Johnson Outdoors
Annual Report 2007

Plain-text annual report

2007 Johnson Outdoors Inc. annual report State of the Company........................ 2 FISHING & BOATING........................... 4 Minn Kota® Humminbird® Cannon® PADDLING............................................. 16 Necky® / Old Town® / Ocean Kayak™ Lendal® / Carlisle® / Extrasport® DIVING................................................... 26 SCubaprO® / uWaTEC® CAMPING............................................... 32 Eureka!® Tech4O® / Silva® Johnson Outdoors............................. 40 philosophy people Environment 2007 Financials................................... 46 Corporate Governance board of Directors 1 2007 Johnson outdoors aNNuaL rEpOrT Helen Johnson-Leipold, Chairman and CEO, brings to life the spirit of adventure at Johnson Outdoors. bE H ErE Johnson Outdoors has arrived, with a powerful growth strategy and a return to innovation that makes us a global leader in the outdoor recreation industry. The plastic boat industry we launched in the 1970s has grown to a half-billion dollar category, and Johnson Outdoors now markets leading brands across an $11 billion marketplace. With Helen Johnson-Leipold guiding us into the future, now is the time for employees, investors and consumers to be here, with Johnson Outdoors. Ou r M I S S I O N & V I S I O N Our vision is to own the outdoor adventure with innovation and passion. Our mission is to be the innovation leader; bring excitement and growth to our markets; and build a strong, talented team with exceptional passion.  • Well-received paddlesport innovations and double-digit growth improved performance. Our year-end acquisition of Geonav®, in key international markets led to a three percent increase in a premier European chartplotter brand, further advances our Watercraft sales, partially offsetting a one-time $4.4 million growth strategy. settlement payment. • Outdoor Equipment saw double-digit growth in core consumer Geographic expansion. Five years ago we decided to test our marine and paddlesport brands in Europe, anticipating a $10 million sales, partially offsetting the expected decline in military tent sales. opportunity. Continual year-over-year double-digit growth shows the Consumer and commercial tents generated positive momentum. opportunity is much larger. With the right business model, we believe This year we took an in-depth look at the outdoor recreation universe, prioritizing opportunities to expand our footprint. We explored innovative new marketing programs, creating the all our brands have the chance to become market leaders in every key country throughout the region. Geonav® and Seemann™ give us the insight and local resources to deliver smart growth in Europe. industry’s first infomercial for Humminbird® Side Imaging™ We enter 2008 with our long-term strategic growth plan on target, technology. and we analyzed our supply chains, identifying delivering industry-leading results. Our healthy balance sheet opportunities to improve profitability. We continue to refine our gives us the financial flexibility to move forward with our plans. strategic growth plan while executing on its cornerstones: winning We will continue investing in strengthened operations and enhanced innovation, targeted acquisitions and geographic expansion. capability. We will get and stay even closer to our consumers and L E T T Er FrO M T H E C HaIrMaN Johnson Outdoors is generating record sales and improved earnings We demonstrated our commitment to enhanced shareholder value through winning innovation, successful acquisitions and European and our confidence in the future by returning profits to shareholders expansion; leveraging our assets and capabilities to build sustained, through quarterly dividends. and we continued working to manage profitable growth; and well on the way to achieving a half-billion accelerating growth efficiently as we complete the transformation dollars in sales within the next few years. of each business. The growth strategy, developed in 2001, continues to drive positive • In Marine Electronics, strong new products and innovative results, with more than a third of this year’s growth coming from marketing drove a 20 percent increase in net sales. Minn Kota® innovative new products, and another third from acquisitions. In 2007, became our first $100 million brand. we again outperformed our peers, achieving record revenues despite uncertainty over the economy. Net sales exceeded $432 million, a nine percent increase over last year. Excluding military sales in this and the prior year, core brand revenues increased twelve percent. Net earnings were up six percent, to $9.2 million, or $1.00 per diluted share as we continued to invest in the future. • Net sales for Diving increased 13 percent through the addition of Seemann™ Sub, one of Germany’s largest dive equipment providers, a successful new dive computer launch, and favorable currency translation. Winning innovation. For the fourth straight year, more than a third of revenues flowed from new products such as the breakthrough Eureka!® N!ergy™ wired tent and the market-transforming Minn Kota® Terrova™ bow-mount trolling motor. and the pipeline is full of cutting-edge ideas for all our businesses. We are the undisputed innovation leader in our markets, combining a passion for the outdoors with unique consumer insights and advanced technology to develop products aimed squarely at key growth sectors. Meaningful innovation drives demand for our brands, enables us to compete on quality rather than price, and helps us attract top talent. It empowers us to grow regardless of economic trends. targeted acquisitions. Once again more than a third of new growth came from strategic acquisitions of leading brands and state-of-the-art technology to complement our businesses. Humminbird® and Cannon® have exceeded expectations in a very short time. Lendal® is meeting targets, and Seemann™ Sub contributed significantly to Diving’s customers. We will create a business model to deliver sustained profitable growth in Europe. We will pursue strategic acquisitions where the fit is just right. and true to our Johnson values, we will strive to be a workplace of choice for our talented, dedicated and passionate company family. I welcome our employees, our consumers and our investors to be where the excitement is. be here, with Johnson Outdoors. helen Johnson-Leipold Chairman & Chief Executive Officer 2 3 2007 Johnson outdoors aNNuaL rEpOrT LEaD ErS W I T H a K Na C K Find the industry leaders here: Minn Kota®, Humminbird®, Cannon®. Creating winning products to catch fish and dreams, based on our unique insights into anglers’ habits and hopes. In just six years, the Marine Electronics Group has tripled in size through powerful organic growth and strategic acquisitions. Fiscal 2007 saw our fishing systems set records as our technology innovations piled up awards. Focused marketing and acclaimed new products, representing more than a third of group sales, drove a 20 percent net sales increase. Our recent acquisition of Geonav®, a premier European chartplotter brand, advances our strategy and our potential. We now compete in eight distinct marine electronics segments representing a total opportunity of nearly $1 billion. Find the leaders here—driving the industry to its next horizon. 4 5 2007 Johnson outdoors FISHING & bOaTING F IrS T I N T H E W OrL D a G aI N Nearly 75 years after Minn Kota® introduced anglers to the electric trolling motor, our breakthrough products continue to reel ’em in. Minn Kota® is the world’s leading manufacturer of bow- and transom-mount trolling motors. Fishing enthusiasts of every persuasion—walleye and bass, freshwater and saltwater, leisure seeker and trophy seeker—know they can count on Minn Kota®. anywhere. anytime. We stay on top of trends to keep sales soaring. For instance, today’s bigger boats have anglers craving bigger, more powerful motors. Our answer? Not only motors that deliver maximum thrust, but also a patented lift system that makes stow and deploy as easy as lifting your tailgate. Our commitment to innovation, combined with the remarkable insight and experience of our people, keeps Minn Kota® first to the market and first in the market, again and again and again. pO W ErI N G p a S T $ 1 00 M I L L I O N The vision transforming Johnson Outdoors has also transformed Minn Kota®, which this year became our first $100 million brand. Shifting our focus from “trolling motors leader” to “marine electronics leader” helped us expand this great brand to include the best marine batteries, chargers, wireless remotes, trim tabs and more. We see similar growth potential for Humminbird® and Cannon® brands. The rapid integration of these strategic acquisitions, combined with Minn Kota®’s power, helped push fiscal 2007 sales for the entire Marine Electronics Group to a new high—just short of $200 million. Full speed ahead! 6 7 2007 Johnson outdoors FISHING & bOaTING N ExT G E N Er a T I O N T Er rO V a ™ a rIp - rO a rI N G SuC C E S S The market’s most advanced bow-mount trolling motor is the most successful Minn Kota® product launch ever. The result is one tough, durable motor. “You can hit a rockbed or a submerged log, and the composite Terrova™ reinvents electric steer motors with shaft absorbs the impact,” Hansen says. Yet Terrova™ unparalleled precision, performance, digital electronics makes trolling easy, with its patented, effortless and 101 pounds of thrust. Three years of intensive stow and deploy system; low profile foot pedal with research went into developing the breakthrough line. both heel/toe and left/right buttons; and precise, “The essence of bow-mount motors hadn’t changed fluid steering. for a long time,” says ron Hansen, Director of “It makes the whole experience more enjoyable,” research, Development and Engineering for Minn Kota® Hansen says. anglers agree. In fiscal 2007’s and Humminbird®. “We got closer to the consumer, fourth quarter, Terrova™ helped drive a 30.4 percent studied how they fish and got their input to make year-to-year surge in Marine Electronics Group sales. the right decisions.” 8 9 2007 Johnson outdoors FISHING & bOaTING Minn Kota® terrova™ Terrova™ balances unmatched power and durability with effortless stow and deploy, using patented fallaway ramps. T H E FrO N T L I N E I N Ma rI N E E L E C TrO N I C S For more than 30 years Humminbird® has led the industry in developing new ways to help anglers SI D E I Ma G I N G ™ O p E N S bO L D N E W V I S T a S find fish. From 1975’s groundbreaking waterproof Dave betts, principal Engineer for Humminbird®, had depth sounder to today’s paradigm-shattering long envisioned using boatside scanners to produce Side Imaging™ technology, Humminbird® products picture-like underwater images. Now he and his are simply, clearly, better. Humminbird® draws on cutting-edge technology and consumer insight to create must-have marine team have realized that vision, combining advanced displays with four-element, 180-degree sonar to create Humminbird® Side Imaging™ technology. electronics, including fishfinders, chartplotters, Saltwater anglers can see precise details of wrecks, marine radios and global positioning systems. reefs and drop-offs. Freshwater anglers can spot In its first two years with Johnson Outdoors, fish-attracting stumps, rocks and creek beds. all can the brand has exceeded all performance targets, search more water in less time—and pinpoint prime growing revenues more than 50 percent. fishing spots with built-in GpS. The fishing community’s enthusiastic embrace and the Side Imaging™ picture gets bigger. Fans go of Side Imaging™ technology makes it clear online to swap images like they do fish stories. Search Humminbird® knows how to keep the action and rescue pros find it a powerful tool. and researchers going—in the boat, in fishfinding and in the market. have a new way to see underwater, thanks to our innovators who could see the future. HuMMinbird® 997C side Imaging™ This breakthrough fishfinder delivers picture-like images and GPS chartplotting on a wide 8-inch screen. 10 11 2007 Johnson outdoors FISHING & bOaTING Cannon® Mag20 dt/ts The ability to move fishing lures through precise depths gives trolling anglers a valuable edge. SuC C E S S a T E V Er Y L E V E L The charter boat captain heading into the pacific for salmon and the casual angler trolling an inland lake for walleye are both more likely to succeed with Cannon®. Cannon® downriggers enable anglers to place lures at precise depths as they troll, enticing specific varieties of fish. From manual downriggers to tournament series electronic models, Cannon® products are designed to deliver a more rewarding fishing adventure. Continuing innovation keeps Cannon® on top. Our team combines advanced technologies with firsthand experience to produce major advances like CannonLink™, as well as continuing enhancements like the use of corrosion-resistant materials. We share the angler’s passion—and it runs deep. C aN N O N L I N K ™ p aI r I N G Y I E L D S a D Ou bL E W I N N Er Our latest fishing system innovation has already caught plenty of attention. The CannonLink™ Fishing System module lets anglers control up to six downriggers from their Humminbird® fishfinder. “You can program the system to move the downriggers as you troll,” says Dave Nelsen, Head Engineer for Humminbird®. “and you can check downrigger status on the Humminbird® screen.” He says the modular approach makes it easy to expand fishing system capabilities year after year. CannonLink™ was named 2007’s most innovative consumer electronics and software product by the National Marine Manufacturers association. It also won top honors at ICaST. but the real winners are anglers—who just may double their chances of landing the trophy of a lifetime. 12 13 2007 Johnson outdoors FISHING & bOaTING 14 15 2007 Johnson outdoors paDDLING r E V O L uT I O N O N T H E W aT Er Here they come—a delighted army of diverse paddlers: Women in kayaks designed by and for women. anglers on the prowl in the ultimate fishing kayak. Families enjoying time together on the water. Johnson Outdoors paddlesports brands deliver unprecedented performance, convenience and comfort, driving continued sales growth in 2007. Necky®, Old Town® and Ocean Kayak™ excited kayakers with a steady stream of innovative models. Lendal® and Carlisle®, our paddle brands, pulled together smoothly to reach both hard-touring pros and recreational paddlers. Extrasport® accessories represent yet another area of significant growth potential; look for more innovation here in the year ahead. 16 17 2007 Johnson outdoors paDDLING N aV I Ga T OrS F Or T H E SpOr T and Old Town® continues to infuse modern, innovative designs and materials with the timeless spirit of paddling. Inspired by unique consumer insights and their own passion for paddling, our teams develop the innovations that advance the sport and make us the global leader in plastic canoes and kayaks. Ever since Johnson Outdoors introduced the first durable, convenient plastic boat, combining Old Town® heritage of craftsmanship with modern materials, our brands have led the evolution of paddlesports. Necky® performance kayaks blend art, experience and science to craft advanced composite models like the Chatham™, named a “best of adventure Gear” winner by National Geographic Adventure and “Gear of the Year” by Men’s Journal. Ocean Kayak™ is a global leader in sit-on-top kayaks, fueling the growth of recreational kayaking with a host of user-friendly features. N EW F I S H I N G KaYaK S GraN T aN G L ErS’ W I S H E S a global crew of professional anglers inspires Tom Swetish, Director of research and Development for paddlesports, and his fishing kayak design team. “because we can prototype quickly, we have them fish the boat early on to get their input,” he says. Supporting anglers’ movements is key, says Spike Gladwin, Head Designer. “No longer is the user simply facing straight ahead. The fish can go anywhere,” he says. “I saw one guy catch a shark that towed him for an hour.” Swetish says the new Ocean Kayak™ prowler Trident 15™ delivers kayak anglers’ “holy grail”: the rod pod™—a storage hatch they can reach while seated. More inspiration came from sales floor observations. “We saw people trying to figure out the boat,” Swetish says. “So we added graphics to call out key features. and it looks cool.” koru™ Looks baCk, surGes ahead Marrying the features of Native American hunting canoes with aerospace technology, the Old Town® Koru™ revolutionizes the premium market. The Koru™ gives Algonquin and Ojibway features new life in the market’s first infused composite canoe. At 17 feet and 50 pounds, the Koru™ is incredibly durable and stable, yet one of the lightest boats ever for its size. It’s the perfect canoe to take you back to the essence of paddling—and draw you forward to even more time on the water. 18 19 2007 Johnson outdoors paDDLING nECKY® eliza™ kayak Johnson Outdoors contributes one percent of gross sales from women-specific kayaks to the Breast Cancer Fund—since 2002, donating $35,000. WoMen-foCused desIGns For too many women, paddling a kayak was like wearing too-big shoes. In 2002, Sara Knies, Director of Marketing for Paddlesports, decided to step into this untapped segment. “Women make up nearly half the market and will spend more for quality,” she says. Murray Hamilton, Manager of Product Development and Training, and his team consulted women paddlers of all abilities to create a boat for the female physique. “You can’t just take a bigger boat and lower the deck,” he says. “We started from the ground up.” The resulting women-focused boats include the Necky® Eliza™ touring kayak. The Eliza’s™ cockpit is wider, for a woman’s center of gravity, and shorter, for easier spray deck handling. And the shallow V-shaped hull balances tracking and maneuverability, making it a pleasure to paddle. SH O W C a S I N G SuS T aI N a bI L I T Y Six special-edition kayak models made of 100 percent recycled plastic will hit the water in 2008, encouraging consumers and industry leaders alike to act responsibly. The limited-production Ocean Kayak™, Old Town® and Necky® models use sustainable, post-industrial scrap from the company’s manufacturing facilities. Kayak colors will vary slightly from mold to mold due to the recycling process, a “green” badge of honor for consumers. Johnson Outdoors will contribute one percent of gross sales to the Waterkeeper alliance™, supporting stewardship of waterways and their communities worldwide. “The environmental movement is certainly familiar to the industry and to Johnson Outdoors, but the more we thought about it, the more we wanted to illustrate our leadership and commitment to sustainability,” says Nando Zucchi, General Manager of Johnson Outdoors paddlesports. “We’re pleased to help the Waterkeeper alliance build awareness of vital natural resources.” 20 21 2007 Johnson outdoors paDDLING C O MpL E T I N G T H E Ex pErI E N C E Though all eyes may focus on the sculpted beauty of a kayak or canoe, the people in the boat equally appreciate perfection in their paddling accessories. Our brands offer choices for every level of skill and commitment. Lendal® custom designs kayak paddles that surpass conventional concepts of performance, enabling kayakers to go farther and faster, make bigger moves and run harder rapids. Carlisle® paddles and oars delight a wide range of consumers, manufacturing paddles for canoeing and kayaking and oars for rigid-hull and inflatable boats. Extrasport® life vests and accessories provide unparalleled fit, feel and function, meeting the demands of fierce competitors as well as people enjoying a serene afternoon on the bay. Together, our brands free paddlers to focus on the beauty of their own personal adventure. Extrasport® riptide™ Pfd Extrasport® personal flotation devices have long been the most trusted on the market, preferred by rescue experts everywhere. Thanks to our patented Retroglide™ adjustment system, they’re also the most comfortable. Starting this year, Extrasport® will incorporate Retroglide™ into every PFD it offers. The easy-to-use adjustment system eliminates the need for rigid buckles and straps along the shoulder and neck, so wearers enjoy a comfortable, custom fit. 22 23 2007 Johnson outdoors paDDLING 24 25 2007 Johnson outdoors DIVING a D D E D D EpT H H E I G H T E N S S aL E S New-to-the-world products and the successful acquisition of a popular German dive equipment provider led Diving to a 13 percent net sales increase in fiscal 2007. With feature-rich Galileo™ dive computers, uWaTEC® is creating the kind of revolution associated with the line’s scientist namesake. SCubaprO®, renowned since 1963 for breakthrough gear, further advanced split-fin design with the new Twin Jet Max, delivered improved second-stage regulator performance with the new G250V, and set a new standard for diving comfort with the Everflex™ wetsuit. and the april 2007 acquisition of Seemann™ Sub expanded our presence and profitability in Germany, fueling a 180-degree turnaround in Europe. In-depth technological capabilities and consumer insights drive sales—because divers at all levels know they can rely on our brands for the highest quality and comfort in dive equipment, freeing them to enjoy the ultimate underwater experience. 26 27 2007 Johnson outdoors DIVING uWatEC® Galileo™ dive computer The first dive computer to integrate heart rate monitoring, the Galileo™ also features digital navigation, patented technology to monitor up to four divers’ tanks, and software upgrades that can be downloaded from the web. GL Ob aL Ma rK E T I N G uN C O V ErS W OrL D O F Op pOr TuN I T Y Marketing to the elusive dive consumer is like finding the perfect dive Our close connections with consumers yield insight for breakthrough spot, reaching a hidden pocket of riches through insight and skill. products—like the uWaTEC® Galileo™, on track to be our most successful “Only a small percentage of the population dives,” says John Schoene, Global Marketing Director for Diving. “We make sure they can find our products where there’s good diving water—the Caribbean, the red Sea, the pacific Islands.” Specialty dive shops around the world are the key point of consumer contact. “They create communities where divers not only get equipment and training certifications but also share stories and learn about interesting dive opportunities,” Schoene says. The Diving group supports these influential dealers with product and technical training, dynamic merchandising and event organization. dive computer launch ever. The first dive computer to integrate heart rate monitoring, the Galileo™ also features digital navigation, patented technology to monitor up to four divers’ tanks, and upgrades that can be downloaded from our website. Schoene says the website is another doorway to opportunity. “Our target consumer uses the Internet to research and talk about new products,” he says. “Where they go, we go.” 28 29 2007 Johnson outdoors DIVING 30 31 2007 Johnson outdoors CaMpING C O O L G Ea r H Ea T S u p Ma rK E T Whether you treasure hang-out time with your family attention-getting innovation among these brands drove or measure hang time with your snowboarding buddies, double-digit growth this year in Outdoor Equipment’s core our Outdoor Equipment brands gear you up for the consumer segment. Eureka!® N!ergy™, the first wired tent, great outdoors. Eureka!® creates top-quality tents and sleeping bags for backyard campers, global explorers and the u.S. military. Silva® compasses have guided hikers for generations. and Tech4O® leads boldly in developing digital instruments to measure personal performance. garnered significant media coverage plus “best of year” honors from reserveamerica™. The Tech4O® air pod™, for skiers, snowboarders and skateboarders, was named a top innovation by Popular Science. and the Silva® polaris™ compass was deemed essential “Guy Gear” by Boy’s Life, the magazine of the boy Scouts of america. 32 33 2007 Johnson outdoors CaMpING LEaD ErS H Ip Spa N S C E N Tu rI E S In 1899, Eureka!® canvas covers sheltered american frontiersmen in their Conestoga wagons. In 1999, Eureka!® tents made another of their historic trips to the top of Mt. Everest. Wherever our products appear in 2099, they’ll be helping people enjoy life outdoors. Eureka!® creates superior camping tents, sleeping bags and outdoor gear for the boldest explorers and the greenest campers. Our commercial tent division was the first to offer breathtaking, full-scale tension tents for weddings, festivals and other outdoor events. and we proudly meet the challenge of producing tents and accessories to shelter u.S. military personnel in a full range of environments. Our team’s deep insights into consumer needs and desires yield continuing innovation—and keep Eureka!® a timeless market leader. r E S Ea rC H ErS W OrK T O I NCrE a S E FuN How can we help people have more fun outdoors? That question drives Joe Wiegand, Director of research and Development, and his Outdoor Equipment Group team on their hunt for the next breakthrough. “We research intensively to understand what people desire, what’s on the market, what technology exists,” Wiegand says. “Then we find a way to do it better.” That includes finding partners, like power pack experts to help with Eureka!® N!ergy™ tents, and a German accelerometer designer for the Tech4O® air pod™. It can also mean reinventing familiar products—for instance, using proprietary rteq™ fill to create lighter, warmer sleeping bags shaped for the female form. Such breakthroughs keep the business growing. Says Wiegand, “Even in a tough market, innovation is the pillar of success.” From a 1977 stop in western Ireland through a backyard overnight with his two daughters this year, Desmond McGlade camped literally all over the world in his Eureka!® Timberline tent. “The old girl finally gave in,” McGlade says. “She finally said, ‘I’ve given you 30 years of faithful service… Farewell, my friend.’” 34 35 2007 Johnson outdoors CaMpING N !ErG Y ™ T E N T S G E N Er a T E b uZ Z Family campers want to cushion their getaway with the comforts of home—and Eureka!® delivers with its popular N!ergy™ tents. These first-ever fully wired tents draw on the clean, quiet electric power of the portable E! power™ battery pack. Campers can read, watch movies and play video games while keeping music players and cell phones charged. N!ergy™ sales helped catalyze double-digit core consumer sales growth for the Outdoor Equipment Group in 2007. Eureka!® is building on this successful launch with a new line of E! power™ accessories, such as a wet/dry vacuum that doubles as an air pump. 36 37 2007 Johnson outdoors CaMpING EurEKa!® n!ergy™ tent With E! Power™ battery packs, three outlets and on/off switches, N!ergy™ tents offer the coziness of home. tECH4o® traiLeader 1 The TraiLeader watch uses accelerometer technology to measure speed and distance precisely, and offers a host of features for walking, running and exploring. ME a Su rE S O F TrIuMpH Hardcore outdoor adventurers who want to know how far and how fast they’ve traveled, as well as weekend warriors seeking to stay on track for fun, turn to our Tech4O® and Silva® brands. Tech4O® digital performance products deliver the power of knowledge. runners, skiers, snowboarders, skaters—anyone moving through time and space can measure speed, distance, calories burned, heart rate and more. Our products succeed because they’re easy to use, satisfyingly accurate and stylish, all at a sensible price point. Silva® underscores Tech4O® innovation with nearly 65 years of outdoor innovation, creating compasses known for unsurpassed accuracy. The combined power of our brands this year drove double-digit growth in Outdoor Equipment Group core consumer sales—a measurable success indeed. TraI LE aD E r WaTC H p u T S a C C E L E r O M E T E r ON T H E W rI S T Hikers, runners and walkers can set their ankles free. The new Tech4O® TraiLeader watch delivers precise speed and distance measurements, using built-in accelerometer technology. The rugged watch also includes an altimeter, barometer, compass and thermometer—everything necessary for trekking through the wild or walking the dog. Easy-to-use features include calorie and step counters, pace, time, date, stopwatch and alarm features, all in a compact, durable case. 38 39 2007 Johnson outdoors CaMpING bE H ErE Johnson Outdoors is the place where our founder Sam Johnson’s legacy lives on, where we celebrate his love of the outdoors, passion for the environment and entrepreneurial spirit. Here is where our Chairman and CEO, Helen Johnson-Leipold, leads us in bold innovation across our global organization, delighting consumers and driving long-term, profitable growth. Here is where our people-focused values create a climate of caring that extends to our neighbors and communities. 40 41 2007 Johnson outdoors aNNuaL rEpOrT V aL uE S, pO L I C I E S Su p pOr T Ou r pE OpL E The Johnson family legacy lives on in our The result is an environment where employees commitment to our employees’ well-being. care for each other and extend that care to the We pursue “best place to work” programs that community—another Johnson value. We promote support healthy lifestyles, continuing education employee involvement in hundreds of volunteer and, of course, the pursuit of fun and adventure efforts, such as school reading programs, family in the outdoors—on the job and off. From health resource centers, drug awareness programs and care to profit sharing, benefits begin on day one shelters for women and children. of employment. Employees can care for mind and body through fitness center memberships and 100 percent tuition reimbursement. Families gain support through programs such as flex time, elder care assistance, adoption assistance and our Sons and Daughters scholarships. professional development is a top priority, leading to an amazing 53 percent internal promotion rate. This year, Chairman and CEO Helen Johnson- Leipold participated in her first triathlon, finishing second in her age group. Her primary purpose was to encourage all our employees to get outdoors and get healthy. That balance and sense of fun permeate Johnson Outdoors, making it the place where employees want to be. big fish to fry Comfort from home Let us help a notary in need Dan Kuenzi, Director of Global Sales for When the boxes start piling up at Facing aggressive cancer, Sandra Steve and Diane barth knew they the Johnson Outdoors Marine Equipment the SCubaprO® offices in El Cajon, France’s mother, Janet Venegas, could count on Johnson Outdoors Group, tightens his apron and drags a California, it means good things for needed a ride to radiation sessions. for adoption reimbursement assistance slab of perch through his secret-recipe u.S. troops overseas. but a van to accommodate her and travel leave. Then Steve, a Senior wheelchair would cost $170 per trip. programmer/analyst, discovered an breading. Nearby, Floyd Wilkinson, JO Human resources Director, and Kelly Grindle, Group Vice president, Marine Electronics, pull crispy fish from two bubbling fryers. The executives are serving JO employees lunch at the 8th annual Dan Kuenzi Fish Fry. Over the last four years, the plant’s 40 or so employees have sent care France’s Johnson Outdoors packages twice a year to four u.S. co-workers donated money to cover army platoons in Iraq and an air Force the transportation plus a home lift chair platoon in afghanistan. and hospital bed. “We try to include all the comforts of after 14 months of care, including home: snacks, magazines, games and removal of a 12-pound tumor, video games, bath products,” says Venegas is cancer-free. Every fall, the team sets up outside richelle pizl, Customer Service Manager. JO’s downtown headquarters, braving “We want them to know they’re in rain, cold and even snow to fry enough our thoughts.” fish for 100 people. France, a JO Executive assistant, remains amazed at her mother’s recovery and the outpouring of generosity. pizl suggested the program when “Mom always gave to people who had Kuenzi started the tradition when she worked with purchasers from less,” France says. “Now, thanks to the employees fished from a stocked pond SCubaprO®’s military accounts. help we got, she’s alive.” during lunch hour, though the “catch” “They had loved ones overseas, and I now comes from a downtown fish started thinking about how we could market. “The whole point is to bring help. The response here blew me away; everyone together,” he says, as he it reminds me why I work here.” reaches for another slab of fish. extra time-saving benefit. “physician’s statements, employment records, references…all had to be notarized,” Steve says. “and JO has several notaries on staff.” With paperwork approved, Steve and Diane spent three weeks in China and brought home a 14-month-old daughter. Like her parents, Samantha roseanne Chunmei, now a bubbly 4-year-old, knows it’s good to have people you can count on. Says Diane, “at first she’d wake up and we’d see this terrified look in her eyes: ‘Oh, no, they’re still here.’ but after a few days, she’d open her eyes, and you could see the relief: ‘Oh, good, they’re still here.’” 42 43 2007 Johnson outdoors aNNuaL rEpOrT 2007 MPM CLIMate ChanGe eXhIbIt Our commitment to the environment included sponsoring a traveling exhibit on climate change at the Milwaukee Public Museum. J O H N S O N OuT D O OrS & T H E E N V IrO N M E N T supporting stewardship Green in your hands as part of the Johnson Outdoors commitment to You’re holding yet another example of the sustainability, we offer gear and guidance to groups Johnson Outdoors commitment to “green” practices. promoting environmental stewardship. This annual report is printed with environmentally Extrasport® products were used when the Cornell Lab of Ornithology and The Nature Conservancy searched the arkansas Mississippi river Delta for the ivory-billed woodpecker, long thought to be extinct. We’ve also contributed Extrasport® pFDs to the Waterkeeper alliance, chaired by robert F. Kennedy, Jr., for efforts to protect the pacific Northwest’s Columbia river. The Waterkeeper alliance promotes stewardship of waterways and their communities worldwide. Our own manufacturing processes also emphasize environmental stewardship. Our complete line of consumer pFDs, for example, will now be crafted from 100 percent GaIa foam, making them pVC-free. Ou r p a r T N ErS aIDS resource Center american Cancer Society american red Cross big brothers and big Sisters breast Cancer research Fund Cornell university – Center for Entrepreneurship Family Friendly Workplace Institute Fishamerica Foundation Fishing Has No boundaries Focus on Community Gathering Waters Habitat for Humanity friendly soy-based ink and includes post-consumer-use recycled paper. It was produced using Green Seal- certified products and renewable energy sources. by choosing these printing and production methods, we help promote wise stewardship of our natural resources: Homeless assistance Leadership Organization (HaLO) • 4.88 trees preserved for the future • 14.08 pounds water-borne waste not created • 2,071 gallons of wastewater flow saved • 229 pounds solid waste not generated • 451 pounds greenhouse gases prevented • 3,453,720 bTus energy not consumed • 1,563 pounds air emission not generated • 3,719 cubic feet of natural gas not used Climate Change show calls everyone to act This year The Climate Change Show came to the Milwaukee public Museum, with Johnson Outdoors a key local sponsor. The multi-sensory theater experience and interactive exhibits help kids and adults explore the concepts of climate change and understand how everyone can make a difference. We also funded a daytrip to the exhibit by students from the 21st Century preparatory School, an independent public school of Junior achievement Maine river Coalition Canoe Hullabaloo Max McGraw Wildlife Foundation Milwaukee public Museum Next Generation Now Opportunities Industrialization Center project Graduation racine Zoological Society relay for Life river alliance of Wisconsin river bend Nature Center root pike Watershed Initiative Network Take a Kid Fishing The big Fish The prairie School united Way urban Ecology Center Waterkeeper’s alliance choice for racine’s diverse student population. Women’s resource Center of racine and many more... 44 45 2007 Johnson outdoors aNNuaL rEpOrT MaNa G E M E N T pErSpE C T I V E solid growth, increased sales and earnings mark 2007 In 2007, successful acquisitions, winning innovation and European expansion catalyzed record sales and improved earnings that outpaced our industry. • Recently acquired Humminbird®, Cannon®, Lendal® and Seemann™ brands represented a third of the year’s revenue growth. • New products accounted for 30 percent or more of total company net sales for the fourth consecutive year. • Europe has become a high-growth marketplace with significant white space opportunity for every business. although one-time items last year and this year resulted in an unfavorable operating profit comparison, net earnings continued to grow. We are on an accelerated growth curve, with record-setting market demand for our products resulting in increased inventory and working capital levels. Going forward, we will manage growth efficiently by further strengthening operations, streamlining business processes and fully leveraging assets to grow profits faster than sales. Over the past five years, we have created positive marketplace momentum for our leading brands, and built a strong foundation for sustained profitable growth. as a result, today we have the financial capability to both invest in the future and return a portion of earnings to our shareholders through quarterly dividends. Our confidence in the future is matched only by our excitement for the journey that lies ahead. Thank you for your continued support. Sincerely, Shareholder Return Outperforms Competitive Peers* Marine electronics net sales rose 20 percent, as innovative new products captivated the market. Humminbird® and Cannon® have rapidly exceeded expectations, and Minn Kota® is our first $100 million brand. Watercraft sales increased three percent, driven by well-received paddlesport innovations and double-digit growth in key international markets. diving achieved a 180-degree turnaround in Europe with the addition of Seemann™ Sub and a successful new dive computer launch, increasing net sales 13 percent. outdoor equipment saw double-digit growth in core consumer sales, partially offsetting the expected decline in military sales. Consumer and commercial tents continue to generate positive momentum. Sales & Net Income (Millions $) *Johnson Outdoors Operating Results Net Sales Gross Profit 2005 2006 2007 $380,690 $395,790 $432,060 $156,354 $165,216 $174,883 Operating Profit $15,644 $20,625 $17,939 Diluted Earnings Per Common Share $0.81 $0.95 8,795 9,161 $1.00 9,254 Diluted Average Common Shares Outstanding Capitalization Total Debt $50,800 $37,807 $42,806 2007 Growth Percentages 9% GROWTH IN TOTAL COMPANY SALES 12% GROWTH IN CORE CONSUMER BRANDS 6% GROWTH IN NET INCOME helen Johnson-Leipold david W. Johnson Chairman & Chief Executive Officer Vice president & Chief Financial Officer * dollar and numerical values in thousands except for per share data In its filings with the U.S. Securities & Exchange Commission, Johnson Outdoors Inc. and its auditors reported that the Company maintained effective internal controls over its financial reporting as of September 30, 2007. Certain matters discussed in this report are “forward-looking statements” intended to be covered by the safe harbor provisions for forward-looking statements contained in the private Securities Litigation reform act of 1995. please see “Forward Looking Statements” in the 2007 Form 10-K for a discussion of uncertainties and risks associated with these statements. 46 47 2007 Johnson outdoors aNNuaL rEpOrT Shareholders’ Equity $166,434 $180,881 $200,165 Total Debt to Total Capitalization 23.4% 17.3% 17.6% $100 invested on 9/27/02 in stock or index-including reinvestment of dividends. Fiscal year ending September 28. I N N O VaT I O N D E L I V E r S I N DuS Tr Y- L EaD I N G rE SuLT S Our Innovation Engine C Or pOr a T E G O V ErNaN C E bO a rD O F D Ir E C T OrS C Or pOr a T E O F F I C ErS Johnson outdoors employees, investors, business partners and consumers can rely on our passion for innovation, quality—and integrity. Our corporate governance statement includes our Shared Values, describing the principles that guide us in working toward our vision, and our Code of Conduct, describing how we act on those principles every day. We are dedicated to the well-being of our people, to delighting our consumers and to responsible leadership in our industry. and it all starts with our deep commitment to do the right thing. Laws may change, market conditions may change, objectives may change, but our values will never change. Johnson Outdoors is in full compliance with SEC financial disclosure regulations and meets or exceeds all corporate governance standards. To review our Shared Values, Code of Conduct, Corporate Governance Guidelines, board of Director committee charters and other corporate governance documents, please see www.johnsonoutdoors.com. Growth 3x Faster Than Industry Net Sales & New Product Contributions (Millions $) helen P. Johnson-Leipold Chairman of the board Director since 1994 Chairman & CEO, Johnson Outdoors Chairman, Johnson Financial Group Johnson Foundation Director, S. C. Johnson & Son, Inc. Johnson Diversey, Inc. John M. fahey, Jr. Director since 2001 president and Chief Executive Officer and Chairman, the Executive Committee of the board of Trustees of the National Geographic Society Director, Jason Foundation for Education W. Lee McCollum Director since 2005 Executive Vice president and Chief Financial Officer, S.C. Johnson & Son, Inc. Director, Johnson Financial Group Sigma-aldrich Corporation thomas f. Pyle, Jr. Vice Chairman of the board Director since 1987 Chairman, The pyle Group Director, Sub Zero Corporation terry e. London Director since 1999 president, London partners, LLC Director, pier 1 Imports, Inc. edward M. Lang Director since 2006 president, business Operations and alternate Governor, the Nashville predators Director, Nashville’s adventure Science Center and Nashville predators Foundation helen P. Johnson-Leipold Chairman & Chief Executive Officer david W. Johnson Vice president & Chief Financial Officer alisa d. swire Vice president, business Development & Legal affairs; Corporate Secretary John C. Moon Vice president & Chief Information Officer sara M. Vidian Vice president, Human resources Cynthia a. Georgeson Vice president, Worldwide Communication kelly t. Grindle Group Vice president, Marine Electronics William s. kelly Group Vice president, Outdoor Equipment Mark e. Leopold Group Vice president, Watercraft Joseph b. stella Group Vice president, Diving 48 49 2007 Johnson outdoors aNNuaL rEpOrT for more information contact: Johnson outdoors | Cynthia Georgeson Vice President-Worldwide Communication 262.631.6600 | cgeorges@johnsonoutdoors.com Created by: hanson dodge Creative | editor: Mary Jo thome Published by Johnson outdoors Inc. © Copyright 2008 

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