Johnson Outdoors Inc. — FY2021 Form 10-K
Business context and reporting period. Johnson Outdoors designs, manufactures and markets branded outdoor recreation products across Fishing (Minn Kota, Humminbird, Cannon), Camping (Eureka!, Jetboil), Watercraft Recreation (Old Town, Ocean Kayak) and Diving (SCUBAPRO). Fiscal 2021 ended October 1, 2021 and comprised 52 weeks; the comparable fiscal 2020 comprised 53 weeks.
Financial performance and position
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Net sales | $751.7 million | $594.2 million | +26% |
| Gross profit / margin | $334.1 million / 44.5% | $265.0 million / 44.6% | +26% profit; margin down 0.1 point |
| Operating profit / margin | $111.3 million / 14.8% | $71.1 million / 12.0% | +$40.2 million; +57% |
| Net income / diluted EPS | $83.4 million / $8.21 | $55.2 million / $5.47 | Net income +51% |
| Cash from operations | $58.3 million | $61.5 million | Down $3.2 million |
| Capital expenditures | $21.4 million | $15.6 million | Up $5.8 million |
Cash and cash equivalents were $240.4 million at year-end, versus $212.4 million a year earlier. Working capital was $353.7 million and the current ratio was 3.6:1. Inventory rose to $166.6 million from $97.4 million, chiefly as the Company bought ahead to mitigate supply shortages. The Company had no outstanding debt; its revolving credit facility provides up to $75 million, with a conditional $50 million accordion, and was extended to July 2026. Total liabilities were $215.8 million and shareholders’ equity was $458.5 million.
Cash from operations declined despite higher earnings, primarily because inventory consumed $69.6 million of cash, partly offset by increased accounts payable and accrued liabilities. The Company declared $9.3 million in dividends and paid $8.4 million in cash dividends during FY2021.
Segment results
| Segment | FY2021 sales | FY2020 sales | FY2021 operating profit (loss) | FY2020 operating profit (loss) |
|---|---|---|---|---|
| Fishing | $553.0 million | $449.9 million | $122.5 million | $95.9 million |
| Camping | $62.9 million | $41.6 million | $14.0 million | $4.4 million |
| Watercraft Recreation | $66.6 million | $41.9 million | $9.2 million | $(0.3) million |
| Diving | $69.4 million | $60.9 million | $1.5 million | $(2.6) million |
Material changes and management commentary
- Sales growth reflected strong outdoor recreation demand during the pandemic, with Fishing, Camping and Watercraft Recreation benefiting from increased participation and product success. Diving recovered as travel restrictions eased.
- Operating profit improved across all four segments. Fishing remained the largest contributor; Watercraft Recreation and Diving returned to segment profitability.
- Cost of sales increased to $417.5 million, or 55.5% of sales, from $329.2 million, or 55.4%. Favorable mix and pricing largely offset higher freight and tariff costs.
- Operating expenses rose $28.9 million, driven mainly by volume-related costs, headcount and compensation, including higher corporate expenses. Effective tax rate increased to 26.2% from 25.1%.
Outlook, risks and unusual items
Management expects supply-chain and logistics disruptions to continue into fiscal 2022. Strong demand and customer replenishment, component shortages, higher purchase prices and freight costs could constrain the Company’s ability to fill orders and pressure future margins. The filing gives no specific revenue, earnings or margin guidance, and states that the duration and financial effects of pandemic-related impacts cannot be reasonably estimated.
- Inventory and purchase commitments were increased to protect product availability; this raises working-capital exposure and the risk of excess or obsolete inventory if demand changes.
- Chinese tariffs affected fiscal 2021: the risk-factor discussion estimates an approximately $12 million operating-profit impact, while MD&A discusses approximately $7.2 million of additional tariff costs in cost of sales, partly offset by mix and pricing. These disclosures use different descriptions or bases and merit verification.
- The Company recorded a $2.5 million non-cash pension termination charge after settling two frozen pension plans in the fourth quarter.
- One customer accounted for approximately $114.0 million of sales across Fishing, Camping and Watercraft Recreation, about 15% of consolidated revenue.
- Other principal risks include changing discretionary demand and seasonality, supplier concentration and component availability, raw-material and labor costs, competition, foreign exchange, tariffs, cybersecurity, and product liability. Approximately 12% of FY2021 revenue was denominated in foreign currencies.
- Management reported no litigation deemed material and did not believe pending proceedings would have a material adverse effect. No goodwill impairment was recorded in FY2021.
- Auditors issued unqualified opinions on the financial statements and internal control over financial reporting; they reported no critical audit matters.
Important facts for investors to verify
- Whether high pandemic-era demand persists and how normalized seasonality affects comparisons and production plans.
- Inventory composition, turnover and reserves, and whether suppliers can deliver components on time and at acceptable cost.
- The basis and reconciliation of the filing’s differing tariff-cost disclosures, and the extent to which price increases can offset tariffs, freight and input inflation.
- Customer concentration, including the large customer’s sales share and potential effect of any order reductions.
- Cash generation and capital needs as inventory remains elevated; also monitor dividend capacity and compliance with credit-facility covenants.