I focus on investment ideas about companies that pay a (healthy) dividend while you wait for capital appreciation. I like to find good businesses which reward shareholders. The shares of the company should be for a temporary reason undervalued in relation to its fundamentals, peers and/or historical levels. Technically and fundamentally there needs to be high odds for capital appreciation preferably by foreseeable catalysts. These elements provide a simple filter to invest in companies that reward sharehold ...

Core Viewpoint - Clarus Corporation (CLAR) reported mixed fourth-quarter 2024 results, with adjusted earnings missing estimates while revenues exceeded expectations, although both metrics declined year-over-year [1][4]. Financial Performance - Adjusted loss per share was 8 cents, compared to a consensus estimate of 7 cents per share, and a loss of 7 cents per share in the prior year [4]. - Revenues reached $71.4 million, surpassing the consensus mark of $69.3 million, but decreased by 6.7% year-over-year due to challenges in the Adventure segment [5]. - Outdoor segment sales increased by 2% year-over-year to $51.1 million, while Adventure segment sales fell by 22.9% to $20.3 million [6]. Operational Highlights - Gross margin improved to 33.4%, up 450 basis points from the previous year, and adjusted EBITDA was $4.4 million, compared to $1.6 million a year ago [7]. - Adjusted EBITDA margin expanded by 400 basis points year-over-year to 6.1% [7]. Balance Sheet - As of December 31, 2024, cash and cash equivalents were $45.4 million, up from $11.3 million a year earlier, while total debt decreased significantly to $1.9 million from $119.8 million [8]. 2025 Outlook - The company expects sales in the range of $250-$260 million for 2025, with adjusted EBITDA projected between $14-$16 million and an adjusted EBITDA margin of 5.9% at the midpoint [9]. - Capital expenditures are forecasted to be between $4 million and $5 million [9].

Financial Data and Key Metrics Changes - Clarus Corporation reported fourth-quarter revenue of $71.4 million, slightly above guidance, but a 7% decline year-over-year, primarily due to a 23% drop in the Adventure segment [16][57] - Consolidated gross margins improved to 38%, a year-over-year increase of 330 basis points, driven by product simplification and SKU rationalization efforts [17][58] - Adjusted EBITDA for the fourth quarter was $4.4 million, up from $1.6 million in the prior year, but below the guidance range of $5 to $7 million [18][60] - Free cash flow for the fourth quarter was $14.4 million, consistent with historical performance [19] Business Line Data and Key Metrics Changes - Outdoor segment revenue was $51.1 million, up from $50.1 million in the prior year, with adjusted gross margin improving to 36.9% from 32.8% [20][59] - Adventure segment revenue fell to $20.3 million, with adjusted EBITDA of $1.6 million, impacted by lower OEM and Australian wholesale revenue [21][60] - The outdoor segment's adjusted EBITDA was $4.5 million, reflecting improved gross margins and a focus on high-margin products [20][61] Market Data and Key Metrics Changes - In Australia, new vehicle sales were 1.2 million units, up 1.7% year-over-year, but the second half of 2024 saw a significant decline [25] - North America wholesale revenue for the outdoor segment increased by 6.5%, while digital D2C sales declined by 3.2% [46] - International markets saw a 90.4% increase in revenue, driven by improved delivery timing and recovery from previous contractions [48] Company Strategy and Development Direction - The company aims to build a smaller, more profitable business, focusing on simplifying operations and improving inventory quality [8][41] - Strategic initiatives include the acquisition of Rocky Mounts to enhance the Adventure segment and expand product offerings in North America [14][112] - The company anticipates continued margin improvement in 2025, with expectations of 350 to 450 basis points increase in gross margins [12][102] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant market headwinds in 2024 but expressed confidence in the company's strategic direction and operational improvements [8][15] - The outlook for 2025 includes cautious revenue growth expectations, with full-year sales projected between $250 million and $260 million [72] - Management highlighted potential tariff impacts on gross margins, estimating a headwind of up to $2.5 million [67][106] Other Important Information - The company has no third-party bank debt and maintains a strong balance sheet, with cash and equivalents at approximately $45.4 million [62] - The company is actively addressing ongoing litigation matters, including a lawsuit related to Section 16(b) securities [69][70] Q&A Session Summary Question: Clarification on achieving double-digit EBITDA margin - Management confirmed that there is a path to double-digit EBITDA margin on the current outdoor revenue base, with expectations for improvement in the second half of the year [82] Question: Impact of tariffs on ordering behavior - Management indicated it is too early to assess the full impact of tariffs on consumer sentiment and ordering behavior, but initial signals suggest some disruption [86] Question: Breakdown of 2025 guidance and margin expansion - Management noted that margin expansion in 2025 will come from both cost-cutting and product mix improvements, with a focus on gross margin lift [96][102] Question: Trends in Adventure and Outdoor segments - Management acknowledged weakness in the Adventure segment due to lower car sales in Australia, while the Outdoor segment has started the year stronger than anticipated [121][122]

CLARUS Q4 EARNINGS PRESENTATION MARCH 6, 2025 6 February 2023 TODAY'S PRESENTERS CLARUS Warren Kanders EXECUTIVE CHAIRMAN Clarus Mike Yates CFO Clarus Neil Fiske PRESIDENT Black Diamond Equipment Mat Hayward MANAGING DIRECTOR Adventure STRATEGIC PRIORITIES: Q4 AND YTD HIGHLIGHTS Positioned for long-term sustainable growth Black Diamond objective: Simplify and focus on the core Adventure objective: Invest to scale Strong balance sheet/prudent capital allocation Strategic roadmap continues to guide execution ...

Group 1 - Clarus Corporation reported a quarterly loss of $0.08 per share, which was worse than the Zacks Consensus Estimate of $0.07, marking an earnings surprise of -214.29% [1] - The company posted revenues of $71.41 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 3.04%, but down from $76.5 million year-over-year [2] - Over the last four quarters, Clarus has surpassed consensus EPS estimates only once and has topped consensus revenue estimates two times [2] Group 2 - The stock has underperformed, losing about 4.7% since the beginning of the year compared to the S&P 500's decline of -0.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $75.4 million, and for the current fiscal year, it is $0.31 on revenues of $282.08 million [7] - The Zacks Industry Rank for Leisure and Recreation Products is in the bottom 39% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Clarus (CLAR) Q4 2024 Earnings Call March 06, 2025 05:00 PM ET Company Participants Matthew Berkowitz - Managing DirectorWarren Kanders - Executive ChairmanMichael J. Yates - Chief Financial OfficerMathew Hayward - Managing Director of Clarus Adventure SegmentMcNeil Fiske - President of Black Diamond EquipmentPeter McGoldrick - Equity Research Associate Conference Call Participants Anna Glaessgen - Senior Analyst, ConsumerMatthew Koranda - MD & Senior Research AnalystLaurent Vasilescu - Managing Director & ...

Financial Data and Key Metrics Changes - Clarus Corporation reported fourth quarter revenue of $71.4 million, slightly above guidance, but a 7% decline year-over-year, primarily due to a 23% decrease in the Adventure segment [12][39] - Consolidated gross margins improved to 33.4% from 28.9% year-over-year, driven by product simplification and SKU rationalization efforts [39] - Adjusted EBITDA for the fourth quarter was $4.4 million, up from $1.6 million in the prior year, reflecting improved operational efficiency [42] Business Line Data and Key Metrics Changes - Outdoor segment revenue was $51.1 million, up from $50.1 million year-over-year, with adjusted gross margin improving to 36.9% from 32.8% [14][15] - Adventure segment revenue fell to $20.3 million with adjusted EBITDA of $1.6 million, impacted by lower OEM sales and increased growth investments [15][39] - Overall, the Outdoor segment achieved 99% of its net sales target, while the Adventure segment reached 90% [6] Market Data and Key Metrics Changes - In North America, wholesale revenue for the Outdoor segment increased by 6.5%, while digital D2C sales declined by 3.2% [30] - International markets saw a significant increase of 90.4% in revenue, attributed to better timing of deliveries [32] - The Australian market faced challenges with a 10% decline in the wholesale channel due to lower vehicle sales [19] Company Strategy and Development Direction - The company aims to build a smaller, more profitable business, focusing on high-margin products and improving inventory quality [8][29] - Strategic initiatives include investments in R&D and new product launches, particularly in the Adventure segment, to drive future growth [10][25] - The acquisition of Rocky Mounts is expected to enhance the Adventure segment's offerings and market presence in North America [10][86] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant market headwinds but expressed confidence in the company's strategic direction and operational improvements [6][11] - The outlook for 2025 anticipates modest revenue growth, with adjusted EBITDA expected to range between $14 million and $16 million [52] - Concerns regarding tariffs and their potential impact on gross margins were highlighted, with management actively working to mitigate these effects [47][78] Other Important Information - The company reported a strong cash position of approximately $45.4 million, significantly improved from the previous year [44] - Free cash flow for the fourth quarter was $14.4 million, consistent with historical performance [13] - The company is currently involved in ongoing litigation matters, which may impact future financial results [48][49] Q&A Session Summary Question: Clarification on EBITDA margin targets - Management confirmed that there is a path to double-digit EBITDA margins for the Outdoor segment based on current revenue levels, with expectations for improvement in the second half of the year [60] Question: Impact of tariffs on ordering behavior - Management indicated that it is too early to assess the full impact of tariffs on order behavior, but initial signals suggest some consumer sentiment has been affected [61][62] Question: Guidance for 2025 and cost-saving opportunities - Management noted that the guidance reflects both cost-saving initiatives and product mix improvements, with a focus on gross margin expansion [71][75] Question: Trends in Adventure and Outdoor segments - Management acknowledged weakness in the Adventure segment due to lower auto sales in Australia, while the Outdoor segment has started the year stronger than anticipated [93][94]

Financial Performance - Total sales decreased by $21,705, or 7.6%, to $264,315 for the year ended December 31, 2024, compared to $286,020 for the year ended December 31, 2023[267]. - Gross profit decreased by $4,892, or 5.0%, to $92,619, with a gross margin of 35.0% for the year ended December 31, 2024, compared to 34.1% in 2023[273]. - Operating loss improved to $(21,107) in 2023 compared to $(106,483) in 2022, indicating a reduction in losses of approximately 80.2%[285]. - The net loss for the year was $52,287,000, compared to a net loss of $10,146,000 in 2023, representing a substantial increase in losses[319]. - The company reported a consolidated loss from continuing operations before income taxes of $(36,010) million for the year ended December 31, 2024[443]. Cash Flow and Dividends - In 2024, the total quarterly cash dividends paid were $3,831,000, compared to $3,750,000 in 2023 and $3,721,000 in 2022, reflecting a consistent increase in dividend payouts[254]. - Net cash used in operating activities was $(7,300) in 2024, compared to $31,924 provided in 2023, a change of $39,224[289]. - Net cash provided by investing activities was $165,160 in 2024, a significant increase from $(11,416) in 2023, indicating a positive change of $176,576[292]. - The company's cash position improved significantly, with cash increasing to $45,359,000 in 2024 from $11,324,000 in 2023[317]. Restructuring and Charges - The company incurred restructuring charges of $3,223,000 in 2023 and $1,948,000 in 2024, with cumulative charges since 2023 totaling $5,171,000, aimed at facilitating long-term sustainable growth[255]. - The company anticipates completing its restructuring activities in 2025, with ongoing evaluations of cost reduction actions[425]. - Total restructuring charges amounted to $1,948 million, with $1,349 million attributed to employee termination benefits[428]. Acquisitions and Divestitures - The company completed the acquisition of TRED Outdoors Pty Ltd on October 9, 2023, further expanding its portfolio in the outdoor equipment market[252]. - The company received net proceeds of approximately $37,871,000 from the sale of its Precision Sport segment, which includes Sierra and Barnes Bullets, as part of a strategic divestiture[253]. - Clarus Corporation acquired RockyMounts for a total purchase price of up to $8,000, including $4,000 in cash at closing and contingent consideration of up to $2,000 based on net sales targets[369]. - The acquisition of TRED was completed for an aggregate purchase price of approximately $6,849, which included $5,659 in cash and additional contingent consideration of up to $638[372]. Impairments and Goodwill - Impairment of goodwill increased to $36,264 for the year ended December 31, 2024, compared to $0 in 2023[279]. - The company experienced an impairment of goodwill amounting to $36.264 million in 2024, with no impairment recorded in 2023[322]. - Goodwill for the Adventure segment decreased by $36,264,000 due to impairment as of December 31, 2024, reflecting challenging market conditions[387]. Sales and Market Trends - Domestic sales decreased by $6,640, or 5.9%, to $105,745, while international sales decreased by $15,065, or 8.7%, to $158,570 during the same period[270][271]. - The company’s brands, including Black Diamond and Rhino-Rack, are positioned for sustainable long-term growth, driven by powerful industry trends in outdoor and adventure sports[248]. Legal and Compliance Issues - The company recorded a liability of $2,500 million for potential penalties from the U.S. Consumer Product Safety Commission (CPSC) investigation[437]. - Legal expenses incurred in 2024 for ongoing litigation amounted to $3,088 million, which includes the $2,500 million recorded liability[438]. - The CPSC intends to recommend civil monetary penalties totaling $25,135 million for compliance failures related to avalanche transmitters[433]. Research and Development - Total research and development costs for continuing operations were $12,171, $12,740, and $13,029 for the years ended December 31, 2024, 2023, and 2022, respectively[354]. Stock and Compensation - The Company granted stock options for an aggregate of 1,250 shares in 2024, with a grant price ranging from $4.63 to $6.81 per share[417]. - Total non-cash stock compensation expense for continuing operations was $11,198, $11,681, and $8,617 for the years 2024, 2023, and 2022 respectively[422].

Financial Performance - Fourth quarter sales were $71.4 million, a decrease from $76.5 million in the same quarter last year[4] - Net loss for the fourth quarter was $65.5 million, or $(1.71) per diluted share, compared to a net loss of $8.4 million, or $(0.22) per diluted share in the prior year[4] - Full year 2024 sales decreased 7.6% to $264.3 million from $286.0 million in 2023, driven by softness across all selling channels[17] - The Adventure segment saw a 22.9% decline in sales to $20.3 million compared to $26.4 million in the year-ago quarter[9] - Total sales for the three months ended December 31, 2024, were $71.405 million, a decrease of 6.4% from $76.503 million in the same period of 2023[37] - The net loss for the three months ended December 31, 2024, was $65.521 million, compared to a net loss of $8.389 million in the same period of 2023[37] - For the twelve months ended December 31, 2024, total sales were $264.315 million, down from $286.020 million in 2023, representing a decrease of 7.6%[39] - The net loss for the twelve months ended December 31, 2024, was $52.287 million, compared to a net loss of $10.146 million in 2023[39] - The company reported an operating loss of $70.379 million for the twelve months ended December 31, 2024, compared to an operating loss of $21.107 million in 2023[39] Gross Margin and EBITDA - Gross margin improved to 33.4% compared to 28.9% in the year-ago quarter, with adjusted gross margin at 38.0% versus 34.7%[10] - Adjusted EBITDA from continuing operations was $4.4 million, with an adjusted EBITDA margin of 6.1%, compared to $1.6 million and 2.1% in the same quarter last year[15] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $6.875 million, compared to $7.348 million for the same period in 2023[49] - The EBITDA margin for the twelve months ended December 31, 2024, was (21.4)%, down from (2.2)% in the previous year[49] - Adjusted EBITDA margin for the three months ended December 31, 2024, was 6.1%, compared to 2.1% in the same period of 2023[48] Cash and Debt - Cash and cash equivalents totaled $45.4 million, significantly up from $11.3 million, while total debt related to the RockyMounts acquisition was $1.9 million[21] - Cash and cash equivalents increased to $45.359 million as of December 31, 2024, from $11.324 million as of December 31, 2023[35] - Total assets decreased to $294.094 million as of December 31, 2024, from $495.338 million as of December 31, 2023[35] - Total liabilities decreased to $61.001 million as of December 31, 2024, from $203.218 million as of December 31, 2023[35] Acquisitions and Strategic Moves - The company completed the acquisition of RockyMounts, enhancing its product capabilities in the bike-rack market[1] - For fiscal year 2025, the company expects sales between $250 million to $260 million and adjusted EBITDA of approximately $14 million to $16 million[27] - The company plans to focus on restructuring and cost management strategies to improve future performance[44][46] Impairments and Expenses - The company established a full valuation allowance of $21.0 million for deferred tax assets during the fourth quarter[28] - The company incurred $36,264 thousand in goodwill impairment during Q4 2024[44] - The company incurred impairment of goodwill totaling $36.264 million for the twelve months ended December 31, 2024[49] - Stock-based compensation expenses for Q4 2024 were $(1,570) thousand, compared to $(1,218) thousand in Q4 2023[44][45] - The company reported a significant increase in legal costs and regulatory matter expenses, totaling $3.842 million for the twelve months ended December 31, 2024[49] Tax and Other Financial Metrics - The effective tax rate for Q4 2024 was 40.5%, significantly higher than the negative tax rate of (19.0)% in Q4 2023[44][45] - Adjusted loss from continuing operations for Q4 2024 was $(3,162) thousand, compared to an adjusted income of $1,638 thousand in Q4 2023[45] - The adjusted EPS for Q4 2024 was $(0.08), a decline from adjusted EPS of $0.04 in Q4 2023[45] Segment Performance - The outdoor segment reported an operating loss of $999 thousand for the twelve months ended December 31, 2024, compared to a loss of $5.155 million in 2023[49] - Restructuring charges for the three months ended December 31, 2024, amounted to $939 thousand, while for the same period in 2023, it was $1.411 million[48]

Core Insights - Clarus Corporation reported fourth quarter sales of $71.4 million, a decrease from $76.5 million in the same quarter last year, primarily due to challenges with two large accounts in the OEM and Australian markets [5][6] - The company completed the acquisition of RockyMounts, enhancing its product capabilities in the bike-rack segment globally [1][23] - Adjusted EBITDA for the fourth quarter was $4.4 million, with an adjusted EBITDA margin of 6.1%, compared to $1.6 million and 2.1% in the prior year [12][21] Financial Performance - Fourth quarter net loss was $65.5 million, or $(1.71) per diluted share, compared to a net loss of $8.4 million, or $(0.22) per diluted share in the previous year [5][10] - Loss from continuing operations was $73.3 million, or $(1.92) per diluted share, compared to a loss of $7.2 million, or $(0.19) per diluted share in the year-ago quarter [10][19] - For the full year 2024, total sales decreased by 7.6% to $264.3 million from $286.0 million in 2023 [14][15] Segment Performance - Sales in the Outdoor segment increased to $51.1 million from $50.1 million year-over-year, while Adventure segment sales decreased by 22.9% to $20.3 million [6][14] - The Outdoor segment's adjusted gross margin improved to 36.9% in Q4 from 32.8% in the previous year, driven by product simplification and SKU rationalization [4][7] Operational Highlights - Selling, general and administrative expenses decreased to $27.8 million from $30.0 million year-over-year, attributed to lower marketing and retail expenses [8][18] - The company incurred a non-cash expense of $44.8 million for goodwill and indefinite-lived intangible assets impairments in Q4 [9][10] Cash Flow and Liquidity - Free cash flow for Q4 was $14.4 million, up from $13.3 million in the prior year [13] - Cash and cash equivalents at year-end totaled $45.4 million, significantly higher than $11.3 million at the end of the previous year [16] Future Outlook - For fiscal year 2025, the company expects sales to range between $250 million to $260 million and adjusted EBITDA of approximately $14 million to $16 million [24] - Capital expenditures are anticipated to be between $4 million to $5 million, with expected free cash flow ranging from $8 million to $10 million [24]