Clarus(US:CLAR)2022-03-06 16:00Company Mission and Strategy - Clarus Corporation's mission is to identify, acquire, and grow outdoor "super fan" brands through an "innovate and accelerate" strategy[217]. - The company employs approximately 120 engineers focused on enhancing customer performance through technical innovation and product development[218]. - Clarus has a diverse portfolio of brands, including Black Diamond, Sierra, Barnes, Rhino-Rack, and MAXTRAX, which are well-positioned for long-term growth in the outdoor and adventure sport markets[217]. Financial Performance - Consolidated sales increased by $151,787, or 67.8%, to $375,794 for the year ended December 31, 2021, compared to $224,007 for the year ended December 31, 2020[242]. - Domestic sales rose by $93,652, or 70.8%, to $225,878 during the year ended December 31, 2021, compared to $132,226 in the previous year[243]. - International sales increased by $58,135, or 63.3%, to $149,916 for the year ended December 31, 2021, compared to $91,781 for the year ended December 31, 2020[244]. - Net income for the year ended December 31, 2021, was $26,093, compared to $5,545 in the previous year[241]. - Operating income increased to $21,200 for the year ended December 31, 2021, compared to $3,934 in the previous year[241]. Cost and Expenses - Cost of goods sold rose by $92,650, or 63.4%, to $238,862 for the year ended December 31, 2021, compared to $146,212 in the previous year[245]. - Gross profit increased by $59,137, or 76.0%, to $136,932 for the year ended December 31, 2021, with a gross margin of 36.4% compared to 34.7% in the prior year[246]. - Selling, general, and administrative expenses increased by $34,066, or 47.7%, to $105,494 for the year ended December 31, 2021, compared to $71,428 in the previous year[247]. - Transaction costs increased to $11,843 for the year ended December 31, 2021, compared to $2,433 in the previous year, related to financing and acquisition efforts[248]. Market Conditions and Risks - The COVID-19 pandemic has caused significant disruptions in global supply chains, affecting the availability of critical raw materials and finished goods[225]. - Retail demand in the Outdoor segment declined from March to December 2020 but saw an increase in 2021 as outdoor recreation participation rose[226]. - The Precision Sport segment experienced higher demand, positively impacting sales and profitability since the pandemic began[226]. - The company faces potential risks including consumer demand fluctuations, supply chain disruptions, and the ongoing impact of the COVID-19 pandemic[216]. - Clarus's financial results may differ from expectations due to various factors, including the integration of acquisitions and changes in consumer behavior[216]. Acquisitions and Investments - Clarus has made several acquisitions, including Sierra Bullets in 2017 and Rhino-Rack in 2021, to expand its market presence[222]. - Consolidated net cash used in investing activities increased to $178,142 in 2021 from $35,582 in 2020, primarily due to the $160,988 spent on the acquisition of Rhino-Rack and MAXTRAX[277]. Tax and Debt - Consolidated income tax benefit increased by $10,254, or 523.2%, to $12,214 for the year ended December 31, 2021, compared to $1,960 in the previous year[253]. - As of December 31, 2021, the company had net operating loss carryforwards (NOLs) of $60,712, which are expected to offset future U.S. Federal income taxes[279]. - The company's gross deferred tax asset was $38,184, with a valuation allowance of $4,378, resulting in a net deferred tax asset of $33,806 before deferred tax liabilities of $46,653[281]. - As of December 31, 2021, the company had drawn approximately $18,501 of the $100,000 revolving loan commitment and $121,874 outstanding under the term loan commitment[290]. - The company is required to repay the term loan through quarterly payments starting at $1,563, increasing to $3,125 beginning September 30, 2022, with full repayment due by May 3, 2024[290]. Currency Exposure - Approximately 41% of pro forma sales for the year ending December 31, 2021, were denominated in foreign currencies, up from 36% in the prior year, with significant exposure to the Australian Dollar, Euro, and Canadian Dollar[294].