美國
證券交易委員會
華盛頓特區20549
表格
截至本季度結束
或
到 至
委員會檔案編號：
（依憑章程所載的完整登記名稱）
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(依據所在地或其他管轄區) | (國稅局雇主識別號碼) |
| ||
(總部辦公地址) | （郵遞區號） |
( |
(註冊人電話號碼，包括區號) |
根據法案第12(b)條註冊的證券：
每種類別的名稱 |
| 交易符號 |
| 每個註冊交易所的名稱 |
試以勾選符號表示該登記人：(1) 在過去12個月（或該登記人因要求提交此類報告而有較短時期的情況時）已經提交證券交易所法案1934年第13條或第15(d)條要求提交的所有報告，並且(2) 已受上述報告要求制度約束達90天。
請註明勾選標記，註冊者是否已電子提交並發布在其企業網站（如有）的所有互動數據文件，這些文件是根據S-t規則405（本章第232.405條）在前12個月內提交和發布的（或在註冊者被要求提交和發布此類文件的較短期間內）。
請載明檢查標記，公司是否為大型加速披露人、加速披露人、非加速披露人、小型報告公司或新興成長公司。請於「交易所法案」第1202條中查閱「大型加速披露人」、「加速披露人」、「小型報告公司」和「新興成長公司」的定義。
大型加速歸檔人 | ☐ | 非加速歸檔人 | ☐ | |
☒ | 小型報告公司 | |||
新興成長型企業 |
如果一家新興成長型企業，請勾選“是”表示註冊人選擇不使用根據證券交易所法第13(a)條所提供的任何新的或修改後的財務會計準則的延長過渡期來遵守。 ☐
請在核准印章處打勾，表明公司是否為外殼公司（根據《交易所法》第120億2條所定義）。是
截至2024年10月31日，有
第一部分. 財務資料
項目1. 基本報表
clarus corporation
縮表合併資產負債表
（未經審計）
(以千為單位，每股金額除外)
2024年9月30日 |
| 2023年12月31日 | |||
資產 | |||||
流動資產合計 | |||||
現金 | $ | | $ | | |
應收賬款，減少呆賬準備 | |||||
信貸虧損 $ | | | |||
庫存 | | | |||
預付及其他流動資產 | | | |||
應付所得稅款項 | | | |||
待售資產 | - | | |||
全部流動資產 | | | |||
物業及設備，扣除折舊後淨值 | | | |||
其他無形資產淨值 | | | |||
無限期使命能無形資產 | | | |||
商譽 | | | |||
遞延所得稅 | | | |||
其他長期資產 | | | |||
總資產 | $ | | $ | | |
550,714 | |||||
流動負債 | |||||
應付帳款 | $ | | $ | | |
應計負債 | | | |||
應付所得稅 | - | | |||
長期負債的當期部分 | - | | |||
待售負債 | - | | |||
流動負債合計 | | | |||
递延所得税 | | | |||
其他長期負債 | | | |||
總負債 | | | |||
股東權益 | |||||
優先股，面額; 授權 $ | |||||
普通股, $ | | | |||
額外資本贈与金 | | | |||
累積虧損 | ( | ( | |||
庫藏股票，成本 | ( | ( | |||
累積其他全面損失 | ( | ( | |||
股東權益總額 | | | |||
負債和股東權益總額 | $ | | $ | | |
請參閱簡明合併基本報表附註。
3
CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended | |||||
September 30, 2024 |
| September 30, 2023 | |||
Sales | |||||
Domestic sales | $ | | $ | | |
International sales | | | |||
Total sales | | | |||
Cost of goods sold | | | |||
Gross profit | | | |||
Operating expenses | |||||
Selling, general and administrative | | | |||
Restructuring charges | | | |||
Transaction costs | | | |||
Legal costs and regulatory matter expenses | | | |||
Total operating expenses | | | |||
Operating loss | ( | ( | |||
Other income (expense) | |||||
Interest income, net | | | |||
Other, net | | ( | |||
Total other income (expense), net | | ( | |||
Loss before income tax | ( | ( | |||
Income tax benefit | ( | ( | |||
Loss from continuing operations | ( | ( | |||
Discontinued operations, net of tax | - | | |||
Net loss | ( | ( | |||
Other comprehensive income (loss), net of tax: | |||||
Foreign currency translation adjustment | | ( | |||
Unrealized (loss) gain on hedging activities | ( | | |||
Other comprehensive income (loss) | | ( | |||
Comprehensive income (loss) | $ | | $ | ( | |
Loss from continuing operations per share: | |||||
Basic | $ | ( | $ | ( | |
Diluted | ( | ( | |||
Net loss per share: | |||||
Basic | $ | ( | $ | ( | |
Diluted | ( | ( | |||
Weighted average shares outstanding: | |||||
Basic | | | |||
Diluted | | | |||
See accompanying notes to condensed consolidated financial statements.
4
CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands, except per share amounts)
Nine Months Ended | |||||
September 30, 2024 | September 30, 2023 | ||||
Sales | |||||
Domestic sales | $ | | $ | | |
International sales | | | |||
Total sales | | | |||
Cost of goods sold | | | |||
Gross profit | | | |||
Operating expenses | |||||
Selling, general and administrative | | | |||
Restructuring charges | | | |||
Transaction costs | | | |||
Contingent consideration benefit | ( | ( | |||
Legal costs and regulatory matter expenses | | | |||
Total operating expenses | | | |||
Operating loss | ( | ( | |||
Other income (expense) | |||||
Interest income, net | | | |||
Other, net | | ( | |||
Total other income (expense), net | | ( | |||
Loss before income tax | ( | ( | |||
Income tax benefit | ( | ( | |||
Loss from continuing operations | ( | ( | |||
Discontinued operations, net of tax | | | |||
Net income (loss) | | ( | |||
Other comprehensive income (loss), net of tax: | |||||
Foreign currency translation adjustment | | ( | |||
Unrealized gain on hedging activities | | | |||
Other comprehensive income (loss) | | ( | |||
Comprehensive income (loss) | $ | | $ | ( | |
Loss from continuing operations per share: | |||||
Basic | $ | ( | $ | ( | |
Diluted | ( | ( | |||
Net income (loss) per share: | |||||
Basic | $ | | $ | ( | |
Diluted | | ( | |||
Weighted average shares outstanding: | |||||
Basic | | | |||
Diluted | | | |||
See accompanying notes to condensed consolidated financial statements.
5
CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended | |||||
September 30, 2024 |
| September 30, 2023 | |||
Cash Flows From Operating Activities: | |||||
Net income (loss) | $ | | $ | ( | |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||||
Depreciation of property and equipment | | | |||
Amortization of other intangible assets | | | |||
Gain on sale of business | ( | - | |||
Amortization of debt issuance costs | | | |||
Gain on disposition of property and equipment | ( | ( | |||
Noncash lease expense | | | |||
Contingent consideration benefit | ( | ( | |||
Stock-based compensation | | | |||
Deferred income taxes | | ( | |||
Changes in operating assets and liabilities, net of disposition: | |||||
Accounts receivable | | ( | |||
Inventories | ( | | |||
Prepaid and other assets | ( | | |||
Accounts payable | ( | | |||
Accrued liabilities | ( | ( | |||
Income taxes | ( | | |||
Net cash (used in) provided by operating activities | ( | | |||
Cash Flows From Investing Activities: | |||||
Proceeds from the sale of business | | - | |||
Proceeds from disposition of property and equipment | | | |||
Purchase of intangible assets | ( | ( | |||
Purchases of property and equipment | ( | ( | |||
Net cash provided by (used in) investing activities | | ( | |||
Cash Flows From Financing Activities: | |||||
Proceeds from revolving credit facilities | | | |||
Repayments on revolving credit facilities | ( | ( | |||
Repayments on term loans and other debt | ( | ( | |||
Proceeds from issuance of other debt | | - | |||
Purchase of treasury stock | ( | ( | |||
Proceeds from exercise of options | | | |||
Cash dividends paid | ( | ( | |||
Net cash used in financing activities | ( | ( | |||
Effect of foreign exchange rates on cash | | ( | |||
Change in cash | | ( | |||
Cash, beginning of year | | | |||
Cash, end of period | $ | | $ | | |
Supplemental Disclosure of Cash Flow Information: | |||||
Cash paid for income taxes | $ | | $ | | |
Cash paid for interest | $ | | $ | | |
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | |||||
Shares issued for business acquisitions | $ | - | $ | | |
Property and equipment purchased with accounts payable | $ | | $ | | |
Intangible assets purchased with accounts payable | $ | - | $ | | |
Lease liabilities arising from obtaining right-of-use assets | $ | | $ | | |
See accompanying notes to condensed consolidated financial statements.
6
CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(In thousands, except per share amounts)
Accumulated | ||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||
Common Stock | Paid-In | Accumulated | Treasury Stock | Comprehensive | Stockholders’ | |||||||||||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Shares |
| Amount |
| Loss |
| Equity | |||||||||
Balance, December 31, 2022 | | $ | | $ | | $ | ( | ( | $ | ( | $ | ( | $ | | ||||||||||
Net income | - | - | - | | - | - | - | | ||||||||||||||||
Other comprehensive loss | - | - | - | - | - | - | ( | ( | ||||||||||||||||
Cash dividends ($ | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Purchase of treasury stock | - | - | - | - | ( | ( | - | ( | ||||||||||||||||
Stock-based compensation expense | - | - | | - | - | - | - | | ||||||||||||||||
Proceeds from exercise of options | | - | - | - | - | - | - | - | ||||||||||||||||
Balance, March 31, 2023 | | $ | | $ | | $ | ( | ( | $ | ( | $ | ( | $ | | ||||||||||
Net loss | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Other comprehensive loss | - | - | - | - | - | - | ( | ( | ||||||||||||||||
Cash dividends ($ | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Purchase of treasury stock | - | - | - | - | ( | ( | - | ( | ||||||||||||||||
Stock-based compensation expense | - | - | | - | - | - | - | | ||||||||||||||||
Proceeds from exercise of options | | - | | - | - | - | - | | ||||||||||||||||
Balance, June 30, 2023 | | $ | | $ | | $ | ( | ( | $ | ( | $ | ( | $ | | ||||||||||
Net loss | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Other comprehensive loss | - | - | - | - | - | - | ( | ( | ||||||||||||||||
Cash dividends ($ | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Stock-based compensation expense | - | - | | - | - | - | - | | ||||||||||||||||
Proceeds from exercise of options | | - | | - | - | - | - | | ||||||||||||||||
Shares issued in business acquisition | | - | | - | - | - | - | | ||||||||||||||||
Balance, September 30, 2023 | | $ | | $ | | $ | ( | ( | $ | ( | $ | ( | $ | | ||||||||||
7
Accumulated | ||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||
Common Stock | Paid-In | Accumulated | Treasury Stock | Comprehensive | Stockholders’ | |||||||||||||||||||
Shares |
| Amount |
| Capital |
| Deficit |
| Shares |
| Amount |
| Loss |
| Equity | ||||||||||
Balance, December 31, 2023 | | $ | | $ | | $ | ( | ( | $ | ( | $ | ( | $ | | ||||||||||
Net income | - | - | - | | - | - | - | | ||||||||||||||||
Other comprehensive loss | - | - | - | - | - | - | ( | ( | ||||||||||||||||
Cash dividends ($ | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Purchase of treasury stock | - | - | - | - | ( | ( | - | ( | ||||||||||||||||
Stock-based compensation expense | - | - | | - | - | - | - | | ||||||||||||||||
Proceeds from exercise of options | | - | - | - | - | - | - | - | ||||||||||||||||
Balance, March 31, 2024 | | $ | | $ | | $ | ( | ( | $ | ( | $ | ( | $ | | ||||||||||
Net loss | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Other comprehensive income | - | - | - | - | - | - | | | ||||||||||||||||
Cash dividends ($ | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Stock-based compensation expense | - | - | | - | - | - | - | | ||||||||||||||||
Proceeds from exercise of options | | - | | - | - | - | - | | ||||||||||||||||
Balance, June 30, 2024 | | $ | | $ | | $ | ( | ( | $ | ( | $ | ( | $ | | ||||||||||
Net loss | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Other comprehensive income | - | - | - | - | - | - | | | ||||||||||||||||
Cash dividends ($ | - | - | - | ( | - | - | - | ( | ||||||||||||||||
Stock-based compensation expense | - | - | | - | - | - | - | | ||||||||||||||||
Proceeds from exercise of options | | - | | - | - | - | - | | ||||||||||||||||
Balance, September 30, 2024 | | $ | | $ | | $ | ( | ( | $ | ( | $ | ( | $ | | ||||||||||
See accompanying notes to condensed consolidated financial statements.
8
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except per share amounts)
NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements of Clarus Corporation and subsidiaries (which may be referred to as the “Company,” “Clarus,” “we,” “us” or “our”) as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), instructions to the Quarterly Report on Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments, except otherwise disclosed) necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included. The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be obtained for the year ending December 31, 2024. These interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 7, 2024.
Nature of Business
Headquartered in Salt Lake City, Utah, we are a global leader in the design and development of best-in-class equipment and lifestyle products for outdoor enthusiasts. Driven by our rich history of engineering and innovation, our objective is to provide safe, simple, effective and beautiful products so that our customers can maximize their outdoor pursuits and adventures. Each of our brands has a long history of continuous product innovation for core and everyday users alike. The Company’s products are principally sold globally under the Black Diamond®, Rhino-Rack®, MAXTRAX®, and TRED Outdoors® brand names through outdoor specialty and online retailers, our own websites, distributors and original equipment manufacturers.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The more significant estimates relate to the fair value of net assets acquired in business combinations, provision for excess or obsolete inventory, allowance for credit losses, and valuation of contingent consideration liabilities, deferred tax assets, long-lived assets, goodwill and indefinite-lived intangible assets, and other intangible assets. We base our estimates on historical experience, projected future cash flows, and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.
Reclassifications
Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. Specifically, legal costs associated with specific legal matters which were recorded in selling, general, and administrative expenses are now presented in legal costs and regulatory matter expenses in the consolidated statements of comprehensive income (loss). See Note 16 for discussion regarding legal matters.
Recent Accounting Pronouncements
Accounting Pronouncements issued and not yet adopted
In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable
9
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
segment’s profit or loss and assets that are currently required annually. The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the enhanced disclosure requirements; however, it does not anticipate a material change to the consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires a public entity to disclose in its rate reconciliation table additional categories of information about federal, state and foreign income taxes and provide more details about the reconciling items in some categories if items meet a quantitative threshold. The guidance will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. All entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The guidance is effective for public business entities for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the enhanced disclosure requirements; however, it does not anticipate a material change to the consolidated financial statements.
NOTE 2. ACQUISITIONS
TRED
On September 13, 2023, Clarus entered into a Share Purchase Agreement (the “TRED Purchase Agreement”) to acquire TRED Outdoors Pty Ltd. (“TRED”), which subsequently closed on October 9, 2023. All United States dollar amounts contained herein are based on the exchange rates in effect for Australian dollars ($AUD) and the market value of the Company’s common stock at the time of closing of the acquisition of TRED (the “TRED Acquisition”).
The Company acquired TRED for an aggregate purchase price of $AUD
The Company believes the acquisition of TRED will provide the Company with a greater combined global revenue base, increased gross margins, profitability and free cash flows, and access to increased liquidity to further acquire and grow businesses.
The following table is a reconciliation to the fair value of the purchase consideration and how the purchase consideration is allocated to assets acquired and liabilities assumed which have been estimated at their fair values. The fair value measurements for the acquisition of TRED have been completed. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for TRED is included in the Adventure segment. The goodwill consists largely of the growth and profitability expected from the acquisition.
10
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
TRED | |||||
October 9, 2023 | |||||
Number of Shares | Estimated Fair Value | ||||
Cash paid | - | $ | | ||
Issuance of shares of Clarus Corporation | | | |||
Contingent consideration | - | | |||
Total purchase consideration | | $ | | ||
Assets acquired and liabilities assumed | |||||
Assets | |||||
Cash | $ | | |||
Accounts receivable | | ||||
Inventories | | ||||
Prepaid and other current assets | | ||||
Property and equipment | | ||||
Other intangible assets | | ||||
Goodwill | | ||||
Total assets | | ||||
Liabilities | |||||
Accounts payable and accrued liabilities | | ||||
Deferred income taxes | | ||||
Total liabilities | | ||||
Net Book Value Acquired | $ | | |||
The estimated fair value of inventory was recorded at expected sales price less cost to sell plus a reasonable profit margin for selling efforts.
11
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
In connection with the acquisitions, the Company acquired exclusive rights to TRED’s trademarks, customer relationships, product technologies, and tradenames. The amounts assigned to each class of intangible asset, other than goodwill acquired, and the related average useful lives are as follows:
TRED | ||||
Average | ||||
Gross | Useful Life | |||
Intangibles subject to amortization | ||||
Customer relationships | $ | | ||
Product technologies | | |||
Tradenames | | |||
Intangibles not subject to amortization | ||||
Trademarks | - | N/A | ||
$ | | |||
Goodwill of $
NOTE 3. DISCONTINUED OPERATIONS
On February 29, 2024, the Company and Everest/Sapphire Acquisition, LLC, its wholly-owned subsidiary, completed the sale to Bullseye Acquisitions, LLC, an affiliate of JDH Capital Company, of all of the equity associated with the Company’s Precision Sport segment, comprised of the Company’s subsidiaries Sierra and Barnes, pursuant to a Purchase and Sale Agreement dated as of December 29, 2023, by and among, Bullseye Acquisitions, LLC, Everest/Sapphire Acquisition, LLC and the Company (the “Precision Sport Purchase Agreement”). The Precision Sport segment engaged in the business of designing, developing, manufacturing, and marketing bullets and ammunition to the military, law enforcement, and commercial/consumer markets. Under the terms of the Precision Sport Purchase Agreement, the Buyer agreed to pay $
12
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
The carrying amounts of the assets and liabilities of the Precision Sport segment were classified as held for sale in our consolidated balance sheets as of December 31, 2023. The asset and liability balances as of December 31, 2023 were classified as current as we anticipated the sale of these assets and liabilities within a one year period. The carrying amounts were as follows:
December 31, 2023 | |||
Accounts receivable, net | $ | | |
Inventories | | ||
Prepaid and other current assets | | ||
Total current assets held for sale | | ||
Property and equipment, net | | ||
Other intangible assets, net | | ||
Indefinite-lived intangible assets | | ||
Goodwill | | ||
Other long-term assets | | ||
Total assets held for sale | $ | | |
Accounts payable | $ | | |
Accrued liabilities | | ||
Total current liabilities held for sale | | ||
Total liabilities held for sale | $ | | |
Summarized results of discontinued operations for the Precision Sport segment are as follows:
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||
|
|
|
| |||||||||
Sales | $ | - | $ | | $ | | $ | | ||||
Cost of goods sold | - | ( | ( | ( | ||||||||
Selling, general and administrative | - | ( | ( | ( | ||||||||
Restructuring charges | - | ( | ( | ( | ||||||||
Transaction costs | - | ( | ( | ( | ||||||||
Interest expense, net | - | ( | ( | ( | ||||||||
Other, net | - | | ( | | ||||||||
(Loss) income from operations of discontinued operations | - | | ( | | ||||||||
Gain on sale of discontinued operations | - | - | | - | ||||||||
Income from discontinued operations before taxes | - | | | | ||||||||
Income tax expense | - | | | | ||||||||
Income from discontinued operations, net of tax | $ | - | $ | | $ | | $ | | ||||
13
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
In connection with the sale of the Precision Sport segment, all interest expense related to outstanding debt that was required to be repaid with the proceeds received from the sale pursuant to the terms of the Company’s credit facility is allocated to discontinued operations in our condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023.
Summarized cash flow information for the Precision Sport segment discontinued operations are as follows:
Nine Months Ended | ||||||
September 30, 2024 | September 30, 2023 | |||||
Depreciation of property and equipment | $ | - | $ | | ||
Amortization of intangible assets | - | | ||||
Stock-based compensation | | | ||||
Purchase of property and equipment | | | ||||
NOTE 4. INVENTORIES
Inventories, as of September 30, 2024 and December 31, 2023, were as follows:
September 30, 2024 |
| December 31, 2023 | |||
Finished goods | $ | | $ | | |
Work-in-process | | | |||
Raw materials and supplies | | | |||
$ | | $ | | ||
NOTE 5. PROPERTY AND EQUIPMENT
Property and equipment, net, as of September 30, 2024 and December 31, 2023, were as follows:
September 30, 2024 |
| December 31, 2023 | |||
Land | $ | | $ | | |
Building and improvements | | | |||
Furniture and fixtures | | | |||
Computer hardware and software | | | |||
Machinery and equipment | | | |||
Construction in progress | | | |||
| | ||||
Less accumulated depreciation | ( | ( | |||
$ | | $ | | ||
Depreciation expense for continuing operations for the three months ended September 30, 2024 and 2023 was $
14
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
NOTE 6. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The following table summarizes the balances in goodwill by segment:
Outdoor |
| Adventure |
| Total | ||||
Goodwill | $ | | $ | | $ | | ||
Accumulated goodwill impairments | ( | ( | ( | |||||
Balance at December 31, 2023 | $ | - | $ | | $ | | ||
Impact of foreign currency exchange rates | - | | | |||||
Balance at September 30, 2024 | $ | - | $ | | $ | | ||
Indefinite-Lived Intangible Assets
The following table summarizes the changes in indefinite-lived intangible assets:
Balance at December 31, 2023 | $ | |
Impact of foreign currency exchange rates | | |
Balance at September 30, 2024 | $ | |
Trademarks classified as indefinite-lived intangible assets by brand as of September 30, 2024 and December 31, 2023, were as follows:
September 30, 2024 |
| December 31, 2023 | |||
Black Diamond | $ | | $ | | |
PIEPS | | | |||
Rhino-Rack | | | |||
MAXTRAX | | | |||
$ | | $ | | ||
15
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
Other Intangible Assets, net
The following table summarizes the changes in gross other intangible assets:
Gross balance at December 31, 2023 | $ | |
Disposal of fully amortized other intangible assets | ( | |
Impact of foreign currency exchange rates | | |
Gross balance at September 30, 2024 | $ | |
Other intangible assets, net of amortization as of September 30, 2024 and December 31, 2023, were as follows:
September 30, 2024 | |||||||||||
Gross |
| Accumulated Amortization |
| Net |
| Weighted Average Useful Life | |||||
Intangibles subject to amortization | |||||||||||
Customer relationships | $ | | $ | ( | $ | | |||||
Product technologies | | ( | | ||||||||
Tradenames | | ( | | ||||||||
Core technologies | | ( | - | ||||||||
$ | | $ | ( | $ | | ||||||
December 31, 2023 | |||||||||||
Gross |
| Accumulated Amortization |
| Net |
| Weighted Average Useful Life | |||||
Customer relationships | $ | | $ | ( | $ | | |||||
Product technologies | | ( | | ||||||||
Tradenames | | ( | | ||||||||
Core technologies | | ( | - | ||||||||
$ | | $ | ( | $ | | ||||||
Amortization expense for continuing operations for the three months ended September 30, 2024 and 2023, was $
Years Ending December 31, |
| Amortization Expense | |
2024 (excluding the nine months ended September 30, 2024) | $ | | |
2025 | | ||
2026 | | ||
2027 | | ||
2028 | | ||
2029 | | ||
Thereafter | | ||
$ | | ||
16
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
NOTE 7. ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES
Accrued liabilities as of September 30, 2024 and December 31, 2023, were as follows:
September 30, 2024 |
| December 31, 2023 | |||
Accrued payroll and related items | $ | | $ | | |
Accrued bonus | | | |||
Designated forward exchange contracts | | | |||
Accrued warranty | | | |||
Current lease liabilities | | | |||
Accrued commissions | | | |||
Contingent consideration liabilities | - | | |||
Accrued CPSC regulatory matter | | - | |||
Restructuring liabilities | | | |||
Other | | | |||
$ | | $ | | ||
Other long-term liabilities as of September 30, 2024 and December 31, 2023, were as follows:
September 30, 2024 |
| December 31, 2023 | |||
Long-term lease liability | $ | | $ | | |
Other | | | |||
$ | | $ | | ||
NOTE 8. LONG-TERM DEBT
Long-term debt as of September 30, 2024 and December 31, 2023, was as follows:
September 30, 2024 |
| December 31, 2023 | |||
Revolving credit facility (a) | $ | - | $ | | |
Other debt (b) | - | | |||
Term loan (c) | - | | |||
- | | ||||
Less current portion | - | ( | |||
$ | - | $ | - | ||
| (a) | On February 29, 2024, upon the closing of the disposition of the Precision Sport segment, the Company terminated and paid off amounts outstanding under the revolving credit facility, and pursuant to the Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto (the “Restated Credit Agreement”), in full. The Company paid interest monthly on any borrowings on the Restated Credit Agreement. As of December 31, 2023, the interest rates ranged between approximately |
17
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
| (b) | Foreign subsidiaries of the Company had term debt with financial institutions, which was repaid as of September 30, 2024. The foreign subsidiaries paid interest monthly on any borrowings on the credit facility as well as monthly payments on the term debt. As of December 31, 2023, the interest rate was approximately |
| (c) | On February 29, 2024, upon the closing of the disposition of the Precision Sport segment, the Company terminated and paid off amounts outstanding under the term loan in full. The Company paid interest monthly on any borrowings on the Restated Credit Agreement. As of December 31, 2023, the rate was approximately |
NOTE 9. DERIVATIVE FINANCIAL INSTRUMENTS
The Company’s primary exchange rate risk management objective is to mitigate the uncertainty of anticipated cash flows attributable to changes in foreign currency exchange rates. The Company primarily focuses on mitigating changes in cash flows resulting from sales denominated in currencies other than the U.S. dollar. The Company manages this risk primarily by using currency forward and option contracts. If the anticipated transactions are deemed probable, the resulting relationships are formally designated as cash flow hedges. The Company accounts for these contracts as cash flow hedges and tests effectiveness by determining whether changes in the expected cash flow of the derivative offset, within a range, changes in the expected cash flow of the hedged item.
At September 30, 2024, the Company’s derivative contracts had remaining maturities of less than
The Company held the following contracts designated as hedging instruments as of September 30, 2024 and December 31, 2023:
September 30, 2024 | |||
Notional |
| Latest | |
Amount | Maturity | ||
Foreign exchange contracts - Canadian Dollars | $ | ||
Foreign exchange contracts - Euros | € | ||
December 31, 2023 | |||
Notional |
| Latest | |
Amount | Maturity | ||
Foreign exchange contracts - Canadian Dollars | $ | ||
Foreign exchange contracts - Euros | € | ||
For contracts that qualify as effective hedge instruments, the effective portion of gains and losses resulting from changes in fair value of the instruments are included in accumulated other comprehensive loss and reclassified to sales in the period the underlying hedged transaction is recognized in earnings. Gains of $
18
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
The following table presents the balance sheet classification and fair value of derivative instruments as of September 30, 2024 and December 31, 2023:
Classification |
| September 30, 2024 |
| December 31, 2023 | |||
Derivative instruments in asset positions: | |||||||
Designated forward exchange contracts | Prepaid and other current assets | $ | | $ | - | ||
Derivative instruments in liability positions: | |||||||
Designated forward exchange contracts | Accrued liabilities | $ | | $ | | ||
Designated forward exchange contracts | Other long-term liabilities | $ | - | $ | | ||
NOTE 10. ACCUMULATED OTHER COMPREHENSIVE LOSS
Accumulated other comprehensive loss (“AOCI”) primarily consists of foreign currency translation adjustments and changes in our forward foreign exchange contracts. The following table sets forth the changes in AOCI, net of tax, for the three months ended September 30, 2024:
Foreign Currency Translation Adjustments |
| Unrealized Gains (Losses) on Cash Flow Hedges |
| Total | ||||
Balance as of June 30, 2024 | $ | ( | $ | | $ | ( | ||
Other comprehensive income (loss) before reclassifications | | ( | | |||||
Amounts reclassified from other comprehensive income (loss) | - | ( | ( | |||||
Net current period other comprehensive income (loss) | | ( | | |||||
Balance as of September 30, 2024 | $ | ( | $ | ( | $ | ( | ||
The following table sets forth the changes in AOCI, net of tax, for the three months ended September 30, 2023:
Foreign Currency Translation Adjustments |
| Unrealized Gains (Losses) on Cash Flow Hedges |
| Total | ||||
Balance as of June 30, 2023 | $ | ( | $ | ( | $ | ( | ||
Other comprehensive (loss) income before reclassifications | ( | | ( | |||||
Amounts reclassified from other comprehensive loss | - | ( | ( | |||||
Net current period other comprehensive (loss) income | ( | | ( | |||||
Balance as of September 30, 2023 | $ | ( | $ | | $ | ( | ||
19
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
The following table sets forth the changes in AOCI, net of tax, for the nine months ended September 30, 2024:
Foreign Currency Translation Adjustments |
| Unrealized Gains (Losses) on Cash Flow Hedges |
| Total | ||||
Balance as of December 31, 2023 | $ | ( | $ | ( | $ | ( | ||
Other comprehensive income before reclassifications | | | | |||||
Amounts reclassified from other comprehensive income (loss) | - | ( | ( | |||||
Net current period other comprehensive income | | | | |||||
Balance as of September 30, 2024 | $ | ( | $ | ( | $ | ( | ||
The following table sets forth the changes in AOCI, net of tax, for the nine months ended September 30, 2023:
Foreign Currency Translation Adjustments |
| Unrealized Gains (Losses) on Cash Flow Hedges |
| Total | ||||
Balance as of December 31, 2022 | $ | ( | $ | ( | $ | ( | ||
Other comprehensive (loss) income before reclassifications | ( | | ( | |||||
Amounts reclassified from other comprehensive loss | - | ( | ( | |||||
Net current period other comprehensive (loss) income | ( | | ( | |||||
Balance as of September 30, 2023 | $ | ( | $ | | $ | ( | ||
The effects on net income of amounts reclassified from unrealized gains (losses) on cash flow hedges for foreign exchange contracts for the three and nine months ended September 30, 2024 and 2023, were as follows:
Gains reclassified from AOCI to the Consolidated Statements of Comprehensive Income (Loss) | |||||||||||
Affected line item in the Consolidated | Three Months Ended | Nine Months Ended | |||||||||
Statements of Comprehensive Income (Loss) | September 30, 2024 |
| September 30, 2023 |
| September 30, 2024 |
| September 30, 2023 | ||||
Foreign exchange contracts: | |||||||||||
Sales | $ | | $ | | $ | | $ | | |||
Less: Income tax expense | | | | | |||||||
Amount reclassified, net of tax | $ | | $ | | $ | | $ | | |||
Total reclassifications from AOCI | $ | | $ | | $ | | $ | | |||
20
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
NOTE 11. FAIR VALUE MEASUREMENTS
We measure certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1 - inputs to the valuation methodology are quoted market prices for identical assets or liabilities in active markets.
Level 2 - inputs to the valuation methodology include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.
Level 3 - inputs to the valuation methodology are based on prices or valuation techniques that are unobservable.
Items Measured at Fair Value on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023 were as follows:
September 30, 2024 | ||||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Assets | ||||||||||||
Designated forward exchange contracts | $ | $ | | $ | $ | | ||||||
$ | $ | | $ | $ | | |||||||
Liabilities | ||||||||||||
Designated forward exchange contracts | $ | $ | | $ | $ | | ||||||
$ | $ | | $ | $ | | |||||||
December 31, 2023 | ||||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Assets | ||||||||||||
Designated forward exchange contracts | $ | $ | - | $ | $ | - | ||||||
$ | $ | - | $ | $ | - | |||||||
Liabilities | ||||||||||||
Designated forward exchange contracts | $ | $ | | $ | $ | | ||||||
Contingent consideration liabilities | $ | $ | - | $ | | $ | | |||||
$ | $ | | $ | | $ | | ||||||
Derivative financial instruments are recorded at fair value based on current market pricing models. No nonrecurring fair value measurements existed at September 30, 2024 and December 31, 2023.
The Company estimated the initial fair value of the contingent consideration liabilities primarily using the Monte-Carlo pricing model. Significant unobservable inputs used in the valuation included a discount rate of
21
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
financial projections of the acquired company, such as sales-based milestones and estimated probabilities of achievement, with the change in fair value recognized in contingent consideration benefit in the accompanying consolidated statements of comprehensive income (loss) for such period. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements.
The following table summarizes the changes in contingent consideration liabilities:
TRED | ||
Balance at December 31, 2023 | $ | |
( | ||
Impact of foreign currency exchange rates | ( | |
Balance at September 30, 2024 | $ | - |
As the contingent consideration liabilities are remeasured to fair value each reporting period, significant increases or decreases in projected sales, discount rates or the time until payment is made could result in a significantly lower or higher fair value measurement. Our determination of fair value of the contingent consideration liabilities could change in future periods based on our ongoing evaluation of these significant unobservable inputs. As of September 30, 2024, the net sales threshold required for the payment of the TRED contingent consideration is not expected to be met.
NOTE 12. STOCKHOLDERS’ EQUITY
On August 6, 2018, the Company announced that its Board of Directors approved the initiation of a quarterly cash dividend program of $
NOTE 13. EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share is computed by dividing earnings (loss) by the weighted average number of common shares outstanding during each period. Diluted earnings (loss) per share is computed by dividing earnings (loss) by the total of the weighted average number of shares of common stock outstanding during each period, plus the effect of dilutive outstanding stock options and unvested restricted stock grants. Potentially dilutive securities are excluded from the computation of diluted earnings (loss) per share if their effect is anti-dilutive to the loss from continuing operations.
22
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
The following table is a reconciliation of basic and diluted shares of common stock outstanding used in the calculation of earnings (loss) per share:
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2024 |
| September 30, 2023 |
| September 30, 2024 |
| September 30, 2023 | |||||
Weighted average shares outstanding - basic | | | | | |||||||
Effect of dilutive stock awards | - | - | - | - | |||||||
Weighted average shares outstanding - diluted | | | | | |||||||
Loss from continuing operations per share: | |||||||||||
Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||
Diluted | ( | ( | ( | ( | |||||||
Income from discontinued operations per share: | |||||||||||
Basic | $ | - | $ | | $ | | $ | | |||
Diluted | - | | | | |||||||
Net (loss) income per share: | |||||||||||
Basic | $ | ( | $ | ( | $ | | $ | ( | |||
Diluted | ( | ( | | ( | |||||||
For the three months ended September 30, 2024 and 2023, equity awards of
NOTE 14. STOCK-BASED COMPENSATION PLAN
Under the Company’s current 2015 Stock Incentive Plan (the “2015 Plan”), the Company’s Board of Directors has flexibility to determine the type and amount of awards to be granted to eligible participants, who must be employees, directors, officers or consultants of the Company or its subsidiaries. The 2015 Plan allows for grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted units. The aggregate number of shares of common stock that may be granted through awards under the 2015 Plan to any employee in any calendar year may not exceed
Options Granted:
During the nine months ended September 30, 2024, the Company issued stock options for an aggregate of
23
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
For computing the fair value of the stock-based awards, the fair value of each option grant has been estimated as of the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Options Granted During the Nine Months Ended September 30, 2024
Number of options | ||
Option vesting period | ||
Grant price (per share) | $ | |
Dividend yield | ||
Expected volatility (a) | ||
Risk-free interest rate | ||
Expected life (years) (b) | ||
Weighted average fair value (per share) | $ |
| (a) | Expected volatility is based upon the Company’s historical volatility. |
| (b) | The expected term was determined based upon the underlying terms of the awards and the category and employment history of employee award recipient. |
The grant date fair value of the stock options granted during the nine months ended September 30, 2024 was $
Restricted Stock Awards Granted:
On March 11, 2024, the Company issued and granted employees restricted stock awards of
The total non-cash stock compensation expense for continuing operations related to restricted stock, stock options and stock awards recorded by the Company for the three months ended September 30, 2024 and 2023 was $
As of September 30, 2024, there were
NOTE 15. RESTRUCTURING
Starting in 2023, the Company began incurring expenses to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs. During the three months ended September 30, 2024 and 2023, the Company incurred $
24
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
charges in the condensed consolidated statements of comprehensive income (loss). Severance costs primarily consist of severance benefits through payroll continuation, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs. Other costs consist primarily of costs related to the discontinuance of certain product lines and are distinguishable and directly attributable to the Company’s restructuring initiative and not a result of external market factors associated with the ongoing business. We estimate that we will continue to incur restructuring costs related to employee-related costs and facility exit costs during the year 2024; however, the Company cannot estimate the total amount expected to be incurred as cost reduction actions continue to be evaluated. The Company anticipates completing these restructuring activities in 2025.
The following table summarizes the restructuring charges, payments and the remaining liabilities related to restructuring costs at September 30, 2024, which are included within accrued liabilities in the condensed consolidated balance sheets:
Outdoor | Adventure | Corporate | Total | |||||||||
Balance at December 31, 2023 | $ | | $ | - | $ | - | $ | | ||||
Charges to expense: | ||||||||||||
Employee termination benefits | | | - | | ||||||||
Exit costs | | - | - | | ||||||||
Total restructuring charges | $ | | $ | | $ | - | $ | | ||||
Cash payments and non-cash charges: | ||||||||||||
Cash payments | ( | ( | - | ( | ||||||||
Asset impairments | ( | - | - | ( | ||||||||
Balance at September 30, 2024 | $ | | $ | | $ | - | $ | | ||||
NOTE 16. COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS
As a consumer goods manufacturer and distributor, the Company faces the risk of product liability and related lawsuits involving claims for substantial money damages, product recall actions and higher than anticipated rates of warranty returns or other returns of goods. The Company is therefore vulnerable to various personal injury and property damage lawsuits relating to its products and incidental to its business.
The Company is involved in various legal disputes and other legal proceedings that arise from time to time in the ordinary course of business. Anticipated costs related to litigation matters are accrued when it is both probable that a liability has been incurred and the amount can be reasonably estimated. Based on currently available information, the Company does not believe that it is reasonably possible that the disposition of any of the legal disputes the Company or its subsidiaries is currently involved in will have a material adverse effect upon the Company’s consolidated financial position, results of operations or cash flows, except for the U.S. Consumer Product Safety Commission (“CPSC”) matter discussed below. There is a reasonable possibility of loss from contingencies in excess of the amounts accrued by the Company in the accompanying condensed consolidated balance sheets; however, the actual amounts of such possible losses cannot currently be reasonably estimated by the Company. It is possible that, as additional information becomes available, the Company may subsequently determine that it may incur losses from such contingencies materially in excess of the amounts initially accrued by the Company which could have a material adverse effect on the Company’s liquidity, stock price, consolidated financial position, results of operations and/or cash flows.
Legal expenses incurred in the ordinary course of business are included in selling, general, and administrative expenses in the consolidated statements of comprehensive income (loss) except as described below. See Part II, Item 1. “Legal Proceedings.”
25
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
U.S. Consumer Product Safety Commission
In January 2021, Black Diamond Equipment, Ltd. (“BDEL”) wrote to the CPSC outlining its new cradle solution for certain models of its avalanche beacon transceivers to prevent such transceivers from switching unexpectedly out of “send” mode. The proposed new cradle solution was designed to improve transceiver safety by locking the transceiver into “send” mode prior to use so that it would not switch unexpectedly out of “send” mode. BDEL also requested approval for the CPSC Fast-Track Program for a voluntary product recall to implement this cradle solution. The CPSC approved the recall and entered into a Corrective Action Plan agreement with BDEL in March 2021. BDEL received a letter from the CPSC, dated October 28, 2021, stating that the CPSC is investigating whether BDEL has timely complied with the reporting requirements of Section 15(b) of the Consumer Protection Safety Act and related regulations regarding certain models of avalanche transceivers switching unexpectedly out of “send” mode.
Separately, on April 21, 2022, BDEL filed a Section 15(b) report and applied for Fast-Track consideration for a voluntary recall, consisting of free repair or replacement of such malfunctioning models of avalanche transceivers, which would not switch from “send” mode to “search” mode due to an electronic malfunction in the reed switch or foil. The CPSC approved the recall and entered into a Corrective Action Plan agreement with BDEL in August 2022. BDEL received a letter from the CPSC, dated January 17, 2023, stating that the CPSC is investigating whether BDEL has timely complied with the reporting requirements of Section 15(b) of the Consumer Protection Safety Act and related regulations regarding the malfunction in the reed switch or foil in certain models of avalanche transceivers switching out of “search” mode. BDEL responded to the CPSC’s investigation by letter dated March 31, 2023, accompanied with documents responsive to the CPSC’s requests. The CPSC asked for further clarification and documents, and BDEL sent a responsive letter accompanied by additional documents on June 23, 2023. On September 6, 2023, the CPSC requested further clarification and information regarding the reed switch issue, to which BDEL responded on October 6 and 13, 2023.
By letters dated October 12, 2023 and December 18, 2023, BDEL was notified by the CPSC that the agency staff has concluded BDEL failed to timely meet our statutory reporting obligations under the Consumer Product Safety Act with respect to certain models of BDEL’s avalanche transceivers switching unexpectedly out of “send” mode and certain models of BDEL’s avalanche transceivers not switching from “send” mode into “search” mode, that BDEL made a material misrepresentation in a report to the CPSC, and that the agency staff intends to recommend that the CPSC impose civil monetary penalties of $
On November 20, 2023 and February 8, 2024, respectively, BDEL submitted a comprehensive response disputing the CPSC’s findings and conclusions in the October 12, 2023 and December 18, 2023 letters, including the amount of any potential penalties. The CPSC ultimately disagreed with our position and the agency staff has restated their recommendation for the monetary penalties which the Company intends to strongly contest and vigorously defend against.
John C. Walbrecht, the former President of BDEL and the Company, received a letter from the CPSC dated June 25, 2024 alleging that in his personal capacity he knowingly violated the Consumer Product Safety Act by failing to timely report the occurrence resulting in beacons switching unexpectedly out of “send” mode. The staff of the CPSC recommended a $
Based on currently available information, the Company believes an unfavorable outcome with the CPSC is probable, however, we cannot reasonably estimate on what terms this matter will be resolved. During the nine months ended September 30, 2024, the Company recorded a liability of $
26
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
accrued liability during the first quarter of 2024 and a corresponding expense is included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive income (loss).
We believe it is reasonably possible that a change in our ability to estimate the amount of loss could occur in the near term and that the change in the estimate could be material. In addition, as this matter is ongoing, the Company is currently unable to predict its duration, resources required or outcome, or the impact it may have on the Company’s liquidity, financial condition, results of operations and/or cash flows. Any penalties imposed by the CPSC or other regulators, could be costly to us and could damage our business and reputation as well as have a material adverse effect on the Company’s liquidity, stock price, consolidated financial position, results of operations and/or cash flows. During the three months ended September 30, 2024 and 2023, the Company incurred legal expenses of $
Clarus Corporation v. HAP Trading, LLC and Harsh A. Padia
On September 23, 2022, the Company filed a lawsuit in the United States District Court for the Southern District of New York against HAP Trading, LLC and Harsh A. Padia (“HAP Trading”), seeking disgorgement of profits from transactions in the Company’s common stock and related derivative securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended.
Clarus Corporation v. Caption Management, LLC, et al.
On March 8, 2024, the Company filed a lawsuit in the United States District Court for the Southern District of New York against Caption Management, LLC, Caption Partners II LP, Caption GP, LLC, William Cooper and Jason Strasser (“Caption Management”), seeking disgorgement of profits from transactions in the Company’s stock and related derivative securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended.
During the three months ended September 30, 2024, and 2023, the Company incurred legal expenses of $
NOTE 17. INCOME TAXES
The Company’s U.S. federal statutory tax rate is
The difference between the Company’s estimated effective tax rate benefit of
The difference between the Company’s estimated effective tax rate benefit of
As of December 31, 2023, the Company’s gross deferred tax asset was $
27
CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
has provided a valuation allowance against a portion of the deferred tax assets as of September 30, 2024 and December 31, 2023, because the ultimate realization of those assets did not meet the more-likely-than-not criteria. Part of the Company’s deferred tax assets consist of net operating loss carryforwards (“NOLs”) for federal tax purposes. If a change in control were to occur, these could be limited under Section 382 of the Internal Revenue Code of 1986 (“Code”), as amended.
In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and net operating loss and credit carryforwards expire. The estimates and judgments associated with the Company’s valuation allowance on deferred tax assets are considered critical due to the amount of deferred tax assets recorded by the Company on its consolidated balance sheets and the judgment required in determining the Company’s future taxable income. The need for a valuation allowance is reassessed at each interim reporting period.
As of September 30, 2024, we had approximately $
As of December 31, 2023, the Company had NOLs and research and experimentation credit for U.S. federal income tax purposes of $
NOLs available to offset taxable income, subject to compliance with Section 382 of the Code, begin to expire based upon the following schedule:
Net Operating Loss Carryforward Expiration Dates | |||
December 31, 2023 | |||
Expiration Dates December 31, |
| Net Operating Loss Amount | |
2024 | $ | - | |
2025 | - | ||
2026 | - | ||
2027 and beyond | | ||
Total | $ | | |
NOTE 18. SEGMENT INFORMATION
We operate our business structure within
| ● | Our Outdoor segment, which includes Black Diamond Equipment and PIEPS, is a global leader in designing, manufacturing, and marketing innovative outdoor engineered equipment and apparel for climbing, mountaineering, trail running, backpacking, skiing, and a wide range of other year-round outdoor recreation |
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CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
| activities. Our Outdoor segment offers a broad range of products including: high-performance, activity-based apparel (such as shells, insulation, midlayers, pants and logowear); rock-climbing footwear and equipment (such as carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gear); technical backpacks and high-end day packs; trekking poles; headlamps and lanterns; and gloves and mittens. We also offer advanced skis, ski poles, ski skins, and snow safety products, including avalanche airbag systems, avalanche transceivers, shovels, and probes. |
| ● | Our Adventure segment, which includes Rhino-Rack, MAXTRAX, and TRED, is a manufacturer of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, recovery boards and accessories in Australia and New Zealand and a growing presence in the United States. |
As noted above, the Company has a wide variety of technical outdoor equipment and lifestyle products that are sold to a variety of customers in multiple end markets. While there are multiple products sold, the terms and nature of revenue recognition policy is similar for all segments.
Financial information for our segments, as well as revenue by geography, which the Company believes provides a meaningful depiction how the nature, timing and uncertainty of revenue are affected by economic factors, is as follows:
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2024 |
| September 30, 2023 |
| September 30, 2024 |
| September 30, 2023 | |||||
Sales to external customers: | |||||||||||
Outdoor | |||||||||||
Domestic sales | $ | | $ | | $ | | $ | | |||
International sales | | | | | |||||||
Total Outdoor | | | | | |||||||
Adventure | |||||||||||
Domestic sales | | | | | |||||||
International sales | | | | | |||||||
Total Adventure | | | | | |||||||
Total sales to external customers | | | | | |||||||
Segment operating (loss) income: | |||||||||||
Outdoor | | | ( | | |||||||
Adventure | ( | ( | ( | ( | |||||||
Total segment operating (loss) income | ( | | ( | | |||||||
Corporate costs | ( | ( | ( | ( | |||||||
Interest income, net | | | | | |||||||
Other, net | | ( | | ( | |||||||
Loss before income tax | $ | ( | $ | ( | $ | ( | $ | ( | |||
There were no intercompany sales between the Outdoor and Adventure segments for the periods presented.
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CLARUS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
(in thousands, except per share amounts)
Total assets by segment, as of September 30, 2024 and December 31, 2023, were as follows:
| September 30, 2024 |
| December 31, 2023 | ||||||||
Outdoor | $ | | $ | | |||||||
Adventure | | | |||||||||
Corporate | | | |||||||||
$ | | $ | | ||||||||
Capital expenditures, depreciation and amortization by segment is as follows.
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2024 |
| September 30, 2023 |
| September 30, 2024 |
| September 30, 2023 | |||||
Capital expenditures: | |||||||||||
Outdoor | $ | | $ | | $ | | $ | | |||
Adventure | | | | | |||||||
Total capital expenditures | $ | | $ | | $ | | $ | | |||
Depreciation: | |||||||||||
Outdoor | $ | | $ | | $ | | $ | | |||
Adventure | | | | | |||||||
Total depreciation | $ | | $ | | $ | | $ | | |||
Amortization: | |||||||||||
Outdoor | $ | | $ | | $ | | $ | | |||
Adventure | | | | | |||||||
Total amortization | $ | | $ | | $ | | $ | | |||
30
CLARUS CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Please note that in this Quarterly Report on Form 10-Q Clarus Corporation (which may be referred to as the “Company,” “Clarus,” “we,” “our” or “us”) may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “intends,” “future” and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.
Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, the overall level of consumer demand on our products; general economic conditions and other factors affecting consumer confidence, preferences, and behavior, including, without limitation, the impact of inflation; disruption and volatility in the global currency, capital and credit markets; the financial strength of retail economies and the Company’s customers; the Company’s ability to implement its business strategy; the ability of the Company to execute and integrate acquisitions; the Company’s exposure to product liability or product warranty claims and other loss contingencies, including, without limitation, recalls and liability claims relating to our avalanche beacon transceivers; disruptions and other impacts to the Company’s business, as a result of an outbreak of disease or similar public health threat, such as the COVID 19 global pandemic, and government actions and restrictive measures implemented in response; stability of the Company’s manufacturing facilities and suppliers, as well as consumer demand for our products, in light of disease epidemics and health-related concerns such as the COVID 19 global pandemic; the impact that global climate change trends may have on the Company and its suppliers and customers, increased focus on sustainability issues as a result of global climate change; regulatory or market responses to global climate change; the Company’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, or interruptions in, our information systems; the ability of our information technology systems or information security systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes; our ability to properly maintain, protect, repair or upgrade our information technology systems or information security systems, or problems with our transitioning to upgraded or replacement systems; the impact of adverse publicity about the Company and/or its brands and products, including without limitation, through social media or in connection with brand damaging events and/or public perception; the potential impact of the Consumer Products Safety Commission’s investigation related to the Company’s reporting obligations under the Consumer Product Safety Act in connection with the Company’s recall of certain models of its avalanche transceivers on our business, results of operations, and financial condition; fluctuations in the price, availability and quality of raw materials and contracted products as well as foreign currency fluctuations; ongoing disruptions and delays in the shipping and transportation of our products due to port congestion, container ship availability and/or other logistical challenges; the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations; our ability to utilize our net operating loss carryforwards; changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks; the Company’s ability to maintain a quarterly dividend; our ability to obtain additional capital and funding on acceptable terms to meet our financial obligations as well as to support our business operations and growth strategy; and any material differences in the actual financial results of the Company’s past and future acquisitions, including the impact of acquisitions and any recognition of impairment or other charges relating to any such acquisitions on the Company’s future earnings per share. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to the Company as of the date of this Quarterly Report on Form 10-Q, and speak only as of the date hereof. We assume no
31
CLARUS CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
obligation to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.
Overview
Headquartered in Salt Lake City, Utah, Clarus is a global leader in the design and development of best-in-class equipment and lifestyle products for outdoor enthusiasts. Driven by our rich history of engineering and innovation, our objective is to provide safe, simple, effective and beautiful products so that our customers can maximize their outdoor pursuits and adventures. Each of our brands has a long history of continuous product innovation for core and everyday users alike. The Company’s products are principally sold globally under the Black Diamond®, Rhino-Rack®, MAXTRAX®, and TRED Outdoors® brand names through outdoor specialty and online retailers, our own websites, distributors and original equipment manufacturers. Our portfolio of iconic brands is well-positioned for sustainable, long-term growth underpinned by powerful industry trends across the outdoor and adventure sport end markets.
Our iconic brands are rooted in performance-defining technologies that enable our customers to have their best days outdoors. We have a long history of technical innovation and product development, backed by an extensive patent portfolio that continues to evolve and advance our markets. We focus on enhancing our customers’ performance in the most critical moments. Our commitment to quality, rigorous safety, and ultimately best-in-class design is evidenced by outstanding industry recognition, as we have received numerous product awards across our portfolio of brands.
Each of our brands represents a unique customer value proposition. Supported by six decades of proven innovation, Black Diamond is an established global leader in high-performance, activity-based climbing, skiing, and technical mountain sports equipment. The brand is synonymous with premium performance, safety and reliability. Founded in 1992, our Rhino-Rack brand is a globally-recognized designer and distributor of highly-engineered automotive roof racks and accessories to enhance the outdoor enthusiast’s experience. Founded in 2005, our MAXTRAX brand offers high-quality overlanding and off-road vehicle recovery and extraction tracks for the overland and off-road market. Similarly, TRED, founded in 2012, is a trusted brand for key retailers and distributors in the overlanding and off-road vehicle recovery market.
Clarus, incorporated in Delaware in 1991, acquired Black Diamond Equipment, Ltd. in May 2010 and changed its name to Black Diamond, Inc. in January 2011. In October 2012, we acquired PIEPS Holding GmbH and its subsidiaries. On August 14, 2017, the Company changed its name from Black Diamond, Inc. to Clarus Corporation and its stock ticker symbol from “BDE” to “CLAR” on the NASDAQ stock exchange.
On August 21, 2017, the Company acquired Sierra Bullets, L.L.C. (“Sierra”). On November 6, 2018, the Company acquired the assets of SKINourishment, Inc. (“SKINourishment”). During the first quarter of 2024, the Company ceased operations of SKINourishment. On October 2, 2020, the Company completed the acquisition of certain assets and liabilities constituting the Barnes business (“Barnes”). On July 1, 2021, the Company completed the acquisition of Australia-based Rhino-Rack Holdings Pty Ltd (“Rhino-Rack”). On December 1, 2021, the Company completed the acquisition of Australia-based MaxTrax Australia Pty Ltd (“MAXTRAX”). On October 9, 2023, the Company completed the acquisition of Australia-based TRED Outdoors Pty Ltd. (“TRED”).
On February 29, 2024, the Company completed the sale of all of the equity associated with the Company’s Precision Sport segment, comprised of the Company’s subsidiaries Sierra and Barnes, pursuant to a Purchase and Sale Agreement dated as of December 29, 2023 (the “Precision Sport Purchase Agreement”). Under the terms of the Precision Sport Purchase Agreement, the Company received approximately $175,674 in cash in exchange for all of the equity associated with the Company’s Precision Sport segment. The activities of the Precision Sport segment have been segregated and reported as discontinued operations for all periods presented. See Note 3 to our condensed consolidated financial statements for financial information regarding discontinued operations.
32
CLARUS CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
On August 6, 2018, the Company announced that its Board of Directors approved the initiation of a quarterly cash dividend program of $0.025 per share of the Company’s common stock (the “Quarterly Cash Dividend”) or $0.10 per share on an annualized basis. The declaration and payment of future Quarterly Cash Dividends is subject to the discretion of and approval of the Company’s Board of Directors. On November 6, 2024, the Company announced that its Board of Directors approved the payment on November 27, 2024 of the Quarterly Cash Dividend of $0.025 to the record holders of shares of the Company’s common stock as of the close of business on November 18, 2024.
Restructuring
Starting in 2023, the Company began incurring expenses to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs. During the three months ended September 30, 2024 and 2023, the Company incurred $478 and $1,076, respectively, and during the nine months ended September 30, 2024 and 2023, the Company incurred $1,009 and $1,812, respectively, of restructuring charges related to these actions. The Company has incurred $4,232 of cumulative restructuring charges since the commencement of restructuring actions in 2023. The Company accrues for restructuring costs when they are probable and reasonably estimable. These costs include severance costs, exit costs, and other restructuring costs and are included in restructuring charges in the condensed consolidated statements of comprehensive income (loss). Severance costs primarily consist of severance benefits through payroll continuation, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs. Other costs consist primarily of costs related to the discontinuance of certain product lines and are distinguishable and directly attributable to the Company’s restructuring initiative and not a result of external market factors associated with the ongoing business. We estimate that we will continue to incur restructuring costs related to employee-related costs and facility exit costs during the year 2024; however, the Company cannot estimate the total amount expected to be incurred as cost reduction actions continue to be evaluated. The Company anticipates completing these restructuring activities in 2025.
Critical Accounting Policies and Use of Estimates
Management’s discussion of our financial condition and results of operations is based on the consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting periods. Our critical accounting policies that require the use of estimates and assumptions were discussed in detail in our Annual Report on Form 10-K for the year ended December 31, 2023. We base our estimates on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.
No impairments were recorded for goodwill or intangible assets during the nine months ended September 30, 2024. However, factors such as a sustained decline in revenues and cash flows, or other adverse changes in macroeconomic conditions, including our current and future share price, could result in an impairment charge to our Adventure reporting unit in a future reporting period. The Company performs its annual impairment assessment during the fourth quarter of 2024.
At this time, we consider it more likely than not that we will have sufficient taxable income in future periods that will allow us to realize our deferred tax assets. However, unless we can generate sufficient taxable income from our future operations, a valuation allowance to reduce our U.S. deferred tax assets may be required, which would materially increase our income tax expense in the period the allowance is recognized and have a material adverse effect on our results of operations and consolidated financial position.
There have been no significant changes to our critical accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2023.
33
CLARUS CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
Recent Accounting Pronouncements
See “Recent Accounting Pronouncements” in Note 1 to our condensed consolidated financial statements.
Results of Operations
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
The following presents a discussion of operations for the three months ended September 30, 2024, compared with the three months ended September 30, 2023.
Three Months Ended | |||||
September 30, 2024 |
| September 30, 2023 | |||
Sales | |||||
Domestic sales | $ | 24,365 | $ | 30,423 | |
International sales | 42,750 | 50,879 | |||
Total sales | 67,115 | 81,302 | |||
Cost of goods sold | 43,618 | 54,018 | |||
Gross profit | 23,497 | 27,284 | |||
Operating expenses | |||||
Selling, general and administrative | 27,880 | 28,404 | |||
Restructuring charges | 478 | 1,076 | |||
Transaction costs | 103 | 400 | |||
Legal costs and regulatory matter expenses | 394 | 579 | |||
Total operating expenses | 28,855 | 30,459 | |||
Operating loss | (5,358) | (3,175) | |||
Other income (expense) | |||||
Interest income, net | 373 | 19 | |||
Other, net | 1,164 | (445) | |||
Total other income (expense), net | 1,537 | (426) | |||
Loss before income tax | (3,821) | (3,601) | |||
Income tax benefit | (664) | (1,395) | |||
Loss from continuing operations | (3,157) | (2,206) | |||
Discontinued operations, net of tax | - | 942 | |||
Net loss | $ | (3,157) | $ | (1,264) | |
34
CLARUS CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
Sales
Total sales decreased $14,187, or 17.4%, to $67,115 during the three months ended September 30, 2024, compared to total sales of $81,302 during the three months ended September 30, 2023. The decrease in sales was attributable to a decrease in sales at the Outdoor and Adventure segments of $11,789 and $2,398, respectively.
Sales in the Adventure segment increased by $281 due to foreign exchange impact from the weakening of the U.S. dollar against the Australian dollar during the three months ended September 30, 2024, compared to the prior period. Sales in the Outdoor segment were reduced by $13 due to foreign exchange impact from the strengthening of the U.S. dollar primarily against the euro during the three months ended September 30, 2024, compared to the prior period.
Sales in the Outdoor segment decreased due to weakness in our North American wholesale and direct to consumer (“DTC”) channels, independent global distributor (“IGD”) customers, and softness in our European markets, combined with the effects from our product simplification and SKU rationalization strategy. Sales in the Adventure segment decreased due to lower demand from original equipment manufacturer (“OEM”) customers and challenging wholesale in the Australia and US markets, partially offset by a $1,237 increase from the TRED Outdoors acquisition.
Domestic sales decreased $6,058, or 19.9%, to $24,365 during the three months ended September 30, 2024, compared to domestic sales of $30,423 during the three months ended September 30, 2023. The decrease in sales was attributable to decreases at the Outdoor and Adventure segments of $5,253 and $805, respectively.
International sales decreased $8,129, or 16.0%, to $42,750 during the three months ended September 30, 2024, compared to international sales of $50,879 during the three months ended September 30, 2023. The decrease in sales was attributable to decreases at the Outdoor and Adventure segments of $6,536 and $1,593, respectively.
Cost of Goods Sold
Cost of goods sold decreased $10,400, or 19.3%, to $43,618 during the three months ended September 30, 2024, compared to cost of goods sold of $54,018 during the three months ended September 30, 2023.
Gross Profit
Gross profit decreased $3,787, or 13.9%, to $23,497 during the three months ended September 30, 2024, compared to gross profit of $27,284 during the three months ended September 30, 2023. Gross margin was 35.0% during the three months ended September 30, 2024, compared to a gross margin of 33.6% during the three months ended September 30, 2023. Gross margin during the three months ended September 30, 2024 increased compared to the prior year as a result of favorable product mix at the Outdoor segment, as well as a favorable channel mix due to lower OEM sales and higher MAXTRAX revenue at the Adventure segment. These increases were partially offset by an increase in polyfluoroalkyl substances (“PFAS”) related inventory reserve expenses at the Outdoor segment, as well as sales return reserve and rebate expenses at the Adventure segment.
Selling, General and Administrative
Selling, general, and administrative expenses decreased $524, or 1.8%, to $27,880 during the three months ended September 30, 2024, compared to selling, general and administrative expenses of $28,404 during the three months ended September 30, 2023. Selling, general and administrative expenses at the Outdoor segment decreased by $1,688 primarily as a result of lower retail expenses due to store closures and other expense reduction initiatives to manage costs. Selling, general and administrative expenses at the Adventure segment increased by $1,212 primarily as a result of investments in global marketing and e-commerce initiatives to accelerate growth.
35
CLARUS CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
Restructuring Charges
Restructuring charges decreased to $478 during the three months ended September 30, 2024, compared to restructuring charges of $1,076 during the three months ended September 30, 2023. The restructuring charges incurred during the three months ended September 30, 2024 relate to benefits provided to employees who were terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization of $478.
Transaction Costs
Transaction costs decreased to $103 during the three months ended September 30, 2024, compared to transaction costs of $400 during the three months ended September 30, 2023, which consisted of expenses related to the Company’s various acquisition efforts.
Legal Costs and Regulatory Matter Expenses
Legal costs and regulatory matter expenses decreased to $394 during the three months ended September 30, 2024, compared to legal costs and regulatory matter expenses of $579 during the three months ended September 30, 2023, which consisted of expenses related to the Company’s specific legal matters. See Note 16 to our condensed consolidated financial statements for financial information regarding specific legal matters.
Interest Income, net
Interest income, net increased to $373 during the three months ended September 30, 2024, compared to interest income, net of $19 during the three months ended September 30, 2023. The increase in interest income recognized during the three months ended September 30, 2024, was due to interest income on higher cash balances.
Other, net
Other, net, changed by $1,609, or 361.6%, to $1,164 during the three months ended September 30, 2024, compared to other, net of ($445) during the three months ended September 30, 2023. The change in other, net, was primarily attributable to an increase in remeasurement gains recognized on the Company’s foreign denominated accounts receivable and accounts payable. The change was partially offset by losses in mark-to-market adjustments on non-hedged foreign currency contracts during the three months ended September 30, 2024.
Income Taxes
Income tax benefit decreased by $731, or 52.4%, to $664 during the three months ended September 30, 2024, compared to $1,395 during the same period in 2023. Our effective income tax rate was a benefit of 17.4% for the three months ended September 30, 2024, and differed compared to the statutory tax rates primarily due to the impact of stock compensation and research and experimentation expenditures and credits. For the three months ended September 30, 2023, our effective income tax rate was a benefit of 38.7% and differed compared to the statutory tax rates primarily due to the impact of stock compensation, research and experimentation expenditures and credits, and discrete stock option windfall benefits.
Discontinued Operations
Net income from discontinued operations was $0 during the three months ended September 30, 2024, compared to net income from discontinued operations of $942 during the three months ended September 30, 2023. The change in net income from discontinued operations is due to the sale of the Precision Sport segment occurring during the three months ended March 31, 2024. There was no activity in discontinued operations during the three months ended September 30, 2024.
36
CLARUS CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
The following presents a discussion of operations for the nine months ended September 30, 2024, compared with the nine months ended September 30, 2023.
Nine Months Ended | |||||
September 30, 2024 |
| September 30, 2023 | |||
Sales | |||||
Domestic sales | $ | 75,583 | $ | 80,545 | |
International sales | 117,327 | 128,972 | |||
Total sales | 192,910 | 209,517 | |||
Cost of goods sold | 124,156 | 134,148 | |||
Gross profit | 68,754 | 75,369 | |||
Operating expenses | |||||
Selling, general and administrative | 84,176 | 84,640 | |||
Restructuring charges | 1,009 | 1,812 | |||
Transaction costs | 168 | 459 | |||
Contingent consideration benefit | (125) | (1,565) | |||
Legal costs and regulatory matter expenses | 3,795 | 1,062 | |||
Total operating expenses | 89,023 | 86,408 | |||
Operating loss | (20,269) | (11,039) | |||
Other income (expense) | |||||
Interest income, net | 1,198 | 32 | |||
Other, net | 669 | (143) | |||
Total other income (expense), net | 1,867 | (111) | |||
Loss before income tax | (18,402) | (11,150) | |||
Income tax benefit | (3,290) | (2,591) | |||
Loss from continuing operations | (15,112) | (8,559) | |||
Discontinued operations, net of tax | 28,346 | 6,802 | |||
Net income (loss) | $ | 13,234 | $ | (1,757) | |
Sales
Total sales decreased $16,607, or 7.9%, to $192,910 during the nine months ended September 30, 2024, compared to total sales of $209,517 during the nine months ended September 30, 2023. The decrease in sales was attributable to a decrease in sales at the Outdoor segment of $21,422, partially offset by an increase in sales at the Adventure segment of $4,815.
37
CLARUS CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
Sales in the Adventure segment were reduced by $611 due to foreign exchange impact from the strengthening of the U.S. dollar against the Australian dollar during the nine months ended September 30, 2024, compared to the prior period. Sales in the Outdoor segment increased by $256 due to foreign exchange impact from the weakening of the U.S. dollar primarily against the euro during the nine months ended September 30, 2024, compared to the prior period.
Sales in the Outdoor segment decreased due to weakness in our European, IGD, and North American markets, combined with the effects from our product simplification and SKU rationalization strategy. Sales in the Adventure segment increased due to higher demand from OEM customers, improved domestic MAXTRAX sales, and a $3,473 increase from the TRED Outdoors acquisition.
Domestic sales decreased $4,962, or 6.2%, to $75,583 during the nine months ended September 30, 2024, compared to domestic sales of $80,545 during the nine months ended September 30, 2023. The decrease in sales was attributable to a decrease in sales at the Outdoor segment of $6,173, partially offset by an increase in sales at the Adventure segment of $1,211.
International sales decreased $11,645, or 9.0%, to $117,327 during the nine months ended September 30, 2024, compared to international sales of $128,972 during the nine months ended September 30, 2023. The decrease in sales was attributable to a decrease in sales at the Outdoor segment of $15,249, partially offset by an increase in sales at the Adventure segment of $3,604.
Cost of Goods Sold
Cost of goods sold decreased $9,992, or 7.4%, to $124,156 during the nine months ended September 30, 2024, compared to cost of goods sold of $134,148 during the nine months ended September 30, 2023.
Gross Profit
Gross profit decreased $6,615, or 8.8%, to $68,754 during the nine months ended September 30, 2024, compared to gross profit of $75,369 during the nine months ended September 30, 2023. Gross margin was 35.6% during the nine months ended September 30, 2024, compared to a gross margin of 36.0% during the nine months ended September 30, 2023. Gross margin during the nine months ended September 30, 2024, decreased compared to the prior year due to unfavorable PFAS-related inventory reserve expenses at the Outdoor segment, as well as an increase in sales return reserve and rebate expenses at the Adventure segment.
Selling, General and Administrative
Selling, general, and administrative expenses decreased $464, or 0.5%, to $84,176 during the nine months ended September 30, 2024, compared to selling, general and administrative expenses of $84,640 during the nine months ended September 30, 2023. Selling, general and administrative expenses at the Outdoor segment decreased by $4,850 primarily as a result of lower retail expenses due to store closures and other expense reduction initiatives to manage costs. Selling, general and administrative expenses at the Adventure segment increased by $3,753 primarily as a result of investments in global marketing, e-commerce initiatives, and organizational leadership to accelerate growth.
Restructuring Charges
Restructuring charges decreased to $1,009 during the nine months ended September 30, 2024, compared to restructuring charges of $1,812 during the nine months ended September 30, 2023. The restructuring charges incurred during the nine months ended September 30, 2024 relate to benefits provided to employees who were terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization of $993 and lease exit and contract termination costs of $16.
38
CLARUS CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
Transaction Costs
Transaction costs decreased to $168 during the nine months ended September 30, 2024, compared to transaction costs of $459 during the nine months ended September 30, 2023, which consisted of expenses related to the Company’s various acquisition efforts.
Contingent Consideration Benefit
Contingent consideration benefit decreased to $125 during the nine months ended September 30, 2024, compared to a contingent consideration benefit of $1,565 during the nine months ended September 30, 2023, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisitions of MAXTRAX in 2021 and TRED in 2023.
Legal Costs and Regulatory Matter Expenses
Legal costs and regulatory matter expenses increased to $3,795 during the nine months ended September 30, 2024, compared to legal costs and regulatory matter expenses of $1,062 during the nine months ended September 30, 2023. The increase in legal costs and regulatory matter expenses recognized during the nine months ended September 30, 2024 reflects the Company’s accrued liability for the outstanding regulatory matter with the United States Consumer Product Safety Commission and increased expenses related to the Company’s specific legal matters. See Note 16 to our condensed consolidated financial statements for financial information regarding specific legal matters.
Interest Income, net
Interest income, net increased to $1,198 during the nine months ended September 30, 2024, compared to interest income, net of $32 during the nine months ended September 30, 2023. The increase in interest income recognized during the nine months ended September 30, 2024, was due to interest income on higher cash balances.
Other, net
Other, net, changed by $812, or 567.8%, to $669 during the nine months ended September 30, 2024, compared to other, net of ($143) during the nine months ended September 30, 2023. The change in other, net, was primarily attributable to a decrease in remeasurement losses recognized on the Company’s foreign denominated accounts receivable and accounts payable. The change was partially offset by a reduction in gains in mark-to-market adjustments on non-hedged foreign currency contracts during the nine months ended September 30, 2024.
Income Taxes
Income tax benefit increased by $699, or 27.0%, to $3,290 during the nine months ended September 30, 2024, compared to $2,591 during the same period in 2023. Our effective income tax rate was a benefit of 17.9% for the nine months ended September 30, 2024, and differed compared to the statutory tax rates primarily due to the impact of stock compensation and research and experimentation expenditures and credits. For the nine months ended September 30, 2023, our effective income tax rate was a benefit of 23.2% and differed compared to the statutory tax rates due to the impact of stock compensation, research and experimentation expenditures and credits, and discrete stock option windfall benefits.
Discontinued Operations
Net income from discontinued operations changed by $21,544, to $28,346 during the nine months ended September 30, 2024, compared to net income from discontinued operations of $6,802 during the nine months ended September 30, 2023. The change in net income from discontinued operations was primarily attributable to the pre-tax gain on the sale of the
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MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
Precision Sport segment of $40,585. There was no activity in discontinued operations during the three months ended September 30, 2024.
Liquidity and Capital Resources
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Our primary ongoing funding requirements are for working capital, expansion of our operations (both organically and through acquisitions) and general corporate needs, as well as investing in the various brands. We plan to fund these activities through a combination of our future operating cash flows and cash on hand. Upon the closing of the sale of the Precision Sport segment, the Company terminated and settled all outstanding borrowings on our revolving credit facility and term debt under the Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto (the “Restated Credit Agreement”). We believe that our liquidity requirements and contractual obligations for at least the next 12 months will be adequately covered by cash provided by operations and cash on hand. Additionally, long-term contractual obligations are currently expected to be funded from cash from operations and cash on hand.
At September 30, 2024, we had total cash of $36,399, compared to total cash of $11,324 at December 31, 2023. At September 30, 2024, the Company had $5,109 of the $36,399 in cash held by foreign entities, of which $3,819 is considered permanently reinvested.
The following presents a discussion of cash flows for the condensed consolidated nine months ended September 30, 2024 compared with the condensed consolidated nine months ended September 30, 2023.
Nine Months Ended | |||||
September 30, 2024 |
| September 30, 2023 | |||
Net cash (used in) provided by operating activities | $ | (23,870) | $ | 17,428 | |
Net cash provided by (used in) investing activities | 171,144 | (4,549) | |||
Net cash used in financing activities | (122,281) | (16,191) | |||
Effect of foreign exchange rates on cash | 82 | (725) | |||
Change in cash | 25,075 | (4,037) | |||
Cash, beginning of year | 11,324 | 12,061 | |||
Cash, end of period | $ | 36,399 | $ | 8,024 | |
Net Cash From Operating Activities
Net cash used in operating activities was $23,870 during the nine months ended September 30, 2024, compared to net cash provided by operating activities of $17,428 during the nine months ended September 30, 2023. The change in net cash (used in) provided by operating activities during 2024 is primarily due to the gain on sale of $40,585 related to the disposition of the Precision Sport segment and an increase in cash outflows related to working capital of $18,859. These were partially offset by an increase in net income and deferred income taxes, as well as a decrease in contingent consideration benefit during the nine months ended September 30, 2024, compared to the same period in 2023.
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MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
Free cash flow, defined as net cash (used in) provided by operating activities less capital expenditures, of ($28,395) was used during the nine months ended September 30, 2024 compared to $12,933 generated during the same period in 2023. The Company believes that the non-GAAP measure, free cash flow, provides an understanding of the capital required by the Company to expand its asset base. A reconciliation of free cash flows to the nearest comparable GAAP financial measure is set forth below:
Nine Months Ended | |||||
September 30, 2024 |
| September 30, 2023 | |||
Net cash (used in) provided by operating activities | $ | (23,870) | $ | 17,428 | |
Purchase of property and equipment | (4,525) | (4,495) | |||
Free cash flow | $ | (28,395) | $ | 12,933 | |
Net Cash From Investing Activities
Net cash provided by investing activities was $171,144 during the nine months ended September 30, 2024, compared to net cash used in investing activities of $4,549 during the nine months ended September 30, 2023. The increase in cash provided during the nine months ended September 30, 2024 is primarily due to the cash received related to the disposition of the Precision Sport segment, compared to the same period in 2023.
Net Cash From Financing Activities
Net cash used in financing activities was $122,281 during the nine months ended September 30, 2024, compared to net cash used in financing activities of $16,191 during the nine months ended September 30, 2023. The change in net cash used in financing activities during the nine months ended September 30, 2024, compared to the same period in 2023 was primarily due to the settlement of all outstanding borrowings on our revolving credit facility and term debt under the Restated Credit Agreement.
Net Operating Loss
As of December 31, 2023, the Company had net operating loss carryforwards (“NOLs”) and research and experimentation credit for U.S. federal income tax purposes of $7,699 and $2,997, respectively. The Company believes its U.S. Federal NOLs will offset a portion of its future U.S. Federal income taxes. The Company has $7,699 of NOLs, of which, $0 expire on December 31, 2024. These NOLs are subject to compliance with Section 382 of the Internal Revenue Code of 1986 (“Code”), as amended.
As of December 31, 2023, the Company’s gross deferred tax asset was $39,893. The Company has recorded a valuation allowance of $714, resulting in a net deferred tax asset of $39,179, before deferred tax liabilities of $34,434. The Company has provided a valuation allowance against a portion of the net deferred tax assets as of December 31, 2023, because the ultimate realization of those assets does not meet the more-likely-than-not criteria. Part of the Company’s deferred tax assets consist of net operating loss carryforwards for federal tax purposes. If a change in control were to occur, these could be limited under Section 382 of the Code.
As of September 30, 2024, we had approximately $18,000 in U.S. net deferred tax assets. These deferred tax assets are expected to reverse into NOL carryforwards that can be used to offset taxable income and reduce income taxes payable in future periods. At this time, we consider it more likely than not that we will have sufficient taxable income in future periods that will allow us to realize these deferred tax assets. However, unless we can generate sufficient taxable income from our future operations, a valuation allowance to reduce our U.S. deferred tax assets may be required, which would materially increase our income tax expense in the period the allowance is recognized and have a material adverse effect on our results of operations and consolidated financial position.
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MANAGEMENT DISCUSSION AND ANALYSIS
(in thousands, except per share amounts)
Credit Agreement
Upon the closing of the sale of the Precision Sport segment on February 29, 2024, the Company terminated and settled all outstanding borrowings on our revolving credit facility and term debt under the Restated Credit Agreement.
Off-Balance Sheet Arrangements
We do not engage in any transactions or have relationships or other arrangements with unconsolidated entities. These include special purpose and similar entities or other off-balance sheet arrangements. We also do not engage in energy, weather or other commodity-based contracts.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has not been any material change in the market risk disclosure contained in our Annual Report on Form 10-K for the year ended December 31, 2023.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s Executive Chairman and Chief Financial Officer, its principal executive officer and principal financial officer, respectively, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15I and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) as of September 30, 2024, pursuant to Exchange Act Rule 13a-15. Such disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company is accumulated and communicated to the appropriate management on a basis that permits timely decisions regarding disclosure. Based upon that evaluation, the Company’s Executive Chairman and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of September 30, 2024, were effective.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during the nine months ended September 30, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Legal Proceedings
The Company is involved in various legal disputes and other legal proceedings that arise from time to time in the ordinary course of business. Based on currently available information, and except as disclosed herein, the Company does not believe that the existence of any of the legal disputes the Company or its subsidiaries is currently involved in will have a material adverse effect upon the Company’s consolidated financial position, results of operations or cash flows, except for the U.S. Consumer Product Safety Commission (“CPSC”) matter discussed below. It is possible that, as additional information becomes available, the impact on the Company of an adverse determination could have a different effect. See also Part II, Item 1A. “Risk Factors.”.
Litigation
The Company is involved in various lawsuits arising from time to time that the Company considers ordinary routine litigation incidental to its business. Amounts accrued for litigation matters represent the anticipated costs (damages and/or settlement amounts) in connection with pending litigation and claims and related anticipated legal fees and other expenses or costs for defending such actions, which legal fees and expenses or costs are expensed as incurred. The costs are accrued when it is both probable that a liability has been incurred and the amount can be reasonably estimated. The accruals are based upon the Company’s assessment, after consultation with counsel (if deemed appropriate), of probable loss based on the facts and circumstances of each case, the legal issues involved, the nature of the claim made, the nature of the damages sought and any relevant information about the plaintiffs and other significant factors that vary by case. When it is not possible to estimate a specific expected cost to be incurred, the Company evaluates the range of probable loss and records the minimum end of the range. Based on currently available information, the Company does not believe that it is reasonably possible that the disposition of any of the legal disputes the Company or its subsidiaries is currently involved in will have a material adverse effect upon the Company’s consolidated financial position, results of operations or cash flows, except for the CPSC matter discussed below. There is a reasonable possibility of loss from contingencies in excess of the amounts accrued by the Company in the accompanying condensed consolidated balance sheets; however, the actual amounts of such possible losses cannot currently be reasonably estimated by the Company at this time. It is possible that, as additional information becomes available, the impact on the Company could have a different effect.
Product Liability
As a consumer goods manufacturer and distributor, the Company faces the risk of product liability and related lawsuits involving claims for substantial money damages, product recall actions and higher than anticipated rates of warranty returns or other returns of goods. The Company is therefore vulnerable to various personal injury and property damage lawsuits relating to its products and incidental to its business.
Except as disclosed herein, there are no pending product liability claims and lawsuits of the Company, which the Company believes in the aggregate, will have a material adverse effect on the Company’s business, brand reputation, liquidity, stock price, consolidated financial position, results of operations and/or cash flows. See also Part II, Item 1A. “Risk Factors.”.
U.S. Consumer Product Safety Commission
In January 2021, Black Diamond Equipment, Ltd. (“BDEL”) wrote to the CPSC outlining its new cradle solution for certain models of its avalanche beacon transceivers to prevent such transceivers from switching unexpectedly out of “send” mode. The proposed new cradle solution was designed to improve transceiver safety by locking the transceiver into “send” mode prior to use so that it would not switch unexpectedly out of “send” mode. BDEL also requested approval for the CPSC Fast-Track Program for a voluntary product recall to implement this cradle solution. The CPSC approved the recall and entered into a Corrective Action Plan agreement with BDEL in March 2021. BDEL received a letter from the CPSC, dated October 28, 2021, stating that the CPSC is investigating whether BDEL has timely complied with the reporting
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requirements of Section 15(b) of the Consumer Protection Safety Act and related regulations regarding certain models of avalanche transceivers switching unexpectedly out of “send” mode.
Separately, on April 21, 2022, BDEL filed a Section 15(b) report and applied for Fast-Track consideration for a voluntary recall, consisting of free repair or replacement of such malfunctioning models of avalanche transceivers, which would not switch from “send” mode to “search” mode due to an electronic malfunction in the reed switch or foil. The CPSC approved the recall and entered into a Corrective Action Plan agreement with BDEL in August 2022. BDEL received a letter from the CPSC, dated January 17, 2023, stating that the CPSC is investigating whether BDEL has timely complied with the reporting requirements of Section 15(b) of the Consumer Protection Safety Act and related regulations regarding the malfunction in the reed switch or foil in certain models of avalanche transceivers switching out of “search” mode. BDEL responded to the CPSC’s investigation by letter dated March 31, 2023, accompanied with documents responsive to the CPSC’s requests. The CPSC asked for further clarification and documents, and BDEL sent a responsive letter accompanied by additional documents on June 23, 2023. On September 6, 2023, the CPSC requested further clarification and information regarding the reed switch issue, to which BDEL responded on October 6 and 13, 2023.
By letters dated October 12, 2023 and December 18, 2023, BDEL was notified by the CPSC that the agency staff had concluded BDEL failed to timely meet our statutory reporting obligations under the Consumer Product Safety Act with respect to certain models of BDEL’s avalanche transceivers switching unexpectedly out of “send” mode and certain models of BDEL’s avalanche transceivers not switching from “send” mode into “search” mode, that BDEL made a material misrepresentation in a report to the CPSC, and that the agency staff intends to recommend that the CPSC impose civil monetary penalties of $16,135,000 and $9,000,000, respectively, for the two matters described above.
On November 20, 2023 and February 8, 2024, respectively, BDEL submitted a comprehensive response disputing the CPSC’s findings and conclusions in the October 12, 2023 and December 18, 2023 letters, including the amount of any potential penalties. The CPSC ultimately disagreed with our position and the agency staff has restated their recommendation for the monetary penalties which the Company intends to strongly contest and vigorously defend against.
John C. Walbrecht, the former President of BDEL and the Company, received a letter from the CPSC dated June 25, 2024 alleging that in his personal capacity he knowingly violated the Consumer Product Safety Act by failing to timely report the occurrence resulting in beacons switching unexpectedly out of “send” mode. The staff of the CPSC recommended a $5,000,000 fine against Mr. Walbrecht personally. Pursuant to the Company’s by-laws, the Company has agreed to indemnify Mr. Walbrecht and pay his legal fees, and he has provided an undertaking to the Company that the Company will be entitled to recover those expenses if it is ultimately determined that he was not entitled to indemnification. On August 26, 2024, Mr. Walbrecht’s independent counsel responded to the CPSC, denying the allegations of its June 25 letter and rejecting its demand for a penalty.
Based on currently available information, the Company believes an unfavorable outcome with the CPSC is probable, however, we cannot be sure on what terms this matter will be resolved. During the nine months ended September 30, 2024, the Company recorded a liability of $2,500,000 representing the low end of the range of our estimated exposure. The Company does not have a better estimate of the loss; therefore the low-end of the range was recorded as an accrued liability during the first quarter of 2024 and a corresponding expense is included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive income (loss).
ITEM 1A. RISK FACTORS
There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
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ITEM 5. OTHER INFORMATION
During the three month period ended September 30, 2024,
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ITEM 6. EXHIBITS
Exhibit |
| Description |
3.1 | ||
4.1 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document * | |
101.SCH | XBRL Taxonomy Extension Schema Document * | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document * | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document * | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document * | |
104 | Cover Page Interactive Data File – formatted as Inline XBRL and contained in Exhibit 101 | |
* | Filed herewith | |
** | Furnished herewith |
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CLARUS CORPORATION | ||
Date: November 7, 2024 | By: | /s/ Warren B. Kanders | |
Name: | Warren B. Kanders | ||
Title: | Executive Chairman | ||
(Principal Executive Officer) | |||
Date: November 7, 2024 | By: | /s/ Michael J. Yates | |
Name: | Michael J. Yates | ||
Title: | Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) | |||
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