Financial Data and Key Metrics Changes - Total sales for the second quarter of 2023 were $83.7 million, down from $114.9 million in the prior year quarter, representing a 27% decline [14] - Adjusted EBITDA for the second quarter was $7.3 million, with an adjusted EBITDA margin of 8.7%, compared to $17.6 million and 15.3% in the same quarter last year [18] - Net loss in the second quarter was $2.1 million, or a loss of $0.06 per diluted share, compared to net income of $3.8 million, or $0.09 EPS in the prior year quarter [18] - Free cash flow for the second quarter was $12.3 million, significantly up from $2.3 million in the same period last year [33] Business Segment Performance Changes - The Adventure segment saw improved gross margins of 370 basis points to 42.4%, with sales increasing by 63% month-over-month compared to Q1 2023 [7] - The Outdoor segment experienced a 24% decline in sales to $40.1 million, attributed to lower consumer demand and inventory destocking by retail partners [14][9] - Precision Sports reported a gross margin of 31.7%, down from 44.9% in the prior year quarter, due to lower margin sales in a promotional pricing environment [16] Market Data and Key Metrics Changes - The company noted a tightening of open-to-buy dollars among retail partners, impacting inventory levels and purchasing behavior [9] - Retail partners are currently holding approximately six to seven weeks of inventory on hand, down from 10-12 weeks pre-COVID, indicating a shift in inventory management strategies [79] Company Strategy and Industry Competition - The company is focused on maximizing value across its three segments and expects to reduce normalized corporate overhead by $1.5 million compared to 2022 [6] - Strategic initiatives include digital transformation and enhancing e-commerce platforms to support both B2B and B2C opportunities [13] - The company anticipates that the destocking environment will continue but expects improvements in retail purchasing habits by year-end [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about reaching the trough in the Outdoor and Adventure segments, with expectations for more profitable growth in the future [35] - The company expects sales for the full year 2023 to be in the range of $385 million to $400 million, with adjusted EBITDA projected between $42 million and $50 million [20] - Management highlighted that the promotional environment is expected to persist but anticipates improvements as inventory levels normalize [66] Other Important Information - The company incurred over $700,000 in moving costs during the first half of 2023 due to consolidating warehouses, which is not expected to recur [15] - The company ended the quarter with total debt of $127.2 million, maintaining a net debt leverage ratio of 2.7 times on a trailing 12-month adjusted EBITDA basis [19] Q&A Session Summary Question: What areas of your portfolio are seeing the heaviest destocking from retailer partners? - Management noted that the most significant destocking is occurring within national accounts and key accounts, particularly those with private label offerings [25] Question: How do you expect the realization of forward orders to improve in the back half of the year? - Management expects improvements in the realization of forward orders, projecting levels to return to 80%-85% from the current 65%-70% [27] Question: Can you provide insights on the promotional environment and its impact on sales? - Management indicated that the promotional environment has intensified, particularly in the Outdoor segment, but is expected to improve as inventory levels normalize [70] Question: How is the international market performing compared to domestic? - Management stated that international sales are stabilizing, with higher fulfillment levels compared to previous quarters, indicating a better inventory situation [58] Question: What is the outlook for the Precision Sports segment? - Management anticipates that the upcoming hunting season and the election cycle will help recalibrate demand and reduce the need for aggressive promotions [89]

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Clarus Corporation as of June 30, 2023, and for the three and six-month periods then ended, compared to the prior year [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets decreased to $498.0 million, total liabilities decreased to $208.0 million, and total stockholders' equity remained relatively stable at $290.0 million Condensed Consolidated Balance Sheets (in thousands) | | June 30, 2023 | December 31, 2022 | |:---|:---:|:---:| | **Total Assets** | $497,996 | $518,145 | | **Total Liabilities** | $208,023 | $226,037 | | **Total Stockholders' Equity** | $289,973 | $292,108 | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The company reported a net loss of $2.1 million for Q2 2023 and $0.5 million for H1 2023, driven by significant sales declines of 27.2% and 20.6% respectively Financial Performance for the Three Months Ended June 30 (in thousands) | Metric | 2023 | 2022 | |:---|:---:|:---:| | **Total Sales** | $83,728 | $114,933 | | **Gross Profit** | $30,754 | $43,682 | | **Operating (Loss) Income** | $(241) | $7,791 | | **Net (Loss) Income** | $(2,091) | $3,764 | | **Diluted EPS** | $(0.06) | $0.09 | Financial Performance for the Six Months Ended June 30 (in thousands) | Metric | 2023 | 2022 | |:---|:---:|:---:| | **Total Sales** | $181,112 | $228,209 | | **Gross Profit** | $66,775 | $87,934 | | **Operating Income** | $4,452 | $15,904 | | **Net (Loss) Income** | $(493) | $9,073 | | **Diluted EPS** | $(0.01) | $0.23 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly improved to $17.3 million for the first half of 2023, primarily due to better working capital management, while investing and financing activities used $3.1 million and $14.0 million respectively Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | |:---|:---:|:---:| | **Net cash provided by (used in) operating activities** | $17,286 | $(6,276) | | **Net cash used in investing activities** | $(3,083) | $(3,774) | | **Net cash (used in) provided by financing activities** | $(13,962) | $4,930 | | **Change in cash** | $(746) | $(5,577) | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1: Nature of Operations and Summary of Significant Accounting Policies](index=14&type=section&id=NOTE%201.%20NATURE%20OF%20OPERATIONS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Clarus Corporation designs, manufactures, and distributes outdoor equipment and lifestyle products, with financial statements prepared under U.S. GAAP involving significant management estimates for asset valuation - The company's mission is to acquire and grow outdoor "super fan" brands through an "innovate and accelerate" strategy[37](index=37&type=chunk) - Significant accounting estimates include fair value of net assets from acquisitions, inventory valuation, allowance for credit losses, and valuation of long-lived and intangible assets[38](index=38&type=chunk) [Note 2: Inventories](index=14&type=section&id=NOTE%202.%20INVENTORIES) Total inventories slightly increased to $149.0 million as of June 30, 2023, primarily driven by a rise in finished goods Inventory Balances (in thousands) | Category | June 30, 2023 | December 31, 2022 | |:---|:---:|:---:| | Finished goods | $111,169 | $107,453 | | Work-in-process | $9,360 | $8,719 | | Raw materials and supplies | $28,434 | $30,900 | | **Total** | **$148,963** | **$147,072** | [Note 3: Property and Equipment](index=16&type=section&id=NOTE%203.%20PROPERTY%20AND%20EQUIPMENT) Net property and equipment decreased to $41.9 million as of June 30, 2023, with depreciation expense remaining consistent at $3.7 million for the first six months Property and Equipment, Net (in thousands) | | June 30, 2023 | December 31, 2022 | |:---|:---:|:---:| | Gross Property and Equipment | $81,885 | $79,481 | | Less Accumulated Depreciation | $(39,966) | $(36,471) | | **Net Property and Equipment** | **$41,919** | **$43,010** | - Depreciation expense was **$3,732 thousand** for the six months ended June 30, 2023, compared to **$3,709 thousand** for the same period in 2022[2](index=2&type=chunk) [Note 4: Goodwill and Intangible Assets](index=16&type=section&id=NOTE%204.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill and indefinite-lived intangible assets slightly decreased to $62.4 million and $82.0 million respectively as of June 30, 2023, primarily due to foreign currency impacts Goodwill and Intangible Asset Balances (in thousands) | Asset Type | June 30, 2023 | December 31, 2022 | |:---|:---:|:---:| | Goodwill | $62,437 | $62,993 | | Indefinite-Lived Intangible Assets | $81,976 | $82,901 | | Other Intangible Assets, Net | $47,792 | $55,255 | - Amortization expense for other intangible assets was **$6.5 million** for the first six months of 2023, down from **$8.1 million** in the prior-year period[84](index=84&type=chunk) [Note 6: Long-Term Debt](index=19&type=section&id=NOTE%206.%20LONG-TERM%20DEBT) Total long-term debt decreased to $114.7 million as of June 30, 2023, primarily composed of a term loan and revolving credit facility, with the company in compliance with all debt covenants Long-Term Debt Composition (in thousands) | Component | June 30, 2023 | December 31, 2022 | |:---|:---:|:---:| | Revolving credit facility | $11,884 | $18,049 | | Term loan | $115,625 | $120,311 | | Total Debt | $127,228 | $139,034 | | Less current portion | $(12,543) | $(11,952) | | **Long-term debt, net** | **$114,685** | **$127,082** | - The Restated Credit Agreement provides for up to **$300 million** in revolving loans and a **$125 million** term loan, maturing April 18, 2027[91](index=91&type=chunk) - As of June 30, 2023, approximately **$32 million** was available to borrow on the revolving loan, and the interest rate was approximately **7.5%**[93](index=93&type=chunk) [Note 16: Segment Information](index=34&type=section&id=NOTE%2016.%20SEGMENT%20INFORMATION) All three segments—Outdoor, Precision Sport, and Adventure—experienced sales declines for the six months ended June 30, 2023, with Precision Sport remaining the most profitable and Adventure reporting an operating loss Segment Sales for Six Months Ended June 30 (in thousands) | Segment | 2023 | 2022 | |:---|:---:|:---:| | Outdoor | $92,842 | $104,126 | | Precision Sport | $52,897 | $68,305 | | Adventure | $35,373 | $55,778 | | **Total** | **$181,112** | **$228,209** | Segment Operating Income (Loss) for Six Months Ended June 30 (in thousands) | Segment | 2023 | 2022 | |:---|:---:|:---:| | Outdoor | $266 | $3,359 | | Precision Sport | $12,488 | $24,015 | | Adventure | $(1,651) | $2,768 | | **Total Segment Operating Income** | **$11,103** | **$30,142** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses significant sales and profitability declines for Q2 and H1 2023 due to challenging market conditions and lower demand, while highlighting strong liquidity and positive operating cash flow [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Sales declined across all segments and geographies for the three and six-month periods ended June 30, 2023, due to weak demand, impacting gross margins despite lower operating expenses - Q2 2023 total sales decreased **27.2%** YoY to **$83.7 million**, primarily due to weakness in the Outdoor, Precision Sport, and Adventure segments[71](index=71&type=chunk) - H1 2023 total sales decreased **20.6%** YoY to **$181.1 million**, with declines in the Adventure, Precision Sport, and Outdoor segments[66](index=66&type=chunk) - Gross margin for H1 2023 decreased to **36.9%** from **38.5%** in H1 2022, driven by unfavorable product mix and currency effects, partially offset by easing freight costs[228](index=228&type=chunk) - Selling, general, and administrative expenses for H1 2023 decreased by **9.5%** to **$63.0 million**, mainly due to lower stock compensation and cost-saving measures[67](index=67&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained solid liquidity with $11.3 million in cash and $32 million available on its credit facility, with net cash from operations significantly improving to $17.3 million for the first half of 2023 - As of June 30, 2023, the company had **$11.3 million** in cash and **$32 million** available to borrow under its revolving credit facility[235](index=235&type=chunk)[236](index=236&type=chunk) Free Cash Flow (Non-GAAP) for Six Months Ended June 30 (in thousands) | | 2023 | 2022 | |:---|:---:|:---:| | Net cash provided by (used in) operating activities | $17,286 | $(6,276) | | Purchase of property and equipment | $(3,252) | $(4,072) | | **Free cash flow** | **$14,034** | **$(10,348)** | - The company was in compliance with all debt covenants as of June 30, 2023, including a consolidated total leverage ratio limit of **3.75 to 1**[249](index=249&type=chunk)[261](index=261&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) There have been no material changes in the company's market risk disclosures, including foreign currency and interest rate risks, from its 2022 Annual Report on Form 10-K - There has been no material change in the market risk disclosure from the company's 2022 Annual Report on Form 10-K[282](index=282&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - The Executive Chairman and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[267](index=267&type=chunk) - No material changes to internal control over financial reporting were identified during the six months ended June 30, 2023[268](index=268&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=58&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in routine legal proceedings, but management does not anticipate any material adverse effect on its financial condition or operations - The company is involved in routine litigation incidental to its business but does not expect any material adverse impact from current proceedings[270](index=270&type=chunk)[271](index=271&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - There have been no material changes in risk factors from those disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022[274](index=274&type=chunk) [Item 6. Exhibits](index=59&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and XBRL data files - Exhibits filed include Sarbanes-Oxley certifications (31.1, 31.2, 32.1, 32.2) and XBRL interactive data files[277](index=277&type=chunk)

Financial Data and Key Metrics Changes - Sales for Q1 were $97.4 million, down 14% from $113.3 million in the prior year quarter, and down 12% on a constant currency basis [2] - Net income for Q1 was $1.6 million or $0.04 per diluted share, compared to $5.3 million or $0.13 per diluted share in the prior year quarter [115] - Adjusted EBITDA for Q1 was $9.6 million with a margin of 9.9%, down from $19.7 million and a margin of 17.4% in the same quarter last year [115] - Consolidated gross margin in Q1 declined to 37.0% from 39.1% in the year-ago period [113] Business Line Data and Key Metrics Changes - Outdoor segment sales increased by 2% to $52.8 million compared to $51.5 million in Q1 2022, with a 5% increase when adjusted for foreign currency [2] - Adventure segment sales were $17.5 million, down 39% from $28.6 million in the prior year, with a significant decline in the RhinoRack North American market [3] - Precision Sports sales were $27.1 million in Q1, down from $33.1 million in the same quarter last year, impacted by sourcing challenges for brass casings [112] Market Data and Key Metrics Changes - European markets saw a 26% year-over-year growth, while international distributors grew by 35% [104] - North American market continues to face challenges due to excess inventory and destocking activities among retail partners [86][104] - Direct-to-consumer sales grew by 28% during the quarter, with comparable store sales lifting by 13% [81] Company Strategy and Development Direction - The company is focused on transforming product development and innovation processes to improve speed to market and product differentiation [1] - A renewed emphasis on customer and consumer insights is driving a revamped product hierarchy [1] - The company aims to reduce Outdoor inventory levels by 15% by the end of the year compared to the end of 2022 [91] - Strategic investments will focus on product innovation, marketing, digital, and international growth [91] Management's Comments on Operating Environment and Future Outlook - Management expressed a long-term positive view of the RhinoRack brand despite current challenges [3] - The company anticipates that supply and demand will take another six months to reach equilibrium [81] - Management remains optimistic about the future, citing strong demand for key products and a commitment to enhancing operational performance [96] Other Important Information - The company implemented cost cuts in Q1 and Q2, expected to save $1 million annually [77] - Cash and cash equivalents were $10.3 million at the end of Q1, down from $12.1 million at the end of 2022 [116] - Free cash flow for Q1 was $1.7 million, a significant improvement from a negative cash flow of $12.7 million in the same quarter last year [117] Q&A Session Summary Question: What are the biggest changes or enhancements expected around strategy with new leaders in place? - Management highlighted the hiring of new leaders and the focus on filling gaps in North American sales, indicating progress in leadership and strategy [5] Question: What is the outlook for gross margin and sales in Q2? - Management guided for a gross margin in the historical range of 37% to 39% and projected Q2 sales of $92 million [7] Question: How is the company addressing supply chain challenges? - Management acknowledged ongoing supply chain issues but emphasized efforts to improve sourcing and operational efficiency [25][42] Question: What is the company's strategy for the Adventure segment? - Management confirmed a commitment to enhancing customer service and focusing on key account partnerships to drive performance [111] Question: How does the company view the performance of the European market? - Management noted strong performance in Europe despite challenges in North America, attributing growth to key product categories [64]

Washington, D.C. 20549 FORM 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: March 31, 2023 or ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to _________ Commission File Number: 001-34767 CLARUS CORPORATION (Exact name of registrant as specified in its charter) Delaware 58-1972600 (State or other jurisdiction of incorporation or organization) (I. ...

Sales ($M): $148 $171 $212 $229 $224 $376 $448 $420 2016 2017 2018 2019 2020 2021 2022 2023 Outlook (1) Adj. EBITDA Margins (2): (1.8%) 3.6% 9.8% 9.9% 10.0% 14.4% 16.4% 14.3%(1) Source: Public filings. (1) Management 2023 outlook issued and only effective as of February 27, 2023. (2) Adjusted EBITDA is a non-GAAP financial measure. See appendix for reconciliation. 9 2023 Outlook Key Financial Metrics(1) | --- | --- | |------------------|-----------------------------------| | | ~$420M Sales | | | | | | ~$60M ...

Clarus Corporation (NASDAQ:CLAR) Q4 2022 Earnings Conference Call February 27, 2023 5:00 PM ET Company Participants Cody Slach - External Director of IR John Walbrecht - President Mike Yates - CFO Conference Call Participants Alexander Perry - Bank of America Randal Konik - Jefferies Joseph Altobello - Raymond James Ryan Sundby - William Blair Matt Koranda - Roth MKM Mark Smith - Lake Street Linda Bolton-Weiser - D.A. Davidson Jim Duffy - Stifel Operator Good afternoon, everyone, and thank you for participa ...

For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company also formally assesses, both at the inception of the hedging rel ...

Clarus Corporation (NASDAQ:CLAR) Q3 2022 Earnings Conference Call November 7, 2022 5:00 PM ET Company Participants John Walbrech - President Mike Yates - CFO Cody Slach - External Director of IR Conference Call Participants Alex Perry - Bank of America Joseph Altobello - Raymond James Anna Glaessgen - Jefferies Matt Koranda - ROTH Ryan Sundby - William Blair Linda Bolton-Weiser - D.A. Davidson Mark Smith - Lake Street Operator Good afternoon, everyone and thank you for participating in today's conference ca ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: September 30, 2022 or ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to _________ Commission File Number: 001-34767 CLARUS CORPORATION (Exact name of registrant as specified in its charter) Delaware 58-1972600 (State or oth ...

CLARUS Investor Presentation August 2022 Disclaimer Forward-Looking Statements This presentation contains statements that constitute forward-looking statements which involve risks and uncertainties. These statements include descriptions regarding the intent, belief, estimates, forecasts, projections, assumptions or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition, future events and plans of the Company. These forward-looking s ...