10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2018

OR

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number 0-16255

JOHNSON OUTDOORS INC.

(Exact name of Registrant as specified in its charter)

Wisconsin	39-1536083
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

555 Main Street, Racine, Wisconsin 53403

(Address of principal executive offices)

(262) 631-6600

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒   No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer ☐Accelerated filer ☒Non-accelerated filer (do not check if a smaller reporting company) ☐Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

As of July 27, 2018,8,855,015 shares of Class A and 1,211,686 shares of Class B common stock of the Registrant were outstanding.

JOHNSON OUTDOORS INC.

Index			Page No.
PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Consolidated Statements of Operations – Three and nine months ended June 29, 2018 and June 30, 2017	1
		Condensed Consolidated Statements of Comprehensive  Income – Three and nine months ended June 29, 2018 and June 30, 2017	2
		Condensed Consolidated Balance Sheets – June 29, 2018, September 29, 2017 and June 30, 2017	3
		Condensed Consolidated Statements of Cash Flows – Nine months ended June 29, 2018 and June 30, 2017	4
		Notes to Condensed Consolidated Financial Statements	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27
	Item 4.	Controls and Procedures	28
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings	28
	Item 1A.	Risk Factors	28
	Item 6.	Exhibits	28
		Signatures	29
		Exhibit Index	29

JOHNSON OUTDOORS INC.

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended						Nine Months Ended
(thousands, except per share data)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Net sales	$	170,779		$	155,274		$	453,136		$	398,810
Cost of sales		91,446			84,644			250,797			226,702
Gross profit		79,333			70,630			202,339			172,108
Operating expenses:
Marketing and selling		31,191			29,438			89,280			79,056
Administrative management, finance and information systems		11,071			11,584			32,713			33,146
Research and development		5,116			4,871			15,352			14,239
Total operating expenses		47,378			45,893			137,345			126,441
Operating profit		31,955			24,737			64,994			45,667
Interest income		(172	)		(52	)		(493	)		(84	)
Interest expense		55			77			170			687
Other (income) expense, net		293			(848	)		(4,231	)		(2,288	)
Profit before income taxes		31,779			25,560			69,548			47,352
Income tax expense		8,009			9,007			23,923			12,784
Net income	$	23,770		$	16,553		$	45,625		$	34,568
Weighted average common shares - Basic:
Class A		8,739			8,688			8,727			8,670
Class B		1,212			1,212			1,212			1,212
Participating securities		50			28			49			26
Weighted average common shares - Dilutive		10,001			9,928			9,988			9,908
Net income per common share - Basic:
Class A	$	2.40		$	1.68		$	4.62		$	3.50
Class B	$	2.19		$	1.52		$	4.20		$	3.18
Net income per common share - Diluted:
Class A	$	2.37		$	1.65		$	4.54		$	3.45
Class B	$	2.37		$	1.65		$	4.54		$	3.45
Dividends declared per common share:
Class A	$	0.12		$	0.09		$	0.32		$	0.27
Class B	$	0.11		$	0.08		$	0.29		$	0.25

The accompanying notes are an integral part of the condensed consolidated financial statements.

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JOHNSON OUTDOORS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

	Three Months Ended					Nine Months Ended
(thousands)	June 29, 2018			June 30, 2017		June 29, 2018			June 30, 2017
Comprehensive income:
Net income	$	23,770		$	16,553	$	45,625		$	34,568
Other comprehensive income (loss):
Foreign currency translation		(2,442	)		2,350		(2,213	)		(523	)
Write off of currency translation adjustment gain		61			—		(2,290	)		—
Change in pension plans, net of tax of $12, $100, $100 and $208, respectively		38			165		315			340
Total other comprehensive income (loss)		(2,343	)		2,515		(4,188	)		(183	)
Total comprehensive income	$	21,427		$	19,068	$	41,437		$	34,385

The accompanying notes are an integral part of the condensed consolidated financial statements.

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JOHNSON OUTDOORS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(thousands, except share data)	June 29, 2018			September 29, 2017			June 30, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	104,277		$	63,810		$	53,741
Short term investments		25,000			46,607			40,000
Accounts receivable, net		80,877			46,814			79,292
Inventories		77,299			79,148			68,239
Other current assets		1,012			4,470			2,495
Total current assets		288,465			240,849			243,767
Property, plant and equipment, net of accumulated depreciation of $129,028, $132,567 and $132,188, respectively		54,152			48,938			48,239
Deferred income taxes		12,829			22,632			22,291
Goodwill		11,184			11,238			11,201
Other intangible assets, net		12,716			13,476			13,727
Other assets		18,205			16,526			15,732
Total assets	$	397,551		$	353,659		$	354,957
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	32,978		$	31,686		$	33,889
Accrued liabilities:
Salaries, wages and benefits		17,590			21,825			17,211
Accrued warranty		8,897			6,393			6,251
Income taxes payable		11,551			5,434			8,647
Accrued discounts and returns		6,450			5,137			5,751
Other		14,780			13,602			15,140
Total current liabilities		92,246			84,077			86,889
Deferred income taxes		1,775			1,845			1,232
Retirement benefits		3,788			8,844			11,355
Other liabilities		17,682			15,889			15,557
Total liabilities		115,491			110,655			115,033
Shareholders’ equity:
Common stock:
Class A shares issued and outstanding:		442			442			442
June 29, 2018:  8,785,735
September 29, 2017:  8,784,513
June 30, 2017:  8,783,099
Class B shares issued and outstanding:		61			61			61
June 29, 2018:  1,211,686
September 29, 2017:  1,211,686
June 30, 2017:  1,211,686
Capital in excess of par value		74,229			72,801			72,143
Retained earnings		209,169			166,905			167,304
Accumulated other comprehensive income		805			4,993			2,171
Treasury stock at cost, shares of Class A common stock:  67,655, 67,137 and 67,137, respectively		(2,646	)		(2,198	)		(2,197	)
Total shareholders’ equity		282,060			243,004			239,924
Total liabilities and shareholders’ equity	$	397,551		$	353,659		$	354,957

The accompanying notes are an integral part of the condensed consolidated financial statements.

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JOHNSON OUTDOORS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended
(thousands)	June 29, 2018			June 30, 2017
CASH PROVIDED BY OPERATING ACTIVITIES
Net income	$	45,625		$	34,568
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		8,901			8,699
Amortization of intangible assets		716			978
Amortization of deferred financing costs		51			270
Write off of currency translation adjustment gain		(2,290	)		—
Stock based compensation		1,585			1,377
Gain on disposal of productive assets		(1,262	)		(205	)
Pension contributions		(5,140	)		(1,308	)
Deferred income taxes		9,780			(3,073	)
Change in operating assets and liabilities:
Accounts receivable, net		(34,798	)		(37,503	)
Inventories, net		1,218			380
Accounts payable and accrued liabilities		8,685			19,443
Other current assets		3,526			2,191
Other non-current assets		—			18
Other long-term liabilities		463			335
Other, net		(34	)		(284	)
		37,026			25,886
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
Purchase of short-term investments		(25,000	)		(40,000	)
Proceeds from sale of short-term investments		46,607			—
Proceeds from sale of productive assets		1,306			205
Capital expenditures		(14,653	)		(8,147	)
		8,260			(47,942	)
CASH USED FOR FINANCING ACTIVITIES
Principal payments on term loans and other long-term debt		—			(7,374	)
Common stock transactions		68			—
Debt issuance costs paid		(61	)		—
Dividends paid		(3,164	)		(2,669	)
Purchases of treasury stock		(675	)		(663	)
		(3,832	)		(10,706	)
Effect of foreign currency rate changes on cash		(987	)		(791	)
Increase (Decrease) in cash and cash equivalents		40,467			(33,553	)
CASH AND CASH EQUIVALENTS
Beginning of period		63,810			87,294
End of period	$	104,277		$	53,741
Supplemental Disclosure:
Cash paid for taxes	$	8,049		$	9,170
Cash paid for interest		117			447

The accompanying notes are an integral part of the condensed consolidated financial statements.

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JOHNSON OUTDOORS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1 BASIS OF PRESENTATION

The condensed consolidated financial statements included herein are unaudited. In the opinion of management, these statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Johnson Outdoors Inc. and subsidiaries (collectively, the “Company”) as of June 29, 2018 and June 30, 2017, and their results of operations for the three and nine month periods then ended and cash flows for the nine month periods then ended. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 29, 2017 which was filed with the Securities and Exchange Commission on December 8, 2017.

Due to seasonal variations and other factors, the results of operations for the three and nine months ended June 29, 2018 are not necessarily indicative of the results to be expected for the Company’s full 2018 fiscal year.  See “Seasonality” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere herein for additional information.

The Company considers all short-term investments in interest-bearing accounts and all securities and other instruments with an original maturity of three months or less, to be equivalent to cash.  Cash equivalents are stated at cost which approximates market value.  Short-term investments consist of certificates of deposit with original maturities greater than three months but less than one year.

All monetary amounts, other than share and per share amounts, are stated in thousands.

2 ACCOUNTS RECEIVABLE

Accounts receivable are stated net of allowances for doubtful accounts of $1,446, $2,231 and $1,931 as of June 29, 2018, September 29, 2017 and June 30, 2017, respectively. The increase in net accounts receivable to $80,877 as of June 29, 2018 from $46,814 as of September 29, 2017 is attributable to the seasonal nature of the Company’s business and the resulting increases in sales volumes between periods. The determination of the allowance for doubtful accounts is based on a combination of factors. In circumstances where specific collection concerns about a receivable exist, a reserve is established to value the affected account receivable at an amount the Company believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on historical experience of bad debts as a percent of accounts receivable outstanding for each business segment. Uncollectible accounts are written off against the allowance for doubtful accounts after collection efforts have been exhausted. The Company typically does not require collateral on its accounts receivable.

3 EARNINGS PER SHARE (“EPS”)

Net income or loss per share of Class A common stock and Class B common stock is computed using the two-class method.  Grants of restricted stock which receive non-forfeitable dividends are classified as participating securities and are required to be included as part of the basic weighted average share calculation under the two-class method.

Holders of Class A common stock are entitled to cash dividends equal to 110% of all dividends declared and paid on each share of Class B common stock. The Company grants shares of unvested restricted stock in the form of Class A shares, which carry the same distribution rights as the Class A common stock described above.  As such, the undistributed earnings for each period are allocated to each class of common stock based on the proportionate share of the amount of cash dividends that each such class is entitled to receive.

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JOHNSON OUTDOORS INC.

Basic EPS

Basic net income or loss per share is computed by dividing net income or loss allocated to Class A common stock and Class B common stock by the weighted-average number of shares of Class A common stock and Class B common stock outstanding, respectively.  In periods with cumulative year to date net income and undistributed income, the undistributed income for each period is allocated to each class of common stock based on the proportionate share of the amount of cash dividends that each such class is entitled to receive.  In periods where there is a cumulative year to date net loss or no undistributed income because distributions through dividends exceed net income, Class B shares are treated as anti-dilutive and, therefore, net losses are allocated equally on a per share basis among all participating securities.

For the three and nine month periods ended June 29, 2018 and June 30, 2017, basic income per share for the Class A and Class B shares has been presented using the two class method and reflects the allocation of undistributed income described above.

Diluted EPS

Diluted net income per share is computed by dividing allocated net income by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options, restricted stock units (“stock units” or “units”) and non-vested restricted stock.  Anti-dilutive stock options, units and non-vested stock are excluded from the calculation of diluted EPS.  The computation of diluted net income per share of Class A common stock assumes that Class B common stock is converted into Class A common stock.  Therefore, diluted net income per share is the same for both Class A and Class B common shares.  In periods where the Company reports a net loss, the effect of anti-dilutive stock options and units is excluded and diluted loss per share is equal to basic loss per share for both classes of stock.

For the three and nine month periods ended June 29, 2018 and June 30, 2017, diluted net income per share reflects the effect of dilutive stock units and assumes the conversion of Class B common stock into Class A common stock.

Non-vested stock that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive totaled 46,776 and 95,068 for the three months ended June 29, 2018 and June 30, 2017, respectively, and 57,624 and 111,061 for the nine months ended June 29, 2018 and June 30, 2017, respectively.  Stock units that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive were 38,392 and 32,357 for the three month periods ended June 29, 2018 and June 30, 2017, respectively, and 39,605 and 34,746 for the nine month periods ended June 29, 2018 and June 30, 2017, respectively.

4 STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS

The Company’s current stock ownership plans allow for issuance of stock options to acquire shares of Class A common stock by key executives and non-employee directors. Current plans also allow for issuance of shares of restricted stock, restricted stock units or stock appreciation rights in lieu of stock options.

Under the Company’s 2010 Long-Term Stock Incentive Plan and the 2012 Non-Employee Director Stock Ownership Plan (the only two plans where shares remain available for future equity incentive awards) there were a total of 578,880 shares of the Company’s Class A common stock available for future grant to key executives and non-employee directors at June 29, 2018.

Non-vested Stock

All shares of non-vested stock awarded by the Company have been granted in the form of shares of Class A common stock at their fair market value on the date of grant and vest four years after the grant date.  The fair value at date of grant is based on the number of shares granted and the average of the Company’s high and low Class A common stock price on the date of grant or, if the Company’s Class A shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock price on the last preceding date on which the Company’s Class A shares traded.

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JOHNSON OUTDOORS INC.

A summary of non-vested stock activity for the nine months ended June 29, 2018 related to the Company’s stock ownership plans is as follows:

	Shares			Weighted Average Grant Price
Non-vested stock at September 29, 2017		95,068		$	27.68
Non-vested stock grants		6,532			70.39
Restricted stock vested		(54,824	)		25.36
Non-vested stock at June 29, 2018		46,776			36.37

Non-vested stock grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of shares by tendering a portion of the vested shares back to the Company.  Shares tendered back to the Company were 9,377 and 17,832 during the nine month periods ended June 29, 2018 and June 30, 2017, respectively.

Stock compensation expense, net of forfeitures, related to non-vested stock was $106 and $219 for the three month periods ended June 29, 2018 and June 30, 2017, respectively, and $394 and $722 for the nine month periods ended June 29, 2018 and June 30, 2017, respectively.  Unrecognized compensation cost related to non-vested stock as of June 29, 2018 was $798, which amount will be amortized to expense through November 2021 or adjusted for changes in future estimated or actual forfeitures.

The fair value of restricted stock vested during the nine month periods ended June 29, 2018 and June 30, 2017 was $3,948 and $3,219, respectively.

Restricted Stock Units

All restricted stock units (RSUs) awarded by the Company have been granted in the form of units payable in shares of Class A common stock upon vesting.  The units are valued at the fair market value of a share of Class A common stock on the date of grant and vest within one year from the date of grant for RSUs granted to directors and three years from the date of grant for RSUs granted to employees.  The fair value at the date of grant is based on the number of units granted and the average of the Company’s high and low Class A common stock trading price on the date of grant or, if the Company’s Class A shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock trading price on the last preceding date on which the Company’s Class A shares traded.

A summary of RSU activity for the nine months ended June 29, 2018 follows:

	Number of RSUs			Weighted Average Grant Price
RSUs at September 29, 2017		60,642		$	31.85
RSUs granted		27,868			67.82
RSUs vested		(8,931	)		35.27
RSUs at June 29, 2018		79,579			44.06

Stock compensation expense, net of forfeitures, related to RSUs was $450 and $213 for the three months ended June 29, 2018 and June 30, 2017, respectively, and $1,149 and $640 for the nine months ended June 29, 2018 and June 30, 2017, respectively.  Unrecognized compensation cost related to non-vested RSUs as of June 29, 2018 was $1,532, which amount will be amortized to expense through September 2020 or adjusted for changes in future estimated or actual forfeitures.

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JOHNSON OUTDOORS INC.

Compensation expense related to units earned by employees is based upon the attainment of certain financial goals related to cumulative net sales and cumulative operating profit over a three-year performance period.  Awards are only paid if at least 80% of the target levels are met and maximum payouts are made if 120% or more of target levels are achieved.  The payouts for achievement at the threshold levels of performance are equal to 50% of the target award amount.  The payouts for achievement at maximum levels of performance are equal to 150% of the target award amount.  To the extent earned, awards are issued in shares of Company common stock after the end of the three-year performance period.

Employees’ Stock Purchase Plan

The Company’s shareholders have adopted the Johnson Outdoors Inc. 2009 Employees’ Stock Purchase Plan, which was most recently amended on March 2, 2017, and which provides for the issuance of shares of Class A common stock at a purchase price of not less than 85% of the fair market value of such shares on the date of grant or on the date of purchase, whichever is lower.

During the three month period ended June 29, 2018, the Company issued no shares of Class A common stock and recognized $20 of expense in connection with the Employees’ Stock Purchase Plan.  During the nine months ended June 29, 2018, the Company issued 1,740 shares of Class A common stock and recognized $41 of expense in connection with the Plan.  During the three and nine month periods ended June 30, 2017, the Company issued no shares of Class A common stock and recognized $10 and $15 of expense, respectively, in connection with the Plan.

5 PENSION PLANS

The Company has non-contributory defined benefit pension plans covering certain of its U.S. employees. Retirement benefits are generally provided based on the employees’ years of service and average earnings. Normal retirement age is 65, with provisions for earlier retirement.

The Company elected to adopt ASU 2017-07 at the beginning of the first quarter of fiscal 2018. The adoption of this standard resulted in a reduction of operating expense of $347 and an increase in other expense of $347 for the three months ended June 29, 2018 and a reduction of operating expense of $637 and an increase in other expense of $637 for the nine months ended June 29, 2018. There was no effect on the Company’s condensed consolidated balance sheet or statement of cash flows as a result of adopting this standard.

The Company made contributions to its pension plans of $47 and $1,043 for the three months ended June 29, 2018 and June 30, 2017, respectively, and contributions of $5,140 and $1,308 for the nine month periods ended June 29, 2018 and June 30, 2017, respectively.

The components of net periodic benefit cost related to Company sponsored defined benefit plans for the three and nine month periods ended June 29, 2018 and June 30, 2017 were as follows:

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JOHNSON OUTDOORS INC.

	Three Months Ended					Nine Months Ended
	June 29, 2018			June 30, 2017		June 29, 2018		June 30, 2017
Components of net periodic benefit cost:
Service cost	$	—		$	—	$	—	$	—
Interest on projected benefit obligation		272			215		794		783
Less estimated return on plan assets		(25	)		347		572		895
Amortization of unrecognized losses		50			265		415		548
Net periodic benefit cost	$	347		$	133	$	637	$	436

6 INCOME TAXES

On December 22, 2017, the U.S. enacted comprehensive tax legislation generally referred to as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).  The Tax Act included significant changes to existing tax law including a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, a one-time repatriation tax on deferred foreign income (“Transition Tax”), deductions, credits and business-related exclusions.

Shortly after the Tax Act was enacted, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which provides a one-year measurement period during which a company may complete its accounting for certain tax effects of the Tax Act impact as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law.  Future adjustments to the provisional numbers are to be recorded as discrete adjustments to income tax expense in the period in which those adjustments become estimable and/or are finalized.

Accordingly, the additional provisional income tax of $6,763 as of June 29, 2018 reflects (i) the current year impacts of the Tax Act on the Company’s estimated annual effective tax rate and (ii) the following discrete items resulting directly from the enactment of the Tax Act based on the information currently available, prepared, or analyzed (including computations) in reasonable detail.

(i) The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. The impact from the permanent reduction to the U.S. federal corporate income tax rate from 35% to 21% is effective January 1, 2018.  When a U.S. federal tax rate change occurs during a fiscal year, taxpayers are required to compute a weighted daily average rate for the fiscal year of enactment and as a result the Company calculated a U.S. federal statutory income tax rate of 24.5% for the current fiscal year end September 28, 2018.

(ii) The tax expense impact associated with the enactment of the U.S. Tax Act resulted in additional discrete tax expense in the current period as follows:

(thousands)	Nine Months Ended June 29, 2018
Transition tax (provisional)	$	3,200
Net impact on U.S. deferred tax assets and liabilities (provisional)		3,563
Net impacts of the enactment of the Tax Act	$	6,763

Within the calculation of the Company’s annual effective tax rate, the Company has used assumptions and estimates that may change as a result of future guidance, interpretation, and rule-making from the Internal Revenue Service, the SEC, and the FASB and/or various other taxing jurisdictions.  For example, the Company anticipates that the state jurisdictions will continue to determine and announce their conformity to the Tax Act which could have an impact on the Company’s annual effective tax rate.

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JOHNSON OUTDOORS INC.

For the three and nine months ended June 29, 2018 and June 30, 2017, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:

	Three Months Ended						Nine Months Ended
(thousands, except tax rate data)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Profit (loss) before income taxes	$	31,779		$	25,560		$	69,548		$	47,352
Income tax expense		8,009			9,007			23,923			12,784
Effective income tax rate		25.2	%		35.2	%		34.4	%		27.0	%

The change in the Company’s effective tax rate for the three months ended June 29, 2018 versus the prior year period was primarily due to the impact of the reduced federal statutory income tax rate on current year earnings from the enactment of the Tax Act.  During the current year quarter, the Company recorded no change to tax expense related to the estimated provisional amount previously recorded.

The change in the Company’s effective tax rate for the nine months ended June 29, 2018 versus the prior year period was primarily due to the impact of the $6,763 provisional tax expense generated by the enactment of the Tax Act in the current year period compared to a prior year foreign tax credit net tax benefit of approximately $4,200 generated by the repatriation of approximately $22,000 from foreign jurisdictions to the U.S.

Adverse changes in profitability and financial outlook in both the U.S. and/or foreign jurisdictions or changes in the Company’s geographic footprint may require changes in valuation allowances in order to reduce the Company’s deferred tax assets.  Such changes may drive fluctuations in the effective tax rate.  The impact of the Company’s operations in jurisdictions where a valuation allowance is assessed, primarily in the foreign locations, is removed from the overall effective tax rate methodology and recorded directly based on year to date results for the year for which no tax expense or benefit can be recognized.  The tax jurisdictions that have a valuation allowance for the periods ended June 29, 2018 and June 30, 2017 were:

June 29, 2018	June 30, 2017
Australia	Australia
Austria	Austria
France	France
Indonesia	Indonesia
	Italy
	Japan
Netherlands	Netherlands
New Zealand	New Zealand
Spain	Spain
	Switzerland

The Company regularly assesses the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes.  As a result, the Company may adjust the reserves for unrecognized tax benefits due to the impact of changes in its assumptions or as a result of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities and lapses of statutes of limitation.  The Company’s 2018 fiscal year tax expense is anticipated to include approximately $500 related to uncertain income tax positions.

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JOHNSON OUTDOORS INC.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized benefits as a component of income tax expense.  The Company is projecting accrued interest of $300 related to uncertain income tax positions for the fiscal year ending September 28, 2018.

The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions.   The Company is currently undergoing income tax examinations in Italy. As of the date of this report, the following tax years remain open to examination by the respective tax jurisdictions:

Jurisdiction	Fiscal Years
United States	2015-2017
Canada	2013-2017
France	2014-2017
Germany	2013-2017
Italy	2012-2017
Switzerland	2007-2017

7 INVENTORIES

Inventories at the end of the respective periods consisted of the following:

	June 29, 2018		September 29, 2017		June 30, 2017
Raw materials	$	32,141	$	32,826	$	26,250
Work in process		77		48		168
Finished goods		45,081		46,274		41,821
	$	77,299	$	79,148	$	68,239

8 GOODWILL

The changes in goodwill during the nine months ended June 29, 2018 and June 30, 2017 were as follows:

	June 29, 2018			June 30, 2017
Balance at beginning of period	$	11,238		$	11,196
Amount attributable to movements in foreign currency rates		(54	)		5
Balance at end of period	$	11,184		$	11,201

The Company evaluates the carrying value of goodwill on an annual basis or more frequently when events and circumstances warrant such an evaluation.  In conducting this analysis, the Company uses the income approach to compare the reporting unit’s carrying value to its indicated fair value.  Fair value is determined primarily by using a discounted cash flow methodology that requires considerable management judgment and long-term assumptions and is considered a Level 3 (unobservable) fair value determination in the fair value hierarchy (see Note 13) below.

9 WARRANTIES

The Company provides warranties on certain of its products as they are sold. The following table summarizes the Company’s warranty activity for the nine months ended June 29, 2018 and June 30, 2017.

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JOHNSON OUTDOORS INC.

	June 29, 2018		June 30, 2017
Balance at beginning of period	$	6,393	$	4,326
Expense accruals for warranties issued during the period		7,485		5,386
Less current period warranty claims paid		4,981		3,461
Balance at end of period	$	8,897	$	6,251

10 CONTINGENCIES

The Company is subject to various legal actions and proceedings in the normal course of business, including those related to commercial disputes, product liability, intellectual property and regulatory matters. The Company is insured against loss for certain of these matters. Although litigation is subject to many uncertainties and the ultimate exposure with respect to these matters cannot be ascertained, management does not believe the final outcome of any pending litigation will have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

11 INDEBTEDNESS

The Company had no debt at June 29, 2018, September 29, 2017, or June 30, 2017.

Term Loans

On October 24, 2016 the Company repaid its outstanding term loans with Ridgestone Bank totaling $7,068.  The early repayment of these loans resulted in a 3% pre-payment penalty.  The Company’s term loans had a maturity date of September 29, 2029.   The interest rate in effect on the term loans was 5.50% at the date of repayment.

Revolvers

During the nine months ended June 29, 2018, the Company and certain of its subsidiaries entered into a new unsecured credit facility with PNC Bank National Association and Associated Bank, N.A. (“the Lending Group”).  This credit facility replaced the Company’s previous revolving credit agreement dated September 16, 2013 and consists of an Amended and Restated Credit Agreement dated November 15, 2017 among the Company, certain of the Company’s subsidiaries, PNC Bank National Association, as lender and as administrative agent, and the other lender named therein (the “New Revolving Credit Agreement” or “New Revolver”).  The New Revolver has an expiration date of November 15, 2022 and provides for borrowing of up to an aggregate principal amount not to exceed $75,000 with a $50,000 accordion feature that gives the Company the option to increase the maximum financing availability (i.e., an aggregate borrowing amount of $125,000) subject to the conditions of the New Revolving Credit Agreement and subject to the approval of the lenders.

The interest rate on the New Revolver is based on LIBOR plus an applicable margin, which margin resets each quarter.  The applicable margin ranges from 1.00% to 1.75% and is dependent on the Company’s leverage ratio for the trailing twelve month period.  The interest rate in effect on the Company’s revolving credit agreement at June 29, 2018 and June 30, 2017 was approximately 3.1% and 2.5%, respectively.

The New Revolving Credit Agreement restricts the Company’s ability to incur additional debt, includes maximum leverage ratio and minimum interest coverage ratio covenants and is unsecured.

Other Borrowings

The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of June 29, 2018 or June 30, 2017.  The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance, which totaled approximately $279 and $279 at June 29, 2018 and June 30, 2017, respectively.

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JOHNSON OUTDOORS INC.

12 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The following disclosures describe the Company’s objectives in using derivative instruments, the business purpose or context for using derivative instruments, and how the Company believes the use of derivative instruments helps achieve the stated objectives.  In addition, the following disclosures describe the effects of the Company’s use of derivative instruments and hedging activities on its financial statements.

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. As the values of the currencies of the foreign countries in which the Company has operations increase or decrease relative to the U.S. dollar, the sales, expenses, profits, losses, assets and liabilities of the Company’s foreign operations, as reported in the Company’s consolidated financial statements, increase or decrease, accordingly.  Approximately 15% of the Company’s revenues for the nine month period ended June 29, 2018 were denominated in currencies other than the U.S. dollar. Approximately 6% were denominated in euros, approximately 6% were denominated in Canadian dollars and approximately 2% were denominated in Hong Kong dollars, with the remaining revenues denominated in various other foreign currencies. Changes in foreign currency exchange rates can cause the Company to experience unexpected financial losses or cash flow needs.

During the nine months ended June 29, 2018, the Company recognized a currency translation gain of $2,290 related to the liquidation of a foreign subsidiary. This gain is reported as a component of “Other (income) expense, net” in the accompanying Condensed Consolidated Statements of Operations.

The Company may mitigate a portion of the fluctuations in certain foreign currencies through the use of foreign currency forward contracts.  Foreign currency forward contracts enable the Company to lock in the foreign currency exchange rate to be paid or received for a fixed amount of currency at a specified date in the future. The Company may use such foreign currency forward contracts to mitigate the risk associated with changes in foreign currency exchange rates on financial instruments and known commitments, including commitments for inventory purchases, denominated in foreign currencies. As of June 29, 2018 and June 30, 2017, the Company held no foreign currency forward contracts.

13 FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable.

• Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets or liabilities.

• Level 2 - Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments.

• Level 3 - Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

The carrying amounts of cash, cash equivalents, short term investments, accounts receivable, and accounts payable approximated their fair values at June 29, 2018, September 29, 2017 and June 30, 2017 due to the short term maturities of these instruments. When indicators of impairment are present, the Company may be required to value certain long-lived assets such as property, plant, and equipment, and other intangibles at their fair value.

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JOHNSON OUTDOORS INC.

Valuation Techniques

Rabbi Trust Assets

Rabbi trust assets are classified as trading securities and are comprised of marketable debt and equity securities that are marked to fair value based on unadjusted quoted prices in active markets.  The rabbi trust assets are used to fund amounts the Company owes to certain officers and other employees under the Company’s non-qualified deferred compensation plan.  The mark to market adjustments are recorded in “Other (income) expense, net” in the accompanying Condensed Consolidated Statements of Operations.  The offsetting deferred compensation liability is also reported at fair value and is included in “Other liabilities” in the Company’s Condensed Consolidated Balance Sheets. Changes in the liability are recorded in “Administrative management, finance and information systems” expense in the accompanying Condensed Consolidated Statements of Operations.

Goodwill and Other Intangible Assets

In assessing the recoverability of the Company’s goodwill and other indefinite lived intangible assets, the Company estimates the future discounted cash flows of the businesses to which such goodwill and intangibles relate.  When estimated future discounted cash flows are less than the carrying value of the net assets and related goodwill, an impairment test is performed to measure and recognize the amount of the impairment loss, if any.  In determining estimated future cash flows, the Company makes assumptions regarding anticipated financial position, future earnings, and other factors to determine the fair value of the respective assets.  This calculation is highly sensitive to changes in key assumptions and could result in a future impairment charge.  The Company will continue to evaluate whether circumstances and events have changed to the extent that they require the Company to conduct an interim test of goodwill.  In particular, if the Company’s business units do not achieve short term revenue and gross margin goals, an interim impairment test may be triggered which could result in a goodwill and indefinite lived intangible asset impairment charge in future periods.

The following table summarizes the Company’s financial assets measured at fair value as of June 29, 2018:

	Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	16,659	$	—	$	—	$	16,659

The following table summarizes the Company’s financial assets measured at fair value as of September 29, 2017:

	Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	14,932	$	—	$	—	$	14,932

The following table summarizes the Company’s financial assets measured at fair value as of June 30, 2017:

	Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	14,071	$	—	$	—	$	14,071

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three month periods ended June 29, 2018 and June 30, 2017 was:

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JOHNSON OUTDOORS INC.

		Three Months Ended
	Location of (income) loss recognized in Statement of Operations	June 29, 2018			June 30, 2017
Rabbi trust assets	Other (income) expense, net	$	(283	)	$	(499	)

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the nine month periods ended June 29, 2018 and June 30, 2017 was:

		Nine Months Ended
	Location of (income) loss recognized in Statement of Operations	June 29, 2018			June 30, 2017
Rabbi trust assets	Other (income) expense, net	$	(854	)	$	(1,050	)

There were no assets or liabilities measured at fair value on a non-recurring basis in periods subsequent to their initial recognition for either of the three or nine month periods ended June 29, 2018 or June 30, 2017.

14 NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which supersedes existing revenue recognition requirements and provides a new comprehensive revenue recognition model.  The underlying principle of the new standard requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for those goods or services.  The provisions are effective for the Company in the first quarter of fiscal 2019 and permit adoption under either the full retrospective approach (recognizing effects of the amended guidance in each prior reporting period presented) or the modified retrospective approach (recognizing the cumulative effect of adoption as an adjustment to retained earnings at the date of initial application).

The Company has developed a project plan including a review of all revenue streams in each business segment.  We continue to assess the potential impact of adopting this guidance and are finalizing our implementation plan.  We are in process of identifying and designing appropriate changes to our processes, systems and controls to support the recognition and disclosure requirements under the new guidance.  Preliminarily, we have not identified any significant impacts to our consolidated financial statements based on our assessment to date. The Company expects to adopt this standard by applying the modified retrospective approach.  Our continued evaluation of the expected impact of the new guidance or the issuance of additional interpretations, if any, could result in an impact that is different from our preliminary conclusions.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The amendments in this update will increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the effect of this standard on its consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. The ASU includes provisions intended to simplify the measurement of inventory and to more clearly articulate the requirements for the measurement and disclosure of inventory. Under such provisions, an entity should measure inventory within the scope of this amendment at the lower of cost or net realizable value.  Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted this standard at the beginning of the first quarter of fiscal 2018. The adoption of this ASU did not have a significant impact on the Company’s consolidated financial statements.

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JOHNSON OUTDOORS INC.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU includes, among other provisions, one that will require presentation of the service cost component of net benefit cost in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period.  The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of a subtotal of income from operations.  This amendment is effective for annual periods beginning after December 15, 2017 and the interim periods within those annual periods.  The Company elected to adopt this accounting standard at the beginning of the first quarter of fiscal 2018. See Note 5 “Pension Plans” of these Notes to Condensed Consolidated Financial Statements for information regarding the effect of this new accounting standard.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220), which allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017.  ASU No. 2018-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  The ASU allows for early adoption in any interim period after issuance of the update.  The Company is currently assessing the impact this ASU will have on its consolidated financial statements.

15 SEGMENTS OF BUSINESS

The Company conducts its worldwide operations through separate business segments, each of which represents major product lines. Operations are conducted in the United States and various foreign countries, primarily in Europe, Canada and the Pacific Basin.  During the three and nine month periods ended June 29, 2018, combined net sales to one customer of the Company’s Fishing, Camping and Watercraft Recreation segments represented approximately $26,755 and $76,035, respectively, of the Company’s consolidated revenues.  There was no single customer that represented more than 10% of the Company’s total net sales during either of the three or nine month periods ended June 30, 2017.

Net sales and operating profit include both sales to customers, as reported in the Company’s accompanying Condensed Consolidated Statements of Operations, and interunit transfers, which are priced to recover cost plus an appropriate profit margin. Total assets represent assets that are used in the Company’s operations in each business segment at the end of the periods presented.

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JOHNSON OUTDOORS INC.

A summary of the Company’s operations by business segment is presented below:

	Three Months Ended						Nine Months Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017			September 29,  2017
Net sales:
Fishing:
Unaffiliated customers	$	121,765		$	103,808		$	335,965		$	276,187
Interunit transfers		155			166			368			282
Camping:
Unaffiliated customers		13,898			12,115			29,810			29,213
Interunit transfers		17			14			33			26
Watercraft Recreation:
Unaffiliated customers		14,000			17,199			29,138			38,477
Interunit transfers		115			91			142			117
Diving
Unaffiliated customers		20,766			21,814			57,565			54,411
Interunit transfers		8			170			17			492
Other / Corporate		350			338			658			522
Eliminations		(295	)		(441	)		(560	)		(917	)
Total	$	170,779		$	155,274		$	453,136		$	398,810
Operating profit (loss):
Fishing	$	33,044		$	24,293		$	77,871		$	54,324
Camping		2,154			1,452			1,732			1,691
Watercraft Recreation		661			2,417			(653	)		2,466
Diving		1,503			1,218			1,132			468
Other / Corporate		(5,407	)		(4,643	)		(15,088	)		(13,282	)
	$	31,955		$	24,737		$	64,994		$	45,667
Total assets (end of period):
Fishing							$	147,479		$	137,259		$	128,706
Camping								34,368			29,777			32,652
Watercraft Recreation								23,259			26,551			20,222
Diving								58,763			55,410			58,190
Other / Corporate								133,682			105,960			113,889
							$	397,551		$	354,957		$	353,659

1

16 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in Accumulated Other Comprehensive Income (“AOCI”) by component, net of tax, for the three months ended June 29, 2018 were as follows:

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JOHNSON OUTDOORS INC.

	Foreign Currency Translation Adjustment			Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at March 30, 2018	$	9,057		$	(5,909	)	$	3,148
Other comprehensive loss before reclassifications		(2,442	)		—			(2,442	)
Amounts reclassified from accumulated other comprehensive income		61			50			111
Tax effects		—			(12	)		(12	)
Balance at June 29, 2018	$	6,676		$	(5,871	)	$	805

The changes in AOCI by component, net of tax, for the three months ended June 30, 2017 were as follows:

	Foreign Currency Translation Adjustment		Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2017	$	7,652	$	(7,996	)	$	(344	)
Other comprehensive loss before reclassifications		2,350		—			2,350
Amounts reclassified from accumulated other comprehensive income		—		265			265
Tax effects		—		(100	)		(100	)
Balance at June 30, 2017	$	10,002	$	(7,831	)	$	2,171

The changes in AOCI by component, net of tax, for the nine months ended June 29, 2018 were as follows:

	Foreign Currency Translation Adjustment			Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at September 29, 2017	$	11,179		$	(6,186	)	$	4,993
Other comprehensive loss before reclassifications		(2,213	)		—			(2,213	)
Amounts reclassified from accumulated other comprehensive income		(2,290	)		415			(1,875	)
Tax effects		—			(100	)		(100	)
Balance at June 29, 2018	$	6,676		$	(5,871	)	$	805

The changes in AOCI by component, net of tax, for the nine months ended June 30, 2017 were as follows:

	Foreign Currency Translation Adjustment			Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at September 30, 2016	$	10,525		$	(8,171	)	$	2,354
Other comprehensive income before reclassifications		(523	)		—			(523	)
Amounts reclassified from accumulated other comprehensive income		—			548			548
Tax effects		—			(208	)		(208	)
Balance at June 30, 2017	$	10,002		$	(7,831	)	$	2,171

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JOHNSON OUTDOORS INC.

The reclassifications out of AOCI for the three months ended June 29, 2018 were as follows:

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	50		Other income and expense
Tax effects		(12	)	Income tax expense
Foreign currency translation adjustments:
Write off of currency translation adjustment gain		61		Other income and expense
Total reclassifications for the period	$	99

The reclassifications out of AOCI for the three months ended June 30, 2017 were as follows:

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	265		Cost of sales / Operating expense
Tax effects		(100	)	Income tax expense
Total reclassifications for the period	$	165

The reclassifications out of AOCI for the nine months ended June 29, 2018 were as follows:

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	415		Other income and expense
Tax effects		(100	)	Income tax expense
Foreign currency translation adjustments:
Write off of currency translation adjustment gain		(2,290	)	Other income and expense
Total reclassifications for the period	$	(1,975	)

The reclassifications out of AOCI for the nine months ended June 30, 2017 were as follows:

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	548		Cost of sales / Operating expense
Tax effects		(208	)	Income tax expense
Total reclassifications for the period	$	340

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes comments and analysis relating to the results of operations and financial condition of Johnson Outdoors Inc. and its subsidiaries (collectively, the “Company”) as of and for the three and nine month periods ended June 29, 2018 and June 30, 2017.  All monetary amounts, other than share and per share amounts, are stated in thousands.

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JOHNSON OUTDOORS INC.

Our MD&A is presented in the following sections:

• Forward Looking Statements

• Trademarks

• Overview

• Results of Operations

• Liquidity and Financial Condition

• Contractual Obligations and Off Balance Sheet Arrangements

• Critical Accounting Policies and Estimates

This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related notes that immediately precede this section, as well as the Company’s Annual Report on Form 10-K for the fiscal year ended September 29, 2017 which was filed with the Securities and Exchange Commission on December 8, 2017.

Forward Looking Statements

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

Factors that could affect actual results or outcomes include the matters described under the caption “Risk Factors” in Item 1A of the Company’s Form 10-K which was filed with the Securities and Exchange Commission on December 8, 2017 and the following:  changes in economic conditions, consumer confidence levels and discretionary spending patterns in key markets; uncertainties stemming from changes in U.S. trade policies, tariffs, and the reaction of other countries to such changes; the Company’s success in implementing its strategic plan, including its targeted sales growth platforms, innovation focus and its increasing digital presence; litigation costs related to actions of and disputes with third parties, including competitors; the Company’s continued success in its working capital management and cost-structure reductions; the Company’s success in integrating strategic acquisitions; the risk of future writedowns of goodwill or other long-lived assets; the ability of the Company’s customers to meet payment obligations; movements in foreign currencies, interest rates or commodity costs; fluctuations in the prices of raw materials or the availability of raw materials used by the Company; any disruptions in the Company’s supply chain as a result of material fluctuations in the Company’s order volumes and requirements for raw materials and other components necessary to manufacture and produce the Company’s products;  the success of the Company’s suppliers and customers and the impact of any consolidation in the industries of the Company’s suppliers and customers; the ability of the Company to deploy its capital successfully; unanticipated outcomes related to outsourcing certain manufacturing processes; unanticipated outcomes related to litigation matters; and adverse weather conditions. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this filing. The Company assumes no obligation, and disclaims any obligation, to update such forward-looking statements to reflect subsequent events or circumstances.

Trademarks

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

Overview

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

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JOHNSON OUTDOORS INC.

Highlights

Net sales of $170,779 for the third quarter of fiscal 2018 increased $15,505, or 10%, from the same period in the prior year reflecting record sales volumes in the Fishing business.  This sales volume increase was the primary driver of a $7,218 improvement in operating profit over the prior year quarter.

Seasonality

The Company’s business is seasonal in nature. The third fiscal quarter falls within the Company’s primary selling season for its warm-weather outdoor recreation products.  The table below sets forth a historical view of the Company’s seasonality during the last three fiscal years.

	Fiscal Year
	2017						2016						2015
Quarter Ended	Net Sales			Operating Profit			Net Sales			Operating Profit			Net Sales			Operating Profit
December		19	%		1	%		20	%		-4	%		16	%		-41	%
March		30	%		45	%		31	%		66	%		31	%		43	%
June		32	%		54	%		32	%		59	%		33	%		92	%
September		19	%		—	%		17	%		-21	%		20	%		6	%
		100	%		100	%		100	%		100	%		100	%		100	%

Results of Operations

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

	Three Months Ended						Nine Months Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Net sales:
Fishing	$	121,920		$	103,974		$	336,333		$	276,469
Camping		13,915			12,129			29,843			29,239
Watercraft Recreation		14,115			17,290			29,280			38,594
Diving		20,774			21,984			57,582			54,903
Other / Eliminations		55			(103	)		98			(395	)
Total	$	170,779		$	155,274		$	453,136		$	398,810
Operating profit (loss):
Fishing	$	33,044		$	24,293		$	77,871		$	54,324
Camping		2,154			1,452			1,732			1,691
Watercraft Recreation		661			2,417			(653	)		2,466
Diving		1,503			1,218			1,132			468
Other / Eliminations		(5,407	)		(4,643	)		(15,088	)		(13,282	)
Total	$	31,955		$	24,737		$	64,994		$	45,667

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JOHNSON OUTDOORS INC.

See “Note 15 – Segments of Business” of the notes to the accompanying Condensed Consolidated Financial Statements for the definition of segment net sales and operating profit.

Net Sales

Consolidated net sales for the three months ended June 29, 2018 were $170,779, an increase of $15,505, or 10%, compared to $155,274 for the three months ended June 30, 2017.  Foreign currency translation had a favorable impact of 1% on current year third quarter net sales compared to the prior year’s third quarter.

Net sales for the three months ended June 29, 2018 for the Fishing business were $121,920, up $17,946, or 17%, from $103,974 during the third fiscal quarter of the prior year.  Strong performance of new products drove the growth over the prior year quarter.

Net sales for the Camping business were $13,915 for the third quarter of the current fiscal year, an increase of $1,786, or 15%, from the prior year net sales during the same period of $12,129.  The increase was driven by higher sales in military and Eureka consumer tents and increases in Jetboil sales, which were offset in part by the divestiture of the Silva brand since the prior year quarter.

Net sales for the third quarter of fiscal 2018 for the Watercraft Recreation business were $14,115, a decrease of $3,175, or 18%, compared to $17,290 in the prior year same period due primarily to a weakened kayak market as well as lost distribution related to retail consolidations.

Diving net sales were $20,774 for the three months ended June 29, 2018 versus $21,984 for the three months ended June 30, 2017, a decrease of $1,210, or 6%.  The decrease was driven primarily by the closure of the Japan entity which was offset in part by foreign currency translation which impacted Diving’s third quarter sales favorably by 3% versus the prior year’s third fiscal quarter.

For the nine months ended June 29, 2018, consolidated net sales increased 14% to $453,136 compared to $398,810 for the nine months ended June 30, 2017.  Foreign currency translation had a favorable impact of 1% on current year to date net sales compared to the prior year period.

Net sales for the nine months ended June 29, 2018 for the Fishing business were $336,333, up $59,864, or 22%, from $276,469 for the first nine months of the prior year.  Strong performance of new products was the primary driver of the increase over the prior year to date period.

Net sales for the Camping business were $29,843 for the nine months ended June 29, 2018, an increase of $604, or 2%, from the prior year net sales during the same period of $29,239.  An increase in Jetboil sales was offset in part by the divestiture of the Silva brand as noted above.

Net sales for the first nine months of fiscal 2018 for the Watercraft Recreation business were $29,280, a decrease of $9,314, or 24%, compared to $38,594 in the prior year period.  The decline was due primarily to a weakened kayak market as well as lost distribution related to retail consolidations.

Diving net sales were $57,582 for the nine months ended June 29, 2018 versus $54,903 for the nine months ended June 30, 2017, an increase of $2,679, or 5%.  Foreign currency translation impacted Diving’s year to date sales favorably by 5% versus the prior year to date period.

Cost of Sales

Cost of sales for the three months ended June 29, 2018 was $91,446 compared to $84,644 for the three months ended June 30, 2017.  The increase year over year was driven primarily by higher sales volume in the current year quarter over the prior year quarter.

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JOHNSON OUTDOORS INC.

For the nine months ended June 29, 2018, cost of sales was $250,797 compared to $226,702 in the same period of the prior year.  The increase year over year was again driven primarily by higher sales volume in the current year to date period over the prior year to date period.

The Company’s business is impacted by international or cross-border trade, including related to tariffs and trade tensions among nations.  The Company is currently analyzing the future impact of recently announced changes in U.S. trade policies, including the announcement of new tariffs on the import of components and other supplies from certain foreign countries, on its cost of sales, operating profit and net income.

Gross Profit Margin

For the three months ended June 29, 2018, gross profit as a percentage of net sales was 46.5% compared to 45.5% in the three month period ended June 30, 2017.  Favorable product mix was the primary driver of the improvement year over year.

For the nine months ended June 29, 2018, gross profit as a percentage of net sales was 44.7% compared to 43.2% in the nine months ended June 30, 2017.  Favorable product mix, lower inventory reserves and overhead efficiencies driven by sales volume increases were the primary drivers of the improvement over the prior year to date period.

Operating Expenses

Operating expenses were $47,378 for the three months ended June 29, 2018 compared to $45,893 for the three months ended June 30, 2017.  The increase of $1,485 was primarily due to higher sales volume related expenses between quarters, such as marketing and selling expenses.

Operating expenses were $137,345 for the nine months ended June 29, 2018 compared to $126,441 for the nine months ended June 30, 2017.  Increased sales volume related expenses, headcount and discretionary compensation expense, warranty costs and professional services related to the Company’s digital initiatives in the current year to date period were the primary drivers of the increase over the same period in the prior year.

Operating Profit

Operating profit on a consolidated basis for the three month period ended June 29, 2018 was $31,955 compared to an operating profit of $24,737 in the third quarter of the prior fiscal year.   The improvement year over year was driven primarily by the increased sales volume between quarters and the other factors noted above.

Operating profit on a consolidated basis for the nine months ended June 29, 2018 was $64,994 compared to an operating profit of $45,667 in the prior year to date period.   The improvement year over year was driven primarily by the increased sales volume between periods and the other factors noted above.

Interest

For the three months ended June 29, 2018, interest expense was $55 compared to $77 in the three months ended June 30, 2017.  Interest expense was $170 for the nine months ended June 29, 2018 compared to $687 for the nine months ended June 30, 2017.   The decrease in the current year-to-date period was due primarily to the write off of deferred financing costs and a 3% prepayment penalty triggered by the prepayment of the Company’s term loans occurring during the first quarter of fiscal 2017.

Interest income for the three month periods ended June 29, 2018 and June 30, 2017 was $172 and $52, respectively. For the nine months ended June 29, 2018, interest income was $493 compared to $84 for the nine months ended June 30, 2017.   The increase in income year over year was driven by interest earnings on short term investments and interest bearing cash in fiscal 2018 versus the corresponding periods of fiscal 2017.

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JOHNSON OUTDOORS INC.

Other (Income) Expense, net

Other expense was $293 for the three months ended June 29, 2018 compared to other income of $848 in the prior year period.  For the three months ended June 29, 2018, foreign currency exchange losses were $213 compared to gains of $147 for the three months ended June 30, 2017.  Investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan were $345 in the three month period ended June 29, 2018 compared to investment gains and earnings of $558 in the three month period ended June 30, 2017.

For the nine months ended June 29, 2018, other income was $4,231 compared to other income of $2,288 in the nine months ended June 30, 2017.  Foreign currency exchange gains were $2,393 for the nine months ended June 29, 2018 compared to gains of $658 for the nine months ended June 30, 2017.  The current nine month period reflects a gain of $2,290 on the recognition of currency translation adjustments related to the liquidation of the Company’s subsidiary in Japan.  Investment gains and earnings on the assets related to the Company’s non-qualified deferred compensation plan were $1,132 for the nine months ended June 29, 2018 compared to investment gains and earnings of $1,456 for the nine months ended June 30, 2017.  The gain on sale of certain trademarks in the Camping business of approximately $1,200 was also included in Other income for the nine months ended June 29, 2018.

Income Tax Expense

The Company’s provision for income taxes is based upon estimated annual effective tax rates in the tax jurisdictions in which the Company operates.  The effective tax rates for the three and nine month periods ended June 29, 2018 were 25.2% and 34.4%, respectively, compared to 35.2% and 27.0%, respectively, in the corresponding periods of the prior year.

The change in the Company’s effective tax rate for the nine month period ended June 29, 2018 versus the prior year nine month period was primarily due to the impact of a $6,763 provisional tax expense generated by the enactment of comprehensive tax legislation generally referred to as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) in the current year to date period.  Additionally, in the prior year to date period, the tax rate was impacted by a foreign tax credit net tax benefit of roughly $4,200 generated by the repatriation of approximately $22,000 to the U.S. from foreign jurisdictions in that period.

The Tax Act, enacted on December 22, 2017, reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign-sourced earnings.  The impact from the permanent reduction to the U.S. federal corporate income tax rate from 35% to 21% was effective as of January 1, 2018.  When a U.S. federal tax rate change occurs during a fiscal year, taxpayers are required to compute a weighted daily average rate for the fiscal year of enactment and as a result the Company calculated a U.S. federal statutory income tax rate of 24.5% for the current fiscal year ending September 28, 2018.  The Company expects the U.S. federal statutory income tax rate to be 21% for fiscal years beginning after September 28, 2018.

As of June 29, 2018, the Company has not yet completed its accounting for the tax effects of the Tax Act; however, within the calculation of the Company’s annual effective tax rate, the Company has made a reasonable estimate of the one-time transition tax and its effect on the Company’s existing deferred tax balances that may change as a result of future guidance, interpretation and rule-making from the Internal Revenue Service, the SEC and the FASB and/or various other taxing jurisdictions.  For example, the company anticipates that the state jurisdictions will continue to determine and announce their conformity to the Tax Act which could have an impact on the Company’s annual effective tax rate.

Net Income

Net income for the three months ended June 29, 2018 was $23,770, or $2.37 per diluted common class A and B share, compared to net income of $16,553, or $1.65 per diluted common class A and B share, for the third quarter of the prior fiscal year.

Net income for the nine months ended June 29, 2018 was $45,625, or $4.54 per diluted common class A and B share, compared to net income of $34,568, or $3.45 per diluted common class A and B share, for the nine months ended June 30, 2017.

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JOHNSON OUTDOORS INC.

Liquidity and Financial Condition

Cash and cash equivalents and short term investments totaled $129,277 as of June 29, 2018, compared to cash and cash equivalents and short term investments of $93,741 as of June 30, 2017.  The Company’s debt to total capitalization ratio was 0% as of June 29, 2018 and June 30, 2017.  The Company’s total debt balance was $0 as of June 29, 2018 and June 30, 2017.  See “Note 11 – Indebtedness” in the notes to the Company’s accompanying condensed consolidated financial statements for further discussion.

Accounts receivable, net of allowance for doubtful accounts, were $80,877 as of June 29, 2018, an increase of $1,585 compared to $79,292 as of June 30, 2017.  Inventories, net of inventory reserves, were $77,299 as of June 29, 2018, an increase of $9,060, compared to $68,239 as of June 30, 2017.  Accounts payable were $32,978 at June 29, 2018 compared to $33,889 as of June 30, 2017.

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

	Nine Months Ended
(thousands)	June 29, 2018			June 30, 2017
Cash provided by (used for):
Operating activities	$	37,026		$	25,886
Investing activities		8,260			(47,942	)
Financing activities		(3,832	)		(10,706	)
Effect of foreign currency rate changes on cash		(987	)		(791	)
Increase (Decrease) in cash and cash equivalents	$	40,467		$	(33,553	)

Operating Activities

Cash provided by operations totaled $37,026 for the nine months ended June 29, 2018 compared with cash provided by operations of $25,886 during the corresponding period of the prior fiscal year.  The increase over the prior year nine month period was due primarily to the $11,057 increase in net income.  Depreciation and amortization charges were $9,617 for the nine month period ended June 29, 2018 compared to $9,677 for the corresponding period of the prior year.

Investing Activities

Cash provided by investing activities totaled $8,260 for the nine months ended June 29, 2018 compared to $47,942 of cash used for investing activities for the corresponding period of the prior fiscal year.  The current year period reflects net proceeds from the change in the level of short-term investments of $21,607 versus the purchase of $40,000 of short-term investments in the prior year period. Cash usage for capital expenditures totaled $14,653 for the current year to date period and $8,147 for the prior year to date period.  The increase in expenditures in the current year period was primarily related to a planned global systems infrastructure upgrade and investments in digital transformation. The Company’s recurring investments are made primarily for software development and tooling for new products and enhancements on existing products. Any additional expenditures in fiscal 2018 are expected to be funded by working capital.

Financing Activities

Cash flows used for financing activities totaled $3,832 for the nine months ended June 29, 2018 compared to cash flows used for financing activities of $10,706 for the nine month period ended June 30, 2017.  The year over year change was due primarily to repayments of debt in the prior year period.

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JOHNSON OUTDOORS INC.

On October 24, 2016 the Company repaid its outstanding term loans with Ridgestone Bank totaling $7,068.  The early repayment of these loans resulted in payment of a 3% pre-payment penalty.  The Company’s term loans had a maturity date of September 29, 2029.   The interest rate in effect on the term loans was 5.50% at the date of repayment.

During the quarter ended December 29, 2017, the Company and certain of its subsidiaries entered into a new unsecured revolving credit facility with PNC Bank National Association and Associated Bank, N.A. (“the Lending Group”).  This credit facility replaced the Company’s previous revolving credit agreement dated September 16, 2013 and consists of an Amended and Restated Credit Agreement dated November 15, 2017 among the Company, certain of the Company’s subsidiaries, PNC Bank National Association, as lender and as administrative agent, and the other lender named therein (the “New Revolving Credit Agreement” or “New Revolver”).  The New Revolver has an expiration date of November 15, 2022 and provides for borrowing of up to an aggregate principal amount not to exceed $75,000 with a $50,000 accordion feature that gives the Company the option to increase the maximum financing availability (i.e., an aggregate borrowing amount of $125,000) subject to the conditions of the New Revolving Credit Agreement and subject to the approval of the lenders.  The New Revolving Credit Agreement restricts the Company’s ability to incur additional debt and includes maximum leverage ratios and minimum interest coverage ratio covenants.

The interest rate on the New Revolver resets each quarter and is based on LIBOR plus an applicable margin.  The applicable margin on the New Revolver ranges from 1.00% to 1.75% and is dependent on the Company’s leverage ratio for the trailing twelve month period.  The interest rate on the Company’s revolving credit agreement at June 29, 2018 and June 30, 2017 was approximately 3.1% and 2.5%, respectively.

As of June 29, 2018 the Company held approximately $35,623 of cash and cash equivalents in bank accounts in foreign taxing jurisdictions.

Contractual Obligations and Off Balance Sheet Arrangements

The Company has contractual obligations and commitments to make future payments including under operating leases and open purchase orders.  The following schedule details these significant contractual obligations existing at June 29, 2018.

	Total		Less than 1 year		2-3 years		4-5 years		After 5 years
Operating lease obligations	$	19,718	$	1,498	$	10,114	$	5,914	$	2,192
Open purchase orders		66,807		66,807		—		—		—
Contractually obligated interest payments		492		28		225		225		14
Total contractual obligations	$	87,017	$	68,333	$	10,339	$	6,139	$	2,206

The Company utilizes letters of credit primarily as security for the payment of future claims under its workers compensation insurance.  Letters of credit outstanding were approximately $279 and $279 at June 29, 2018 and June 30, 2017, respectively.

The Company anticipates making contributions of $47 to its defined benefit pension plans during the remainder of fiscal 2018.

The Company has no other off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The Company’s critical accounting policies and estimates are identified in the Company’s Annual Report on Form 10-K for the fiscal year ending September 29, 2017 in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “Critical Accounting Estimates.”  There were no significant changes to the Company’s critical accounting policies and estimates during the nine months ended June 29, 2018.

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JOHNSON OUTDOORS INC.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company’s exposure to market risk is limited to fluctuations in raw material commodity prices, interest rate fluctuations on borrowings under our secured credit facilities and foreign currency exchange rate risk associated with our foreign operations.  The Company does not utilize financial instruments for trading purposes.

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. As the values of the currencies of the foreign countries in which the Company has operations increase or decrease relative to the U.S. dollar, the sales, expenses, profits, losses, assets and liabilities of the Company’s foreign operations, as reported in the Company’s consolidated financial statements, increase or decrease, accordingly. Approximately 15% of the Company’s revenues for the nine month period ended June 29, 2018 were denominated in currencies other than the U.S. dollar. Approximately 6% were denominated in euros, approximately 6% in Canadian dollars and approximately 2% in Hong Kong dollars, with the remaining revenues denominated in various other foreign currencies. Changes in foreign currency exchange rates can cause unexpected financial losses or cash flow needs.  The Company may mitigate a portion of the fluctuations in certain foreign currencies through the use of foreign currency forward contracts.  Foreign currency forward contracts enable the Company to lock in the foreign currency exchange rate to be paid or received for a fixed amount of currency at a specified date in the future. The Company may use such foreign currency forward contracts to mitigate the risk associated with changes in foreign currency exchange rates on financial instruments and known commitments, including commitments for inventory purchases, denominated in foreign currencies. As of June 29, 2018 and June 30, 2017, the Company held no foreign currency forward contracts.

Interest Rate Risk

The Company operates in a seasonal business and experiences significant fluctuations in operating cash flow as working capital needs increase in advance of the Company’s primary selling and cash generation season, and decline as accounts receivable are collected and cash is accumulated or debt is repaid.  The Company is subject to interest rate risk on its seasonal working capital needs if such needs are funded with short term floating rate debt.

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-cancelable supply contracts.  Primary commodity price exposures include costs associated with metals, resins and packaging materials.

Impact of Inflation

The Company anticipates that changing costs of basic raw materials 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.  Price increases and, in certain situations, price decreases are implemented for individual products, when appropriate.

The Company’s results of operations and financial condition are presented based on historical cost.  The Company does not believe that inflation has significantly affected its results of operations.

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JOHNSON OUTDOORS INC.

Item 4. Controls and Procedures

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

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

PART II OTHER INFORMATION

Item 1. Legal Proceedings

In the normal course of business, the Company may be involved in various legal proceedings from time to time.  We do not believe we are currently involved in any claim or action the ultimate disposition of which would have a material adverse effect on our financial statements.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in our Form 10-K as filed with the Securities and Exchange Commission on December 8, 2017.

Item 6. Exhibits

See Exhibit Index to this Form 10-Q report.

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JOHNSON OUTDOORS INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	JOHNSON OUTDOORS INC.
Signatures Dated: August 7, 2018
	/s/ Helen P. Johnson-Leipold
	Helen P. Johnson-Leipold
	Chairman and Chief Executive Officer
	(Principal Executive Officer)
	/s/ David W. Johnson
	David W. Johnson
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

Exhibit Index to Quarterly Report on Form 10-Q

Exhibit Number	Description
31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 (1)	Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from Johnson Outdoors Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2018 formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Income; (iv) Condensed Consolidated Statements of Cash Flows; and (v) Notes to Condensed Consolidated Financial Statements.

⁽¹⁾ This certification is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

- 29 -

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934

I, Helen P. Johnson-Leipold, certify that:

1) I have reviewed this Quarterly Report on Form 10-Q of Johnson Outdoors Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 7, 2018	/s/ Helen P. Johnson-Leipold
	Helen P. Johnson-Leipold
	Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934

I, David W. Johnson, certify that:

1) I have reviewed this Quarterly Report on Form 10-Q of Johnson Outdoors Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2018	/s/ David W. Johnson
	David W. Johnson
	Vice President and Chief Financial Officer
	Treasurer

EX-32

Exhibit 32

Written Statement of the Chairman and Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350

Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Chairman and Chief Executive Officer of Johnson Outdoors Inc. (the “Company”), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 29, 2018 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Helen P. Johnson-Leipold

Helen P. Johnson-Leipold

Chairman and Chief Executive Officer

August 7, 2018

Written Statement of the Vice President and Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350

Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Vice President and Chief Financial Officer of Johnson Outdoors Inc. (the “Company”), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 29, 2018 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David W. Johnson

David W. Johnson

Vice President and Chief Financial Officer

Treasurer

August 7, 2018

The above certifications are made solely for the purpose of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.

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Document and Entity Information - shares	9 Months Ended
	Jun. 29, 2018	Jul. 27, 2018
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 29, 2018
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018
Entity Registrant Name	JOHNSON OUTDOORS INC
Entity Central Index Key	0000788329
Current Fiscal Year End Date	--09-28
Entity Filer Category	Accelerated Filer
Class A
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		8,855,015
Class B
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		1,211,686

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017
Net sales	$ 170,779	$ 155,274	$ 453,136	$ 398,810
Cost of sales	91,446	84,644	250,797	226,702
Gross profit	79,333	70,630	202,339	172,108
Operating expenses:
Marketing and selling	31,191	29,438	89,280	79,056
Administrative management, finance and information systems	11,071	11,584	32,713	33,146
Research and development	5,116	4,871	15,352	14,239
Total operating expenses	47,378	45,893	137,345	126,441
Operating profit	31,955	24,737	64,994	45,667
Interest income	(172)	(52)	(493)	(84)
Interest expense	55	77	170	687
Other (income) expense, net	293	(848)	(4,231)	(2,288)
Profit before income taxes	31,779	25,560	69,548	47,352
Income tax expense	8,009	9,007	23,923	12,784
Net income	$ 23,770	$ 16,553	$ 45,625	$ 34,568
Weighted avage common shares - Basic:
Participating securities (shares)	50	28	49	26
Weighted average common shares - Dilutive (shares)	10,001	9,928	9,988	9,908
Class A
Weighted avage common shares - Basic:
Weighted average common shares - Basic (shares)	8,739	8,688	8,727	8,670
Net income per common share - Basic:
Net income per common share - Basic (USD per share)	$ 2.40	$ 1.68	$ 4.62	$ 3.50
Net income per common share - Diluted:
Net income per common share - Diluted (USD per share)	2.37	1.65	4.54	3.45
Dividends declared per common share:
Dividends declared per common share (USD per share)	$ 0.12	$ 0.09	$ 0.32	$ 0.27
Class B
Weighted avage common shares - Basic:
Weighted average common shares - Basic (shares)	1,212	1,212	1,212	1,212
Net income per common share - Basic:
Net income per common share - Basic (USD per share)	$ 2.19	$ 1.52	$ 4.20	$ 3.18
Net income per common share - Diluted:
Net income per common share - Diluted (USD per share)	2.37	1.65	4.54	3.45
Dividends declared per common share:
Dividends declared per common share (USD per share)	$ 0.1091	$ 0.08	$ 0.291	$ 0.25

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017
Comprehensive income:
Net income	$ 23,770	$ 16,553	$ 45,625	$ 34,568
Other comprehensive income (loss):
Foreign currency translation	(2,442)	2,350	(2,213)	(523)
Write off of currency translation adjustment gain	61	0	(2,290)	0
Change in pension plans, net of tax of $12, $100, $100 and $208, respectively	38	165	315	340
Total other comprehensive income (loss)	(2,343)	2,515	(4,188)	(183)
Total comprehensive income	$ 21,427	$ 19,068	$ 41,437	$ 34,385

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Change in pension plans, tax	$ 12	$ 100	$ 100	$ 208

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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Jun. 29, 2018	Sep. 29, 2017	Jun. 30, 2017
Current assets:
Cash and cash equivalents	$ 104,277	$ 63,810	$ 53,741
Short term investments	25,000	46,607	40,000
Accounts receivable, net	80,877	46,814	79,292
Inventories	77,299	79,148	68,239
Other current assets	1,012	4,470	2,495
Total current assets	288,465	240,849	243,767
Property, plant and equipment, net of accumulated depreciation of $129,028, $132,567 and $132,188, respectively	54,152	48,938	48,239
Deferred income taxes	12,829	22,632	22,291
Goodwill	11,184	11,238	11,201
Other intangible assets, net	12,716	13,476	13,727
Other assets	18,205	16,526	15,732
Total assets	397,551	353,659	354,957
Current liabilities:
Accounts payable	32,978	31,686	33,889
Accrued liabilities:
Salaries, wages and benefits	17,590	21,825	17,211
Accrued warranty	8,897	6,393	6,251
Income taxes payable	11,551	5,434	8,647
Accrued discounts and returns	6,450	5,137	5,751
Other	14,780	13,602	15,140
Total current liabilities	92,246	84,077	86,889
Deferred income taxes	1,775	1,845	1,232
Retirement benefits	3,788	8,844	11,355
Other liabilities	17,682	15,889	15,557
Total liabilities	115,491	110,655	115,033
Common stock:
Capital in excess of par value	74,229	72,801	72,143
Retained earnings	209,169	166,905	167,304
Accumulated other comprehensive income	805	4,993	2,171
Treasury stock at cost, shares of Class A common stock: 67,655, 67,137 and 67,137, respectively	(2,646)	(2,198)	(2,197)
Total shareholders’ equity	282,060	243,004	239,924
Total liabilities and shareholders’ equity	397,551	353,659	354,957
Class A
Common stock:
Shares issued and outstanding	442	442	442
Class B
Common stock:
Shares issued and outstanding	$ 61	$ 61	$ 61

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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 29, 2018	Sep. 29, 2017	Jun. 30, 2017
Property, plant and equipment, accumulated depreciation	$ 129,028	$ 132,567	$ 132,188
Class A
Common stock, shares issued (shares)	8,785,735	8,784,513	8,783,099
Common stock, shares outstanding (shares)	8,785,735	8,784,513	8,783,099
Treasury stock, shares (shares)	67,655	67,137	67,137
Class B
Common stock, shares issued (shares)	1,211,686	1,211,686	1,211,686
Common stock, shares outstanding (shares)	1,211,686	1,211,686	1,211,686

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017
CASH PROVIDED BY OPERATING ACTIVITIES
Net income	$ 45,625	$ 34,568
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	8,901	8,699
Amortization of intangible assets	716	978
Amortization of deferred financing costs	51	270
Write off of currency translation adjustment gain	(2,290)	0
Stock based compensation	1,585	1,377
Gain on disposal of productive assets	(1,262)	(205)
Pension contributions	(5,140)	(1,308)
Deferred income taxes	9,780	(3,073)
Change in operating assets and liabilities:
Accounts receivable, net	(34,798)	(37,503)
Inventories, net	1,218	380
Accounts payable and accrued liabilities	8,685	19,443
Other current assets	3,526	2,191
Other non-current assets	0	18
Other long-term liabilities	463	335
Other, net	(34)	(284)
CASH PROVIDED BY OPERATING ACTIVITIES	37,026	25,886
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
Purchase of short-term investments	46,607	0
Proceeds from sale of short-term investments	(25,000)	(40,000)
Proceeds from sale of productive assets	1,306	205
Capital expenditures	(14,653)	(8,147)
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	8,260	(47,942)
CASH USED FOR FINANCING ACTIVITIES
Principal payments on term loans and other long-term debt	0	(7,374)
Common stock transactions	68	0
Debt issuance costs paid	(61)	0
Dividends paid	(3,164)	(2,669)
Purchases of treasury stock	(675)	(663)
CASH USED FOR FINANCING ACTIVITIES	(3,832)	(10,706)
Effect of foreign currency rate changes on cash	(987)	(791)
Increase (Decrease) in cash and cash equivalents	40,467	(33,553)
CASH AND CASH EQUIVALENTS
Beginning of period	63,810	87,294
End of period	104,277	53,741
Supplemental Disclosure:
Cash paid for taxes	8,049	9,170
Cash paid for interest	$ 117	$ 447

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BASIS OF PRESENTATION

9 Months Ended

Jun. 29, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The condensed consolidated financial statements included herein are unaudited. In the opinion of management, these statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Johnson Outdoors Inc. and subsidiaries (collectively, the “Company”) as of June 29, 2018 and June 30, 2017, and their results of operations for the three and nine month periods then ended and cash flows for the nine month periods then ended. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 29, 2017 which was filed with the Securities and Exchange Commission on December 8, 2017.

Due to seasonal variations and other factors, the results of operations for the three and nine months ended June 29, 2018 are not necessarily indicative of the results to be expected for the Company’s full 2018 fiscal year.  See “Seasonality” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere herein for additional information.

The Company considers all short-term investments in interest-bearing accounts and all securities and other instruments with an original maturity of three months or less, to be equivalent to cash. Cash equivalents are stated at cost which approximates market value. Short-term investments consist of certificates of deposit with original maturities greater than three months but less than one year.

All monetary amounts, other than share and per share amounts, are stated in thousands.

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ACCOUNTS RECEIVABLE

9 Months Ended

Jun. 29, 2018

Receivables [Abstract]

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

Accounts receivable are stated net of allowances for doubtful accounts of $1,446, $2,231 and $1,931 as of June 29, 2018, September 29, 2017 and June 30, 2017, respectively. The increase in net accounts receivable to $80,877 as of June 29, 2018 from $46,814 as of September 29, 2017 is attributable to the seasonal nature of the Company’s business and the resulting increases in sales volumes between periods. The determination of the allowance for doubtful accounts is based on a combination of factors. In circumstances where specific collection concerns about a receivable exist, a reserve is established to value the affected account receivable at an amount the Company believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on historical experience of bad debts as a percent of accounts receivable outstanding for each business segment. Uncollectible accounts are written off against the allowance for doubtful accounts after collection efforts have been exhausted. The Company typically does not require collateral on its accounts receivable.

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EARNINGS PER SHARE (“EPS”)

9 Months Ended

Jun. 29, 2018

Earnings Per Share [Abstract]

EARNINGS PER SHARE (“EPS”)

EARNINGS PER SHARE (“EPS”)

Net income or loss per share of Class A common stock and Class B common stock is computed using the two-class method.  Grants of restricted stock which receive non-forfeitable dividends are classified as participating securities and are required to be included as part of the basic weighted average share calculation under the two-class method.

Holders of Class A common stock are entitled to cash dividends equal to 110% of all dividends declared and paid on each share of Class B common stock. The Company grants shares of unvested restricted stock in the form of Class A shares, which carry the same distribution rights as the Class A common stock described above.  As such, the undistributed earnings for each period are allocated to each class of common stock based on the proportionate share of the amount of cash dividends that each such class is entitled to receive.

Basic EPS

Basic net income or loss per share is computed by dividing net income or loss allocated to Class A common stock and Class B common stock by the weighted-average number of shares of Class A common stock and Class B common stock outstanding, respectively.  In periods with cumulative year to date net income and undistributed income, the undistributed income for each period is allocated to each class of common stock based on the proportionate share of the amount of cash dividends that each such class is entitled to receive.  In periods where there is a cumulative year to date net loss or no undistributed income because distributions through dividends exceed net income, Class B shares are treated as anti-dilutive and, therefore, net losses are allocated equally on a per share basis among all participating securities.

For the three and nine month periods ended June 29, 2018 and June 30, 2017, basic income per share for the Class A and Class B shares has been presented using the two class method and reflects the allocation of undistributed income described above. 

Diluted EPS

Diluted net income per share is computed by dividing allocated net income by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options, restricted stock units (“stock units” or “units”) and non-vested restricted stock.  Anti-dilutive stock options, units and non-vested stock are excluded from the calculation of diluted EPS.  The computation of diluted net income per share of Class A common stock assumes that Class B common stock is converted into Class A common stock.  Therefore, diluted net income per share is the same for both Class A and Class B common shares.  In periods where the Company reports a net loss, the effect of anti-dilutive stock options and units is excluded and diluted loss per share is equal to basic loss per share for both classes of stock.

For the three and nine month periods ended June 29, 2018 and June 30, 2017, diluted net income per share reflects the effect of dilutive stock units and assumes the conversion of Class B common stock into Class A common stock. 

Non-vested stock that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive totaled 46,776 and 95,068 for the three months ended June 29, 2018 and June 30, 2017, respectively, and 57,624 and 111,061 for the nine months ended June 29, 2018 and June 30, 2017, respectively.  Stock units that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive were 38,392 and 32,357 for the three month periods ended June 29, 2018 and June 30, 2017, respectively, and 39,605 and 34,746 for the nine month periods ended June 29, 2018 and June 30, 2017, respectively.

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STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS

9 Months Ended

Jun. 29, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS

STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS

The Company’s current stock ownership plans allow for issuance of stock options to acquire shares of Class A common stock by key executives and non-employee directors. Current plans also allow for issuance of shares of restricted stock, restricted stock units or stock appreciation rights in lieu of stock options.

Under the Company’s 2010 Long-Term Stock Incentive Plan and the 2012 Non-Employee Director Stock Ownership Plan (the only two plans where shares remain available for future equity incentive awards) there were a total of 578,880 shares of the Company’s Class A common stock available for future grant to key executives and non-employee directors at June 29, 2018.

Non-vested Stock

All shares of non-vested stock awarded by the Company have been granted in the form of shares of Class A common stock at their fair market value on the date of grant and vest four years after the grant date.  The fair value at date of grant is based on the number of shares granted and the average of the Company’s high and low Class A common stock price on the date of grant or, if the Company’s Class A shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock price on the last preceding date on which the Company’s Class A shares traded.

A summary of non-vested stock activity for the nine months ended June 29, 2018 related to the Company’s stock ownership plans is as follows:

	Shares		Weighted Average Grant Price
Non-vested stock at September 29, 2017	95,068		$	27.68
Non-vested stock grants	6,532		70.39
Restricted stock vested	(54,824	)	25.36
Non-vested stock at June 29, 2018	46,776		36.37

Non-vested stock grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of shares by tendering a portion of the vested shares back to the Company.  Shares tendered back to the Company were 9,377 and 17,832 during the nine month periods ended June 29, 2018 and June 30, 2017, respectively.

Stock compensation expense, net of forfeitures, related to non-vested stock was $106 and $219 for the three month periods ended June 29, 2018 and June 30, 2017, respectively, and $394 and $722 for the nine month periods ended June 29, 2018 and June 30, 2017, respectively.  Unrecognized compensation cost related to non-vested stock as of June 29, 2018 was $798, which amount will be amortized to expense through November 2021 or adjusted for changes in future estimated or actual forfeitures.

The fair value of restricted stock vested during the nine month periods ended June 29, 2018 and June 30, 2017 was $3,948 and $3,219, respectively.

Restricted Stock Units

All restricted stock units (RSUs) awarded by the Company have been granted in the form of units payable in shares of Class A common stock upon vesting. The units are valued at the fair market value of a share of Class A common stock on the date of grant and vest within one year from the date of grant for RSUs granted to directors and three years from the date of grant for RSUs granted to employees.  The fair value at the date of grant is based on the number of units granted and the average of the Company’s high and low Class A common stock trading price on the date of grant or, if the Company’s Class A shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock trading price on the last preceding date on which the Company’s Class A shares traded.

A summary of RSU activity for the nine months ended June 29, 2018 follows:

	Number of RSUs		Weighted Average Grant Price
RSUs at September 29, 2017	60,642		$	31.85
RSUs granted	27,868		67.82
RSUs vested	(8,931	)	35.27
RSUs at June 29, 2018	79,579		44.06

Stock compensation expense, net of forfeitures, related to RSUs was $450 and $213 for the three months ended June 29, 2018 and June 30, 2017, respectively, and $1,149 and $640 for the nine months ended June 29, 2018 and June 30, 2017, respectively.  Unrecognized compensation cost related to non-vested RSUs as of June 29, 2018 was $1,532, which amount will be amortized to expense through September 2020 or adjusted for changes in future estimated or actual forfeitures.

Compensation expense related to units earned by employees is based upon the attainment of certain financial goals related to cumulative net sales and cumulative operating profit over a three-year performance period. Awards are only paid if at least 80% of the target levels are met and maximum payouts are made if 120% or more of target levels are achieved. The payouts for achievement at the threshold levels of performance are equal to 50% of the target award amount. The payouts for achievement at maximum levels of performance are equal to 150% of the target award amount. To the extent earned, awards are issued in shares of Company common stock after the end of the three-year performance period.

Employees’ Stock Purchase Plan

The Company’s shareholders have adopted the Johnson Outdoors Inc. 2009 Employees’ Stock Purchase Plan, which was most recently amended on March 2, 2017, and which provides for the issuance of shares of Class A common stock at a purchase price of not less than 85% of the fair market value of such shares on the date of grant or on the date of purchase, whichever is lower.

During the three month period ended June 29, 2018, the Company issued no shares of Class A common stock and recognized $20 of expense in connection with the Employees' Stock Purchase Plan. During the nine months ended June 29, 2018, the Company issued 1,740 shares of Class A common stock and recognized $41 of expense in connection with the Plan. During the three and nine month periods ended June 30, 2017, the Company issued no shares of Class A common stock and recognized $10 and $15 of expense, respectively, in connection with the Plan.

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PENSION PLANS

9 Months Ended

Jun. 29, 2018

Retirement Benefits [Abstract]

PENSION PLANS

PENSION PLANS

The Company has non-contributory defined benefit pension plans covering certain of its U.S. employees. Retirement benefits are generally provided based on the employees’ years of service and average earnings. Normal retirement age is 65, with provisions for earlier retirement.

The Company elected to adopt ASU 2017-07 at the beginning of the first quarter of fiscal 2018. The adoption of this standard resulted in a reduction of operating expense of $347 and an increase in other expense of $347 for the three months ended June 29, 2018 and a reduction of operating expense of $637 and an increase in other expense of $637 for the nine months ended June 29, 2018. There was no effect on the Company's condensed consolidated balance sheet or statement of cash flows as a result of adopting this standard.

The Company made contributions to its pension plans of $47 and $1,043 for the three months ended June 29, 2018 and June 30, 2017, respectively, and contributions of $5,140 and $1,308 for the nine month periods ended June 29, 2018 and June 30, 2017, respectively.

The components of net periodic benefit cost related to Company sponsored defined benefit plans for the three and nine month periods ended June 29, 2018 and June 30, 2017 were as follows:

	Three Months Ended					Nine Months Ended
	June 29, 2018			June 30, 2017		June 29, 2018		June 30, 2017
Components of net periodic benefit cost:
Service cost	$	—		$	—	$	—	$	—
Interest on projected benefit obligation	272			215		794		783
Less estimated return on plan assets	(25		)	347		572		895
Amortization of unrecognized losses	50			265		415		548
Net periodic benefit cost	$	347		$	133	$	637	$	436

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INCOME TAXES

9 Months Ended

Jun. 29, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

On December 22, 2017, the U.S. enacted comprehensive tax legislation generally referred to as the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). The Tax Act included significant changes to existing tax law including a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, a one-time repatriation tax on deferred foreign income (“Transition Tax”), deductions, credits and business-related exclusions.

Shortly after the Tax Act was enacted, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which provides a one-year measurement period during which a company may complete its accounting for certain tax effects of the Tax Act impact as "provisional" when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. Future adjustments to the provisional numbers are to be recorded as discrete adjustments to income tax expense in the period in which those adjustments become estimable and/or are finalized.

Accordingly, the additional provisional income tax of $6,763 as of June 29, 2018 reflects (i) the current year impacts of the Tax Act on the Company's estimated annual effective tax rate and (ii) the following discrete items resulting directly from the enactment of the Tax Act based on the information currently available, prepared, or analyzed (including computations) in reasonable detail.

(i) The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. The impact from the permanent reduction to the U.S. federal corporate income tax rate from 35% to 21% is effective January 1, 2018. When a U.S. federal tax rate change occurs during a fiscal year, taxpayers are required to compute a weighted daily average rate for the fiscal year of enactment and as a result the Company calculated a U.S. federal statutory income tax rate of 24.5% for the current fiscal year end September 28, 2018.

(ii) The tax expense impact associated with the enactment of the U.S. Tax Act resulted in additional discrete tax expense in the current period as follows:

	Nine Months Ended
(thousands)	June 29, 2018
Transition tax (provisional)	$	3,200
Net impact on U.S. deferred tax assets and liabilities (provisional)	3,563
Net impacts of the enactment of the Tax Act	$	6,763

Within the calculation of the Company’s annual effective tax rate, the Company has used assumptions and estimates that may change as a result of future guidance, interpretation, and rule-making from the Internal Revenue Service, the SEC, and the FASB and/or various other taxing jurisdictions. For example, the Company anticipates that the state jurisdictions will continue to determine and announce their conformity to the Tax Act which could have an impact on the Company's annual effective tax rate.

For the three and nine months ended June 29, 2018 and June 30, 2017, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:

	Three Months Ended						Nine Months Ended
(thousands, except tax rate data)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Profit (loss) before income taxes	$	31,779		$	25,560		$	69,548		$	47,352
Income tax expense	8,009			9,007			23,923			12,784
Effective income tax rate	25.2		%	35.2		%	34.4		%	27.0		%

The change in the Company’s effective tax rate for the three months ended June 29, 2018 versus the prior year period was primarily due to the impact of the reduced federal statutory income tax rate on current year earnings from the enactment of the Tax Act. During the current year quarter, the Company recorded no change to tax expense related to the estimated provisional amount previously recorded.

The change in the Company's effective tax rate for the nine months ended June 29, 2018 versus the prior year period was primarily due to the impact of the $6,763 provisional tax expense generated by the enactment of the Tax Act in the current year period compared to a prior year foreign tax credit net tax benefit of approximately $4,200 generated by the repatriation of approximately $22,000 from foreign jurisdictions to the U.S.

Adverse changes in profitability and financial outlook in both the U.S. and/or foreign jurisdictions or changes in the Company's geographic footprint may require changes in valuation allowances in order to reduce the Company’s deferred tax assets. Such changes may drive fluctuations in the effective tax rate.  The impact of the Company’s operations in jurisdictions where a valuation allowance is assessed, primarily in the foreign locations, is removed from the overall effective tax rate methodology and recorded directly based on year to date results for the year for which no tax expense or benefit can be recognized.  The tax jurisdictions that have a valuation allowance for the periods ended June 29, 2018 and June 30, 2017 were:

June 29, 2018	June 30, 2017
Australia	Australia
Austria	Austria
France	France
Indonesia	Indonesia
	Italy
	Japan
Netherlands	Netherlands
New Zealand	New Zealand
Spain	Spain
	Switzerland

The Company regularly assesses the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes.  As a result, the Company may adjust the reserves for unrecognized tax benefits due to the impact of changes in its assumptions or as a result of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities and lapses of statutes of limitation.  The Company’s 2018 fiscal year tax expense is anticipated to include approximately $500 related to uncertain income tax positions.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized benefits as a component of income tax expense.  The Company is projecting accrued interest of $300 related to uncertain income tax positions for the fiscal year ending September 28, 2018.

The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions.   The Company is currently undergoing income tax examinations in Italy. As of the date of this report, the following tax years remain open to examination by the respective tax jurisdictions:

Jurisdiction	Fiscal Years
United States	2015-2017
Canada	2013-2017
France	2014-2017
Germany	2013-2017
Italy	2012-2017
Switzerland	2007-2017

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INVENTORIES

9 Months Ended

Jun. 29, 2018

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Inventories at the end of the respective periods consisted of the following:

	June 29, 2018		September 29, 2017		June 30, 2017
Raw materials	$	32,141	$	32,826	$	26,250
Work in process	77		48		168
Finished goods	45,081		46,274		41,821
	$	77,299	$	79,148	$	68,239

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GOODWILL

9 Months Ended

Jun. 29, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

GOODWILL

The changes in goodwill during the nine months ended June 29, 2018 and June 30, 2017 were as follows:

	June 29, 2018			June 30, 2017
Balance at beginning of period	$	11,238		$	11,196
Amount attributable to movements in foreign currency rates	(54		)	5
Balance at end of period	$	11,184		$	11,201

The Company evaluates the carrying value of goodwill on an annual basis or more frequently when events and circumstances warrant such an evaluation.  In conducting this analysis, the Company uses the income approach to compare the reporting unit's carrying value to its indicated fair value. Fair value is determined primarily by using a discounted cash flow methodology that requires considerable management judgment and long-term assumptions and is considered a Level 3 (unobservable) fair value determination in the fair value hierarchy (see Note 13) below.

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WARRANTIES

9 Months Ended

Jun. 29, 2018

Product Warranties Disclosures [Abstract]

WARRANTIES

WARRANTIES

The Company provides warranties on certain of its products as they are sold. The following table summarizes the Company’s warranty activity for the nine months ended June 29, 2018 and June 30, 2017.

	June 29, 2018		June 30, 2017
Balance at beginning of period	$	6,393	$	4,326
Expense accruals for warranties issued during the period	7,485		5,386
Less current period warranty claims paid	4,981		3,461
Balance at end of period	$	8,897	$	6,251

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CONTINGENCIES

9 Months Ended

Jun. 29, 2018

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES

CONTINGENCIES

The Company is subject to various legal actions and proceedings in the normal course of business, including those related to commercial disputes, product liability, intellectual property and regulatory matters. The Company is insured against loss for certain of these matters. Although litigation is subject to many uncertainties and the ultimate exposure with respect to these matters cannot be ascertained, management does not believe the final outcome of any pending litigation will have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

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INDEBTEDNESS

9 Months Ended

Jun. 29, 2018

Debt Disclosure [Abstract]

INDEBTEDNESS

INDEBTEDNESS

The Company had no debt at June 29, 2018, September 29, 2017, or June 30, 2017.

Term Loans

On October 24, 2016 the Company repaid its outstanding term loans with Ridgestone Bank totaling $7,068.  The early repayment of these loans resulted in a 3% pre-payment penalty.  The Company’s term loans had a maturity date of September 29, 2029.   The interest rate in effect on the term loans was 5.50% at the date of repayment.

Revolvers

During the nine months ended June 29, 2018, the Company and certain of its subsidiaries entered into a new unsecured credit facility with PNC Bank National Association and Associated Bank, N.A. ("the Lending Group").  This credit facility replaced the Company's previous revolving credit agreement dated September 16, 2013 and consists of an Amended and Restated Credit Agreement dated November 15, 2017 among the Company, certain of the Company’s subsidiaries, PNC Bank National Association, as lender and as administrative agent, and the other lender named therein (the “New Revolving Credit Agreement” or “New Revolver”).  The New Revolver has an expiration date of November 15, 2022 and provides for borrowing of up to an aggregate principal amount not to exceed $75,000 with a $50,000 accordion feature that gives the Company the option to increase the maximum financing availability (i.e., an aggregate borrowing amount of $125,000) subject to the conditions of the New Revolving Credit Agreement and subject to the approval of the lenders.

The interest rate on the New Revolver is based on LIBOR plus an applicable margin, which margin resets each quarter.  The applicable margin ranges from 1.00% to 1.75% and is dependent on the Company’s leverage ratio for the trailing twelve month period.  The interest rate in effect on the Company's revolving credit agreement at June 29, 2018 and June 30, 2017 was approximately 3.1% and 2.5%, respectively.

The New Revolving Credit Agreement restricts the Company's ability to incur additional debt, includes maximum leverage ratio and minimum interest coverage ratio covenants and is unsecured.

Other Borrowings

The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of June 29, 2018 or June 30, 2017.  The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance, which totaled approximately $279 and $279 at June 29, 2018 and June 30, 2017, respectively.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

9 Months Ended

Jun. 29, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The following disclosures describe the Company’s objectives in using derivative instruments, the business purpose or context for using derivative instruments, and how the Company believes the use of derivative instruments helps achieve the stated objectives.  In addition, the following disclosures describe the effects of the Company’s use of derivative instruments and hedging activities on its financial statements.

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. As the values of the currencies of the foreign countries in which the Company has operations increase or decrease relative to the U.S. dollar, the sales, expenses, profits, losses, assets and liabilities of the Company’s foreign operations, as reported in the Company’s consolidated financial statements, increase or decrease, accordingly.  Approximately 15% of the Company’s revenues for the nine month period ended June 29, 2018 were denominated in currencies other than the U.S. dollar. Approximately 6% were denominated in euros, approximately 6% were denominated in Canadian dollars and approximately 2% were denominated in Hong Kong dollars, with the remaining revenues denominated in various other foreign currencies. Changes in foreign currency exchange rates can cause the Company to experience unexpected financial losses or cash flow needs.

During the nine months ended June 29, 2018, the Company recognized a currency translation gain of $2,290 related to the liquidation of a foreign subsidiary. This gain is reported as a component of "Other (income) expense, net" in the accompanying Condensed Consolidated Statements of Operations.

The Company may mitigate a portion of the fluctuations in certain foreign currencies through the use of foreign currency forward contracts.  Foreign currency forward contracts enable the Company to lock in the foreign currency exchange rate to be paid or received for a fixed amount of currency at a specified date in the future. The Company may use such foreign currency forward contracts to mitigate the risk associated with changes in foreign currency exchange rates on financial instruments and known commitments, including commitments for inventory purchases, denominated in foreign currencies. As of June 29, 2018 and June 30, 2017, the Company held no foreign currency forward contracts.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Jun. 29, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable.

• Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets or liabilities.

• Level 2 - Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments.

• Level 3 - Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

The carrying amounts of cash, cash equivalents, short term investments, accounts receivable, and accounts payable approximated their fair values at June 29, 2018, September 29, 2017 and June 30, 2017 due to the short term maturities of these instruments. When indicators of impairment are present, the Company may be required to value certain long-lived assets such as property, plant, and equipment, and other intangibles at their fair value.

Valuation Techniques

Rabbi Trust Assets

Rabbi trust assets are classified as trading securities and are comprised of marketable debt and equity securities that are marked to fair value based on unadjusted quoted prices in active markets.  The rabbi trust assets are used to fund amounts the Company owes to certain officers and other employees under the Company’s non-qualified deferred compensation plan.  The mark to market adjustments are recorded in “Other (income) expense, net” in the accompanying Condensed Consolidated Statements of Operations. The offsetting deferred compensation liability is also reported at fair value and is included in "Other liabilities" in the Company's Condensed Consolidated Balance Sheets. Changes in the liability are recorded in "Administrative management, finance and information systems" expense in the accompanying Condensed Consolidated Statements of Operations.

Goodwill and Other Intangible Assets

In assessing the recoverability of the Company’s goodwill and other indefinite lived intangible assets, the Company estimates the future discounted cash flows of the businesses to which such goodwill and intangibles relate.  When estimated future discounted cash flows are less than the carrying value of the net assets and related goodwill, an impairment test is performed to measure and recognize the amount of the impairment loss, if any.  In determining estimated future cash flows, the Company makes assumptions regarding anticipated financial position, future earnings, and other factors to determine the fair value of the respective assets.  This calculation is highly sensitive to changes in key assumptions and could result in a future impairment charge.  The Company will continue to evaluate whether circumstances and events have changed to the extent that they require the Company to conduct an interim test of goodwill.  In particular, if the Company’s business units do not achieve short term revenue and gross margin goals, an interim impairment test may be triggered which could result in a goodwill and indefinite lived intangible asset impairment charge in future periods.

The following table summarizes the Company’s financial assets measured at fair value as of June 29, 2018:

	Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	16,659	$	—	$	—	$	16,659

The following table summarizes the Company’s financial assets measured at fair value as of September 29, 2017:

	Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	14,932	$	—	$	—	$	14,932

The following table summarizes the Company’s financial assets measured at fair value as of June 30, 2017:

	Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	14,071	$	—	$	—	$	14,071

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three month periods ended June 29, 2018 and June 30, 2017 was:

		Three Months Ended
	Location of (income) loss recognized in Statement of Operations	June 29, 2018			June 30, 2017
Rabbi trust assets	Other (income) expense, net	$	(283	)	$	(499	)

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the nine month periods ended June 29, 2018 and June 30, 2017 was:

		Nine Months Ended
	Location of (income) loss recognized in Statement of Operations	June 29, 2018			June 30, 2017
Rabbi trust assets	Other (income) expense, net	$	(854	)	$	(1,050	)

There were no assets or liabilities measured at fair value on a non-recurring basis in periods subsequent to their initial recognition for either of the three or nine month periods ended June 29, 2018 or June 30, 2017.

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NEW ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Jun. 29, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which supersedes existing revenue recognition requirements and provides a new comprehensive revenue recognition model.  The underlying principle of the new standard requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for those goods or services.  The provisions are effective for the Company in the first quarter of fiscal 2019 and permit adoption under either the full retrospective approach (recognizing effects of the amended guidance in each prior reporting period presented) or the modified retrospective approach (recognizing the cumulative effect of adoption as an adjustment to retained earnings at the date of initial application).

The Company has developed a project plan including a review of all revenue streams in each business segment. We continue to assess the potential impact of adopting this guidance and are finalizing our implementation plan. We are in process of identifying and designing appropriate changes to our processes, systems and controls to support the recognition and disclosure requirements under the new guidance. Preliminarily, we have not identified any significant impacts to our consolidated financial statements based on our assessment to date. The Company expects to adopt this standard by applying the modified retrospective approach. Our continued evaluation of the expected impact of the new guidance or the issuance of additional interpretations, if any, could result in an impact that is different from our preliminary conclusions.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The amendments in this update will increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the effect of this standard on its consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. The ASU includes provisions intended to simplify the measurement of inventory and to more clearly articulate the requirements for the measurement and disclosure of inventory. Under such provisions, an entity should measure inventory within the scope of this amendment at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted this standard at the beginning of the first quarter of fiscal 2018. The adoption of this ASU did not have a significant impact on the Company's consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU includes, among other provisions, one that will require presentation of the service cost component of net benefit cost in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of a subtotal of income from operations. This amendment is effective for annual periods beginning after December 15, 2017 and the interim periods within those annual periods. The Company elected to adopt this accounting standard at the beginning of the first quarter of fiscal 2018. See Note 5 "Pension Plans" of these Notes to Condensed Consolidated Financial Statements for information regarding the effect of this new accounting standard.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220), which allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. ASU No. 2018-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The ASU allows for early adoption in any interim period after issuance of the update. The Company is currently assessing the impact this ASU will have on its consolidated financial statements.

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SEGMENTS OF BUSINESS

9 Months Ended

Jun. 29, 2018

Segment Reporting [Abstract]

SEGMENTS OF BUSINESS

SEGMENTS OF BUSINESS

The Company conducts its worldwide operations through separate business segments, each of which represents major product lines. Operations are conducted in the United States and various foreign countries, primarily in Europe, Canada and the Pacific Basin.  During the three and nine month periods ended June 29, 2018, combined net sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $26,755 and $76,035, respectively, of the Company's consolidated revenues. There was no single customer that represented more than 10% of the Company’s total net sales during either of the three or nine month periods ended June 30, 2017. 

Net sales and operating profit include both sales to customers, as reported in the Company’s accompanying Condensed Consolidated Statements of Operations, and interunit transfers, which are priced to recover cost plus an appropriate profit margin. Total assets represent assets that are used in the Company’s operations in each business segment at the end of the periods presented.

A summary of the Company’s operations by business segment is presented below:

	Three Months Ended						Nine Months Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017			September 29, 2017
Net sales:
Fishing:
Unaffiliated customers	$	121,765		$	103,808		$	335,965		$	276,187
Interunit transfers	155			166			368			282
Camping:
Unaffiliated customers	13,898			12,115			29,810			29,213
Interunit transfers	17			14			33			26
Watercraft Recreation:
Unaffiliated customers	14,000			17,199			29,138			38,477
Interunit transfers	115			91			142			117
Diving
Unaffiliated customers	20,766			21,814			57,565			54,411
Interunit transfers	8			170			17			492
Other / Corporate	350			338			658			522
Eliminations	(295		)	(441		)	(560		)	(917		)
Total	$	170,779		$	155,274		$	453,136		$	398,810
Operating profit (loss):
Fishing	$	33,044		$	24,293		$	77,871		$	54,324
Camping	2,154			1,452			1,732			1,691
Watercraft Recreation	661			2,417			(653		)	2,466
Diving	1,503			1,218			1,132			468
Other / Corporate	(5,407		)	(4,643		)	(15,088		)	(13,282		)
	$	31,955		$	24,737		$	64,994		$	45,667
Total assets (end of period):
Fishing							$	147,479		$	137,259		$	128,706
Camping							34,368			29,777			32,652
Watercraft Recreation							23,259			26,551			20,222
Diving							58,763			55,410			58,190
Other / Corporate							133,682			105,960			113,889
							$	397,551		$	354,957		$	353,659

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Jun. 29, 2018

Stockholders' Equity Note [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in Accumulated Other Comprehensive Income (“AOCI”) by component, net of tax, for the three months ended June 29, 2018 were as follows:

	Foreign Currency Translation Adjustment			Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at March 30, 2018	$	9,057		$	(5,909	)	$	3,148
Other comprehensive loss before reclassifications	(2,442		)	—			(2,442		)
Amounts reclassified from accumulated other comprehensive income	61			50			111
Tax effects	—			(12		)	(12		)
Balance at June 29, 2018	$	6,676		$	(5,871	)	$	805

The changes in AOCI by component, net of tax, for the three months ended June 30, 2017 were as follows: 

	Foreign Currency Translation Adjustment		Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2017	$	7,652	$	(7,996	)	$	(344	)
Other comprehensive loss before reclassifications	2,350		—			2,350
Amounts reclassified from accumulated other comprehensive income	—		265			265
Tax effects	—		(100		)	(100		)
Balance at June 30, 2017	$	10,002	$	(7,831	)	$	2,171

The changes in AOCI by component, net of tax, for the nine months ended June 29, 2018 were as follows:

	Foreign Currency Translation Adjustment			Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at September 29, 2017	$	11,179		$	(6,186	)	$	4,993
Other comprehensive loss before reclassifications	(2,213		)	—			(2,213		)
Amounts reclassified from accumulated other comprehensive income	(2,290		)	415			(1,875		)
Tax effects	—			(100		)	(100		)
Balance at June 29, 2018	$	6,676		$	(5,871	)	$	805

The changes in AOCI by component, net of tax, for the nine months ended June 30, 2017 were as follows:

	Foreign Currency Translation Adjustment			Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at September 30, 2016	$	10,525		$	(8,171	)	$	2,354
Other comprehensive income before reclassifications	(523		)	—			(523		)
Amounts reclassified from accumulated other comprehensive income	—			548			548
Tax effects	—			(208		)	(208		)
Balance at June 30, 2017	$	10,002		$	(7,831	)	$	2,171

The reclassifications out of AOCI for the three months ended June 29, 2018 were as follows: 

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	50		Other income and expense
Tax effects	(12		)	Income tax expense
Foreign currency translation adjustments:
Write off of currency translation adjustment gain	61			Other income and expense
Total reclassifications for the period	$	99

The reclassifications out of AOCI for the three months ended June 30, 2017 were as follows: 

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	265		Cost of sales / Operating expense
Tax effects	(100		)	Income tax expense
Total reclassifications for the period	$	165

The reclassifications out of AOCI for the nine months ended June 29, 2018 were as follows:

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	415		Other income and expense
Tax effects	(100		)	Income tax expense
Foreign currency translation adjustments:
Write off of currency translation adjustment gain	(2,290		)	Other income and expense
Total reclassifications for the period	$	(1,975	)

The reclassifications out of AOCI for the nine months ended June 30, 2017 were as follows:

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	548		Cost of sales / Operating expense
Tax effects	(208		)	Income tax expense
Total reclassifications for the period	$	340

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BASIS OF PRESENTATION (Policies)

9 Months Ended

Jun. 29, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The condensed consolidated financial statements included herein are unaudited. In the opinion of management, these statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Johnson Outdoors Inc. and subsidiaries (collectively, the “Company”) as of June 29, 2018 and June 30, 2017, and their results of operations for the three and nine month periods then ended and cash flows for the nine month periods then ended. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 29, 2017 which was filed with the Securities and Exchange Commission on December 8, 2017.

Due to seasonal variations and other factors, the results of operations for the three and nine months ended June 29, 2018 are not necessarily indicative of the results to be expected for the Company’s full 2018 fiscal year.  See “Seasonality” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere herein for additional information.

The Company considers all short-term investments in interest-bearing accounts and all securities and other instruments with an original maturity of three months or less, to be equivalent to cash. Cash equivalents are stated at cost which approximates market value. Short-term investments consist of certificates of deposit with original maturities greater than three months but less than one year.

All monetary amounts, other than share and per share amounts, are stated in thousands.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which supersedes existing revenue recognition requirements and provides a new comprehensive revenue recognition model.  The underlying principle of the new standard requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for those goods or services.  The provisions are effective for the Company in the first quarter of fiscal 2019 and permit adoption under either the full retrospective approach (recognizing effects of the amended guidance in each prior reporting period presented) or the modified retrospective approach (recognizing the cumulative effect of adoption as an adjustment to retained earnings at the date of initial application).

The Company has developed a project plan including a review of all revenue streams in each business segment. We continue to assess the potential impact of adopting this guidance and are finalizing our implementation plan. We are in process of identifying and designing appropriate changes to our processes, systems and controls to support the recognition and disclosure requirements under the new guidance. Preliminarily, we have not identified any significant impacts to our consolidated financial statements based on our assessment to date. The Company expects to adopt this standard by applying the modified retrospective approach. Our continued evaluation of the expected impact of the new guidance or the issuance of additional interpretations, if any, could result in an impact that is different from our preliminary conclusions.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The amendments in this update will increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the effect of this standard on its consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. The ASU includes provisions intended to simplify the measurement of inventory and to more clearly articulate the requirements for the measurement and disclosure of inventory. Under such provisions, an entity should measure inventory within the scope of this amendment at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted this standard at the beginning of the first quarter of fiscal 2018. The adoption of this ASU did not have a significant impact on the Company's consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU includes, among other provisions, one that will require presentation of the service cost component of net benefit cost in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of a subtotal of income from operations. This amendment is effective for annual periods beginning after December 15, 2017 and the interim periods within those annual periods. The Company elected to adopt this accounting standard at the beginning of the first quarter of fiscal 2018. See Note 5 "Pension Plans" of these Notes to Condensed Consolidated Financial Statements for information regarding the effect of this new accounting standard.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220), which allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. ASU No. 2018-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The ASU allows for early adoption in any interim period after issuance of the update. The Company is currently assessing the impact this ASU will have on its consolidated financial statements.

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STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS (Tables)

9 Months Ended

Jun. 29, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Non-Vested Stock Activity

A summary of non-vested stock activity for the nine months ended June 29, 2018 related to the Company’s stock ownership plans is as follows:

	Shares		Weighted Average Grant Price
Non-vested stock at September 29, 2017	95,068		$	27.68
Non-vested stock grants	6,532		70.39
Restricted stock vested	(54,824	)	25.36
Non-vested stock at June 29, 2018	46,776		36.37

Schedule of RSU Activity

A summary of RSU activity for the nine months ended June 29, 2018 follows:

	Number of RSUs		Weighted Average Grant Price
RSUs at September 29, 2017	60,642		$	31.85
RSUs granted	27,868		67.82
RSUs vested	(8,931	)	35.27
RSUs at June 29, 2018	79,579		44.06

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PENSION PLANS (Tables)

9 Months Ended

Jun. 29, 2018

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost

The components of net periodic benefit cost related to Company sponsored defined benefit plans for the three and nine month periods ended June 29, 2018 and June 30, 2017 were as follows:

	Three Months Ended					Nine Months Ended
	June 29, 2018			June 30, 2017		June 29, 2018		June 30, 2017
Components of net periodic benefit cost:
Service cost	$	—		$	—	$	—	$	—
Interest on projected benefit obligation	272			215		794		783
Less estimated return on plan assets	(25		)	347		572		895
Amortization of unrecognized losses	50			265		415		548
Net periodic benefit cost	$	347		$	133	$	637	$	436

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INCOME TAXES (Tables)

9 Months Ended

Jun. 29, 2018

Income Tax Disclosure [Abstract]

Schedule of Additional Discrete Tax Expense

The tax expense impact associated with the enactment of the U.S. Tax Act resulted in additional discrete tax expense in the current period as follows:

	Nine Months Ended
(thousands)	June 29, 2018
Transition tax (provisional)	$	3,200
Net impact on U.S. deferred tax assets and liabilities (provisional)	3,563
Net impacts of the enactment of the Tax Act	$	6,763

Summary of Earnings Before Income Taxes, Income Tax Expense and Effective Income Tax Rate

For the three and nine months ended June 29, 2018 and June 30, 2017, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:

	Three Months Ended						Nine Months Ended
(thousands, except tax rate data)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Profit (loss) before income taxes	$	31,779		$	25,560		$	69,548		$	47,352
Income tax expense	8,009			9,007			23,923			12,784
Effective income tax rate	25.2		%	35.2		%	34.4		%	27.0		%

Summary of Tax Jurisdictions of Entities with Valuation Allowances

The tax jurisdictions that have a valuation allowance for the periods ended June 29, 2018 and June 30, 2017 were:

June 29, 2018	June 30, 2017
Australia	Australia
Austria	Austria
France	France
Indonesia	Indonesia
	Italy
	Japan
Netherlands	Netherlands
New Zealand	New Zealand
Spain	Spain
	Switzerland

Summary of Income Tax Examinations

As of the date of this report, the following tax years remain open to examination by the respective tax jurisdictions:

Jurisdiction	Fiscal Years
United States	2015-2017
Canada	2013-2017
France	2014-2017
Germany	2013-2017
Italy	2012-2017
Switzerland	2007-2017

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INVENTORIES (Tables)

9 Months Ended

Jun. 29, 2018

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories at the end of the respective periods consisted of the following:

	June 29, 2018		September 29, 2017		June 30, 2017
Raw materials	$	32,141	$	32,826	$	26,250
Work in process	77		48		168
Finished goods	45,081		46,274		41,821
	$	77,299	$	79,148	$	68,239

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GOODWILL (Tables)

9 Months Ended

Jun. 29, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in goodwill during the nine months ended June 29, 2018 and June 30, 2017 were as follows:

	June 29, 2018			June 30, 2017
Balance at beginning of period	$	11,238		$	11,196
Amount attributable to movements in foreign currency rates	(54		)	5
Balance at end of period	$	11,184		$	11,201

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WARRANTIES (Tables)

9 Months Ended

Jun. 29, 2018

Product Warranties Disclosures [Abstract]

Summary of Warranty Activity

The following table summarizes the Company’s warranty activity for the nine months ended June 29, 2018 and June 30, 2017.

	June 29, 2018		June 30, 2017
Balance at beginning of period	$	6,393	$	4,326
Expense accruals for warranties issued during the period	7,485		5,386
Less current period warranty claims paid	4,981		3,461
Balance at end of period	$	8,897	$	6,251

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INDEBTEDNESS (Tables)

9 Months Ended

Jun. 29, 2018

Debt Disclosure [Abstract]

Schedule of Debt

at June 29, 2018, September 29, 2017, or June 30, 2017.

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Jun. 29, 2018

Fair Value Disclosures [Abstract]

Summary of Financial Assets Measured at Fair Value

The following table summarizes the Company’s financial assets measured at fair value as of June 29, 2018:

	Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	16,659	$	—	$	—	$	16,659

The following table summarizes the Company’s financial assets measured at fair value as of September 29, 2017:

	Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	14,932	$	—	$	—	$	14,932

The following table summarizes the Company’s financial assets measured at fair value as of June 30, 2017:

	Level 1		Level 2		Level 3		Total
Assets:
Rabbi trust assets	$	14,071	$	—	$	—	$	14,071

Effect of Changes in the Fair Value of Financial Instruments

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three month periods ended June 29, 2018 and June 30, 2017 was:

		Three Months Ended
	Location of (income) loss recognized in Statement of Operations	June 29, 2018			June 30, 2017
Rabbi trust assets	Other (income) expense, net	$	(283	)	$	(499	)

The effect of changes in the fair value of financial instruments on the accompanying Condensed Consolidated Statements of Operations for the nine month periods ended June 29, 2018 and June 30, 2017 was:

		Nine Months Ended
	Location of (income) loss recognized in Statement of Operations	June 29, 2018			June 30, 2017
Rabbi trust assets	Other (income) expense, net	$	(854	)	$	(1,050	)

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SEGMENTS OF BUSINESS (Tables)

9 Months Ended

Jun. 29, 2018

Segment Reporting [Abstract]

Summary of Operations by Business Unit

A summary of the Company’s operations by business segment is presented below:

	Three Months Ended						Nine Months Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017			September 29, 2017
Net sales:
Fishing:
Unaffiliated customers	$	121,765		$	103,808		$	335,965		$	276,187
Interunit transfers	155			166			368			282
Camping:
Unaffiliated customers	13,898			12,115			29,810			29,213
Interunit transfers	17			14			33			26
Watercraft Recreation:
Unaffiliated customers	14,000			17,199			29,138			38,477
Interunit transfers	115			91			142			117
Diving
Unaffiliated customers	20,766			21,814			57,565			54,411
Interunit transfers	8			170			17			492
Other / Corporate	350			338			658			522
Eliminations	(295		)	(441		)	(560		)	(917		)
Total	$	170,779		$	155,274		$	453,136		$	398,810
Operating profit (loss):
Fishing	$	33,044		$	24,293		$	77,871		$	54,324
Camping	2,154			1,452			1,732			1,691
Watercraft Recreation	661			2,417			(653		)	2,466
Diving	1,503			1,218			1,132			468
Other / Corporate	(5,407		)	(4,643		)	(15,088		)	(13,282		)
	$	31,955		$	24,737		$	64,994		$	45,667
Total assets (end of period):
Fishing							$	147,479		$	137,259		$	128,706
Camping							34,368			29,777			32,652
Watercraft Recreation							23,259			26,551			20,222
Diving							58,763			55,410			58,190
Other / Corporate							133,682			105,960			113,889
							$	397,551		$	354,957		$	353,659

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Jun. 29, 2018

Stockholders' Equity Note [Abstract]

Changes in AOCI by Component, Net of Tax

The changes in Accumulated Other Comprehensive Income (“AOCI”) by component, net of tax, for the three months ended June 29, 2018 were as follows:

	Foreign Currency Translation Adjustment			Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at March 30, 2018	$	9,057		$	(5,909	)	$	3,148
Other comprehensive loss before reclassifications	(2,442		)	—			(2,442		)
Amounts reclassified from accumulated other comprehensive income	61			50			111
Tax effects	—			(12		)	(12		)
Balance at June 29, 2018	$	6,676		$	(5,871	)	$	805

The changes in AOCI by component, net of tax, for the three months ended June 30, 2017 were as follows: 

	Foreign Currency Translation Adjustment		Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2017	$	7,652	$	(7,996	)	$	(344	)
Other comprehensive loss before reclassifications	2,350		—			2,350
Amounts reclassified from accumulated other comprehensive income	—		265			265
Tax effects	—		(100		)	(100		)
Balance at June 30, 2017	$	10,002	$	(7,831	)	$	2,171

The changes in AOCI by component, net of tax, for the nine months ended June 29, 2018 were as follows:

	Foreign Currency Translation Adjustment			Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at September 29, 2017	$	11,179		$	(6,186	)	$	4,993
Other comprehensive loss before reclassifications	(2,213		)	—			(2,213		)
Amounts reclassified from accumulated other comprehensive income	(2,290		)	415			(1,875		)
Tax effects	—			(100		)	(100		)
Balance at June 29, 2018	$	6,676		$	(5,871	)	$	805

The changes in AOCI by component, net of tax, for the nine months ended June 30, 2017 were as follows:

	Foreign Currency Translation Adjustment			Unamortized Loss on Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Balance at September 30, 2016	$	10,525		$	(8,171	)	$	2,354
Other comprehensive income before reclassifications	(523		)	—			(523		)
Amounts reclassified from accumulated other comprehensive income	—			548			548
Tax effects	—			(208		)	(208		)
Balance at June 30, 2017	$	10,002		$	(7,831	)	$	2,171

Reclassifications Out of AOCI

The reclassifications out of AOCI for the three months ended June 29, 2018 were as follows: 

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	50		Other income and expense
Tax effects	(12		)	Income tax expense
Foreign currency translation adjustments:
Write off of currency translation adjustment gain	61			Other income and expense
Total reclassifications for the period	$	99

The reclassifications out of AOCI for the three months ended June 30, 2017 were as follows: 

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	265		Cost of sales / Operating expense
Tax effects	(100		)	Income tax expense
Total reclassifications for the period	$	165

The reclassifications out of AOCI for the nine months ended June 29, 2018 were as follows:

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	415		Other income and expense
Tax effects	(100		)	Income tax expense
Foreign currency translation adjustments:
Write off of currency translation adjustment gain	(2,290		)	Other income and expense
Total reclassifications for the period	$	(1,975	)

The reclassifications out of AOCI for the nine months ended June 30, 2017 were as follows:

				Statement of Operations Presentation
Unamortized loss on defined benefit pension plans:
Amortization of loss	$	548		Cost of sales / Operating expense
Tax effects	(208		)	Income tax expense
Total reclassifications for the period	$	340

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ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands	Jun. 29, 2018	Sep. 29, 2017	Jun. 30, 2017
Receivables [Abstract]
Allowances for doubtful accounts receivable	$ 1,446	$ 2,231	$ 1,931
Accounts receivable, net	$ 80,877	$ 46,814	$ 79,292

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EARNINGS PER SHARE (“EPS”) (Details) - shares	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Percentage of cash dividends on Class A common stock relative to Class B common stock			110.00%
Non-Vested Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	46,776	95,068	57,624	111,061
Restricted Stock Units (RSUs)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	38,392	32,357	39,605	34,746

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STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018 USD ($) plan shares	Jun. 30, 2017 USD ($) shares	Jun. 29, 2018 USD ($) plan shares	Jun. 30, 2017 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of plans with shares available for future issuance | plan	2		2
Shares available for grant (shares) | shares	578,880		578,880
Award performance period			3 years
Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee stock purchase plan shares issued (shares) | shares	0	0	1,740
Income in connection with Employee' Stock Purchase Plan	$ 20	$ 10	$ 0	$ 15
Non-Vested Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares tendered for tax withholding (shares) | shares			9,377	17,832
Stock-based compensation expense, net of forfeitures	106	219	$ 394	$ 722
Unrecognized stock-based compensation expense	798		798
Fair value of vested restricted stock			$ 3,948	3,219
Non-Vested Stock | Employees | Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			4 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense, net of forfeitures	450	$ 213	$ 1,149	$ 640
Unrecognized stock-based compensation expense	$ 1,532		$ 1,532
Restricted Stock Units (RSUs) | Vesting Period 1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			1 year
Restricted Stock Units (RSUs) | Vesting Period 2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			3 years
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Bonus achievement target level			80.00%
Bonus payout as a percentage of target award			50.00%
Employee stock purchase plan, purchase price			85.00%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Bonus achievement target level			120.00%
Bonus payout as a percentage of target award			150.00%

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STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS (Schedule of Non-Vested Stock Activity) (Details) - Non-Vested Stock	9 Months Ended
	Jun. 29, 2018 $ / shares shares
Shares
Beginning Balance, shares (shares) | shares	95,068
Stock Grants, shares (shares) | shares	6,532
Stock vested, shares (shares) | shares	(54,824)
Ending Balance, shares (shares) | shares	46,776
Weighted Average Grant Price
Beginning Balance, Weighted Average Grant Price (USD per share) | $ / shares	$ 27.68
Stock grants, Weighted Average Grant Price (USD per share) | $ / shares	70.39
Stock vested, Weighted Average Grant Price (USD per share) | $ / shares	25.36
Ending Balance, Weighted Average Grant Price (USD per share) | $ / shares	$ 36.37

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STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS (Schedule of RSU Activity) (Details) - Restricted Stock Units (RSUs)	9 Months Ended
	Jun. 29, 2018 $ / shares shares
Number of RSUs
Beginning Balance, shares (shares) | shares	60,642
Stock Grants, shares (shares) | shares	27,868
Stock vested, shares (shares) | shares	(8,931)
Ending Balance, shares (shares) | shares	79,579
Weighted Average Grant Price
Beginning Balance, Weighted Average Grant Price (USD per share) | $ / shares	$ 31.85
Stock grants, Weighted Average Grant Price (USD per share) | $ / shares	67.82
Stock vested, Weighted Average Grant Price (USD per share) | $ / shares	35.27
Ending Balance, Weighted Average Grant Price (USD per share) | $ / shares	$ 44.06

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PENSION PLANS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating expenses	$ 47,378	$ 45,893	$ 137,345	$ 126,441
Pension plan contributions	47	1,043	5,140	1,308
Components of net periodic benefit cost:
Service cost	0	0	0	0
Interest on projected benefit obligation	272	215	794	783
Less estimated return on plan assets	(25)	347	572	895
Amortization of unrecognized losses	50	265	415	548
Net periodic benefit cost	347	$ 133	637	$ 436
Accounting Standards Update 2017-07
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating expenses	(347)		(637)
Other expenses	$ 347		$ 637

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INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 29, 2018	Sep. 28, 2018
Income Tax Disclosure [Abstract]
Net impacts of the enactment of the Tax Act	$ 6,763
Current foreign tax expense (benefit)	(4,200)
Repatriation of foreign earnings	$ 22,000
Forecast
Income Tax Contingency [Line Items]
Federal statutory income tax rate		24.50%
Tax expense related to uncertain income tax positions		$ 500
Accrued interest related to uncertain income tax positions		$ 300

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INCOME TAXES (Summary of Additional Discrete Tax Expense) (Details) $ in Thousands	9 Months Ended
	Jun. 29, 2018 USD ($)
Income Tax Disclosure [Abstract]
Transition tax (provisional)	$ 3,200
Net impact on U.S. deferred tax assets and liabilities (provisional)	3,563
Net impacts of the enactment of the Tax Act	$ 6,763

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INCOME TAXES (Summary of Earnings Before Income Taxes, Income Tax Expense and Effective Income Tax Rate) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017
Income Tax Disclosure [Abstract]
Profit (loss) before income taxes	$ 31,779	$ 25,560	$ 69,548	$ 47,352
Income tax expense	$ 8,009	$ 9,007	$ 23,923	$ 12,784
Effective income tax rate	25.20%	35.20%	34.40%	27.00%

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INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 29, 2018	Sep. 29, 2017	Jun. 30, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 32,141	$ 32,826	$ 26,250
Work in process	77	48	168
Finished goods	45,081	46,274	41,821
Inventories	$ 77,299	$ 79,148	$ 68,239

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GOODWILL (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017
Goodwill [Roll Forward]
Balance at beginning of period	$ 11,238	$ 11,196
Amount attributable to movements in foreign currency rates	(54)	5
Balance at end of period	$ 11,184	$ 11,201

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WARRANTIES (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Balance at beginning of period	$ 6,393	$ 4,326
Expense accruals for warranties issued during the period	7,485	5,386
Less current period warranty claims paid	4,981	3,461
Balance at end of period	$ 8,897	$ 6,251

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INDEBTEDNESS (Narrative) (Details) - USD ($)		9 Months Ended
	Oct. 24, 2016	Jun. 29, 2018	Nov. 15, 2017	Jun. 30, 2017
Term Loans
Debt Instrument [Line Items]
Repayment of term loans	$ 7,068,000
Pre-payment penalty percentage	3.00%
Interest rate	5.50%
Financial Standby Letter of Credit
Debt Instrument [Line Items]
Letters of credit outstanding		$ 279,000		$ 279,000
Revolving Credit Facility
Debt Instrument [Line Items]
Interest rate		3.10%		2.50%
Maximum borrowing capacity			$ 125,000,000
Revolving Credit Facility | Maximum | LIBOR
Debt Instrument [Line Items]
Margin percentage		1.75%
Revolving Credit Facility | Minimum | LIBOR
Debt Instrument [Line Items]
Margin percentage		1.00%
Revolving Credit Facility | Revolvers Borrowing Capacity Standard
Debt Instrument [Line Items]
Maximum borrowing capacity			75,000,000
Accordion feature			$ 50,000,000
Unsecured Revolving Credit Facilities At Foreign Subsidiaries
Debt Instrument [Line Items]
Unsecured revolving credit facilities		$ 0		$ 0

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) $ in Thousands	9 Months Ended
	Jun. 29, 2018 USD ($) contract	Jun. 30, 2017 contract
Derivative [Line Items]
Percent of revenues in foreign currency	15.00%
Currency translation gain (loss) | $	$ (2,290)
Number of foreign currency forward contracts (in contracts) | contract	0	0
Euro
Derivative [Line Items]
Percent of revenues in foreign currency	6.00%
Canadian Dollars
Derivative [Line Items]
Percent of revenues in foreign currency	6.00%
Hong Kong, Dollars
Derivative [Line Items]
Percent of revenues in foreign currency	2.00%
Various other currencies
Derivative [Line Items]
Percent of revenues in foreign currency	1.00%

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FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($)	Jun. 29, 2018	Jun. 30, 2017
Fair Value Disclosures [Abstract]
Assets at fair value, nonrecurring	$ 0	$ 0
Liabilities at fair value, nonrecurring	$ 0	$ 0

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FAIR VALUE MEASUREMENTS (Summary of Financial Assets) (Details) - USD ($) $ in Thousands	Jun. 29, 2018	Sep. 29, 2017	Jun. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Rabbi trust assets	$ 16,659	$ 14,932	$ 14,071
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Rabbi trust assets	16,659	14,932	14,071
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Rabbi trust assets	0	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Rabbi trust assets	$ 0	$ 0	$ 0

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FAIR VALUE MEASUREMENTS (Effect of Changes in Financial Instruments) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017
Rabbi trust assets
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value, loss (income)	$ (283)	$ (499)	$ (854)	$ (1,050)

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SEGMENTS OF BUSINESS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017	Sep. 29, 2017
Segment Reporting Information [Line Items]
Net sales	$ 170,779	$ 155,274	$ 453,136	$ 398,810
Operating profit (loss)	31,955	24,737	64,994	45,667
Total assets (end of period)	397,551	354,957	397,551	354,957	$ 353,659
Operating segments
Segment Reporting Information [Line Items]
Operating profit (loss)	(5,407)	(4,643)	(15,088)	(13,282)
Operating segments | Fishing
Segment Reporting Information [Line Items]
Net sales	121,765	103,808	335,965	276,187
Operating profit (loss)	33,044	24,293	77,871	54,324
Total assets (end of period)	147,479	137,259	147,479	137,259	128,706
Operating segments | Camping
Segment Reporting Information [Line Items]
Net sales	13,898	12,115	29,810	29,213
Operating profit (loss)	2,154	1,452	1,732	1,691
Total assets (end of period)	34,368	29,777	34,368	29,777	32,652
Operating segments | Watercraft Recreation
Segment Reporting Information [Line Items]
Net sales	14,000	17,199	29,138	38,477
Operating profit (loss)	661	2,417	(653)	2,466
Total assets (end of period)	23,259	26,551	23,259	26,551	20,222
Operating segments | Diving
Segment Reporting Information [Line Items]
Net sales	20,766	21,814	57,565	54,411
Operating profit (loss)	1,503	1,218	1,132	468
Total assets (end of period)	58,763	55,410	58,763	55,410	58,190
Operating segments | Other / Corporate
Segment Reporting Information [Line Items]
Net sales	350	338	658	522
Total assets (end of period)	133,682	105,960	133,682	105,960	$ 113,889
Interunit transfers
Segment Reporting Information [Line Items]
Net sales	(295)	(441)	(560)	(917)
Interunit transfers | Fishing
Segment Reporting Information [Line Items]
Net sales	155	166	368	282
Interunit transfers | Camping
Segment Reporting Information [Line Items]
Net sales	17	14	33	26
Interunit transfers | Watercraft Recreation
Segment Reporting Information [Line Items]
Net sales	115	91	142	117
Interunit transfers | Diving
Segment Reporting Information [Line Items]
Net sales	8	$ 170	17	$ 492
One Customer
Segment Reporting Information [Line Items]
Net sales	$ 26,755		$ 76,035

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Changes by Component) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			$ 243,004
Other comprehensive income (loss) before reclassifications	$ (2,442)	$ 2,350	(2,213)	$ (523)
Amounts reclassified from accumulated other comprehensive income	111	265	(1,875)	548
Tax effects	(12)	(100)	(100)	(208)
Ending balance	282,060	239,924	282,060	239,924
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	3,148	(344)	4,993	2,354
Ending balance	805	2,171	805	2,171
Foreign Currency Translation Adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	9,057	7,652	11,179	10,525
Other comprehensive income (loss) before reclassifications	(2,442)	2,350	(2,213)	(523)
Amounts reclassified from accumulated other comprehensive income	61	0	(2,290)	0
Tax effects	0	0	0	0
Ending balance	6,676	10,002	6,676	10,002
Unamortized Loss on Defined Benefit Pension Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(5,909)	(7,996)	(6,186)	(8,171)
Other comprehensive income (loss) before reclassifications	0	0	0	0
Amounts reclassified from accumulated other comprehensive income	50	265	415	548
Tax effects	(12)	(100)	(100)	(208)
Ending balance	$ (5,871)	$ (7,831)	$ (5,871)	$ (7,831)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Reclassifications) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 29, 2018	Jun. 30, 2017	Jun. 29, 2018	Jun. 30, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amortization of loss	$ 31,779	$ 25,560	$ 69,548	$ 47,352
Income tax expense	(8,009)	(9,007)	(23,923)	(12,784)
Write off of currency translation adjustment gain	(293)	848	4,231	2,288
Unamortized Loss on Defined Benefit Pension Plans | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amortization of loss	50	265	415	548
Income tax expense	(12)	(100)	(100)	(208)
Write off of currency translation adjustment gain	61		(2,290)
Total reclassifications for the period	$ 99	$ 165	$ (1,975)	$ 340