10q10k10q10k.net

What changed in JOHNSON OUTDOORS INC's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of JOHNSON OUTDOORS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+149 added−174 removedSource: 10-K (2023-12-08) vs 10-K (2022-12-09)

Top changes in JOHNSON OUTDOORS INC's 2023 10-K

149 paragraphs added · 174 removed · 111 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

26 edited+3 added−14 removed29 unchanged
Biggest changeFiscal Year 2022 2021 2020 Quarter Ended Net Sales Operating Profit Net Sales Operating Profit Net Sales 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 % 100 % 100 % 100 % 100 % 100 % 100 % Environment and Climate Change The Company is subject to various supranational, federal, state and local environmental laws, ordinances, regulations, and other requirements of governmental authorities.
Biggest changeThis demand was also impacted by the lingering effects that the pandemic had on the Company's supply chain and the pricing and availability of raw materials and components during fiscal 2022. 6 Table of Contents Fiscal Year 2023 2022 2021 Quarter Ended Net Sales Operating Profit Net Sales Operating Profit Net Sales Operating Profit December 27 % 47 % 21 % 21 % 22 % 22 % March 30 % 97 % 26 % 23 % 27 % 32 % June 28 % 149 % 27 % 36 % 29 % 34 % September 15 % (193) % 26 % 20 % 22 % 12 % 100 % 100 % 100 % 100 % 100 % 100 % Environment and Climate Change The Company is subject to various supranational, federal, state and local environmental laws, ordinances, regulations, and other requirements of governmental authorities.
Camping: The Company’s Camping brands and products compete in the sporting goods and specialty segments of the Camping market. Competitive brands with a strong position in the sporting goods channel include Coleman® and private label brands.
The Company’s Camping brands and products compete in the sporting goods and specialty segments of the Camping market. Competitive brands with a strong position in the sporting goods channel include Coleman® and private label brands.
ITEM 1. BUSINESS Johnson Outdoors is a leading global manufacturer and marketer of branded seasonal, outdoor recreation products used primarily for fishing from a boat, diving, paddling, hiking 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.
ITEM 1. BUSINESS Johnson Outdoors is a leading global manufacturer and marketer of branded seasonal, outdoor recreation products used primarily for fishing from a boat, diving, paddling, hiking and camping. The Company’s portfolio of well-known consumer brands has attained leading market positions due to innovation, marketing excellence, product performance and quality.
Power-Pole is Minn Kota's main competitor in the shallow water anchor business. Competition in both businesses is focused on technological innovation, product quality and durability as well as product features and benefits for fishing. Humminbird’s main competitors in the market for on-boat electronics are Garmin ™ , Lowrance ™ , and Raymarine®.
In addition, Power-Pole is Minn Kota's main competitor in the shallow water anchor business. Competition in both businesses is focused on technological innovation, product quality and durability as well as product features and benefits for fishing. Humminbird’s main competitors in the market for on-boat electronics are Garmin ™ , Lowrance ™ , and Raymarine®.
In doing so, the Company strived to balance the businesses’ need to maintain adequate inventory levels with the cost of holding such inventory by manufacturing to forecast for high volume products, utilizing build-to-order strategies wherever possible, and by having contract-manufactured products delivered to customers directly from the supplier.
In doing so, the Company strives to balance the businesses’ need to maintain adequate inventory levels with the cost of holding such inventory by manufacturing to forecast for high volume products, utilizing build-to-order strategies wherever possible, and by having contract-manufactured products delivered to customers directly from the supplier.
See Note 1, subheading “Foreign Operations and Related Derivative Financial Instruments,” to the consolidated financial statements included elsewhere in this report, along with the information under “Risk Factors” below, for information regarding risks related to the Company’s foreign operations. Research and Development The Company commits significant resources to new product research and development in each of its business segments.
See Note 1, subheading “Foreign Operations and Related Derivative Financial Instruments,” to the consolidated financial statements included elsewhere in this report, along with the information under “Risk Factors” below, for information regarding risks related to the Company’s foreign operations. 4 Table of Contents Research and Development The Company commits significant resources to new product research and development in each of its business segments.
Industry and Competitive Environment The Company believes its products compete favorably on the basis of product innovation, product performance and marketing support and, to a lesser extent, price. Fishing: Minn Kota’s primary competitors in the electric trolling motors business are Motor Guide® and Lowrance ™ , owned by Brunswick Corporation, and Garmin ™ .
Industry and Competitive Environment The Company believes its products compete favorably on the basis of product innovation, product performance and marketing support and, to a lesser extent, price. Fishing: Minn Kota’s primary competitors in the electric trolling motors business are Motor Guide® and Lowrance ™ , both owned by Brunswick Corporation, Garmin ™ and Power-Pole.
Historically, the Company attempted to mitigate product availability and these supply chain risks when possible through the purchase of safety stock, use of forecast-based supply contracts, and, to a lesser extent, with just in time inventory deliveries or supplier-owned inventory located close to the Company’s manufacturing locations.
The Company attempts to mitigate product availability and these supply chain risks when possible through the purchase of safety stock, use of forecast-based supply contracts, and, to a lesser extent, with just in time inventory deliveries or supplier-owned inventory located close to the Company’s manufacturing locations.
Product research, design and innovation for Camping products are conducted at the Company's Binghamton, New York, Racine, Wisconsin, Manchester, New Hampshire, and Old Town, Maine locations. The Company expenses research and development costs as incurred, except for software development for new electronics products and bathymetry data collection and processing.
Product research, design and innovation for Camping products are conducted at the Company's Racine, Wisconsin, and Old Town, Maine locations. The Company expenses research and development costs as incurred, except for software development for new electronics products and bathymetry data collection and processing.
Marketing of Jetboil systems is focused on building brand awareness and leadership in product features and innovation, primarily through digital marketing and social media. Jetboil products are designed at the Company’s operating locations in Manchester, New Hampshire and Old Town, Maine, and manufactured by third party sources in Asia.
Marketing of Jetboil systems is focused on building brand awareness and leadership in product features and 3 Table of Contents innovation, primarily through digital marketing and social media. Jetboil products are designed at the Company’s operating locations in Old Town, Maine, and manufactured by third party sources in Asia.
See Note 13 to the consolidated financial statements included elsewhere in this report for financial information concerning each business segment. 4 Table of Contents International Operations See Note 13 to the consolidated financial statements included elsewhere in this report for financial information regarding the Company’s domestic and international operations.
See Note 13 to the consolidated financial statements included elsewhere in this report for financial information concerning each business segment. International Operations See Note 13 to the consolidated financial statements included elsewhere in this report for financial information regarding the Company’s domestic and international operations.
The SEC’s Public Reference Room can be contacted at 100 F Street, N.E., Washington, D.C. 20549, or by calling 1 (800) 732-0330. 7 Table of Contents
The SEC’s Public Reference Room can be contacted at 100 F Street, N.E., Washington, D.C. 20549, or by calling 1 (800) 732-0330.
Backlog Unfilled orders for future delivery of products varies as a result of numerous factors impacting the Company (including those described in the section titled “Risk Factors” below) and because of the non-binding nature of such orders, the Company does not believe that backlog information is material to the understanding of its business.
Backlog Unfilled orders for future delivery of products varies as a result of numerous factors impacting the Company (including those described in the section titled “Risk Factors” below) and because of the non-binding nature of such orders, the Company does not believe that backlog information is material to the understanding of its business. 5 Table of Contents Employees and Human Capital Resources At September 29, 2023, the Company had approximately 1,400 regular, full-time employees, of which approximately 1,100 were employed in the United States and approximately 300 were employed outside of the United States.
The following table shows, for the past three fiscal years, the total consolidated net sales and operating profit or loss of the Company for each quarter, as a percentage of the total year.
The Company mitigates the seasonality of its businesses somewhat by encouraging customers to purchase and take delivery of products more evenly through the year. The following table shows, for the past three fiscal years, the total consolidated net sales and operating profit or loss of the Company for each quarter, as a percentage of the total year.
Watercraft Recreation accessory brands, including Carlisle branded paddles, are produced primarily by third party sources located in North America and Asia. The company's personal flotation devices are manufactured by third party sources located in Asia and are sold under the Old Town brand.
Watercraft Recreation The Company’s Watercraft Recreation segment designs and markets canoes and kayaks under the Old Town brand name for family recreation, touring and angling. Old Town products are manufactured at the Company’s facility in Old Town, Maine. Watercraft Recreation accessory brands, including Carlisle branded paddles, are produced primarily by third party sources located in North America and Asia.
The Company also competes with specialty companies such as Kelty®, The North Face®, Marmot® and Big Agnes® on the basis of materials and innovative designs for consumers who want performance products priced at a value. The Company’s portable outdoor cooking systems compete in the specialty and higher end performance backpacking and camping markets.
The Company also competes with specialty companies such as Kelty®, The North Face®, Marmot® and Big Agnes® on the basis of materials and innovative designs for consumers who want performance products priced at a value. Watercraft Recreation: The Company primarily competes in this segment in the kayak and canoe product categories of the paddlesports market.
The Company has a network of distributors who sell Company products outside of North America. The Company’s Watercraft Recreation business competes in the mid to high-end of the product category by introducing product innovations, creating quality products and by focusing on the product-specific needs of each marketing channel.
The Company also sells products direct to consumers via the Old Town website, and internet retailer sites. The Company’s Watercraft Recreation business competes in the mid to high-end of the product category by introducing product innovations, creating quality products and by focusing on the product-specific needs of each marketing channel.
Seasonality 6 Table of Contents The Company’s products in each of its business segments are primarily warm-weather, outdoor recreation-related, which has historically resulted in seasonal variations in sales and profitability for the Company.
The Company also seeks to manage its inventory through on-going product design and logistical initiatives with its suppliers to reduce lead times. Seasonality The Company’s products in each of its business segments are primarily warm-weather, outdoor recreation-related, which has historically resulted in seasonal variations in sales and profitability for the Company.
The primary competitor in portable outdoor cooking systems is MSR®. Competition in this market is based on product size and weight, ease of use, reliability and performance. The Company’s competitors in the commercial tent market include Anchor Industries® and Aztec Tents for tension, frame and canopy tents.
Camping: The Company’s portable outdoor cooking systems compete in the specialty and higher end performance backpacking and camping markets. The primary competitor in portable outdoor cooking systems is MSR®. Competition in this market is based on product size and weight, ease of use, reliability and performance.
The Company has numerous trademarks and trade names which it considers important to its business, many of which are noted in this report. Historically, the Company has vigorously defended its intellectual property rights and expects to continue to do so.
Patents, Trademarks and Proprietary Rights The Company holds patents for various of the products it sells and regularly files applications for patents. The Company has numerous trademarks and trade names which it considers important to its business, many of which are noted in this report.
The Company’s kayaks, canoes and accessories are sold through multiple channels primarily in the U.S. and Canada with an emphasis on independent specialty dealers and outdoor specialty chain retailers. The Company also sells products direct to consumers via the Old Town and Ocean Kayak websites, and internet retailer sites.
The company's personal flotation devices are manufactured by third party sources located in Asia and are sold under the Old Town brand. The Company’s kayaks, canoes and accessories are sold through multiple channels primarily in the U.S. and Canada with an emphasis on independent specialty dealers and outdoor specialty chain retailers.
Camping The Company’s Camping segment key brands are: Eureka! consumer, commercial and military tents and accessories, camping furniture and stoves and other recreational camping products; and Jetboil portable outdoor cooking systems.
Camping The Company’s Camping segment key brands are: Jetboil portable outdoor cooking systems and Eureka! consumer recreational camping products and commercial and military tents and accessories. During fiscal 2023, the Company sold the Military and Commercial Tent product lines of Eureka!, and developed plans to fully exit the Eureka! brand, which include liquidating inventory and winding down operations.
Successful execution of our mission is dependent on attracting, developing and retaining key employees and members of our management team, as well as providing competitive pay and benefits. Patents, Trademarks and Proprietary Rights The Company holds patents for various of the products it sells and regularly files applications for patents.
Temporary employees are utilized primarily to manage peaks in the seasonal manufacturing of products. The Company remains committed to areas of work place safety, product quality and customer satisfaction. Successful execution of our mission is dependent on attracting, developing and retaining key employees and members of our management team, as well as providing competitive pay and benefits.
In recent years, we have not experienced any significant work slowdowns, stoppages, or other labor disruptions. The Company considers its employee relations to be excellent. Temporary employees are utilized primarily to manage peaks in the seasonal manufacturing of products. The Company remains committed to areas of work place safety, product quality and customer satisfaction.
Approximately 50 or 4% were represented by a collective bargaining agreement, all of whom are located at our facilities in Batam, Indonesia. In recent years, we have not experienced any significant work slowdowns, stoppages, or other labor disruptions. The Company considers its employee relations to be excellent.
See “Coronavirus (COVID-19)” in Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information of the impact of COVID-19 on the Company’s seasonality for fiscal 2021 and 2022.
As reflected in the table below and as described in greater detail below in the Management's Discussion and Analysis of Financial Condition and Results of Operations, for fiscal 2023 the impact of seasonality on the Company's business returned to more traditional levels experienced by the Company prior to the COVID-19 pandemic.
Marketing of the brand is focused on building brand awareness and leadership in product features and innovation, primarily through digital marketing and social media. Eureka! commercial tents include party tents and accessories, sold primarily to general rental stores, and other commercial tents and accessories sold directly to tent erectors.
Marketing of the brand is focused on building brand awareness and leadership in product features and innovation, primarily through digital marketing and social media. As noted above, the Company will exit this line of products and begin winding down operations in fiscal 2024.
Removed
The Company’s commercial tent products range from 10’x10’ canopies to 120’ 3 Table of Contents wide pole tents and other large scale frame structures and are primarily manufactured by the Company at the Company’s Binghamton, New York location.
Added
Going forward, the Company expects to focus its resources in the Camping segment on marketing and further developing the Jetboil product line.
Removed
Eureka! also designs and manufactures large, heavy-duty tents and lightweight backpacking tents primarily for the U.S. military at its Binghamton, New York location. Tents produced for military use include modular general purpose tents, rapid deployment shelters and various lightweight one and two person tents.
Added
Historically, the Company has vigorously defended its intellectual property rights and expects to continue to do so.
Removed
The Company manufactures military tent accessories like fabric floors and insulated thermal liners and is also a subcontract manufacturer for other providers of military tents.
Added
As a result of the pandemic, the Company's typical seasonality fluctuations among fiscal quarters became disrupted by increased demand for Company products that impacted each of the Company's fiscal quarters during 2022 and 2021.
Removed
Watercraft Recreation The Company’s Watercraft Recreation segment designs and markets canoes and kayaks under the Ocean Kayaks and Old Town brand names for family recreation, touring and angling. These brands are manufactured at the Company’s facility in Old Town, Maine.
Removed
Competition in the commercial tent business is based on price, quality, structure, styling, ease of installation and technical support. The Company sells military tents via third party distributors who hold supply contracts primarily with the U.S. Government, as well as to international governments.
Removed
Such supply contracts can be for commercial off-the-shelf products in addition to products required to be built to unique specifications. Competitors in the military tent business include HDT®, Alaska Structures®, Camel, Outdoor Venture, and Diamond Brand. 5 Table of Contents Watercraft Recreation: The Company primarily competes in this segment in the kayak and canoe product categories of the paddlesports market.
Removed
Employees and Human Capital Resources At September 30, 2022, the Company had approximately 1,500 regular, full-time employees, of which approximately 1,200 were employed in the United States and approximately 300 were employed outside of the United States. Approximately 55 or 4% were represented by a collective bargaining agreement, all of whom are located at our facilities in Batam, Indonesia.
Removed
The Company also seeks to manage its inventory through on-going product design and logistical initiatives with its suppliers to reduce lead times. Since the start of the COVID-19 pandemic, there have been significant widely-documented supply chain and logistics disruptions across industries, including those in which the Company operates.
Removed
While the Company expects that these supply chain disruptions will continue into fiscal 2023, the Company remains focused on evaluating and pursuing additional options (beyond building inventory) to manage its supply chain and meet consumer demand for its products.
Removed
Supply chain disruptions are dynamic and may impact the cost of goods sold for future sales of product or the Company’s ability to fill demand for its products, especially given the volatility and changing circumstances brought on by the COVID-19 pandemic and the resulting economic environment.
Removed
Due to the timing of the COVID-19 outbreak, the Company’s primary-selling season during fiscal 2020 was interrupted resulting in a significant shift in sales volumes during the 2020 fiscal year toward the last fiscal quarter of that year versus the typical primary selling season which usually occurs during the second and third fiscal quarters, as noted above.
Removed
During fiscal years 2021 and 2022, as described above under "Supply Chain and Sourcing of Materials," the Company was impacted by supply chain disruptions that impacted sales and operating profit towards the latter half of fiscal 2022.
Removed
Accordingly, because of the ongoing supply chain disruption and the current macroeconomic conditions (including related to rising prices and inflationary conditions), the Company cannot predict at this time whether it will experience typical seasonality in demand for its products during fiscal 2023 and beyond.
Removed
Typically and prior to the impact of COVID-19 as noted above, the Company had mitigated the seasonality of its businesses somewhat by encouraging customers to purchase and take delivery of products more evenly through the year.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

20 edited+7 added−16 removed82 unchanged
Biggest changeCompetition, consolidation and financial distress in our markets could reduce our net sales, profitability and cash flows. We operate in highly competitive markets. We compete with several large domestic and foreign companies such as Brunswick, Garmin, and Aqua Lung, with private label products sold by many of our retail customers and with other producers of outdoor recreation products.
Biggest changeWe compete with several large domestic and foreign companies such as Brunswick, Garmin, and Aqua Lung, with private label products sold by many of our retail customers and with other producers of outdoor 10 Table of Contents recreation products. Some of our competitors have longer operating histories, stronger brand recognition and greater financial, technical, marketing and other resources than us.
These factors include: • announcements relating to our earnings trends or with respect to any cost-cutting actions or other strategic transactions involving Johnson Outdoors; • announcements relating to, and disruptions in, the sourcing, timing, availability and cost of raw materials and components necessary for the production of our products; • announcements relating to product development efforts of Johnson Outdoors or competitors; • announcements relating to the receipt, modification or termination of customer or supplier contracts, including with respect to any government contracts or grants; • prevailing economic conditions; • business disruptions caused by weather events, pandemics, or other natural disasters; • disputes concerning Johnson Outdoors' or its competitors' intellectual property or other proprietary rights; 12 Table of Contents • sales of our Class A Common Stock by our executive officers and directors or our significant shareholders in the future; • the lack of an active, liquid, and orderly market in our Class A Common Stock; • fluctuations in our quarterly operating results; and • the issuance of new or changed securities analysts' reports or recommendations regarding the shares of our Class A Common Stock In addition, the stock markets in general, and the markets for equity securities in companies principally operating in the outdoor leisure or recreational product markets, have experienced periods of high volatility that have been often unrelated to the operating performance of the issuer.
These factors include: • announcements relating to our earnings trends or with respect to any cost-cutting actions or other strategic transactions involving Johnson Outdoors; • announcements relating to, and disruptions in, the sourcing, timing, availability and cost of raw materials and components necessary for the production of our products; • announcements relating to product development efforts of Johnson Outdoors or competitors; • announcements relating to the receipt, modification or termination of customer or supplier contracts, including with respect to any government contracts or grants; • prevailing economic conditions; • business disruptions caused by weather events, pandemics, or other natural disasters; • disputes concerning Johnson Outdoors' or its competitors' intellectual property or other proprietary rights; • sales of our Class A Common Stock by our executive officers and directors or our significant shareholders in the future; • the lack of an active, liquid, and orderly market in our Class A Common Stock; • fluctuations in our quarterly operating results; and • the issuance of new or changed securities analysts' reports or recommendations regarding the shares of our Class A Common Stock In addition, the stock markets in general, and the markets for equity securities in companies principally operating in the outdoor leisure or recreational product markets, have experienced periods of high volatility that have been often unrelated to the operating performance of the issuer.
If we or one of our own suppliers experience a supply shortage, we may become unable to produce the affected products if we cannot procure the components from another source.
If we or one of our own suppliers experience a supply shortage, we may become unable to produce the affected products if we cannot procure the necessary components from another source.
Risks associated with integrating strategic acquisitions include, but are not limited to: • unanticipated costs relating to the integration of acquired businesses may increase our expenses and reduce our profitability; • difficulties in achieving planned cost savings and synergies may increase our expenses; 8 Table of Contents • unanticipated management or operational problems or liabilities may adversely affect our profitability and financial condition; and/or • breaches of the representations or warranties or other violations of the contractual obligations required by the acquisition agreement of other parties to the acquisition transaction and any contractual remedies related thereto may not adequately protect or compensate us.
Risks associated with integrating strategic acquisitions include, but are not limited to: • unanticipated costs relating to the integration of acquired businesses may increase our expenses and reduce our profitability; • difficulties in achieving planned cost savings and synergies may increase our expenses; • unanticipated management or operational problems or liabilities may adversely affect our profitability and financial condition; and/or • breaches of the representations or warranties or other violations of the contractual obligations required by the acquisition agreement of other parties to the acquisition transaction and any contractual remedies related thereto may not adequately protect or compensate us.
Such production interruptions could impede a ramp-up in production and could have a material adverse effect on our business, results of operations and financial condition. 13 Table of Contents We consider the production capacities and financial condition of suppliers in our selection process, and expect that they will meet our delivery requirements.
Such production interruptions could impede a ramp-up in production and could have a material adverse effect on our business, results of operations and financial condition. 12 Table of Contents We consider the production capacities and financial condition of suppliers in our selection process, and expect that they will meet our delivery requirements.
In addition, our facilities are located throughout the world and could be subject to damage from terrorism incidents or from fires, floods, earthquakes or other natural 14 Table of Contents or man-made disasters.
In addition, our facilities are located 13 Table of Contents throughout the world and could be subject to damage from terrorism incidents or from fires, floods, earthquakes or other natural or man-made disasters.
However, there can be no assurance that strong demand, capacity limitations, shortages of raw materials, labor disputes, freight capacity or other problems will not result in any shortages or delays in the supply of components to us. Currency exchange rate fluctuations could adversely affect the Company’s results.
However, there can be no assurance that strong demand, capacity limitations, shortages of raw materials, labor disputes, freight capacity or other problems impacting our suppliers will not result in any shortages or delays in the supply of components to us. Currency exchange rate fluctuations could adversely affect the Company’s results.
We can make no assurance that we will be successful in ensuring our availability of amounts under our credit facilities when they are needed or in connection with raising additional capital and that any amount, if raised, will be sufficient to meet our cash flow requirements.
We can make no assurance that we 8 Table of Contents will be successful in ensuring our availability of amounts under our credit facilities when they are needed or in connection with raising additional capital and that any amount, if raised, will be sufficient to meet our cash flow requirements.
Moreover, our businesses are cyclical and seasonal in nature, and their success is impacted by general economic conditions and specific economic conditions affecting the regions and markets we serve, the overall level of 11 Table of Contents consumer confidence in the economy and discretionary income levels.
Moreover, our businesses are cyclical and seasonal in nature, and their success is impacted by general economic conditions and specific economic conditions affecting the regions and markets we serve, the overall level of consumer confidence in the economy and discretionary income levels.
Changing definitions of personal data and personal information, within the European Union, the United States, and elsewhere may limit or inhibit our ability to operate or 10 Table of Contents expand our business, including limiting strategic partnerships that may involve the sharing of data.
Changing definitions of personal data and personal information, within the European Union, the United States, and elsewhere may limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing of data.
A limited number of our shareholders can exert significant influence over the Company. As of September 30, 2022, Helen P. Johnson-Leipold, members of her family and related entities (hereinafter the Johnson Family), held approximately 75% of the voting power of both classes of our common stock taken as a whole.
A limited number of our shareholders can exert significant influence over the Company. As of September 29, 2023, Helen P. Johnson-Leipold, members of her family and related entities (hereinafter the Johnson Family), held approximately 75% of the voting power of both classes of our common stock taken as a whole.
Because our common stock is thinly traded, its market price may fluctuate significantly more than the stock market in general or the stock prices of similar companies, which are exchanged, listed or quoted on NASDAQ or another stock exchange. We believe there are approximately 5,301,000 shares of our Class A common stock held by non-affiliates as of September 30, 2022.
Because our common stock is thinly traded, its market price may fluctuate significantly more than the stock market in general or the stock prices of similar companies, which are exchanged, listed or quoted on NASDAQ or another stock exchange. We believe there are approximately 5,387,000 shares of our Class A common stock held by non-affiliates as of September 29, 2023.
Further, uncertainties about future tariff changes could result in mitigation actions undertaken by us that could prove to be detrimental to our business and our relationships with our customers and suppliers.
Further, 9 Table of Contents uncertainties about future tariff changes could result in mitigation actions undertaken by us that could prove to be detrimental to our business and our relationships with our customers and suppliers.
A decline in consumer demand for our products, our failure to develop new products on a timely basis in anticipation of changing consumer preferences or the failure of our new products to achieve and sustain consumer acceptance could reduce our net sales and profitability. Intellectual property disputes relating to our products could increase our costs.
A decline in consumer demand for our products, our failure to develop new products on a timely basis in anticipation of changing consumer preferences or the failure of our new products to achieve and sustain consumer acceptance could reduce our net sales and profitability.
Our industry is susceptible to litigation regarding patent infringement and infringement of other intellectual property rights. We could be either a plaintiff or a defendant in trademark, patent and/or other intellectual property infringement or misappropriation claims and claims of breach of license from time to time.
We could be either a plaintiff or a defendant in trademark, patent and/or other intellectual property infringement or misappropriation claims and claims of breach of license from time to time.
Approximately 13% of our revenues for the year ended September 30, 2022 were denominated in currencies other than the U.S. dollar. Approximately 4% were denominated in euros and approximately 6% were denominated in Canadian dollars with the remaining 3% denominated in various other foreign currencies.
Approximately 14% of our revenues for the year ended September 29, 2023 were denominated in currencies other than the U.S. dollar. Approximately 6% were denominated in euros and approximately 6% were denominated in Canadian dollars with the remaining 2% denominated in various other foreign currencies.
These materials are generally available from a number of suppliers, but traditionally we have chosen to concentrate our sourcing with a limited number of vendors for each commodity or purchased component. Under normal circumstances, we believe our sources of raw materials are reliable and adequate for our needs.
These materials are generally available from a number of suppliers, but traditionally we have chosen to concentrate our sourcing with a limited number of vendors for each commodity or purchased component.
Our stock price is volatile and our shareholders may not be able to resell shares of Class A Common Stock at or above the price they paid. The trading price of our Class A Common Stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
The trading price of our Class A Common Stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
Any of these events could result in the loss of key information, impair our production and supply chain processes, harm our competitive position, damage our reputation with customers, cause us to incur significant costs to remedy any damages and ultimately materially and adversely affect our business, results of operations and financial condition. 9 Table of Contents While we have implemented a number of protective measures, such measures may not be adequate or implemented properly to prevent or fully address the adverse effect of such events.
Any of these events could result in the loss of key information, impair our production and supply chain processes, harm our competitive position, damage our reputation with customers, cause us to incur significant costs to remedy any damages and ultimately materially and adversely affect our business, results of operations and financial condition.
Among other things, trading of a relatively small volume of our common stock may have a greater impact on the trading price for our stock than would be the case if our public float were larger.
Among other things, trading of a relatively small volume of our common stock may have a greater impact on the trading price for our stock than would be the case if our public float were larger. 11 Table of Contents Our stock price is volatile and our shareholders may not be able to resell shares of Class A Common Stock at or above the price they paid.
Removed
Market and Economic Risk Factors The COVID-19 pandemic has significantly impacted worldwide economic conditions and could continue to have a material adverse effect on our operations and business. Our operations are exposed to risks associated with pandemics, epidemics or other public health emergencies, such as the outbreak of coronavirus disease (COVID-19).
Added
Intellectual property disputes relating to our products could increase our costs. 7 Table of Contents Our industry is susceptible to litigation regarding patent infringement and infringement of other intellectual property rights.
Removed
Outbreaks such as these have resulted, and can continue to result, in governments around the world implementing stringent or restrictive measures to help control the spread of the virus, including quarantines, "shelter in place" and "stay at home" orders, travel restrictions, business curtailments, school closures, and other measures.
Added
While we have implemented a number of protective measures, such measures may not be adequate or implemented properly to prevent or fully address the adverse effect of such events. Our inability to manage our inventory levels could have a material adverse effect on our business.
Removed
Depending on the timing of these actions, and the scope of the economic activity they impact, we may experience negative impacts on our operations, supply chain, transportation networks, customers and employees and any of such events can impact or adjust the historic seasonality or buying patterns for our products.
Added
To ensure we are able to meet customer demand in a highly seasonal business, and to account for long lead times or disruptions in supply chain, we may at times purchase components or materials in advance of normal timing for issuing purchase orders or at greater levels than existing purchase orders on hand.
Removed
Further, any health pandemic (or any worsening thereof), including COVID-19 or a similar pandemic, may result in public health measures that may cause an economic downturn that adversely affects demand for our products, and negatively impacts our business or results of operations through the temporary closure of our operating locations or those of our customers or suppliers.
Added
If we or our customers overestimate demand, or if demand is impacted by factors outside of our customers' control, and anticipated sales ultimately do not materialize or are lower than expected, we may experience higher inventory carrying and operating costs and/or increased excess or obsolete inventory or reserve charges, which would negatively impact our results of operations and profitability.
Removed
The pandemic (or the continuing worsening of it) may also impact the buying patterns and demand for our products (either positively or negatively) by our customers including by generally limiting or discouraging various leisure and travel activities that may adversely impact consumer use of certain of our products.
Added
Moreover, inventory levels in excess of customer demand may result in lower than planned financial performance. Alternatively, if we underestimate demand for our products, we may experience inventory shortages resulting in delays in fulfilling customer demands while we work to replenish inventory levels, missed sales and/or lost revenues.
Removed
As we have previously disclosed in our public filings with the Securities and Exchange Commission, during the latter half of fiscal 2020 and throughout fiscal 2021, we saw favorable impact of COVID-19 on our results due to increased participation in fishing, camping and watercraft recreation and related demand for our products, largely driven by consumer desire to engage in socially distant and safe activities in the great outdoors.
Added
Market and Economic Risk Factors Competition, consolidation and financial distress in our markets could reduce our net sales, profitability and cash flows. We operate in highly competitive markets.
Removed
It is not certain any previously experienced favorable impacts will continue or will recur in the future, especially as demand for outdoor recreation products moderate.
Added
Although we believe our sources of raw materials are reliable and adequate for our current needs, adverse events in our supply chain may impact the pricing or availability of required raw materials and components to manufacture our products.
Removed
Additionally, even where demand may be strong, we face the potential for supply chain constraints and disruptions (including as it relates to the timing, sourcing, availability and cost of raw materials and components) given the overall increased stress on global supply chains and the need to operate with appropriate safety measures in operating environments.
Removed
The extent to which COVID-19 or another similar pandemic may continue to adversely or favorably impact our business depends on future developments, which are highly uncertain and unpredictable, including new information concerning the severity of the outbreak, the effectiveness of actions globally to contain or mitigate its effects, including government actions to stimulate the economy and prevent further downturns, and the impact of these events on the timing, sourcing, availability and cost of raw materials and components for production of our products.
Removed
The current level of uncertainty over the economic and operational impacts of any pandemic (including COVID-19 or similar health pandemic) and the impact of such a pandemic on our supply chain requirements means the related financial impact cannot be reasonably estimated at this time.
Removed
Some of our competitors have longer operating histories, stronger brand recognition and greater financial, technical, marketing and other resources than us.
Removed
However, many materials and components continue to be subject to shortages and significant commodity pricing fluctuations due to deterioration of the global supply chain. The development of future sourcing issues related to the availability of these materials as well as significant fluctuations in the market prices of these materials may have an adverse effect on our financial results.
Removed
For example, our inventory levels have increased significantly in recent periods as we attempt to build inventory with the goal of mitigating and/or preparing for a continuing disruption of the supply chain, originally starting as a result of the COVID-19 pandemic, but continuing as a result of global economic conditions, including due to rising interest rates, inflationary pressures and the conflict in the Ukraine.
Removed
We are currently experiencing supply shortages and cost increases for certain components and raw materials that are crucial to our manufacturing process.
Removed
Continued higher levels of consumer demand or growth in demand for our outdoor recreation products may exacerbate these pressures, and, therefore, depending upon the severity of, and any continuing adverse impact to, global economic conditions affecting the cost and availability of raw materials and components used in our products, these supply chain challenges described above may continue for the foreseeable future, and may continue to adversely impact our margins for some time.
Removed
As noted above, we have chosen to take action to increase our inventories and purchase commitments in an attempt to ensure we have adequate inventory levels to meet customer expectations and demand for our products. Nonetheless not all necessary components to build inventory have been readily available at reasonable prices or at all.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeAs of September 30, 2022, the Company’s principal manufacturing (identified with an asterisk) and other locations are: Alpharetta, Georgia (Fishing) Antibes, France (Diving) Batam, Indonesia* (Diving) Binghamton, New York* (Camping) Burlington, Ontario, Canada (Fishing, Camping, Watercraft Recreation) Casarza Ligure, Italy* (Diving) Chai Wan, Hong Kong (Diving) Chatswood, Australia (Diving) El Cajon, California (Diving) Eufaula, Alabama* (Fishing) Little Falls, Minnesota (Fishing) Manchester, New Hampshire (Camping) Mankato, Minnesota* (Fishing) Mexicali, Mexico* (Fishing) Old Town, Maine* (Watercraft Recreation) Toronto, Ontario, Canada (Fishing) Nuremberg, Germany (Diving) Zurich, Switzerland (Diving) The Company’s corporate headquarters is located in a facility in Racine, Wisconsin.
Biggest changeAs of September 29, 2023, the Company’s principal manufacturing (identified with an asterisk) and other locations are: Alpharetta, Georgia (Fishing) Antibes, France (Diving) Batam, Indonesia* (Diving) Binghamton, New York (Camping) Burlington, Ontario, Canada (Fishing, Camping, Watercraft Recreation) Casarza Ligure, Italy* (Diving) Chai Wan, Hong Kong (Diving) Chatswood, Australia (Diving) El Cajon, California (Diving) Eufaula, Alabama* (Fishing) Little Falls, Minnesota (Fishing) Mankato, Minnesota* (Fishing) Mexicali, Mexico* (Fishing) Old Town, Maine* (Watercraft Recreation) Toronto, Ontario, Canada (Fishing) Nuremberg, Germany (Diving) Zurich, Switzerland (Diving) The Company’s corporate headquarters is located in a facility in Racine, Wisconsin.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+2 added−0 removed6 unchanged
Biggest changeIndex; (b) the total return (assuming reinvestment of dividends) on the Russell 2000 Index; and (c) the total return (assuming reinvestment of dividends) on a self-constructed peer group index. The Company’s peer group consists of Clarus Corporation, Brunswick Corporation, Callaway Golf Company, Escalade Inc., Garmin Ltd., Marine Products Corporation, Malibu Boats Inc. and Nautilus, Inc.
Biggest changeThe Company’s peer group consists of Clarus Corporation, Brunswick Corporation, Callaway Golf Company, Escalade Inc., Garmin Ltd., Marine Products Corporation, Malibu Boats Inc. and Nautilus, Inc. The graph assumes $100 was invested on September 28, 2018 in the Company’s Class A common stock, The NASDAQ Stock Market-U.S.
Total Shareholder Return The graph below compares on a market cap weighted cumulative basis the yearly percentage change since September 29, 2017 in the total return (assuming reinvestment of dividends) to shareholders on the Class A common stock with (a) the total return (assuming reinvestment of dividends) on The NASDAQ Stock Market-U.S.
Total Shareholder Return The graph below compares on a market cap weighted cumulative basis the yearly percentage change since September 28, 2018 in the total return (assuming reinvestment of dividends) to shareholders on the Class A common stock with (a) the total return (assuming reinvestment of dividends) on The NASDAQ Stock Market-U.S.
Quarterly dividends declared in the first three quarters of fiscal 2022 were $0.30 per share of Class A common stock, and $0.31 per share for the fourth fiscal quarter of 2022.
Quarterly dividends declared in the first three quarters of fiscal 2023 were $0.31 per share of Class A common stock, and $0.33 per share for the fourth fiscal quarter of 2023.
Quarterly dividends declared per share of Class B common stock were $0.27 for the first three quarters of fiscal 2022, and $0.28 per share for the fourth fiscal quarter of 2022. Total dividends declared in fiscal 2022 were $12,171.
Quarterly dividends declared per share of Class B common stock were $0.28 for the first three quarters of fiscal 2023, and $0.30 per share for the fourth fiscal quarter of 2023. Total dividends declared in fiscal 2023 were $12,781.
The Company’s ability to pay dividends could be affected by future business performance (including as a result of the continued impact of supply chain disruption, inflation and macroeconomic dynamics on our operations and cash flows), liquidity, capital needs, alternative investment opportunities and compliance with debt covenants in its loan agreements.
The Company’s ability to pay dividends could be affected by future business performance (including as a result of adverse developments in profitability, including reductions in margins, inflation and macroeconomic dynamics on our operations and cash flows), liquidity, capital needs, alternative investment opportunities and compliance with debt covenants in its loan agreements.
A summary of the high and low closing prices for the Company’s Class A common stock during each quarter of the years ended September 30, 2022, October 1, 2021 and October 2, 2020 is as follows: First Quarter Second Quarter Third Quarter Fourth Quarter 2022 2021 2020 2022 2021 2020 2022 2021 2020 2022 2021 2020 Stock prices: High $ 115.87 $ 113.21 $ 78.17 $ 95.60 $ 148.50 $ 78.84 $ 82.48 $ 154.09 $ 88.41 $ 73.32 $ 122.23 $ 95.54 Low 92.82 83.60 57.53 77.44 109.00 51.29 59.04 117.92 57.46 50.54 105.51 80.27 Dividends The Company’s Articles of Incorporation provide that no dividend, other than a dividend payable in shares of the Company’s common stock, may be declared or paid upon the Class B common stock unless such dividend is declared or paid upon both classes of common stock.
A summary of the high and low closing prices for the Company’s Class A common stock during each quarter of the years ended September 29, 2023, September 30, 2022 and October 1, 2021 is as follows: First Quarter Second Quarter Third Quarter Fourth Quarter 2023 2022 2021 2023 2022 2021 2023 2022 2021 2023 2022 2021 Stock prices: High $ 68.18 $ 115.87 $ 113.21 $ 71.49 $ 95.60 $ 148.50 $ 64.24 $ 82.48 $ 154.09 $ 60.13 $ 73.32 $ 122.23 Low 46.93 92.82 83.60 58.93 77.44 109.00 56.53 59.04 117.92 52.01 50.54 105.51 Dividends The Company’s Articles of Incorporation provide that no dividend, other than a dividend payable in shares of the Company’s common stock, may be declared or paid upon the Class B common stock unless such dividend is declared or paid upon both classes of common stock.
However, the Class B common stock is convertible at all times at the option of the holder into shares of Class A common stock on a share for share basis. As of September 30, 2022, the Company had 419 holders of record of its Class A common stock and 20 holders of record of its Class B common stock.
However, the Class B common stock is convertible at all times at the option of the holder into shares of Class A common stock on a share for share basis. As of September 29, 2023, the Company had 402 holders of record of its Class A common stock and 19 holders of record of its Class B common stock.
Cash dividends paid in fiscal 2022 totaled $12,056 and dividends payable of $3,120 were included in current liabilities at September 30, 2022.
Cash dividends paid in fiscal 2023 totaled $12,554 and dividends payable of $3,347 were included in current liabilities at September 29, 2023.
Indices calculated on a mid-month basis. 9/29/2017 9/28/2018 9/27/2019 10/2/2020 10/1/2021 9/30/2022 Johnson Outdoors Inc. $ 100.0 $ 127.7 $ 81.1 $ 120.4 $ 154.4 $ 73.3 NASDAQ Composite 100.0 125.2 124.9 175.9 232.9 170.4 Russell 2000 Index 100.0 115.2 104.8 107.6 158.3 119.1 Peer Group 100.0 133.1 135.8 162.5 257.1 148.1 The information in this section titled “Total Shareholder Return” shall not be deemed to be “soliciting material” or “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C promulgated by the Securities and Exchange Commission or subject to the liabilities of section 18 of the Securities Exchange Act of 1934, as amended, and this information shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Indices calculated on a mid-month basis. 9/28/2018 9/27/2019 10/2/2020 10/1/2021 9/30/2022 9/29/2023 Johnson Outdoors Inc. $ 100.0 $ 63.5 $ 94.3 $ 120.9 $ 57.4 $ 62.5 NASDAQ Composite 100.0 99.8 140.5 186.1 136.1 171.7 Russell 2000 Index 100.0 90.9 93.4 137.4 103.3 112.6 S&P Small Cap 600 Consumer Discretionary Index 100.0 87.4 99.0 165.2 109.3 131.2 Peer Group 100.0 102.0 122.1 193.1 111.3 135.3 The information in this section titled “Total Shareholder Return” shall not be deemed to be “soliciting material” or “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C promulgated by the Securities and Exchange Commission or subject to the liabilities of section 18 of the Securities Exchange Act of 1934, as amended, and this information shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
The graph assumes $100 was invested on September 29, 2017 in the Company’s Class A common stock, The NASDAQ Stock Market-U.S. Index, the Russell 2000 Index and the peer group index. 16 Table of Contents * $100 invested on September 29, 2017 in stock or index, including reinvestment of dividends.
During the year of transition, both indexes are shown in the graph and table below. * $100 invested on September 28, 2018 in stock or index, including reinvestment of dividends.
Added
Index; (b) the total return (assuming reinvestment of dividends) on the Russell 2000 Index; (c) the total return (assuming reinvestment of dividends) on the S&P Small Cap 600 Consumer Discretionary Index; and (d) the total return (assuming reinvestment of dividends) on a self-constructed peer group index.
Added
Index, the Russell 2000 Index, the S&P Small Cap 600 Index, and the peer group index. 15 Table of Contents For the year ended September 29, 2023, the Company replaced the Russell 2000 Index with the S&P Small Cap 600 Consumer Discretionary Index, as the Company determined that the companies included in the S&P Small Cap 600 Consumer Discretionary Index were more representative of the Company's market and industry profile and that use of the S&P Small Cap 600 Consumer Discretionary Index would provide the Company with a more reasonable comparison in the Pay versus Performance disclosures in our 2024 Proxy Statement for the 2024 Annual Shareholder Meeting than the Russell 2000 Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

54 edited+26 added−33 removed30 unchanged
Biggest changeResults of Operations Summary consolidated financial results from continuing operations for the fiscal years presented were as follows: 18 Table of Contents (thousands, except per share data) 2022 2021 2020 Net sales $ 743,355 $ 751,651 $ 594,209 Gross profit 271,332 334,125 264,993 Operating expenses 205,022 222,842 193,923 Operating profit 66,310 111,283 71,070 Interest income, net (654) (221) (1,270) Other income, net 8,076 (1,418) (1,362) Income tax expense 14,397 29,541 18,469 Net income 44,491 83,381 55,233 The Company’s internal and external sales and operating profit (loss) by business segment for each of the three most recent completed fiscal years were as follows: 2022 2021 2020 Net sales: Fishing $ 526,582 $ 553,000 $ 449,878 Camping 70,355 62,921 41,592 Watercraft Recreation 67,940 66,603 41,857 Diving 78,874 69,447 60,873 Other / Eliminations (396) (320) 9 $ 743,355 $ 751,651 $ 594,209 2022 2021 2020 Operating profit (loss): Fishing $ 65,433 $ 122,490 $ 95,884 Camping 13,415 14,025 4,406 Watercraft Recreation 6,173 9,173 (329) Diving 4,705 1,530 (2,576) Other / Eliminations (23,416) (35,935) (26,315) $ 66,310 $ 111,283 $ 71,070 See Note 13 to the Consolidated Financial Statements included elsewhere in this report for the definition of segment net sales and operating profit.
Biggest changeResults of Operations Summary consolidated financial results from continuing operations for the fiscal years presented were as follows: (thousands, except per share data) 2023 2022 2021 Net sales $ 663,844 $ 743,355 $ 751,651 Gross profit 244,087 271,332 334,125 Operating expenses 232,347 205,022 222,842 Operating profit 11,740 66,310 111,283 Interest income, net (4,391) (654) (221) Other (income) expense, net (9,693) 8,076 (1,418) Income tax expense 6,290 14,397 29,541 Net income 19,534 44,491 83,381 The Company’s internal and external sales and operating profit (loss) by business segment for each of the three most recent completed fiscal years were as follows: 2023 2022 2021 Net sales: Fishing $ 492,927 $ 526,582 $ 553,000 Camping 45,322 70,355 62,921 Watercraft Recreation 40,768 67,940 66,603 Diving 85,069 78,874 69,447 Other / Eliminations (242) (396) (320) $ 663,844 $ 743,355 $ 751,651 17 Table of Contents 2023 2022 2021 Operating profit (loss): Fishing $ 41,325 $ 65,433 $ 122,490 Camping 457 13,415 14,025 Watercraft Recreation (1,777) 6,173 9,173 Diving 6,092 4,705 1,530 Other / Eliminations (34,357) (23,416) (35,935) $ 11,740 $ 66,310 $ 111,283 See Note 13 to the Consolidated Financial Statements included elsewhere in this report for the definition of segment net sales and operating profit.
Interest income of $807 increased from prior year interest income of $366 due to the increase in deposit interest rates year over year. Net other expense of $8,076 in fiscal 2022 decreased from net other income of $1,418 in fiscal 2021.
Interest income of $807 increased from fiscal 2021 interest income of $366 due to the increase in deposit interest rates year over year. Net other expense of $8,076 in fiscal 2022 decreased from net other income of $1,418 in fiscal 2021.
Operating profit for the Diving business increased by $3,175 in fiscal 2022 from fiscal 2021, due primarily to increased sales volumes and pricing actions. Other Income and Expenses Interest expense of $153 was relatively flat as compared to the prior year expense of $145.
Operating profit for the Diving business increased by $3,175 in fiscal 2022 from fiscal 2021, due primarily to increased sales volumes and pricing actions. Other Income and Expenses Interest expense of $153 was relatively flat as compared to fiscal 2021 expense of $145.
Goodwill and Other Intangible Assets Impairment 25 Table of Contents Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. Generally, annual impairment tests are performed by the Company in the fourth quarter of each fiscal year.
Goodwill and Other Intangible Assets Impairment Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. Generally, annual impairment tests are performed by the Company in the fourth quarter of each fiscal year.
Cost of Sales Cost of sales was $472,023, or 63.5% of net sales, on a consolidated basis for fiscal 2022 compared to $417,526, or 55.5% of net sales, in the prior year. Despite the decrease in sales over the prior fiscal year, the increase in cost of sales was primarily driven by significant increases in materials costs between years.
Cost of Sales Cost of sales was $472,023, or 63.5% of net sales, on a consolidated basis for fiscal 2022 compared to $417,526, or 55.5% of net sales, in fiscal 2021. Despite the decrease in sales over fiscal 2021, the increase in cost of sales was primarily driven by significant increases in materials costs between years.
The year over year decrease reflects lower people costs, including $11,200 of lower deferred compensation expenses, as well as lower incentive compensation and lower health insurance costs from the prior year. Operating Results The Company’s operating profit was $66,310 in fiscal 2022 compared to an operating profit of $111,283 in fiscal 2021.
The year over year decrease reflected lower people costs, including $11,200 of lower deferred compensation expenses, as well as lower incentive compensation and lower health insurance costs from fiscal 2021. Operating Results The Company’s operating profit was $66,310 in fiscal 2022 compared to an operating profit of $111,283 in fiscal 2021.
Gross Profit Gross profit of $271,332 was 36.5% of net sales on a consolidated basis for the year ended September 30, 2022 compared to $334,125, or 44.5% of net sales in the prior year.
Gross Profit Gross profit of $271,332 was 36.5% of net sales on a consolidated basis for the year ended September 30, 2022 compared to $334,125, or 44.5% of net sales in fiscal 2021.
Gross profit in the Fishing business decreased by $66,217 from the prior year due primarily to the 5% decrease in net sales year over year, as well as significant increases in materials costs, as discussed above.
Gross profit in the Fishing business decreased by $66,217 from fiscal 2021 due primarily to the 5% decrease in net sales year over year, as well as significant increases in materials costs, as discussed above.
Fishing operating profit decreased by $57,057 to $65,433 from $122,490 in the prior year due primarily to higher costs of goods and also lower sales volumes between years, stemming from supply chain disruptions, which were particularly acute in electronics.
Fishing operating profit decreased by $57,057 to $65,433 from $122,490 in fiscal 2021 due primarily to higher costs of goods and also lower sales volumes between years, stemming from supply chain disruptions, which were particularly acute in electronics.
While customer and consumer demand was strong, the decrease over the prior year was driven by significant supply chain disruptions and the resulting unavailability of certain necessary components (especially as it related to electronic components) experienced in the current year, which impacted the ability to complete product build and fill customer orders.
While customer and consumer demand was strong, the decrease over fiscal 2021 was driven by significant supply chain disruptions and the resulting unavailability of certain necessary components (especially as it related to electronic components) experienced in fiscal 2022, which impacted the ability to complete product build and fill customer orders.
As several regions around the world have re-opened, sales volumes have increased along with the increase in tourism, partially offset by an unfavorable foreign currency translation impact on sales in these segment of approximately 4.5% in 2022 versus the prior year period.
As several regions around the world re-opened, sales volumes increased during fiscal 2022 along with the increase in tourism, partially offset by an unfavorable foreign currency translation impact on sales in these segment of approximately 4.5% in 2022 versus the fiscal 2021 period.
The current year net other expense included currency losses of $1,741 and market losses net of dividend income of $5,878 on deferred compensation plan assets. In the prior year, net other income included $5,329 of market gains and dividends on the deferred compensation plan assets, partially offset by $215 of currency losses and pension termination expense of $2,526.
The fiscal 2022 net other expense included currency losses of $1,741 and market losses net of dividend income of $5,878 on deferred compensation plan assets. In fiscal 2021, net other income included $5,329 of market gains and dividends on the deferred compensation plan assets, partially offset by $215 of currency losses and pension termination expense of $2,526.
Operating Expenses Operating expenses decreased from the prior year by $17,820. The decrease was primarily due to the impact of overall lower sales volume-driven expenses, as well as lower variable and deferred compensation expense incurred in fiscal 2022 as compared to the prior fiscal year. Operating expenses for the Fishing segment decreased by $9,160 from fiscal 2021 levels.
The decrease was primarily due to the impact of overall lower sales volume-driven expenses, as well as lower variable and deferred compensation expense incurred in fiscal 2022 as compared to fiscal 2021. Operating expenses for the Fishing segment decreased by $9,160 from fiscal 2021 levels. The decrease was due primarily to lower sales volume related expenses between years.
The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance. Letters of credit outstanding at September 30, 2022 and October 1, 2021 were $173 and $181, respectively, and were included in the Company’s total loan availability.
The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance. Letters of credit outstanding at September 29, 2023 and September 30, 2022 were $67 and $173, respectively, and were included in the Company’s total loan availability.
Critical Accounting Estimates The Company’s management discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S.
The Company’s results of operations and financial condition are presented based on historical cost. 23 Table of Contents Critical Accounting Estimates The Company’s management discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S.
The Company continues to manage disruptions in its supply chain to ensure the availability of necessary components, parts and other raw materials, in some cases at significantly higher price points than what was historically paid, to try to meet sales demand for our products across segments.
During fiscal 2022, the Company devoted significant effort to managing disruptions in its supply chain to ensure the availability of necessary components, parts and other raw materials, in some cases at significantly higher price points than what was historically paid, to try to meet sales demand for our products across segments.
In 2020, dividend payments totaled $6,773. Contractual Obligations and Off Balance Sheet Arrangements The Company has contractual obligations and commitments to make future payments under its 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 year ended September 30, 2022.
Contractual Obligations and Off Balance Sheet Arrangements The Company has contractual obligations and commitments to make future payments under its 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 year ended September 29, 2023.
The decrease was due primarily to lower sales volume related expenses between years. Camping operating expenses increased by $2,467 from the prior year due primarily to increased sales volume related expenses and increased people costs. In the Watercraft Recreation segment, operating expenses increased $475 from their levels in fiscal 2021 due primarily to increased sales volume related expenses in 2022.
Camping operating expenses increased by $2,467 from fiscal 2021 due primarily to increased sales volume related expenses and increased people costs. In the Watercraft Recreation segment, operating expenses increased $475 from their levels in fiscal 2021 due primarily to increased sales volume related expenses in 2022.
Fiscal 2022 vs. Fiscal 2021 Net Sales Net sales in fiscal 2022 decreased by 1% to $743,355 compared to $751,651 in fiscal 2021. Foreign currency exchange had an unfavorable impact of less than 1% on the current year’s sales versus the prior year. Net sales for the Fishing business decreased by $26,418, or 5% during fiscal 2022 from fiscal 2021.
Foreign currency exchange had an unfavorable impact of less than 1% on fiscal 2022 sales versus the prior year. Net sales for the Fishing business decreased by $26,418, or 5% during fiscal 2022 from fiscal 2021.
Short-term investments in prior years consisted of certificates of deposit, with original maturities greater than three months but less than one year, with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade.
Short-term investments consist of marketable securities, with original maturities greater than three months but less than one year, and long-term investments consist of marketable securities with original maturities greater than one year, with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade.
Approximately 13% of the Company’s revenues for the fiscal year ended September 30, 2022 were denominated in currencies other than the U.S. dollar. Approximately 4% were denominated in euros and approximately 6% were denominated in Canadian dollars, with the remaining 3% denominated in various other foreign currencies.
Approximately 14% of the Company’s revenues for the fiscal year ended September 29, 2023 were denominated in currencies other than the U.S. dollar. Approximately 6% were denominated in euros and approximately 6% were denominated in Canadian dollars, with the remaining 2% denominated in various other foreign currencies.
Commodities Certain components used in the Company’s products are exposed to commodity price changes. The Company manages this risk through instruments such as purchase orders and non-cancellable supply contracts.
Commodities Certain components used in the Company’s products are exposed to commodity price changes. The Company manages this risk through instruments such as purchase orders and non-cancellable supply contracts. Primary commodity price exposures include costs associated with metals, resins and packaging materials.
The Company’s cash flows from operating, investing and financing activities, as reflected in the accompanying Consolidated Statements of Cash Flows, are summarized in the following table: Year Ended (thousands) September 30 2022 October 1 2021 October 2 2020 Cash (used for) provided by : Operating activities $ (62,144) $ 58,318 $ 61,493 Investing activities (31,678) (21,381) (15,587) Financing activities (12,233) (9,033) (7,107) Effect of foreign currency rate changes on cash (4,590) 107 1,256 (Decrease) increase in cash and cash equivalents $ (110,645) $ 28,011 $ 40,055 Operating Activities The following table sets forth the Company’s working capital position at the end of each of the years shown: (thousands, except share data) September 30 2022 October 1 2021 Current assets $ 480,316 $ 491,264 Current liabilities 114,713 137,570 Working capital $ 365,603 $ 353,694 Current ratio 4.2:1 3.6:1 Cash flows used for operations in fiscal 2022 totaled $62,144, and cash provided by operations totaled $58,318 and $61,493 in fiscal 2021 and 2020, respectively.
The Company’s cash flows from operating, investing and financing activities, as reflected in the accompanying Consolidated Statements of Cash Flows, are summarized in the following table: Year Ended (thousands) September 29 2023 September 30 2022 October 1 2021 Cash (used for) provided by : Operating activities $ 41,713 $ (62,144) $ 58,318 Investing activities (48,374) (31,678) (21,381) Financing activities (12,732) (12,233) (9,033) Effect of foreign currency rate changes on cash 1,444 (4,590) 107 (Decrease) increase in cash and cash equivalents $ (17,949) $ (110,645) $ 28,011 Operating Activities The following table sets forth the Company’s working capital position at the end of each of the years shown: (thousands, except share data) September 29 2023 September 30 2022 Current assets $ 458,656 $ 480,316 Current liabilities 104,006 114,713 Working capital $ 354,650 $ 365,603 Current ratio 4.4:1 4.2:1 Cash flows provided by operations in fiscal 2023 totaled $41,713, cash flows used for operations totaled $62,144 in fiscal 2022, respectively, and cash provided by operations totaled $58,318 in fiscal 2021.
Increased sales of Eureka and Jetboil products as a result of continued participation in outdoor recreation activities were the primary driver of the increase year over year. Net sales in the Watercraft Recreation business increased $1,337, or 2%.
Increased sales of Eureka! and Jetboil products as a result of continued participation in outdoor recreation activities were the primary driver of the increase year over year. Net sales in the Watercraft Recreation business increased $1,337, or 2%. Continued new product success drove the overall increase over fiscal 2021. Diving net sales increased $9,427, or 14%, year over year.
The dividends and market gains and losses on deferred compensation plan assets recognized in the Consolidated Statement of Operations in “Other income, net” are offset as compensation expense in “Operating expenses.” Pretax Income and Income Taxes 22 Table of Contents The Company realized pretax income of $112,922 in fiscal 2021 compared to $73,702 in fiscal 2020.
The dividends and market gains and 19 Table of Contents losses on deferred compensation plan assets recognized in the Consolidated Statement of Operations in “Other (income) expense, net” are offset as compensation expense in “Operating expenses.” Pretax Income and Income Taxes The Company realized pretax income of $25,824 in fiscal 2023 compared to $58,888 in fiscal 2022.
The discounted cash flow analysis used to estimate fair value requires a number of key estimates and assumptions. The Company estimates the future cash flows of the reporting units based on historical and forecasted revenues and operating costs and applies a discount rate to the estimated future cash flows for purposes of the valuation.
The Company estimates the future cash flows of the reporting units based on historical and forecasted revenues and operating costs and applies a discount rate to the estimated future cash flows for purposes of the valuation.
When fair value is less than the carrying value of the net assets and related goodwill, an impairment charge is recognized based on the excess of carrying amount over its fair value. The Company did not recognize any goodwill impairment charges in 2022, 2021 or 2020.
When fair value is less than the carrying value of the net assets and related goodwill, an impairment charge is recognized based on the excess of carrying amount over its fair value.
Gross profit in the Watercraft Recreation segment decreased by $2,525 from 2021, despite increased sales in 2022 versus the prior year, primarily due to increased materials and freight costs. The $4,169 increase in gross profit in the Diving segment was due primarily to increased sales volumes and pricing actions during fiscal 2022 as compared to the prior year.
The $4,169 increase in gross profit in the Diving segment was due primarily to increased sales volumes and pricing actions during fiscal 2022 as compared to fiscal 2021. Operating Expenses Operating expenses decreased from fiscal 2021 by $17,820.
Net Income The Company recognized net income of $44,491, or $4.37 per diluted common share, in fiscal 2022 compared to $83,381, or $8.21 per diluted common share, in fiscal 2021 based on the factors discussed above. Fiscal 2021 vs. Fiscal 2020 Net Sales Net sales in 2021 increased by 26% to $751,651 compared to $594,209 in 2020.
Net Income The Company recognized net income of $19,534, or $1.90 per diluted common share, in fiscal 2023 compared to $44,491, or $4.37 per diluted common share, in fiscal 2022 based on the factors discussed above. Fiscal 2022 vs. Fiscal 2021 Net Sales Net sales in fiscal 2022 decreased by 1% to $743,355 compared to $751,651 in fiscal 2021.
The operating profit for the Watercraft Recreation business was $6,173 in fiscal 2022 compared to $9,173 in fiscal 2021 due to the factors noted above on changes in sales volumes and operating 20 Table of Contents expenses.
The operating profit for Camping was $13,415 compared to $14,025 in 2021 which decrease was primarily a result of the higher operating expenses between periods. The operating profit for the Watercraft Recreation business was $6,173 in fiscal 2022 compared to $9,173 in fiscal 2021 due to the factors noted above on changes in sales volumes and operating expenses.
Specifically, due to the technical and electronic nature of the product categories, the Fishing segment has been the most susceptible to the previously discussed supply chain issues, as discussed in "Coronavirus (COVID-19)" above. Camping net sales increased $7,434, or 12%, in 2022 from 2021.
Specifically, due to the technical and electronic nature of the product categories, the Fishing segment was most susceptible to the supply chain disruption issues, (including with respect to cost and availability of necessary materials and components) caused by the Coronavirus (COVID-19) pandemic. Camping net sales increased $7,434, or 12%, in 2022 from 2021.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless otherwise stated, all monetary amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, other than per share amounts, are stated in thousands. Executive Overview The Company designs, manufactures and markets high quality recreational products for the outdoor enthusiast.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 16 Table of Contents Unless otherwise stated, all monetary amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, other than per share amounts, are stated in thousands.
Through a combination of innovative products, strong marketing, a talented and passionate workforce and efficient distribution, the Company seeks to set itself apart from the competition in its markets. Its subsidiaries operate as a network that promotes innovation and leverages best practices and synergies, following the strategic vision set by executive management and approved by the Company’s Board of Directors.
Its subsidiaries operate as a network that promotes innovation and leverages best practices and synergies in the design, production and marketing of their recreational products, following the strategic vision set by executive management and approved by the Company’s Board of Directors.
Camping gross profit increased by $1,857 from 2021 due primarily to increased sales volumes, pricing actions and a favorable mix of products sold in the current year as compared to the prior year.
Camping gross profit increased by $1,857 from 2021 due primarily to increased sales volumes, pricing actions and a favorable mix of products sold in fiscal 2022 as compared to fiscal 2021. 20 Table of Contents Gross profit in the Watercraft Recreation segment decreased by $2,525 from 2021, despite increased sales in 2022 versus fiscal 2021, primarily due to increased materials and freight costs.
Financial Condition, Liquidity and Capital Resources The Company believes its existing balances of cash and cash equivalents will be sufficient to satisfy its working capital needs, capital asset purchase requirements, outstanding commitments and other liquidity requirements associated with its existing operations over the next twelve months.
Net Income The Company recognized net income of $44,491, or $4.37 per diluted common share, in fiscal 2022 compared to $83,381, or $8.21 per diluted common share, in fiscal 2021 based on the factors discussed above. 21 Table of Contents Financial Condition, Liquidity and Capital Resources The Company believes its existing balances of cash and cash equivalents will be sufficient to satisfy its working capital needs, capital asset purchase requirements, outstanding commitments and other liquidity requirements associated with its existing operations over the next twelve months.
In general, the Company’s ongoing capital expenditures are primarily related to tooling for new products, facilities investments and information systems improvements. 23 Table of Contents Financing Activities Cash flows used for financing activities totaled $12,233 in fiscal 2022 compared to $9,033 and $7,107 in 2021 and 2020, respectively, and were primarily for the payment of dividends of $12,056 and $8,400 in 2022 and 2021, respectively.
Financing Activities 22 Table of Contents Cash flows used for financing activities totaled $12,732 in fiscal 2023 compared to $12,233 and $9,033 in 2022 and 2021, respectively, and were primarily for the payment of dividends of $12,554 and $12,056 in 2023 and 2022, respectively. In 2021, dividend payments totaled $8,400.
The operating profit for the Watercraft Recreation business was $9,173 in fiscal 2021 compared to a loss of $329 in fiscal 2020 due to the factors noted above on changes in sales volumes and operating expenses.
The operating loss for the Watercraft Recreation business was $1,777 in fiscal 2023 compared to operating profit of $6,173 in fiscal 2022 due to the changes in sales volumes noted above. Operating profit for the Diving business increased by $1,387 in fiscal 2023 from fiscal 2022, due primarily to increased sales volumes and improved margins.
Primary commodity price exposures include costs associated with metals, resins and packaging materials. 24 Table of Contents Impact of Inflation The Company anticipates that changing costs of basic raw materials (including due to inflationary conditions in the economy) may impact future operating costs and, accordingly, the prices of its products.
Impact of Inflation The Company anticipates that changing costs of basic raw materials (including due to inflationary conditions in the economy) may impact future operating costs and, accordingly, the prices of its products. The Company is involved in continuing programs to mitigate the impact of cost increases through changes in product design and identification of sourcing and manufacturing efficiencies.
Continued new product success drove the overall increase over the prior year. 19 Table of Contents Diving net sales increased $9,427, or 14%, year over year. Prior year sales were negatively impacted due to the negative effects of COVID-19 on demand due to restrictions in destination travel and tourism.
Fiscal 2021 sales were negatively impacted due to the negative effects of COVID-19 on demand due to restrictions in destination travel and tourism.
Operating expenses for the Diving business increased by $1,357 year over year due primarily to increased sales volume related expenses, as well as increased people costs between periods. The Company's 2021 general corporate expenses of $36,317 increased $9,827 from $26,490 in 2020.
Operating expenses for the Diving business increased by $2,460 year over year due primarily to increased sales volume related expenses and increased headcount and personnel-related costs between periods. The Company's fiscal 2023 general corporate expenses of $34,765 increased $11,043 from $23,722 in fiscal 2022.
Foreign currency exchange had a favorable impact of less than 1%, on the fiscal 2021 sales versus the prior year. Net sales for the Fishing business increased by $103,122, or 23% during 2021 from 2020.
Fiscal 2023 vs. Fiscal 2022 Net Sales Net sales in fiscal 2023 decreased by 11% to $663,844 compared to $743,355 in fiscal 2022. Foreign currency exchange had an unfavorable impact of less than 1% on the current year’s sales versus the prior year. Net sales for the Fishing business decreased by $33,655, or 6% during fiscal 2023 from fiscal 2022.
The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of September 30, 2022 or October 1, 2021. The Company has no other off-balance sheet arrangements.
The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of September 29, 2023 or September 30, 2022. The Company has no other off-balance sheet arrangements. Market Risk Management Foreign Exchange Risk The Company has significant foreign operations, for which the functional currencies are denominated primarily in euros, Swiss francs, Hong Kong dollars and Canadian dollars.
The $5,463 increase in gross profit in the Diving segment was due primarily to increased sales volumes, pricing actions and favorable product mix during fiscal 2021 as compared to fiscal 2020. Operating Expenses Operating expenses increased in fiscal 2021 from fiscal 2020 by $28,919.
The $3,846 increase in gross profit in the Diving segment was due primarily to sales volume increases and pricing actions during fiscal 2023 as compared to the prior year.
Gross Profit Gross profit of $334,125 was 44.5% of net sales on a consolidated basis for the year ended October 1, 2021 compared to $264,993, or 44.6% of net sales in fiscal 2020. 21 Table of Contents Gross profit in the Fishing business in fiscal 2021 increased by $39,676 from fiscal 2020 due primarily to the 23% increase in net sales year over year.
Gross Profit Gross profit of $244,087 was 36.8% of net sales on a consolidated basis for the year ended September 29, 2023 compared to $271,332, or 36.5% of net sales in the prior year. Gross profit in the Fishing business decreased by $7,685 from the prior year due primarily to the 6% decrease in net sales year over year.
Fishing operating profit increased by $26,606 to $122,490 from $95,884 in the prior year due primarily to higher sales volumes between years. The operating profit for Camping was $14,025 compared to $4,406 in 2020 which increase was also primarily a result of higher sales volumes between periods.
Fishing operating profit decreased by $24,108 to $41,325 from $65,433 in the prior year due primarily to lower sales volumes between years, as well as increased operating expenses, as discussed above. The operating profit for Camping was $457 compared to $13,415 in 2022 which decrease was primarily a result of the lower sales volumes between periods.
Investing Activities Cash flows used for investing activities were $31,678, $21,381, and $15,587 in fiscal 2022, 2021, and 2020, respectively. There were no sales or purchases of short-term investments in fiscal 2022, 2021 or 2020. Expenditures for property, plant and equipment were $31,690, $21,409 and $15,600 in fiscal 2022, 2021 and 2020, respectively.
Depreciation and amortization charges were $16,295, $14,234 and $13,401 in fiscal 2023, 2022 and 2021, respectively. Investing Activities Cash flows used for investing activities were $48,374, $31,678, and $21,381 in fiscal 2023, 2022, and 2021, respectively. During fiscal 2023, the Company purchased investments of $40,700. There were no sales or purchases of investments in fiscal 2022 or 2021.
The Company recorded income tax expense of $29,541 in fiscal 2021, which equated to an effective tax rate of 26.2%, compared to $18,469 in fiscal 2020, which equated to an effective tax rate of 25.1%.
The Company recorded income tax expense of $6,290 in 2023, which equated to an effective tax rate of 24.4%, compared to $14,397 in 2022, which equated to an effective tax rate of 24.4%.
Fiscal 2021 net other income included currency losses of $215 and market gains and dividends of $5,329 on deferred compensation plan assets, partially offset by pension termination expense of $2,526. In fiscal 2020, net other income included $269 of currency losses and $2,454 of market gains and dividends on the deferred compensation plan assets.
In the prior year, net other expense included $5,878 of market losses net of dividends on the deferred compensation plan assets, as well as $1,741 of currency losses.
The increase was driven primarily by higher sales volume related costs incurred in fiscal 2021 as compared to the prior fiscal year. Additionally, increased headcount and compensation costs further increased expenses year over year. Operating expenses for the Fishing segment increased by $13,069 from fiscal 2020 levels.
Operating Expenses Operating expenses increased from the prior year by $27,325 despite the decrease in sales volumes due to investments in marketing and research & development and higher headcount and deferred compensation costs. Operating expenses for the Fishing segment increased by $16,423 from fiscal 2022 levels.
In the Watercraft Recreation segment, operating expenses increased $2,787 in fiscal 2021 from their levels in fiscal 2020 due primarily to increased sales volume related expenses in 2021, partially offset by decreased spending rate on advertising and promotions.
Other costs will be expensed as incurred and are not expected to be material. In the Watercraft Recreation segment, operating expenses decreased $3,438 from their levels in fiscal 2022 due primarily to decreased sales volume related expenses in 2023.
The increase was due primarily to higher sales volume related expenses, as well as increased people costs between years. Camping operating expenses increased by $1,879 in fiscal 2021 from the prior year due primarily to increased sales volume related expenses.
Camping operating expenses increased by $838 from the prior year where increased expenses related to the Eureka! exit more than offset the decline in operating expenses resulting from decreased sales volume-driven expenses between years.
Cost of Sales Cost of sales was $417,526, or 55.5% of net sales, on a consolidated basis for fiscal 2021 compared to $329,216, or 55.4% of net sales, in fiscal 2020. Higher sales volumes between years were the primary driver of the increase in the cost of sales between periods.
Cost of Sales Cost of sales was $419,757, or 63.2% of net sales, on a consolidated basis for fiscal 2023 compared to $472,023, or 63.5% of net sales, in the prior year.
The year over year increase reflects higher people costs including $2,900 of higher deferred compensation expenses and higher health insurance costs over the prior year as well as higher professional services expense. Operating Results The Company’s operating profit was $111,283 in fiscal 2021 compared to an operating profit of $71,070 in fiscal 2020.
Additionally, professional services costs increased approximately $2,800 over the prior year. Operating Results The Company’s operating profit was $11,740 in fiscal 2023 compared to an operating profit of $66,310 in fiscal 2022.
Operating profit for the Diving business increased by $4,106 in fiscal 2021 from fiscal 2020, due to recovery from the impact of COVID-19 and demand for our Diving products and the other factors discussed above. Other Income and Expenses Interest expense in fiscal 2021 of $145 was relatively flat as compared to the prior year expense of $143.
Other Income and Expenses Interest expense of $152 was flat as compared to the prior year expense of $153. Interest income of $4,543 increased from prior year interest income of $807 due to the increase in deposit interest rates year over year, as well as increased cash and investment balances over the prior year.
Removed
Coronavirus (COVID-19) 17 Table of Contents The COVID-19 pandemic drove consumer desire to engage in socially distant and safe activities outdoors. As a result, increased participation in Fishing, Camping and Watercraft Recreation also increased demand for our products across Company segments beginning in fiscal 2020 and continuing throughout fiscal 2022.
Added
Executive Overview The Company designs, manufactures and markets innovative, high quality recreational products for the outdoor enthusiast. Through a combination of innovative products, strong marketing, a talented and passionate workforce and efficient distribution, the Company seeks to set itself apart from the competition in its markets.
Removed
As global travel restrictions also eased, we experienced increased participation and resulting increased product demand in the Diving segment beginning in fiscal 2021 and continuing through fiscal 2022. In addition to this increase in demand for Company products, COVID-19 and the resulting macroeconomic dynamics have also caused widely-documented supply chain and logistics disruptions across industries.
Added
Highlights Fiscal 2023 saw a significant change in pacing of sales compared to fiscal 2022 and 2021 as seasonality fluctuations in the Company's business returned to more traditional pre-pandemic levels. During the last quarter of fiscal 2022, as supply chain restrictions eased, the Company filled a significant number of backlogged customer orders.
Removed
Specifically, the adverse supply chain and logistics constraints and disruptions have impacted the timing, sourcing, availability and cost of raw materials and components that are necessary to manufacture our outdoor recreation products, especially in our Fishing segment due to the electronic components used in those products.
Added
As a result, the fiscal 2023 fourth quarter comparisons show a significant reduction in sales versus the prior year fourth quarter. The Company’s fiscal 2023 full-year revenues decreased by 11% from the prior year as outdoor recreation markets continued to moderate after elevated pandemic-driven demand.
Removed
Because certain electronic components that are necessary for manufacturing our higher volume products in that segment have been most impacted by the supply chain and logistics disruptions, there has been limited availability of those materials and components, as well as increased pricing and inflationary pressures on such components when they have become available, all of which impacted our margins during fiscal 2022.
Added
The decrease in sales volumes and a 13% increase in operating expenses between years resulted in a $54,570 decrease in operating profit in fiscal 2023 from fiscal 2022.
Removed
The Company has attempted to mitigate these disruptions by purchasing significantly higher levels of certain raw material and component inventory as they have been available, in many cases at higher price points than what was historically paid, to enable the Company to complete finished product orders as soon as the missing raw material and component inventory items become available.
Added
The decrease from prior year is primarily due to the following key factors: moderating demand during fiscal 2023 from record highs in the prior two fiscal years fueled by the impact of the pandemic; and the effect of customers more tightly managing their inventory levels as the Company transitioned its bow-mount trolling motor product lines.
Removed
Nonetheless, shortages throughout fiscal 2022 have impacted the Fishing segment's ability to complete products for shipping, which has ultimately resulted in decreased sales volumes in the Fishing segment over the prior year, despite continued demand for our Fishing products, as evidenced by outstanding orders.
Added
Camping net sales decreased $25,033, or 36%, in 2023 from 2022, as demand significantly declined from the increased levels seen during the pandemic. Additionally, approximately $6,600 of the decrease in net sales from the prior year period was related to the sale of the Military and Commercial Tents product lines during the second fiscal quarter of 2023.
Removed
Additionally, the Company's buying actions have subsequently resulted in decreased margins and the Company carrying significantly higher levels of inventory for a number of its materials, components and products at the end of fiscal 2022.
Added
The Company sold these product lines to a third party in an asset sale for a purchase price of $14,990 which closed on March 17, 2023.
Removed
Though the Company continues to believe the inventory that it has built and which exists on its balance sheet is useable and salable in the ordinary course of business, it continues to monitor the current reserve balances for obsolete and excess inventory.
Added
The net book value of the assets and liabilities sold was approximately $8,350, resulting in a gain on sale of approximately $6,640, which is recorded in Other (income) expense, net in the Company’s accompanying Condensed Consolidated Statements of Operations.
Removed
However, any changes in consumer demand for the Company's outdoor recreation products, changes in economic conditions, or changes in customer inventory levels or competitive conditions could have a favorable or unfavorable effect on required reserve balances in the future.
Added
The purchase price and the net proceeds received by the Company related to this sale were subject to customary purchase price adjustment provisions and Company indemnity obligations set forth in the definitive purchase agreement.
Removed
Because the Company expects that supply chain disruptions, as well as inflationary pricing conditions for raw materials and components necessary to manufacture product, will continue into fiscal 2023, the Company remains focused on evaluating and pursuing additional options (beyond building inventory) to meet the demand for its products.
Added
Accordingly, during the third and fourth fiscal quarter, working capital true-up and purchase price adjustments reduced the purchase price and the final net gain to approximately $6,560. Net sales in the Watercraft Recreation business decreased $27,172, or 40% as the overall market significantly declined from the elevated levels seen during the pandemic.
Removed
During fiscal 2023 the Company expects to closely monitor customer demand and proactively manage its higher than normal inventory levels. Nonetheless, these supply chain and logistics disruptions and inflationary pricing conditions remain fluid and will likely adversely impact the cost of goods sold for future sales of product.
Added
Diving net sales increased $6,195, or 8%, year over year.
Removed
Highlights The Company's fiscal 2022 and 2021 each comprised 52 weeks, whereas the fiscal year ended October 2, 2020 comprised 53 weeks. The Company’s fiscal 2022 revenues decreased by 1% from the prior year.
Added
The sales increase was due to increased demand for our products as the global tourism industry continued to recover from the pandemic, as well as the impact of price increases, which were partially offset by an unfavorable foreign currency translation impact on sales in this segment of approximately 1% in 2023 versus the prior year period.
Removed
While consumer and customer demand for the Company's products remained strong throughout fiscal 2022 as evidenced by outstanding order volumes, sales volumes were negatively impacted by product availability caused by the supply chain disruptions described above, particularly in Fishing, the Company's largest segment.
Added
The decrease in cost of sales was relatively consistent with the decrease in sales year over year and improved slightly as a percentage of net sales as supply chain conditions improved and costs of materials and freight both came down.

… 33 more changes not shown on this page.

Other JOUT 10-K year-over-year comparisons