Company Overview & Strategy - Black Diamond aims to be indistinguishable from the sports it serves, focusing on high-quality, durable technical products[6] - The company targets a large and growing global outdoor sports industry, estimated at $25 billion in annual sales[10] - A diversified business model spans multiple categories, geographies, and distribution channels, with 61% of sales from outside the U S[22, 24] - The company is focused on organic growth, leveraging a scalable global operating platform[69] Financial Performance & Growth - Pro forma sales have grown from $125 million in FY2010 to $203 million in FY2013[5] - TTM sales as of March 2014 reached $206 6 million, with FY2014 sales estimated at $237 5 million[5] - The company has net operating losses (NOLs) of $210 4 million as of December 31, 2013, protecting future cash flow[70, 73] - 2014 total sales guidance is between $235 million and $240 million, representing a year-over-year growth of 16-18%[74] Opportunities & Initiatives - The company sees a $250 million opportunity at specialty retail with its apparel initiative[38, 74] - Black Diamond is broadening distribution and elevating its brand, particularly in the fragmented European market[41, 45] - The acquisition of POC (helmets, body armor, goggles) in 2012 and PIEPS (avalanche beacons & snow safety products) in 2012 expands the product platform[48, 53]

Core Insights - Clarus Corporation reported a quarterly loss of $0.02 per share, missing the Zacks Consensus Estimate of $0.01, compared to break-even earnings per share a year ago, resulting in an earnings surprise of -300% [1] - The company posted revenues of $60.43 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 6.35%, but down from $69.31 million year-over-year [2] - Clarus shares have declined approximately 24.4% since the beginning of the year, contrasting with the S&P 500's decline of -4.3% [3] Earnings Outlook - The earnings outlook for Clarus is mixed, with the current consensus EPS estimate at $0.01 on revenues of $55.05 million for the upcoming quarter and $0.26 on revenues of $254.58 million for the current fiscal year [7] - The company's Zacks Rank is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Leisure and Recreation Products industry, to which Clarus belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Data and Key Metrics Changes - Q1 net sales reached $60.4 million, exceeding expectations despite a challenging consumer backdrop, reflecting a decline from $69.3 million in the prior year [5][32] - Adjusted EBITDA for Q1 was a loss of $800,000, compared to breakeven guidance, indicating a significant decline in profitability [37][41] - Gross margin decreased to 34.4% from 35.9% year-over-year, impacted by lower volumes and unfavorable product mix [36] Business Line Data and Key Metrics Changes - Adventure segment revenue fell 28% to $16.1 million, primarily due to significant declines from three specific accounts [33][34] - Outdoor segment revenue was $44.3 million, down 6% year-over-year, driven by planned declines in ski business and product simplification efforts [34][35] - The company sold $2.7 million of discontinued merchandise in the Outdoor segment, which negatively impacted gross margin by 80 to 90 basis points [72][76] Market Data and Key Metrics Changes - North America wholesale for Outdoor was down 7.3%, with a 38% decline in the ski category [17] - Europe digital D2C sales increased by 10.7%, while international distributor markets saw a decline of 21.4% [18] - Apparel bookings for the fall/winter season increased by 30% in Europe and 50% in North America, indicating strong demand [20][67] Company Strategy and Development Direction - The company is focused on executing its strategic roadmap for profitable growth, emphasizing product simplification and SKU rationalization [5][6] - A new leadership appointment in the Adventure segment aims to drive growth and improve market positioning [10][11] - The company is accelerating efforts to reduce reliance on China for manufacturing, with plans to complete the transition by the end of 2026 [23][43] Management's Comments on Operating Environment and Future Outlook - Management has withdrawn full-year guidance due to macroeconomic uncertainties and the impact of U.S. trade policies [13][41] - The company is taking decisive actions to maintain competitive positioning and financial strength, with zero third-party bank debt [13][39] - Management remains confident in the strategic direction and is actively working to mitigate the impact of tariffs on operations [42][43] Other Important Information - The company announced the divestiture of its PEEP Snow Safety brand for EUR 7.8 million, aligning with its strategy to simplify the business [40] - Cash and cash equivalents at the end of Q1 were $41.3 million, down from $45.4 million at the end of the previous year [38] Q&A Session Summary Question: Are there any cancellations in products brought into the U.S. due to tariff impacts? - Management confirmed there have been no cancellations and emphasized efforts to maintain supply while managing margin impacts [49][50] Question: Can you quantify the headwinds to gross margin in each segment? - Management indicated that discontinued merchandise accounted for a significant portion of the gross margin decline, with specific percentages provided for each segment [55][61] Question: What is the expected annualized contribution from the PEEP business? - The PEEP business historically generates about $5 million in revenue annually, with EBITDA around breakeven [64] Question: How is the company addressing distribution in the U.S.? - The company is focusing on specialty distribution channels rather than mass discount retailers, expanding its reach significantly in the bike rack segment [87] Question: What is the status of price increases in relation to competitors? - The company has been proactive in implementing price increases to offset tariffs, positioning itself ahead of competitors in this regard [89][91]

Financial Data and Key Metrics Changes - Q1 net sales were $60.4 million, exceeding expectations despite a challenging consumer backdrop, reflecting a decline from $69.3 million in the prior year [4][31] - Adjusted EBITDA for the quarter was a loss of $800,000, compared to breakeven guidance, indicating a significant decline in profitability [36][40] - Gross margin for Q1 was 34.4%, down from 35.9% in the prior year, impacted by lower volumes and unfavorable product mix [34][35] Business Line Data and Key Metrics Changes - Adventure segment revenue was $16.1 million, down 28% year-over-year, primarily due to significant declines from three specific accounts [32][29] - Outdoor segment revenue was $44.3 million, down 6% year-over-year, driven by product simplification and a planned decline in ski business [15][32] - The company sold $2.7 million of discontinued merchandise in the Outdoor segment, which contributed to the revenue but negatively impacted gross margin by 80-90 basis points [70][73] Market Data and Key Metrics Changes - North America wholesale sales in the Outdoor segment were down 7.3%, with a 38% decline in the ski category [16] - Europe digital D2C sales were up 10.7%, indicating some regional strength despite overall declines [17] - International distributor markets saw a 21.4% decline due to optimal timing shifts in deliveries [17] Company Strategy and Development Direction - The company is focused on executing its strategic roadmap for profitable growth, emphasizing product simplification and SKU rationalization [4][5] - A new leadership appointment in the Adventure segment aims to drive critical progress and revamp the organizational structure [8][9] - The company is actively working to reduce its exposure to China sourced products, with plans to complete the transition by the end of 2026 [22][41] Management's Comments on Operating Environment and Future Outlook - Management has withdrawn full-year guidance due to economic uncertainty and the impact of U.S. trade policies on consumer demand [11][40] - The company is taking decisive actions to maintain competitive positioning and financial strength, supported by a balance sheet with zero third-party bank debt [11][39] - Management remains confident in the strategic direction and is proactively working to mitigate the impact of trade policies on financial performance [40][41] Other Important Information - The company announced the divestiture of its PEEP Snow Safety brand for EUR 7.8 million, aligning with its strategy to simplify the business [39] - Cash and cash equivalents at the end of Q1 were $41.3 million, down from $45.4 million at the end of the previous year [38] Q&A Session Summary Question: Are there any cancellations in products brought into the U.S. due to tariff impacts? - Management confirmed there have been no cancellations and emphasized efforts to maintain supply while managing margin impacts [47][49] Question: Can you size the headwinds to gross margin in each segment? - Management indicated that the unfavorable margin mix was primarily due to higher levels of discontinued merchandise, impacting gross margins significantly [55][58] Question: What is the annualized contribution of the PEEP business to revenue and EBITDA? - The PEEP business historically contributes about $5 million in revenue annually, with EBITDA around breakeven [62] Question: What is the strategy around Black Diamond stores? - The company aims to maintain a limited number of stores as brand expression and learning labs, with a focus on community partnerships [77][78]

Financial Data and Key Metrics Changes - Q1 2025 net sales were $60.4 million, exceeding expectations despite a challenging consumer backdrop, compared to $69.3 million in Q1 2024, reflecting a 13% decline year-over-year [5][33] - Adjusted EBITDA for Q1 was a loss of $800,000, down from breakeven guidance, with adjusted EBITDA margin at negative 1.3% [37][41] - Gross margin for Q1 was 34.4%, down from 35.9% in the prior year, impacted by lower volumes and unfavorable product mix [35][36] Business Line Data and Key Metrics Changes - Adventure segment revenue was $16.1 million, down 28% year-over-year, primarily due to significant declines from three specific accounts [34] - Outdoor segment revenue was $44.3 million, down 6% year-over-year, driven by a planned decline in the ski business and the shift of IGD revenue to Q4 2024 [34][35] - The company sold $2.7 million of discontinued merchandise in the Outdoor segment during Q1, which contributed to the revenue but negatively impacted gross margins [69] Market Data and Key Metrics Changes - North America wholesale sales in the Outdoor segment were down 7.3%, with a 38% decline in the ski category [17] - North America digital D2C sales were down 7%, while Europe digital D2C sales increased by 10.7% [18] - International distributor markets saw a decline of 21.4% due to optimal timing shifts of deliveries [18] Company Strategy and Development Direction - The company is focused on executing its strategic roadmap for long-term profitable growth, emphasizing product simplification and SKU rationalization [5][6] - A new leadership appointment in the Adventure segment aims to drive growth and improve organizational structure [10][11] - The company is accelerating efforts to reduce exposure to China sourced products, with plans to complete the transition by Q4 2025 [24][42] Management's Comments on Operating Environment and Future Outlook - Management has withdrawn full-year guidance due to macroeconomic uncertainties and the impact of U.S. trade policies on consumer demand [12][41] - The company is committed to maintaining competitive positioning and financial strength, supported by a balance sheet with zero third-party bank debt [13][41] - Management remains optimistic about the potential for long-term growth despite current challenges, citing a strong order book for fall/winter apparel [21][46] Other Important Information - The company announced the divestiture of its PEEP Snow Safety brand for EUR 7.8 million, aligning with its strategy to simplify the business [40] - Cash and cash equivalents at the end of Q1 were $41.3 million, down from $45.4 million at the end of 2024 [38] - The company is actively pursuing legal matters related to Section 16B securities litigation and cooperating with ongoing investigations by the DOJ and CPSC [44][45] Q&A Session Summary Question: Are there any cancellations in products brought into the U.S. due to tariff impacts? - Management confirmed there have been no cancellations and emphasized efforts to maintain supply while managing margin impacts [48][50] Question: Can you quantify the headwinds to gross margin in each segment? - Management indicated that the unfavorable product mix and promotional sales efforts negatively impacted gross margins, with specific percentages provided for each segment [56][58] Question: What is the expected annualized contribution from the PEEP business before divestiture? - The PEEP business historically generates about $5 million in annual revenue, with Q1 revenue reported at $1.8 million [61] Question: How is the company navigating distribution in the U.S.? - The company is focusing on specialty distribution channels rather than mass discount retailers, expanding its reach with new partnerships [84] Question: What is the strategy regarding price increases in light of tariffs? - The company has proactively communicated price increases to offset tariffs and is among the first in the industry to do so [86][88]

[Part I - Financial Information](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Clarus Corporation reported a 12.8% sales decrease to $60.4 million in Q1 2025, with a $5.2 million net loss, while maintaining a stable balance sheet and addressing ongoing restructuring and legal contingencies | Financial Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Sales** | $60,433 | $69,311 | -12.8% | | Gross Profit | $20,794 | $24,851 | -16.3% | | Operating Loss | $(6,762) | $(6,774) | +0.2% | | Loss from Continuing Operations | $(5,244) | $(6,462) | +18.9% | | Net (Loss) Income | $(5,244) | $21,884 | -124.0% | | Diluted EPS from Cont. Ops | $(0.14) | $(0.17) | +17.6% | | Diluted Net (Loss) Income EPS | $(0.14) | $0.57 | -124.6% | | Balance Sheet Item | March 31, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash | $41,315 | $45,359 | | Total Current Assets | $178,341 | $177,780 | | Total Assets | $292,837 | $294,094 | | Total Liabilities | $63,547 | $61,001 | | Total Stockholders' Equity | $229,290 | $233,093 | - Net cash used in operating activities **improved to $2.1 million** from $16.4 million, primarily due to working capital changes and the non-recurrence of a prior-year gain on sale from discontinued operations[14](index=14&type=chunk)[147](index=147&type=chunk) - The company agreed to sell Black Diamond Austria GmbH and PIEPS GmbH for approximately **€7.8 million (about $8.4 million)**, with the transaction expected to close by Q3 2025[103](index=103&type=chunk) [Discontinued Operations](index=14&type=section&id=NOTE%203.%20DISCONTINUED%20OPERATIONS) - The company completed the sale of its Precision Sport segment for **$175 million in cash** on February 29, 2024, recognizing a **pre-tax gain of $40.6 million** in Q1 2024, with segment activities reported as discontinued operations[30](index=30&type=chunk)[32](index=32&type=chunk) [Restructuring](index=28&type=section&id=NOTE%2015.%20RESTRUCTURING) - Restructuring charges in Q1 2025 were **$173,000**, a decrease from $370,000 in Q1 2024, with cumulative charges totaling **$5.3 million** and completion anticipated by the end of 2025[70](index=70&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) [Legal Matters and Contingencies](index=30&type=section&id=NOTE%2016.%20COMMITMENTS%2C%20CONTINGENCIES%20AND%20LEGAL%20MATTERS) - The company is under CPSC investigation for untimely reporting on avalanche transceivers, with recommended civil penalties exceeding **$25 million** and referral to the U.S. Department of Justice[78](index=78&type=chunk)[79](index=79&type=chunk)[171](index=171&type=chunk) - A **$2.5 million liability** was recorded in Q1 2024 for the CPSC matter, representing the low end of estimated exposure, though the final outcome could be materially adverse[83](index=83&type=chunk)[176](index=176&type=chunk) - The company and its subsidiary BDEL received grand jury subpoenas from the Department of Justice in January 2025 concerning avalanche transmitters[81](index=81&type=chunk)[174](index=174&type=chunk) [Segment Performance](index=35&type=section&id=NOTE%2018.%20SEGMENT%20INFORMATION) Segment Sales and Operating Results | Segment | Q1 2025 Sales (in thousands) | Q1 2024 Sales (in thousands) | Q1 2025 Operating (Loss) Income (in thousands) | Q1 2024 Operating Loss (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Outdoor | $44,323 | $47,022 | $122 | $(1,709) | | Adventure | $16,110 | $22,289 | $(3,054) | $(770) | - The Outdoor segment's operating results **improved to a $0.1 million profit** from a $1.7 million loss year-over-year, while the Adventure segment's operating loss **widened to $3.1 million** from $0.8 million due to sales decline[99](index=99&type=chunk) [Management's Discussion and Analysis (MD&A)](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 12.8% sales decline to segment-specific challenges, with gross margin contraction offset by reduced SG&A expenses, while liquidity remains strong with $41.3 million cash and no outstanding debt [Results of Operations](index=45&type=section&id=Results%20of%20Operations) - Total sales **decreased by 12.8% to $60.4 million**, with Adventure segment sales falling by **$6.2 million** and Outdoor segment sales decreasing by **$2.7 million** due to market conditions and strategic adjustments[126](index=126&type=chunk)[129](index=129&type=chunk) - Gross margin **decreased to 34.4%** from 35.9% due to lower volumes, unfavorable product mix, and increased promotional activities across segments[133](index=133&type=chunk) - Selling, general, and administrative (SG&A) expenses **decreased by 5.7% to $26.6 million**, driven by successful cost reduction initiatives across various expense categories[134](index=134&type=chunk) - Legal and regulatory matter expenses **decreased significantly to $625,000** from $3.0 million in Q1 2024, with the prior year including a **$2.5 million accrual** for the CPSC matter[138](index=138&type=chunk)[83](index=83&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) - The company ended the quarter with **$41.3 million in cash** and no outstanding borrowings, as primary credit facilities were terminated and paid off using proceeds from the Precision Sport segment sale[144](index=144&type=chunk)[145](index=145&type=chunk)[154](index=154&type=chunk) Cash Flow Summary | Cash Flow Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(2,073) | $(16,361) | | Capital Expenditures | $(1,181) | $(1,897) | | **Free Cash Flow (Non-GAAP)** | **$(3,254)** | **$(18,258)** | - As of December 31, 2024, a **full valuation allowance** was provided against U.S. deferred tax assets due to uncertainty regarding their realization[92](index=92&type=chunk)[153](index=153&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Principal executive and financial officers concluded that disclosure controls and procedures were **effective** as of March 31, 2025[158](index=158&type=chunk) - No material changes occurred during the quarter affecting the company's internal control over financial reporting[159](index=159&type=chunk) [Part II - Other Information](index=53&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company faces significant legal proceedings, notably a CPSC investigation into avalanche transceivers with recommended civil penalties and Department of Justice referral, for which $2.5 million has been accrued - CPSC staff concluded BDEL failed statutory reporting obligations for avalanche transceivers, recommending civil penalties of **$16.1 million** and **$9.0 million** for two separate issues[171](index=171&type=chunk) - The CPSC referred the matter to the U.S. Department of Justice for further proceedings, and the company intends to vigorously defend against claims[172](index=172&type=chunk) - An unfavorable outcome is probable, but the final loss cannot be reasonably estimated beyond the **$2.5 million accrued**, which represents the low end of the estimated range[176](index=176&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported compared to the latest Annual Report on Form 10-K - No material changes in risk factors were reported compared to the latest Annual Report on Form 10-K[179](index=179&type=chunk)

[Overall Performance and Strategic Updates](index=1&type=section&id=Overall%20Performance%20and%20Strategic%20Updates) [Q1 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) In Q1 2025, Clarus reported sales of $60.4 million, a 13% decrease year-over-year. The company experienced a net loss of $5.2 million, or $(0.14) per diluted share, a significant shift from the net income of $21.9 million in the prior-year quarter which included discontinued operations. Adjusted EBITDA from continuing operations was $(0.8) million, down from $2.0 million year-over-year Key Financial Metrics | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Sales (Millions USD) | $60.4M | $69.3M | -12.8% | | Gross Margin | 34.4% | 35.9% | -1.5 p.p. | | Adjusted Gross Margin | 34.6% | 36.9% | -2.3 p.p. | | Net (Loss) Income (Millions USD) | $(5.2)M | $21.9M | N/A | | Loss from Continuing Operations (Millions USD) | $(5.2)M | $(6.5)M | +19.8% | | Adjusted Loss from Continuing Operations (Millions USD) | $(0.7)M | $(0.1)M | -600% | | Adjusted EBITDA from Continuing Operations (Millions USD) | $(0.8)M | $2.0M | -140% | - The significant year-over-year decline in net income is primarily because the Q1 2024 results included **$28.3 million** from discontinued operations, whereas Q1 2025 had none[4](index=4&type=chunk)[28](index=28&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management highlighted a challenging consumer backdrop in the outdoor market. Despite meeting topline expectations, the company withdrew its full-year 2025 guidance due to macroeconomic uncertainty, particularly concerning tariffs and consumer demand. The strategic focus remains on strengthening the core Outdoor segment, where Black Diamond's inventory and organization are considered healthy, and investing in innovation for the Adventure segment to drive future growth - The company has **withdrawn its full-year 2025 guidance** for revenue, adjusted EBITDA, capital expenditures, and free cash flow due to ongoing macroeconomic uncertainty and potential impacts from tariffs[5](index=5&type=chunk)[19](index=19&type=chunk) - Strategic priorities include **strengthening the Outdoor segment** by focusing on profitable styles and leveraging the iconic Black Diamond brand. For the Adventure segment, the focus is on **investing in innovation and new product development** to drive future growth despite current market challenges[3](index=3&type=chunk)[5](index=5&type=chunk) - The Black Diamond business has been **simplified and its inventory right-sized** over the past two years, positioning it to better withstand near-term market headwinds[5](index=5&type=chunk) [Strategic Initiatives and Corporate Developments](index=3&type=section&id=Strategic%20Initiatives%20and%20Corporate%20Developments) Clarus is undertaking significant strategic actions to refine its business portfolio and leadership. The company appointed Tripp Wyckoff, an industry veteran with experience at Thule and VSG, as the new Managing Director of the Adventure segment. Additionally, Clarus entered into an agreement to divest its PIEPS snow safety brand for €7.8 million, a move aimed at simplifying the business and rationalizing product categories - **Tripp Wyckoff** has been appointed as the **new Managing Director of the Adventure segment**, bringing over 20 years of experience from roles at Vertical Supply Group and Thule[14](index=14&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) - The company has agreed to **sell the PIEPS brand** and related JetForce IP for **€7.8 million**. The transaction is expected to close before the end of Q3 2025[18](index=18&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) For Q1 2025, consolidated sales fell 13% to $60.4 million. Gross margin decreased to 34.4% from 35.9% year-over-year, primarily due to lower volumes and unfavorable product mix in both segments. Selling, general, and administrative (SG&A) expenses were reduced to $26.6 million from $28.2 million, reflecting cost management initiatives - **Gross margin declined to 34.4%** due to lower volumes and unfavorable product mix. This was driven by sales of discontinued merchandise in the Outdoor segment and promotional sales in the Adventure segment[8](index=8&type=chunk) - **SG&A expenses decreased by $1.6 million** year-over-year to **$26.6 million**, resulting from lower wages, marketing costs, and reduced retail expenses due to store closures[9](index=9&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) The Outdoor segment's sales decreased by 6% to $44.3 million, influenced by SKU rationalization, though partially offset by strong performance in high-margin products. The Adventure segment's sales saw a steep 28% decline to $16.1 million, attributed to lower OEM demand and a weak Australian wholesale market, despite a $1.3 million contribution from the RockyMounts acquisition Segment Sales Performance | Segment | Q1 2025 Sales (Millions USD) | Q1 2024 Sales (Millions USD) | YoY Change | | :--- | :--- | :--- | :--- | | Outdoor | $44.3M | $47.0M | -6% | | Adventure | $16.1M | $22.3M | -28% | | **Total** | **$60.4M** | **$69.3M** | **-13%** | - The decline in the Outdoor segment was a result of a **product simplification and SKU rationalization strategy**[7](index=7&type=chunk) - The Adventure segment's sales drop was caused by **lower demand from global OEM customers** and a **challenging wholesale market in Australia** for Rhino-Rack and Maxtrax[7](index=7&type=chunk) [Profitability Analysis](index=3&type=section&id=Profitability%20Analysis) The company reported a loss from continuing operations of $5.2 million, an improvement from a $6.5 million loss in the prior year. On an adjusted basis, the loss from continuing operations was $(0.7) million, or $(0.02) per share. Adjusted EBITDA from continuing operations was negative at $(0.8) million, with a margin of (1.3)%, compared to a positive $2.0 million in Q1 2024 Key Profitability Metrics | Profitability Metric | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | | :--- | :--- | :--- | | Loss from Continuing Operations | $(5.2)M | $(6.5)M | | Adjusted Loss from Continuing Operations | $(0.7)M | $(0.1)M | | Adjusted EBITDA from Continuing Operations | $(0.8)M | $2.0M | | Adjusted EBITDA Margin | (1.3)% | 2.9% | - The Q1 2025 loss from continuing operations included **$5.1 million in special charges**, such as amortization, restructuring, and transaction costs[10](index=10&type=chunk) [Cash Flow and Liquidity](index=3&type=section&id=Cash%20Flow%20and%20Liquidity) The company demonstrated significant improvement in cash management. Net cash used in operating activities was $(2.1) million, a substantial improvement from $(16.4) million in the prior year. Free cash flow was $(3.3) million, compared to $(18.3) million in Q1 2024. As of March 31, 2025, the company held $41.3 million in cash and cash equivalents with total debt of only $1.9 million Cash Flow Summary | Cash Flow & Liquidity | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(2.1)M | $(16.4)M | | Capital Expenditures | $1.2M | $1.9M | | Free Cash Flow | $(3.3)M | $(18.3)M | Liquidity Position | Liquidity Position | March 31, 2025 (Millions USD) | December 31, 2024 (Millions USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $41.3M | $45.4M | | Total debt | $1.9M | $1.9M | [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The balance sheet as of March 31, 2025, shows total assets of $292.8 million and total liabilities of $63.5 million. The income statement for the quarter ended March 31, 2025, details total sales of $60.4 million, a gross profit of $20.8 million, and a net loss of $5.2 million [Balance Sheet](index=7&type=section&id=Balance%20Sheet) As of March 31, 2025, total assets were $292.8 million, slightly down from $294.1 million at year-end 2024. Key assets include $41.3 million in cash, $42.8 million in accounts receivable, and $87.5 million in inventories. Total liabilities stood at $63.5 million, with total stockholders' equity at $229.3 million Condensed Consolidated Balance Sheet | Balance Sheet Items (in thousands USD) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $178,341 | $177,780 | | Total Assets | $292,837 | $294,094 | | Total Current Liabilities | $40,031 | $36,037 | | Total Liabilities | $63,547 | $61,001 | | Total Stockholders' Equity | $229,290 | $233,093 | [Statement of (Loss) Income](index=8&type=section&id=Statement%20of%20(Loss)%20Income) For the three months ended March 31, 2025, the company generated $60.4 million in sales, down from $69.3 million in the prior year. Gross profit was $20.8 million. After operating expenses of $27.6 million, the operating loss was $6.8 million. The final net loss was $5.2 million, or $(0.14) per share Condensed Consolidated Statement of (Loss) Income | Income Statement Items (in thousands USD) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Sales | $60,433 | $69,311 | | Gross Profit | $20,794 | $24,851 | | Operating Loss | $(6,762) | $(6,774) | | Loss from Continuing Operations | $(5,244) | $(6,462) | | Net (Loss) Income | $(5,244) | $21,884 | [Non-GAAP Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) The company provided reconciliations for several non-GAAP measures to their nearest GAAP equivalents. Adjusted gross profit for Q1 2025 was $20.9 million (34.6% margin). Adjusted loss from continuing operations was $(0.7) million after excluding items like amortization and stock-based compensation. Adjusted EBITDA was $(0.8) million, with the Outdoor segment contributing $1.7 million and the Adventure segment detracting $(0.2) million before corporate costs - Adjusted gross profit in Q1 2025 was **$20.9 million (34.6% margin)** after adding back a **$120 thousand** inventory fair value adjustment[30](index=30&type=chunk) - Adjusted loss from continuing operations was **$(658) thousand** after excluding **$4.6 million** in net adjustments, primarily for amortization of intangibles (**$1.9M**) and stock-based compensation (**$1.4M**)[33](index=33&type=chunk) Adjusted EBITDA by Segment | Adjusted EBITDA by Segment (in thousands USD) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Outdoor Segment | $1,732 | $2,908 | | Adventure Segment | $(211) | $1,892 | | Corporate Costs | $(2,282) | $(2,782) | | **Total Adjusted EBITDA** | **$(761)** | **$2,018** |

Financial Performance - Clarus' Q1 2025 revenue was $60.4 million, a 13% decrease year-over-year compared to $69.3 million in Q1 2024[16, 24] - The adjusted gross margin was 34.6% in Q1 2025, down 230 basis points from 36.9% in Q1 2024[16, 24] - Clarus reported an adjusted EBITDA loss of $0.8 million in Q1 2025, compared to an adjusted EBITDA of $2.0 million in Q1 2024[16, 24] - The adjusted EBITDA margin was (1.3)% in Q1 2025, compared to 2.9% in Q1 2024[24] Segment Performance - Adventure segment revenue was $16.1 million, a 6% decrease year-over-year[16] - Outdoor segment revenue was $44.3 million, a 16% decrease year-over-year[16] - Outdoor segment adjusted EBITDA was $1.7 million[16] - Adventure segment adjusted EBITDA was $(0.2) million[16] Balance Sheet - Clarus had $41.3 million in cash on the balance sheet as of March 31, 2025[14] Strategic Focus - The company is positioned for long-term sustainable growth, focusing on simplifying and focusing on the core for Black Diamond and investing to scale for Adventure[14]

Core Insights - Clarus Corporation continues to execute its strategic initiatives aimed at long-term profitable growth despite facing challenges in the outdoor market [3][17] - The company has appointed Tripp Wyckoff as the new Managing Director of the Adventure segment, promoting from within to leverage his extensive industry experience [13][15] - Clarus has entered into an agreement to divest the PIEPS Snow Safety Brand for €7.8 million, aligning with its strategy to simplify the business [16] Financial Performance - For Q1 2025, total sales were $60.4 million, a decrease of 13% from $69.3 million in Q1 2024 [4][10] - The Outdoor segment saw a sales decline of 6% to $44.3 million, while the Adventure segment experienced a more significant drop of 28% to $16.1 million [4][5] - Gross margin for Q1 2025 was 34.4%, down from 35.9% in the same quarter last year, primarily due to lower volumes and an unfavorable product mix [6][10] Operational Highlights - Selling, general, and administrative expenses decreased to $26.6 million from $28.2 million year-over-year, attributed to lower wages and marketing costs [7] - The loss from continuing operations was $5.2 million, or $(0.14) per diluted share, an improvement from a loss of $6.5 million, or $(0.17) per diluted share, in the prior year [8][10] - Adjusted EBITDA from continuing operations was $(0.8) million, with an adjusted EBITDA margin of (1.3)%, compared to $2.0 million and a margin of 2.9% in Q1 2024 [11][10] Strategic Initiatives - The company is focusing on product simplification and SKU rationalization, which has impacted sales but is expected to enhance profitability in the long term [5][3] - Investments in innovation are anticipated to drive new product introductions in the second half of 2025, despite current challenges in the Adventure segment [3][5] - The decision to withdraw full-year guidance reflects the unpredictable macroeconomic environment and its potential impact on consumer demand [17]

Company Overview - Clarus Corporation is a global leader in the design and development of equipment and lifestyle products for outdoor enthusiasts [3] - The company is headquartered in Salt Lake City, Utah, and focuses on providing safe, simple, effective, and beautiful products to maximize outdoor pursuits [3] - Clarus markets its products under well-known brands such as Black Diamond®, Rhino-Rack®, MAXTRAX®, and TRED Outdoors® through various retail channels [3] Upcoming Financial Results - Clarus Corporation will hold a conference call on May 8, 2025, at 5:00 pm ET to discuss its financial results for the first quarter ended March 31, 2025 [1][2] - The financial results will be released in a press release after the close of regular stock market trading hours on the same day as the conference call [1]