JOUT Johnson Outdoors Inc

STAMFORD, Conn., Sept. 28 /PRNewswire/ -- On August 18, 2005 Dolphin Limited Partnership I, L.P. sent the following letter to Ms. Helen Johnson-Leipold, Chairman and CEO of Johnson Outdoors Inc. (NASDAQ:JOUT). Dolphin has now been informed that this letter was recently forwarded to the entire board and the board "will be discussing the proposals outlined in the letter at its upcoming meeting." In its letter Dolphin advocates a one million share $19-$21 per share Dutch Auction Tender offer that it believes would be an accretive way to deploy JOUT's sizable amount of low yielding cash. Dolphin also suggested the implementation of a 2:1 stock split to enhance liquidity in the Class A common stock and the initiation of an appropriate quarterly cash dividend. Dolphin believes these steps in conjunction with appropriate accretive acquisitions and more detailed public disclosure of the Company's five year strategic plan would generate short and long-term value for all shareholders. Dolphin awaits the results of the board's deliberations on these matters. Dolphin Limited Partnership I, L.P. Ninety-Six Cummings Point Road Stamford, Ct 06902 August 18, 2005 Via Facsimile and Federal Express Ms. Helen P. Johnson-Leipold Chairman and Chief Executive Officer Johnson Outdoors Inc. 555 Main Street Racine, WS 53403 Dear Helen: After so many months of not being able to connect with you, it was a pleasure to finally speak with you on JOUT's August 9, 2005 third quarter conference call. It appears from the Company's strong third quarter results that JOUT's inherent value is crystallizing for investors. We congratulate you and your colleagues on taking good first steps to resolve some outstanding operating challenges. You indicated on the call that the company "doesn't talk about internal budget expectations", so you would not indicate whether the 2005 nine month results exceeded the Company's plan. Nevertheless, we observed the following: 1. As of July 1, 2005, the Company's high cost debt had declined by $16.2 million. This debt carries an onerous prepayment penalty which, we believe, meaningfully increased the cost of the going private transaction and, we assume, correspondingly decreased the consideration offered to minority shareholders. 2. Net debt declined $15.6 million year over year to $11.2 million; however, with the seasonal high in accounts receivable of $83.7 million at July 1, 2005 (up from $49.7 million at Fiscal Year End, October 1, 2004), as we predicted in our letter of March 31, 2005, we suspect JOUT is more likely now in an average net cash position. 3. JOUT's shares are currently trading at approximately 1.0x book value and 1.2x tangible book value. 4. Consistent with the Company's 2004 10-K, the sizable EBITDA loss at Watercraft was reduced by $2.9 million for the 2005 nine months and, as indicated on the call, it appears more progress is expected. 5. Without adjusting for the anticipated drop in military tent sales and higher energy and raw materials costs, it appears that adjusted EBITDA for the 2005 nine months increased approximately 4%. As we were requesting on the call for the Company to produce for all investors, below we have "more finely broken out" this comparison: ($ Millions) Nine Months Ended July 1, 2005 July 2, 2004 Net Sales $ 303.6 $ 279.7 Reported Operating Profit $ 20.1 $ 23.7 Depreciation & Amortization $ 7.1 $ 6.2 Non-Cash Equity Compensation .4 -- Watercraft Charge .7 Litigation Settlement Received -- (2.0) Diving Accrual Reversal (.7) Merger Costs 2.5 1.4 Adjusted EBITDA* $ 29.8 $ 28.6 * After corporate overhead (without merger costs) of $10.7 and $10.4, respectively. Full Fiscal Year 2004 corporate overhead was $14.1 million. While the operating picture appears to be clarifying, this has not translated into value for all shareholders. Given JOUT's nine months operating results and its very favorable balance sheet position, we encourage you and the board to proactively implement steps to improve the price of JOUT's shares and their liquidity. In this regard, we request the board to initiate a Dutch auction tender offer for 1.0 million Class A shares at a price from $19 to $21/share where all shareholders may participate pro rata. With over $39.0 million of low yielding cash and a seasonally high accounts receivable balance at July 1, 2005, the cash requirements for this transaction appear modest when compared to JOUT's financial capability. Accordingly, this would not detract from JOUT's ability to make accretive acquisitions. If, for example, one million shares were acquired at $21/share, we believe this would be significantly accretive. We further suggest that these initiatives be followed by a 2:1 stock split and the implementation of an appropriate quarterly dividend. As you know, some investors can not own shares in a company that does not pay a dividend. We believe this program represents a compelling opportunity for the board to deliver short-term and long-term value for all shareholders. We look forward to discussing this with you in person at your earliest convenience and will follow-up directly with you shortly. Very truly yours, Donald T. Netter Senior Managing Director DATASOURCE: Dolphin Limited Partnership I, L.P. CONTACT: L. Bolster, +1-203-358-8000

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