|
15.8
|
|||||
Other/eliminations
|
(0.1
|
)
|
--
|
||||
Total
|
$
|
71.7
|
$
|
72.6
|
|||
Operating
profit (loss):
|
|||||||
Marine
electronics
|
$
|
0.2
|
$
|
2.4
|
|||
Outdoor
equipment
|
1.6
|
1.6
|
|||||
Watercraft
|
(2.4
|
)
|
(2.5
|
)
|
|||
Diving
|
0.6
|
0.1
|
|||||
Other/eliminations
|
(2.6
|
)
|
(2.4
|
)
|
|||
Total
|
$
|
(2.6
|
)
|
$
|
(0.8
|
)
|
|
|||||||
(millions)
|
Three
Months Ended
|
||||||
|
December
29
2006
|
December
30
2005
|
|||||
Cash
provided by (used for):
|
|||||||
Operating
activities
|
$
|
(30.8
|
)
|
$
|
(29.3
|
)
|
|
Investing
activities
|
(4.1
|
)
|
(11.9
|
)
|
|||
Financing
activities
|
31.2
|
15.0
|
|||||
Effect
of exchange rate changes
|
0.6
|
(0.7
|
)
|
||||
Decrease
in cash and temporary cash investments
|
$
|
(3.1
|
)
|
$
|
(26.9
|
)
|
|
||||||||||||||||
|
Payment
Due by Period
|
|||||||||||||||
(millions)
|
Total
|
Remainder
2007
|
2008/09
|
2010/11
|
2012
& After
|
|||||||||||
Long-term
debt
|
$
|
20.8
|
$
|
--
|
$
|
20.8
|
$
|
--
|
$
|
--
|
||||||
Short-term
debt
|
48.0
|
48.0
|
--
|
--
|
--
|
|||||||||||
Operating
lease obligations
|
24.7
|
4.0
|
7.6
|
5.2
|
7.9
|
|||||||||||
Open
purchase orders
|
77.6
|
77.6
|
--
|
--
|
--
|
|||||||||||
Contractually
obligated interest payments
|
2.6
|
1.0
|
1.6
|
--
|
--
|
|||||||||||
Total
contractual obligations
|
$
|
173.7
|
$
|
130.6
|
$
|
30.0
|
$
|
5.2
|
$
|
7.9
|
|
|||
(millions)
|
Estimated
Impact on
|
||
Fair
Value
|
Earnings
Before Income Taxes
|
||
Interest
rate instruments
|
$
0.3
|
$
0.2
|
JOHNSON
OUTDOORS INC.
|
|
Signatures
Dated: February 7, 2007
|
|
/s/
Helen P.
Johnson-Leipold
|
|
Helen
P. Johnson-Leipold
Chairman
and Chief Executive Officer
|
|
/s/
David W.
Johnson
|
|
David
W. Johnson
Vice
President and Chief Financial Officer
(Principal
Financial and Accounting Officer)
|
Exhibit
Number
|
Description
|
|
31.1
|
|
|
31.2
|
||
32
(1)
|
1)
|
I
have reviewed this Quarterly Report on Form 10-Q of Johnson Outdoors
Inc.;
|
2)
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3)
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4)
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5)
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
functions):
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
|
February
7, 2007
|
/s/
Helen P. Johnson-Leipold
|
|
Helen
P. Johnson-Leipold
Chairman
and Chief Executive Officer
|
1)
|
I
have reviewed this Quarterly Report on Form 10-Q of Johnson Outdoors
Inc.;
|
2)
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3)
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4)
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5)
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent
functions):
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
|
February
7, 2007
|
/s/
David W.
Johnson
|
|
David
W. Johnson
Vice
President and Chief Financial
Officer
|
/s/
Helen P.
Johnson-Leipold
|
Helen
P. Johnson-Leipold
Chairman
and Chief Executive Officer
February
7, 2007
|
/s/
David W.
Johnson
|
David
W. Johnson
Vice
President and Chief Financial Officer
Treasurer
February
7, 2007
|