JOHNSON OUTDOORS INCJOUT
JOHNSON OUTDOORS INC Income Taxes Disclosure
INCOME TAXES
On July 4, 2025, the One Big Beautiful Bill (OBBB) Act, which includes a broad range of tax reform provisions, was signed into law in the United States. The Company does not believe it will have a significant impact on its estimated annual effective tax rate.
The U.S. and foreign income before income taxes for the respective years consisted of the following:
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | (11,745) | $ | (32,560) | $ | 16,070 | |||||||||||
| Foreign | 2,466 | 2,698 | 9,754 | ||||||||||||||
| $ | (9,279) | $ | (29,862) | $ | 25,824 | ||||||||||||
Income tax expense for the respective years consisted of the following:
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 1,595 | $ | 159 | $ | 7,631 | |||||||||||
| State | 597 | 40 | 2,267 | ||||||||||||||
| Foreign | 2,193 | 1,618 | 3,286 | ||||||||||||||
| Deferred | 20,630 | (5,146) | (6,894) | ||||||||||||||
| $ | 25,015 | $ | (3,329) | $ | 6,290 | ||||||||||||
The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at the end of the respective years are presented below:
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Inventories | $ | 5,139 | $ | 6,126 | |||||||
| Compensation | 5,437 | 4,386 | |||||||||
Lease liabilities | 10,299 | 10,746 | |||||||||
| Tax credit carryforwards | 1,670 | 2,272 | |||||||||
| Net operating loss carryforwards | 9,407 | 5,374 | |||||||||
| Research and Experimental Expenditures | 12,881 | 8,846 | |||||||||
| Other | 7,820 | 7,510 | |||||||||
| Total gross deferred tax assets | 52,653 | 45,260 | |||||||||
| Less valuation allowance | 35,725 | 6,367 | |||||||||
| Deferred tax assets | 16,928 | 38,893 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Goodwill and other intangibles | 2,200 | 1,395 | |||||||||
Right of Use assets | 9,806 | 10,316 | |||||||||
| Depreciation and amortization | 3,097 | 4,941 | |||||||||
| Foreign statutory reserves | 812 | 734 | |||||||||
| Net deferred tax assets | $ | 1,013 | $ | 21,507 | |||||||
The net deferred tax assets recorded in the accompanying Consolidated Balance Sheets as of the years ended October 3, 2025 and September 27, 2024 were as follows:
| 2025 | 2024 | ||||||||||
| Non-current assets | $ | 3,074 | $ | 23,420 | |||||||
| Non-current liabilities | 2,061 | 1,913 | |||||||||
| Net deferred tax assets | $ | 1,013 | $ | 21,507 | |||||||
The significant differences between the statutory federal tax rate and the effective income tax rates for the Company for the respective years shown below were as follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Statutory U.S. federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | ||||||||||||||
| State income tax, net of federal benefit | 4.6 | % | 2.2 | % | 3.4 | % | ||||||||||||||
| Uncertain tax positions, net of settlements | 2.0 | % | — | % | (0.3) | % | ||||||||||||||
| Foreign-derived intangible income ("FDII") deduction | 1.7 | % | — | % | (2.3) | % | ||||||||||||||
| Foreign tax rate differences | (4.6) | % | (4.5) | % | 2.2 | % | ||||||||||||||
| Compensation | (9.0) | % | (3.8) | % | 2.4 | % | ||||||||||||||
| Changes in estimates related to prior years tax return filing | 8.2 | % | (0.2) | % | (1.3) | % | ||||||||||||||
| Goodwill impairment | — | % | (7.3) | % | — | % | ||||||||||||||
| Deferred tax asset - valuation allowance | (294.4) | % | 3.5 | % | 1.7 | % | ||||||||||||||
| Tax Credits | 2.6 | % | 1.6 | % | (2.5) | % | ||||||||||||||
| Other | (1.7) | % | (1.4) | % | 0.1 | % | ||||||||||||||
| (269.6) | % | 11.1 | % | 24.4 | % | |||||||||||||||
The Company considered both positive and negative evidence in evaluating the need for a valuation allowance relating to the deferred tax assets of the U.S. tax jurisdiction. Based on projections for the U.S. tax jurisdictions the Company determined that it was more likely than not that certain deferred tax assets will not be realized and a valuation allowance balance of $25,880 was reported against the net deferred tax assets for the U.S.
The Company’s net operating loss carryforwards and their expirations as of October 3, 2025 were as follows:
| State | Foreign | Total | |||||||||||||||
| Year of expiration | |||||||||||||||||
| 2026-2030 | $ | 2,624 | $ | 13,874 | $ | 16,498 | |||||||||||
| 2031-2035 | 1,946 | 4,166 | 6,112 | ||||||||||||||
| 2036-2040 | 5,263 | — | 5,263 | ||||||||||||||
| 2041-2045 | 994 | — | 994 | ||||||||||||||
| Indefinite | 5,589 | 23,361 | 28,950 | ||||||||||||||
| Total | $ | 16,416 | $ | 41,401 | $ | 57,817 | |||||||||||
The Company has tax credit carryforwards as follows:
| State | Federal | Total | |||||||||||||||
| Year of expiration | |||||||||||||||||
| 2026-2030 | $ | 1,158 | $ | — | $ | 1,158 | |||||||||||
| 2031-2035 | 478 | — | 478 | ||||||||||||||
| 2036-2040 | 34 | — | 34 | ||||||||||||||
| 2041-2045 | — | — | — | ||||||||||||||
| Total | $ | 1,670 | $ | — | $ | 1,670 | |||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
| 2025 | 2024 | ||||||||||
| Beginning balance | $ | 6,072 | $ | 6,096 | |||||||
| Gross increases - tax positions in prior period | — | — | |||||||||
| Gross decreases - tax positions in prior period | — | — | |||||||||
| Gross increases - tax positions in current period | 465 | 460 | |||||||||
| Settlements | — | — | |||||||||
| Lapse of statute of limitations | (695) | (484) | |||||||||
| Ending balance | $ | 5,842 | $ | 6,072 | |||||||
The total accrued interest and penalties with respect to income taxes was $2,022 and $2,014 for the years ended October 3, 2025 and September 27, 2024, respectively. The Company’s liability for unrecognized tax benefits as of October 3, 2025 was $5,842, and if recognized, $4,934 of such amount would have an effective tax rate impact.
In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. Interest and penalties of $8, $101 and $47 were recorded as a component of income tax expense in the accompanying Consolidated Statements of Operations during fiscal years 2025, 2024 and 2023, respectively.
The Company’s policy is to remit earnings from foreign subsidiaries only to the extent the remittance does not result in an incremental U.S. tax liability. The Company does not currently provide for the additional U.S. and foreign income taxes which would become payable upon remission of undistributed earnings of foreign subsidiaries. If all undistributed earnings were remitted, an additional income tax provision of approximately $6.1 million would have been necessary as of October 3, 2025.
The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The amount of unrecognized tax benefits recognized within the next twelve months may decrease due to expiration of the statute of limitations for certain years in various jurisdictions. The Company is under examination in Germany for fiscal years 2018, 2019, 2020, and 2021 with anticipated completion next fiscal year with no material adjustments. It is possible in the future that other jurisdictions may open an audit prior to the statute expiring that may result in adjustments to the Company’s tax filings. At this time, an estimate of the range of the reasonably possible change cannot be made.
The following tax years remain subject to examination by the Company's respective major tax jurisdictions:
| Jurisdiction | Fiscal Years | ||||
| United States | 2022-2025 | ||||
| Canada | 2021-2025 | ||||
| France | 2021-2025 | ||||
| Germany | 2019-2025 | ||||
| Italy | 2023-2025 | ||||
| Switzerland | 2015-2025 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 12, 2025 | Showing above |
| 2024 | Dec 11, 2024 | |
| 2023 | Dec 8, 2023 | |
| 2022 | Dec 9, 2022 | |
| 2021 | Dec 10, 2021 | |
| 2020 | Dec 11, 2020 | |
| 2019 | Dec 6, 2019 | |
| 2018 | Dec 7, 2018 | |
| 2017 | Dec 8, 2017 | |
| 2016 | Dec 13, 2016 | |
| 2015 | Dec 8, 2015 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.