Overall Performance and Strategic Updates Q1 2025 Financial Highlights 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 none428 Management Commentary and Outlook 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are considered healthy, and investing in innovation for the Adventure segment to drive future growth - The company has withdrawn its full-year 2025 guidance for revenue, adjusted EBITDA, capital expenditures, and free cash flow due to ongoing macroeconomic uncertainty and potential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 tariffs519 - 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 challenges35 - 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 headwinds5 Strategic Initiatives and Corporate Developments 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 Thule141617 - 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 202518 Detailed Financial Performance Consolidated Financial Results 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 segment8 - 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 closures9 Segment Performance 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 strategy7 - 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 Maxtrax7 Profitability Analysis 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 costs10 Cash Flow and Liquidity 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 Condensed Consolidated Financial Statements 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 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 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 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 adjustment30 - 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 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 |
Clarus(CLAR) - 2025 Q1 - Quarterly Results