Form 8-K - Current report

 

 

 

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form 8-K

Current Report

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 1, 2024

 

CLARUS CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware (State or other jurisdiction of incorporation)

001-34767 (Commission File Number)

58-1972600 (IRS Employer Identification Number)

 

2084 East 3900 South, Salt Lake City, Utah (Address of principal executive offices)

84124 (Zip Code)

 

Registrant’s telephone number, including area code: [phone]

 

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

¨

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.   ¨

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $.0001 per share		CLAR		NASDAQ Global Select Market

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition

 

On August 1, 2024, Clarus Corporation (the “Company”) issued a press release announcing results for the second quarter ended June 30, 2024 (the “Press Release”). A copy of the Press Release is furnished as Exhibit 99.1 and incorporated herein by reference. Attached hereto as Exhibit 99.2 and incorporated herein by reference is a presentation regarding the Company’s financial results for the second quarter ended June 30, 2024 (the “Presentation”).

 

The Press Release and/or the Presentation contain the non-GAAP measures: (i) adjusted gross margin and adjusted gross profit, (ii) adjusted (loss) income from continuing operations and related earnings (loss) per diluted share, (iii) earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin, (iv) segment EBITDA and adjusted segment EBITDA, and (v) free cash flow (defined as net cash provided by operating activities less capital expenditures). The Company believes that the presentation of certain non-GAAP measures, i.e.: (i) adjusted gross margin and adjusted gross profit, (ii) adjusted (loss) income from continuing operations and related earnings (loss) per diluted share, (iii) EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin, (iv) segment EBITDA and adjusted segment EBITDA, and (v) free cash flow, provide useful information for the understanding of its ongoing operations and enables investors to focus on period- over -period operating performance, and thereby enhances the user's overall understanding of the Company's current financial performance relative to past performance and provides, along with the nearest GAAP measures, a baseline for modeling future earnings expectations. Non-GAAP measures are reconciled to comparable GAAP financial measures within the Press Release and/or the Presentation. We do not provide a reconciliation of the following non-GAAP guidance measures: (i) adjusted EBITDA, adjusted EBITDA margin, and mid-point adjusted EBITDA margin (ii) adjusted corporate costs, and (iii) adjusted free cash flow for the fiscal year ended December 31, 2024 to the most comparable GAAP financial measures, due to the inherent difficulty of forecasting certain types of expenses and gains, without unreasonable effort. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company's reported GAAP results. Additionally, the Company notes that there can be no assurance that the above referenced non-GAAP financial measures are comparable to similarly titled financial measures used by other publicly traded companies.

 

The information in Item 2.02 of this Current Report on Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits.

 

Exhibit		Description
99.1		Press Release dated August 1, 2024 (furnished only).
99.2		Slide Presentation for Conference Call held on August 1, 2024 (furnished only)
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

 

SIGNATURES

 

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

 

Dated: August 1, 2024

 

	CLARUS CORPORATION
	By:	/s/ Michael J. Yates
	Name: Michael J. Yates
	Title: Chief Financial Officer

 

 

 

Exhibit 99.1

 

 

Clarus Reports Second Quarter 2024 Results

 

Makes Incremental Progress Executing Strategic Initiatives to Accelerate Long-Term Growth

 

Three Veteran Operating and Sales Executives Added to Adventure Team to Support U.S., International and OEM Markets

 

Strategic Review Initiated for PIEPS Snow Safety Brand within the Outdoor Segment

 

SALT LAKE CITY, August 1, 2024 (GLOBE NEWSWIRE) -- Clarus Corporation (NASDAQ: CLAR) (“Clarus” and/or the “Company”), a global company focused on the outdoor enthusiast markets, reported financial results for the second quarter ended June 30, 2024.

 

Second Quarter 2024 Financial Summary vs. Same Year-Ago Quarter (adjusted to reflect the reclassification of the Precision Sport segment as discontinued operations)

 

·

Sales of $56.5 million compared to $57.9 million.

·

Gross margin was 36.1% compared to 39.0%; adjusted gross margin of 37.4% compared to 39.0%.

·

Net loss, which includes the impact of discontinued operations, of $5.5 million, or $(0.14) per diluted share, compared to net loss of $2.1 million, or $(0.06) per diluted share.

·

Loss from continuing operations of $5.5 million, or $(0.14) per diluted share, compared to loss from continuing operations of $4.3 million, or $(0.12) per diluted share.

·

Adjusted EBITDA from continuing operations of $(1.9) million with an adjusted EBITDA margin of (3.4)% compared to $1.0 million with an adjusted EBITDA margin of 1.7%.

 

Management Commentary

“Against a backdrop of constrained consumers in the outdoor space, we made incremental progress in the second quarter executing Clarus’ strategic initiatives to seek to create long-term value,” said Warren Kanders, Clarus’ Executive Chairman. “We are pleased to see continued improvement in the Outdoor segment, particularly related to simplification and the rationalization of product lines, combined with continued evidence of stabilizing trends in the North American wholesale market, as we focus on our core products and categories. In the Adventure segment, while revenue increased year-over-year for the fourth consecutive quarter, the level of sales growth was affected by constrained consumer demand in the North American market compared to our expectations, and overall profitability was impacted by increased investment aimed at accelerating long-term growth.”

 

 

 

 

 

 

Mr. Kanders added, “Looking forward, we are confident that Clarus is well positioned to drive sustainable and profitable growth as a pure-play, ESG-friendly outdoor business, supported by outstanding leadership and a debt-free balance sheet. We remain in the early stages of our multi-year strategic plan but believe the investments we have made to date strengthening our teams, enhancing business processes, and ensuring we offer in-demand, premium product across our key categories will deliver significant long-term benefit. Based on our results through the first half of the year, we are pleased to reaffirm our full-year revenue guidance. Reflective of market headwinds, as well as our strategic decision to aggressively invest in the business, we have revised our 2024 adjusted EBITDA expectations.”

 

Second Quarter 2024 Financial Results

Sales in the second quarter were $56.5 million compared to $57.9 million in the same year-ago quarter. This decrease was primarily driven by softness in the European wholesale and North American direct-to-consumer markets at Outdoor, partially offset by a year-over-year increase in Adventure segment sales, specifically the OEM channel.

 

Sales in the Adventure segment increased 13.6% to $20.3 million, or $20.5 million on a constant currency basis, compared to $17.9 million in the year-ago quarter, reflecting higher demand from OEM customers and an increase from the TRED Outdoors acquisition. Sales in the Outdoor segment were $36.2 million, compared to $40.1 million in the year-ago quarter. The decline primarily reflects weakness in our North American direct-to-consumer markets and softness in our European markets.

 

Gross margin in the second quarter was 36.1% compared to 39.0% in the year-ago quarter. The decrease in gross margin was primarily due to an increase in PFAS (Per-and Polyfluoroalkyl Substances) related inventory reserve expenses, unfavorable product mix due to increased discontinued merchandise sales at the Outdoor segment, as well as higher inventory and sales return reserve expenses at the Adventure segment. Adjusted gross margin reflecting the PFAS related inventory reserve was 37.4% for the quarter.

 

Selling, general and administrative expenses in the second quarter were $28.1 million compared to $26.9 million in the same year-ago quarter. The increase was primarily due to an increase in higher investment in marketing initiatives in the Adventure segment, as well as higher employee-related expenses across the Company. These increases were partially offset by expense reduction initiatives in the Outdoor segment to manage costs, as well as lower intangible amortization.

 

The loss from continuing operations in the second quarter of 2024 was $5.5 million, or $(0.14) per diluted share, compared to loss from continuing operations of $4.3 million, or $(0.12) per diluted share in the year-ago quarter. Loss from continuing operations in the second quarter included $0.4 million of charges relating to legal cost and regulatory matter expenses and $0.7 million of PFAS inventory reserve.

 

 

 

 

 

 

Adjusted loss from continuing operations in the second quarter of 2024 was $1.2 million, or $(0.03) per diluted share, compared to adjusted loss from continuing operations of $0.1 million, or $(0.00) per diluted share, in the year-ago quarter. Adjusted loss from continuing operations excludes legal cost and regulatory matters expenses, PFAS inventory reserves, contingent consideration benefits, restructuring charges and transaction costs, as well as non-cash items for intangible amortization and stock-based compensation.

 

Adjusted EBITDA from continuing operations in the second quarter was $(1.9) million, or an adjusted EBITDA margin of (3.4)%, compared to adjusted EBITDA from continuing operations of $1.0 million, or an adjusted EBITDA margin of 1.7%, in the same year-ago quarter.

 

Net cash generated in operating activities for the three months ended June 30, 2024, was $0.8 million compared to net cash generated of $14.1 million in the prior year quarter. Capital expenditures in the second quarter of 2024 were $1.6 million compared to $1.8 million in the prior year quarter. Free cash flow for the second quarter of 2024 was an outflow of $0.7 million.

 

Liquidity at June 30, 2024 vs. December 31, 2023

·

Cash and cash equivalents totaled $46.2 million compared to $11.3 million.

·

Total debt of $0.0 million compared to $119.8 million.

 

Appoints Three Veteran Operating and Sales Executives to Support Adventure Segment

In July, the Company announced three important strategic hires to seek to accelerate international growth and global OEM initiatives. Adventure appointed Tripp Wyckoff to the role of General Manager of the Americas, David Cook as Global Head of OEM and Daniel Bruntsch as Head of EMEA Sales.

 

Strategic Review of PIEPS

The Company has initiated a review and evaluation of strategic options for its PIEPS snow safety brand, with the intention of soliciting interest from potential acquirors. This strategic initiative is aligned with Clarus’ prioritization of simplifying the business and rationalizing our product categories. The Company’s Board of Directors has not set a timetable to complete this review and evaluation of strategic options nor have any decisions been made relating to strategic options at this time. There can be no assurance that the review process will result in any transaction that will be consummated. The Company and the Company’s Board of Directors do not intend to comment further about this strategic review unless and until they deem further disclosure is appropriate.

 

2024 Outlook

The Company continues to expect fiscal year 2024 sales to range between $270 million to $280 million. Due to investments seeking to scale the Adventure segment, particularly in North America, Europe and through direct marketing initiatives, the Company now expects adjusted EBITDA of approximately $11 million to $14 million, or an adjusted EBITDA margin of 4.5% at the mid-point of revenue and adjusted EBITDA. In addition, the Company now expects capital expenditures to range between $6 million to $7 million, of which $0.9 million related to Precision Sport prior to disposal, and adjusted free cash flow to range between $7 million to $9 million for the full year 2024, excluding $2.0 million of cash outflow related to Precision Sport prior to disposal.

 

 

 

 

 

 

Net Operating Loss (NOL)

The Company has net operating loss carryforwards (“NOLs”) for U.S. federal income tax purposes of $7.7 million. None of the NOLs expire until December 31, 2029.

 

Conference Call

The Company will hold a conference call today at 5:00 p.m. Eastern time to discuss its second quarter 2024 results. To access the call by phone, please dial (833)-630-1956 (domestic) or (412)-317-1837 (international) and ask to be joined into the Clarus Corporation call. The conference call will be broadcast live and available for replay here and on the Company’s website at www.claruscorp.com.

 

About Clarus Corporation

Headquartered in Salt Lake City, Utah, Clarus Corporation is a global leader in the design and development of best-in-class equipment and lifestyle products for outdoor enthusiasts . Driven by our rich history of engineering and innovation, our objective is to provide safe, simple, effective and beautiful products so that our customers can maximize their outdoor pursuits and adventures. Each of our brands has a long history of continuous product innovation for core and everyday users alike. The Company’s products are principally sold globally under the Black Diamond®, Rhino-Rack®, MAXTRAX®, TRED Outdoors® brand names through outdoor specialty and online retailers, our own websites, distributors, and original equipment manufacturers.

 

Use of Non-GAAP Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). This press release contains the non-GAAP measures: (i) adjusted gross margin and adjusted gross profit, (ii) adjusted (loss) income from continuing operations and related earnings (loss) per diluted share, (iii) earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin, and (iv) free cash flow (defined as net cash provided by operating activities less capital expenditures). The Company believes that the presentation of certain non-GAAP measures, i.e.: (i) adjusted gross margin and adjusted gross profit, (ii) adjusted (loss) income from continuing operations and related earnings (loss) per diluted share , (iii) EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin, and (iv) free cash flow, provide useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance, and thereby enhances the user's overall understanding of the Company's current financial performance relative to past performance and provides, along with the nearest GAAP measures, a baseline for modeling future earnings expectations. Non-GAAP measures are reconciled to comparable GAAP financial measures within this press release. We do not provide a reconciliation of the non-GAAP guidance measures Adjusted EBITDA and/or Adjusted EBITDA Margin for the fiscal year 2024 to net income for the fiscal year 2024, the most comparable GAAP financial measure, due to the inherent difficulty of forecasting certain types of expenses and gains, without unreasonable effort, which affect net income but not Adjusted EBITDA and/or Adjusted EBITDA Margin. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company's reported GAAP results. Additionally, the Company notes that there can be no assurance that the above referenced non-GAAP financial measures are comparable to similarly titled financial measures used by other publicly traded companies.

 

 

 

 

 

 

Forward-Looking Statements

Please note that in this press release we may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this press release, include, but are not limited to, those risks and uncertainties more fully described from time to time in the Company's public reports filed with the Securities and Exchange Commission, including under the section titled “Risk Factors” in the Company's Annual Report on Form 10-K, and/or Quarterly Reports on Form 10-Q, as well as in the Company’s Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release and speak only as of the date hereof. We assume no obligation to update any forward- looking statements to reflect events or circumstances after the date of this press release.

 

Company Contact:

Michael J. Yates

Chief Financial Officer

[e-mail]

 

Investor Relations:

The IGB Group

Leon Berman / Matt Berkowitz

Tel [phone]

[e-mail] / [e-mail]

 

 

 

 

 

 

CLARUS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

 

		June 30, 2024				December 31, 2023
Assets
Current assets
Cash		$	46,221			$	11,324
Accounts receivable, less allowance for
credit losses of $1,566 and $1,412			43,721				53,971
Inventories			91,456				91,409
Prepaid and other current assets			6,018				4,865
Income tax receivable			1,371				892
Assets held for sale			-				137,284
Total current assets			188,787				299,745
Property and equipment, net			17,029				16,587
Other intangible assets, net			35,779				41,466
Indefinite-lived intangible assets			57,694				58,527
Goodwill			38,834				39,320
Deferred income taxes			17,199				22,869
Other long-term assets			14,078				16,824
Total assets		$	369,400			$	495,338
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		$	9,533			$	20,015
Accrued liabilities			23,358				24,580
Income tax payable			-				805
Current portion of long-term debt			-				119,790
Liabilities held for sale			-				5,744
Total current liabilities			32,891				170,934
Deferred income taxes			16,697				18,124
Other long-term liabilities			12,529				14,160
Total liabilities			62,117				203,218
Stockholders’ Equity
Preferred stock, $0.0001 par value per share; 5,000 shares authorized; none issued			-				-
Common stock, $0.0001 par value per share; 100,000 shares authorized; 42,940 and 42,761 issued and 38,298 and 38,149 outstanding, respectively			4				4
Additional paid in capital			694,194				691,198
Accumulated deficit			(336,261	)			(350,739	)
Treasury stock, at cost			(33,114	)			(32,929	)
Accumulated other comprehensive loss			(17,540	)			(15,414	)
Total stockholders’ equity			307,283				292,120
Total liabilities and stockholders’ equity		$	369,400			$	495,338

 

 

 

 

 

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF LOSS

(Unaudited)

(In thousands, except per share amounts)

 

		Three Months Ended
		June 30, 2024				June 30, 2023
Sales
Domestic sales		$	22,934			$	25,925
International sales			33,550				32,012
Total sales			56,484				57,937
Cost of goods sold			36,078				35,360
Gross profit			20,406				22,577
Operating expenses
Selling, general and administrative			28,081				26,882
Restructuring charges			161				736
Transaction costs			27				22
Contingent consideration benefit			(125	)			-
Legal costs and regulatory matter expenses			399				355
Total operating expenses			28,543				27,995
Operating loss			(8,137	)			(5,418	)
Other income
Interest income, net			455				8
Other, net			414				226
Total other income, net			869				234
Loss before income tax			(7,268	)			(5,184	)
Income tax benefit			(1,775	)			(862	)
Loss from continuing operations			(5,493	)			(4,322	)
Discontinued operations, net of tax			-				2,231
Net loss		$	(5,493	)		$	(2,091	)
Loss from continuing operations per share:
Basic		$	(0.14	)		$	(0.12	)
Diluted			(0.14	)			(0.12	)
Net loss per share:
Basic		$	(0.14	)		$	(0.06	)
Diluted			(0.14	)			(0.06	)
Weighted average shares outstanding:
Basic			38,297				37,192
Diluted			38,297				37,192

 

 

 

 

 

 

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

(In thousands, except per share amounts)

 

		Six Months Ended
		June 30, 2024				June 30, 2023
Sales
Domestic sales		$	51,218			$	50,122
International sales			74,577				78,093
Total sales			125,795				128,215
Cost of goods sold			80,538				80,130
Gross profit			45,257				48,085
Operating expenses
Selling, general and administrative			56,296				56,236
Restructuring charges			531				736
Transaction costs			65				59
Contingent consideration benefit			(125	)			(1,565	)
Legal costs and regulatory matter expenses			3,401				483
Total operating expenses			60,168				55,949
Operating loss			(14,911	)			(7,864	)
Other (expense) income
Interest income, net			825				13
Other, net			(495	)			302
Total other income, net			330				315
Loss before income tax			(14,581	)			(7,549	)
Income tax benefit			(2,626	)			(1,196	)
Loss from continuing operations			(11,955	)			(6,353	)
Discontinued operations, net of tax			28,346				5,860
Net income (loss)		$	16,391			$	(493	)
Loss from continuing operations per share:
Basic		$	(0.31	)		$	(0.17	)
Diluted			(0.31	)			(0.17	)
Net income (loss) per share:
Basic		$	0.43			$	(0.01	)
Diluted			0.43				(0.01	)
Weighted average shares outstanding:
Basic			38,253				37,164
Diluted			38,253				37,164

 

 

 

 

 

 

CLARUS CORPORATION

RECONCILIATION FROM GROSS PROFIT TO ADJUSTED GROSS PROFIT

AND ADJUSTED GROSS MARGIN

THREE MONTHS ENDED

 

		June 30, 2024						June 30, 2023
Sales		$	56,484			Sales		$	57,937
Gross profit as reported		$	20,406			Gross profit as reported		$	22,577
Plus impact of PFAS inventory reserve			716			Plus impact of PFAS inventory reserve			-
Adjusted gross profit		$	21,122			Adjusted gross profit		$	22,577
Gross margin as reported			36.1	%		Gross margin as reported			39.0	%
Adjusted gross margin			37.4	%		Adjusted gross margin			39.0	%

 

SIX MONTHS ENDED

 

			June 30, 2024						June 30, 2023
Sales		$	125,795			Sales		$	128,215
Gross profit as reported		$	45,257			Gross profit as reported		$	48,085
Plus impact of PFAS inventory reserve			1,445			Plus impact of PFAS inventory reserve			-
Adjusted gross profit		$	46,702			Adjusted gross profit		$	48,085
Gross margin as reported			36.0	%		Gross margin as reported			37.5	%
Adjusted gross margin			37.1	%		Adjusted gross margin			37.5	%

 

 

 

 

 

 

CLARUS CORPORATION

RECONCILIATION FROM LOSS FROM CONTINUING OPERATIONS TO ADJUSTED LOSS FROM CONTINUING OPERATIONS AND RELATED EARNINGS PER DILUTED SHARE

(In thousands, except per share amounts)

 

		Three Months Ended June 30, 2024
		Total				Gross				Operating				Income tax				Tax				Loss from				Diluted
		sales				profit				expenses				(benefit) expense				rate				continuing operations				EPS (1)
As reported		$	56,484			$	20,406			$	28,543			$	(1,775	)			(24.4	)%		$	(5,493	)		$	(0.14	)
Amortization of intangibles			-				-				(2,451	)			265								2,186
Restructuring charges			-				-				(161	)			37								124
Transaction costs			-				-				(27	)			6								21
Contingent consideration benefit			-				-				125				(38	)							(87	)
PFAS inventory reserve			-				716				-				146								570
Legal costs and regulatory matter expenses			-				-				(399	)			152								247
Stock-based compensation			-				-				(1,528	)			306								1,222
As adjusted		$	56,484			$	21,122			$	24,102			$	(901	)			42.7	%		$	(1,210	)		$	(0.03	)

 

(1) Potentially dilutive securities are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive to the loss from continuing operations. Reported loss from continuing operations per share and adjusted loss from continuing operations per share are both calculated based on 38,297 basic and diluted weighted average shares of common stock.

 

		Three Months Ended June 30, 2023
		Total				Gross				Operating				Income tax				Tax				Loss from				Diluted
		sales				profit				expenses				(benefit) expense				rate				continuing operations				EPS (1)
As reported		$	57,937			$	22,577			$	27,995			$	(862	)			(16.6	)%		$	(4,322	)		$	(0.12	)
Amortization of intangibles			-				-				(2,714	)			613								2,101
Restructuring charges			-				-				(736	)			74								662
Transaction costs			-				-				(22	)			2								20
Legal costs and regulatory matter expenses			-				-				(355	)			69								286
Stock-based compensation			-				-				(1,486	)			295								1,191
As adjusted		$	57,937			$	22,577			$	22,682			$	191				148.1	%		$	(62	)		$	(0.00	)

 

(1) Potentially dilutive securities are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive to the loss from continuing operations.  Reported loss from continuing operations per share and adjusted loss from continuing operations per share are both calculated based on 37,192 basic and diluted weighted average shares of common stock.

 

 

 

 

 

 

CLARUS CORPORATION

RECONCILIATION FROM LOSS FROM CONTINUING OPERATIONS TO ADJUSTED (LOSS) INCOME FROM CONTINUING OPERATIONS AND RELATED EARNINGS PER DILUTED SHARE

(In thousands, except per share amounts)

 

		Six Months Ended June 30, 2024
		Total				Gross				Operating				Income tax				Tax				Loss from				Diluted
		sales				profit				expenses				(benefit) expense				rate				continuing operations				EPS (1)
As reported		$	125,795			$	45,257			$	60,168			$	(2,626	)			(18.0	)%		$	(11,955	)		$	(0.31	)
Amortization of intangibles			-				-				(4,900	)			882								4,018
Restructuring charges			-				-				(531	)			96								435
Transaction costs			-				-				(65	)			12								53
Contingent consideration benefit			-				-				125				(38	)							(87	)
PFAS inventory reserve			-				1,445				-				260								1,185
Legal costs and regulatory matter expenses			-				-				(3,401	)			613								2,788
Stock-based compensation			-				-				(2,706	)			487								2,219
As adjusted		$	125,795			$	46,702			$	48,690			$	(314	)			18.9	%		$	(1,344	)		$	(0.04	)

 

(1) Potentially dilutive securities are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive to the loss from continuing operations. Reported loss from continuing operations per share and adjusted loss from continuing operations per share are both calculated based on 38,253 basic and diluted weighted average shares of common stock.

 

		Six Months Ended June 30, 2023
		Total				Gross				Operating				Income tax				Tax				(Loss) income from				Diluted
		sales				profit				expenses				(benefit) expense				rate				continuing operations				EPS (1)
As reported		$	128,215			$	48,085			$	55,949			$	(1,196	)			(15.8	)%		$	(6,353	)		$	(0.17	)
Amortization of intangibles			-				-				(5,482	)			891								4,591
Restructuring charges			-				-				(736	)			74								662
Transaction costs			-				-				(59	)			8								51
Contingent consideration benefit			-				-				1,565				(335	)							(1,230	)
Legal costs and regulatory matter expenses			-				-				(483	)			71								412
Stock-based compensation			-				-				(2,772	)			572								2,200
As adjusted		$	128,215			$	48,085			$	47,982			$	85				20.3	%		$	333			$	0.01

 

(1) Potentially dilutive securities are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive to the loss from continuing operations.  Reported loss from continuing operations per share is calculated based on 37,164 basic and diluted weighted average shares of common stock. Adjusted income from continuing operations per share is calculated based on 38,086 diluted shares of common stock.    

 

 

 

 

 

 

CLARUS CORPORATION

RECONCILIATION FROM LOSS FROM CONTINUING OPERATIONS TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION (EBITDA), EBITDA MARGIN, ADJUSTED EBITDA, AND ADJUSTED EBITDA MARGIN

(In thousands)

 

		Three Months Ended
		June 30, 2024				June 30, 2023
Loss from continuing operations		$	(5,493	)		$	(4,322	)
Income tax benefit			(1,775	)			(862	)
Other, net			(414	)			(226	)
Interest income, net			(455	)			(8	)
Operating loss			(8,137	)			(5,418	)
Depreciation			1,045				1,080
Amortization of intangibles			2,451				2,714
EBITDA			(4,641	)			(1,624	)
Restructuring charges			161				736
Transaction costs			27				22
Contingent consideration benefit			(125	)			-
PFAS inventory reserve			716				-
Legal costs and regulatory matter expenses			399				355
Stock-based compensation			1,528				1,486
Adjusted EBITDA		$	(1,935	)		$	975
Sales		$	56,484			$	57,937
EBITDA margin			-8.2	%			-2.8	%
Adjusted EBITDA margin			-3.4	%			1.7	%

 

 

 

 

 

 

CLARUS CORPORATION

RECONCILIATION FROM LOSS FROM CONTINUING OPERATIONS TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION (EBITDA), EBITDA MARGIN, ADJUSTED EBITDA, AND ADJUSTED EBITDA MARGIN

(In thousands)

 

		Six Months Ended
		June 30, 2024				June 30, 2023
Loss from continuing operations		$	(11,955	)		$	(6,353	)
Income tax benefit			(2,626	)			(1,196	)
Other, net			495				(302	)
Interest income, net			(825	)			(13	)
Operating loss			(14,911	)			(7,864	)
Depreciation			2,071				2,019
Amortization of intangibles			4,900				5,482
EBITDA			(7,940	)			(363	)
Restructuring charges			531				736
Transaction costs			65				59
Contingent consideration benefit			(125	)			(1,565	)
PFAS inventory reserve			1,445				-
Legal costs and regulatory matter expenses			3,401				483
Stock-based compensation			2,706				2,772
Adjusted EBITDA		$	83			$	2,122
Sales		$	125,795			$	128,215
EBITDA margin			-6.3	%			-0.3	%
Adjusted EBITDA margin			0.1	%			1.7	%

 

 

 

Exhibit 99.2

 

Q2 EARNINGS PRESENTATION AUGUST 1 , 2024

 

 

6 February 2023 PAGE 2 Forward - Looking Statements Please note that in this presentation we may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “int end s,” “future,” and similar expressions which constitute forward - looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward - looking statem ents are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. We caution that forward - looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward - looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward - looking statements in this presentation, include, but are not limited to, those risks and uncert ainties more fully described from time to time in the Company's public reports filed with the Securities and Exchange Commission, including under the section titled “Risk Factors” in the Company's Annual Report on Form 10 - K, and/or Quarterly Reports on Form 10 - Q, as well as in the Company’s Current Reports on Form 8 - K. All forward - looking statements included in this presentation are based upon information available t o the Company as of the date of this presentation and speak only as of the date hereof. We assume no obligation to update any forward - looking statements to reflect events or circumstances after the date of t his presentation. Non - GAAP Financial Measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). This pre sen tation contains the non - GAAP measures: ( i ) adjusted gross margin and adjusted gross profit, (ii) adjusted (loss) income from continuing operations and related earnings (loss) per diluted share, (iii) ear nin gs before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin , (iv) segment EBITDA and adjusted segment EBITDA, and (v) free cash flow (defined as net cash provided by operating activities less capital expenditures). The Company believes that the presentation of certain non - GAAP measures, i.e.: ( i ) adjusted gross margin and adjusted gross profit, (ii) adjusted (loss) income from continuing operations and related earnings (loss) per diluted share , (iii) EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin, (iv) segment EBITDA and adjusted segment EBITDA, an d (v) free cash flow, provide useful information for the understanding of its ongoing operations and enables investors to focus on period - over - period operating per formance, and thereby enhances the user's overall understanding of the Company's current financial performance relative to past performance and provides, along with the nearest GAAP measures, a ba sel ine for modeling future earnings expectations. Non - GAAP measures are reconciled to comparable GAAP financial measures herein. We do not provide a reconciliation of the non - GAAP guidance measures, i.e.: ( i ) a djusted EBITDA, adjusted EBITDA m argin, and mid - point adjusted EBITDA margin (ii) adjusted corporate costs, and (iii) adjusted free cash flow for the fiscal year 2024 to the most comparab le GAAP financial measure, due to the inherent difficulty of forecasting certain types of expenses and gains, without unreasonable effort. The Company cautions that non - GAAP measures should be considered in addition to, but not as a substitute for, the Company's repo rted GAAP results. Additionally, the Company notes that there can be no assurance that the above referenced non - GAAP financial measures are compara ble to similarly titled financial measures used by other publicly traded companies. Market and Industry Data The market and industry data used throughout this presentation was obtained from various sources, including the Company’s own re search and estimates, surveys or studies conducted by third parties and industry or general publications and forecasts. Industry publications, surveys and forecasts generally state that they have o bta ined information from sources believed to be reliable, but there can be no assurance as to the accuracy and completeness of such information. While the Company believes that each of these surveys, studies, publ ica tions and forecasts is reliable, it has not independently verified such data and the Company is not making any representation as to the accuracy of such information. Similarly, the Company believes its internal re search and estimates are reliable but it has not been verified by any independent sources. In addition, while the Company believes that the industry and market information included herein is generally reliab le, such information is inherently imprecise. While the Company is not aware of any misstatements regarding the industry and market data presented herein, its estimates involve risks and uncertainties and are sub ject to change based on various factors, including those discussed under the heading “Forward - Looking Statements” above. DISCLAIMER

 

 

Warren Kanders EXECUTIVE CHAIRMAN Clarus TODAY’S PRESENTERS Mike Yates CFO Clarus Neil Fiske PRESIDENT Black Diamond Equipment Mat Hayward MANAGING DIRECTOR Adventure

 

 

6 February 2023 PAGE 4 THE NEW CLARUS: Q2 2024 Positioned for long - term growth as pure - play outdoor business Q2 execution consistent with strategic objectives Black Diamond objective : Simplify and focus on the core Progress rationalizing product lines, continued stabilization of North American wholesale channel Adventure objective: Invest to scale Fourth consecutive quarter of y/y revenue growth, further investment to achieve 3 - year strategic plan to scale geographically and expand DTC channel via new tech Strong balance sheet/ p rudent capital allocation Debt - free with $46.2 million of cash on the balance sheet at 6/30

 

 

Solid foundation in place, with continued operational progress at Outdoor and Adventure $56 .5m $20.3 m $ 36.2m 37.4 % $( 1.9 ) m Revenue - 3% Y/Y Adventure Revenue + 14% Y/Y Outdoor Revenue - 10% Y/Y Adj. Gross Margin - 160 BPS Y/Y Adj. EBITDA - 300% Y/Y Q2 RESULTS AT A GLANCE Adventure Adj. EBITDA: $1.2m Outdoor Adj. EBITDA: $(0.4)m

 

 

6 February 2023 PAGE 6 ADVENTURE - STRATEGIC PRIORITIES: Q2 2024 HIGHLIGHTS • Focused on primary objective: invest to scale • Strong results in core Australia/New Zealand markets: - Sales growth and margin expansion driven by strong OEM customer demand and specific key accounts - Success driving down inventory levels below targets • Outperformance in Wholesale and OEM channels, while sales in U.S. and ROW lagged • Made key investments in Q2 to accelerate U.S. and international growth: - New leader responsible for managing and growing brands in U.S., Canada and Latin America - Appointed new Head of EMEA Sales and Head of APAC • In total, brought on 15 new team members across 3 regions in 1H24 MANAGEMENT COMMENTARY BUILDING BLOCKS IN FOCUS INVESTMENT INTO U.S. AND ROW INVESTMENT INTO BRAND REBUILT LEADERSHIP TEAM

 

 

6 February 2023 PAGE 7 OUTDOOR - STRATEGIC PRIORITIES: Q2 2024 HIGHLIGHTS • Strategic initiatives continuing to yield incremental near - term benefits, driving Q2 results in line with expectations • Market still adjusting to post - pandemic demand levels • Benefitting from rebuilt sales team in North America – in 1H 2024, NA Wholesale grew 1% y/y; stabilization trend intact • Challenging demand trends in Europe but signs that conditions should stabilize in 2H 2024 • Consistent with simplification objectives, operating costs down 9% year over year with continued improvement expected during remainder of 2024 • Further progress on inventory reduction initiatives, highlighted by 17% inventory decline in Q2 y/y • Undertaking strategic review of PIEPS snow safety brand MANAGEMENT COMMENTARY BUILDING BLOCKS IN FOCUS SIMPLIFICATION EXECUTION PRODUCT LEADERSHIP FEWER, BIGGER, BETTER

 

 

6 February 2023 PAGE 8 NET SALES Q2 2024 FINANCIAL RESULTS Q2 202 4 Q2 2023 ADJ. GROSS MARGIN ADJ. NET INCOME ADJ. EBITDA ADJ. EBITDA MARGIN (3.4)% ( $ 1.9 M) ($5.5M) 37.4 % $56.5M 1.7% $1.0M ($4.3M) 39.0% $ 57.9 M

 

 

6 February 2023 PAGE 9 NET SALES 2024 GUIDANCE ADJ. CORPORATE COSTS ADJ. EBITDA MID - POINT ADJ. EBITDA % CAPEX ADJ. FREE CASH FLOWS $270M - $280M $6M - $7M $11M - $14M 4 .5% $(11.0)M $7M - $ 9 M 2024 • Consistent with historical seasonal pattern, H 2 accelerates versus H 1 • Q 3 guidance : net sales between $ 70 - $ 75 million ; adj . EBITDA between $ 3 - $ 4 million

 

 

APPENDIX

 

 

6 February 2023 PAGE 11 BALANCE SHEET

 

 

6 February 2023 PAGE 12 INCOME STATEMENT (Q2)

 

 

6 February 2023 PAGE 13 INCOME STATEMENT (YTD)

 

 

6 February 2023 PAGE 14 NON - GAAP RECONCILIATION

 

 

6 February 2023 PAGE 15 NON - GAAP RECONCILIATION (Q2)

 

 

6 February 2023 PAGE 16 NON - GAAP RECONCILIATION (YTD)

 

 

6 February 2023 PAGE 17 NON - GAAP RECONCILIATION (Q2)

 

 

6 February 2023 PAGE 18 NON - GAAP RECONCILIATION (YTD)

 

 

6 February 2023 PAGE 19 NON - GAAP RECONCILIATION (Q2) Outdoor Segment Adventure Segment Corporate Costs Total Operating loss (2,395)$ (1,267)$ (4,475)$ (8,137)$ Depreciation 661 384 - 1,045 Amortization of intangibles 285 2,166 - 2,451 EBITDA (1,449) 1,283 (4,475) (4,641) Restructuring charges 146 15 - 161 Transaction costs - - 27 27 Contingent consideration - (125) - (125) PFAS inventory reserve 716 - - 716 Legal costs and regulatory matter expenses 180 - 219 399 Stock-based compensation - - 1,528 1,528 Adjusted EBITDA (407)$ 1,173$ (2,701)$ (1,935)$ Sales 36,187$ 20,297$ -$ 56,484$ EBITDA Margin -4.0% 6.3% -8.2% Adjusted EBITDA Margin -1.1% 5.8% -3.4% CLARUS CORPORATION (In thousands) RECONCILIATION FROM OPERATING LOSS TO SEGMENT EBITDA AND ADJUSTED SEGMENT EBITDA Three Months Ended June 30, 2024

 

 

6 February 2023 PAGE 20 NON - GAAP RECONCILIATION (YTD) Outdoor Segment Adventure Segment Corporate Costs Total Operating loss (4,106)$ (2,037)$ (8,768)$ (14,911)$ Depreciation 1,334 737 - 2,071 Amortization of intangibles 571 4,329 - 4,900 EBITDA (2,201) 3,029 (8,768) (7,940) Restructuring charges 370 161 - 531 Transaction costs - - 65 65 Contingent consideration - (125) - (125) PFAS inventory reserve 1,445 - - 1,445 Legal costs and regulatory matter expenses 2,885 - 516 3,401 Stock-based compensation - - 2,706 2,706 Adjusted EBITDA 2,499$ 3,065$ (5,481)$ 83$ Sales 83,209$ 42,586$ -$ 125,795$ EBITDA Margin -2.6% 7.1% -6.3% Adjusted EBITDA Margin 3.0% 7.2% 0.1% CLARUS CORPORATION RECONCILIATION FROM OPERATING LOSS TO SEGMENT EBITDA AND ADJUSTED SEGMENT EBITDA (In thousands) Six Months Ended June 30, 2024

 

 

 

Cover	Aug. 01, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 01, 2024
Entity File Number	001-34767
Entity Registrant Name	CLARUS CORPORATION
Entity Central Index Key	0000913277
Entity Tax Identification Number	58-1972600
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	2084 East 3900 South
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84124
City Area Code	801
Local Phone Number	278-5552
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $.0001 per share
Trading Symbol	CLAR
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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