Clarus Corporation (NASDAQ: CLAR) (“Clarus” and/or the “Company”),
a global company focused on the outdoor and consumer enthusiast
markets, reported financial results for the first quarter ended
March 31, 2023.
First Quarter 2023 Financial Summary vs.
Same Year‐Ago Quarter
- Sales of $97.4 million compared to $113.3 million.
- Gross margin was 37.0% compared to 39.1%.
- Net income of $1.6 million, or $0.04 per diluted share,
compared to $5.3 million, or $0.13 per diluted share.
- Adjusted net income before non‐cash items of $6.9 million, or
$0.18 per diluted share, compared to $14.8 million, or $0.37 per
diluted share.
- Adjusted EBITDA of $9.6 million with an adjusted EBITDA margin
of 9.9% compared to $19.7 million with an adjusted EBITDA margin of
17.4%.
Management
Commentary
“Clarus’ consolidated Q1 performance was
resilient given the macroeconomic headwinds that carried over from
2022,” said Warren Kanders, Clarus’ Executive Chairman. “In
Outdoor, strong direct‐to‐consumer and international performance
was offset by lower open‐to‐buys at our North American retail
accounts as 2022 inventory positions unwind. We are encouraged by
our robust order book at Precision Sports, however, our ability to
consistently source components constrained ammunition shipments in
the quarter. While at Adventure, we experienced sequential
stabilization throughout the quarter in our home market of
Australia, but continued challenges in North America due to
elevated inventory levels in all selling channels.
“Operationally, we enhanced our segment
leadership to activate the next phase of our corporate and brand
evolution. Our brand leaders are focused on establishing revenue,
gross margin and EBITDA baselines, upgrading talent, and further
driving shareholder value through cash flow generation and debt
paydown.”
First Quarter 2023 Financial
Results
Sales in the first quarter were $97.4 million
compared to $113.3 million in the same year‐ago quarter. Foreign
currency exchange was unfavorable to sales by $2.4 million in the
first quarter as the U.S. dollar continued to strengthen against
the Euro and Australian dollar.
Sales in the Outdoor segment increased 2% to
$52.8 million, or $54.2 million on a constant currency basis,
compared to $51.5 million in the year ago quarter. The increase was
due to growth in the direct-to-consumer channels, and European and
IGD markets, nearly offset by continued weakness at the Company’s
key North American retail accounts. Precision Sport sales decreased
to $27.1 million compared to $33.1 million in the year-ago quarter
due to ongoing supply chain challenges limiting ammo sales. Sales
in the Adventure segment were $17.5 million compared to $28.6
million in the year-ago quarter, reflecting lower consumer demand
given the challenging market conditions and the difficult
macro-environment in both Australia and North America.
Gross margin in the first quarter was 37.0%
compared to 39.1% in the year‐ago quarter due to changes in channel
and product mix and unfavorable foreign currency exchange movement.
Easing freight costs positively impacted gross margin by 290 basis
points, which was partially offset by a 150 basis point negative
impact from foreign currency exchange, negative 130 basis points
related higher inventory reserves, and unfavorable channel and
product mix of 220 basis points. Specifically, the lower
open-to-buys from the Company’s key North American retail partners
in the Outdoor segment further negatively impacted gross
margin.
Selling, general and administrative expenses in
the first quarter were $32.8 million compared to $34.2 million in
the same year‐ago quarter. The decline was driven by expense
improvements in the Adventure and Precision Sport segments, as well
as lower non-cash stock-based compensation expense for performance
awards at corporate. These savings were partially offset by higher
investments at Outdoor for employee costs and investments in the
direct-to-consumer channel.
Net income in the first quarter was $1.6
million, or $0.04 per diluted share, compared to $5.3 million, or
$0.13 per diluted share, in the prior year’s first quarter.
Adjusted net income before non-cash items in the
first quarter, which excludes non‐cash items and transaction costs,
was $6.9 million, or $0.18 per diluted share, compared to $14.8
million, or $0.37 per diluted share, in the same year‐ago
quarter.
Adjusted EBITDA in the first quarter was $9.6
million, or an adjusted EBITDA margin of 9.9%, compared to $19.7
million, or an adjusted EBITDA margin of 17.4%, in the same
year‐ago quarter. The decline in adjusted EBITDA was driven by
lower sales volumes in the North American portion of the Company’s
Outdoor and Adventure segments and a $2.4 million consolidated
headwind due to strength of the U.S. dollar.
Net cash provided by operating activities for
the three months ended March 31, 2023, was $3.2 million compared to
$(10.8) million in the prior year quarter. Capital expenditures in
the first quarter of 2023 were $1.5 million compared to $1.9
million in the prior year quarter. Free cash flow for the first
quarter of 2023 was $1.7 million compared to $(12.7) million in the
prior year quarter due to reduced inventory levels compared to
December 31, 2022.
Liquidity at March 31, 2023 vs. December
31, 2022
- Cash and cash equivalents totaled $10.3 million compared to
$12.1 million.
- Total debt of $137.0 million compared to $139.0 million.
- The Company’s credit facility matures in April of 2027 and
bears interest at a variable rate that was approximately 6.8% at
March 31, 2023.
- Remaining access to approximately $61 million on the Company’s
revolving line of credit.
- Net debt leverage ratio of 2.4x compared to 2.0x
2023 Outlook
The Company continues to expect fiscal year 2023
sales of approximately $420 million and adjusted EBITDA of
approximately $60 million, or an adjusted EBITDA margin of 14.3%.
In addition, capital expenditures are expected to range between $7
- $8 million and free cash flow is expected to range between $35 -
$40 million for the full year 2023.
Net Operating Loss
(NOL)
The Company estimates that it has available net
operating loss (the “NOLs”) carryforwards for U.S. federal income
tax purposes of approximately $17.7 million, which includes $1.8
million of U.S. federal NOL carryforwards that expire on December
31, 2023. The Company’s common stock is subject to a rights
agreement dated February 7, 2008, that is intended to limit
the number of 5% or more owners and therefore reduce the risk of a
possible change of ownership under Section 382 of the Internal
Revenue Code of 1986, as amended. Any such change of ownership
under these rules would limit or eliminate the ability of the
Company to use its existing NOLs for federal income tax purposes.
However, there is no guaranty that the Company will be able fully
utilize the NOLs to offset current and future earnings or that the
rights agreement will achieve the objective of preserving the value
of the NOLs.
Conference
Call
The Company will hold a conference call today at
5:00 p.m. Eastern time to discuss its first quarter 2023
results.
Date: Monday, May 1, 2023Time: 5:00 p.m. Eastern
time (3:00 p.m. Mountain time) Registration Link:
https://register.vevent.com/register/BIc5f71fc4f41044a884f3cb436104a976
To access the call by phone, please register via
the live call registration link above and you will be provided with
dial-in instructions and details. If you have any difficulty
connecting with the conference call, please contact Gateway Group
at 1-949-574-3860.
The conference call will be broadcast live and
available for replay here and on the Company’s website at
www.claruscorp.com.
A replay of the conference call will be
available after 7:00 p.m. Eastern Time on the same day through May
1, 2024.
About Clarus Corporation
Headquartered in Salt Lake City, Utah, Clarus
Corporation is a global leading designer, developer, manufacturer
and distributor of best-in-class outdoor equipment and lifestyle
products focused on the outdoor and consumer enthusiast markets.
Our mission is to identify, acquire and grow outdoor “super fan”
brands through our unique “innovate and accelerate” strategy. We
define a “super fan” brand as a brand that creates the world’s
pre-eminent, performance-defining product that the best-in-class
user cannot live without. 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®, Sierra®, and Barnes® 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. For additional
information, please visit www.claruscorp.com or the brand websites
at www.blackdiamondequipment.com, www.rhinorack.com,
www.maxtrax.com.au, www.sierrabullets.com, www.barnesbullets.com,
www.pieps.com, or www.goclimbon.com.
Use of Non‐GAAP Measures
The Company reports its financial results in
accordance with U.S. generally accepted accounting principles
(“GAAP”). This press release contains the non-GAAP measures: (i)
adjusted gross margin and adjusted gross profit, (ii) net income
before non-cash items and related income per diluted share, and
adjusted net income before non-cash items and related income per
diluted share, (iii) earnings before interest, taxes, other income
or expense, depreciation and amortization (“EBITDA”), EBITDA
margin, adjusted EBITDA, and adjusted EBITDA margin, and (iv) free
cash flow (defined as net cash provided by operating activities
less capital expenditures). The Company believes that the
presentation of certain non-GAAP measures, i.e.: (i) adjusted gross
margin and adjusted gross profit, (ii) net income before non-cash
items and related income per diluted share, and adjusted net income
before non-cash items and related income per diluted share, (iii)
EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin,
and (iv) free cash flow, provide useful information for the
understanding of its ongoing operations and enables investors to
focus on period- over-period operating performance, and thereby
enhances the user's overall understanding of the Company's current
financial performance relative to past performance and provides,
along with the nearest GAAP measures, a baseline for modeling
future earnings expectations. Non-GAAP measures are reconciled to
comparable GAAP financial measures within this press release. The
Company cautions that non-GAAP measures should be considered in
addition to, but not as a substitute for, the Company's reported
GAAP results. Additionally, the Company notes that there can be no
assurance that the above referenced non-GAAP financial measures are
comparable to similarly titled financial measures used by other
publicly traded companies.
Forward-Looking
Statements
Please note that in this press release we 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 release,
include, but are not limited to, those risks and uncertainties more
fully described from time to time in the Company's public reports
filed with the Securities and Exchange Commission, including under
the section titled “Risk Factors” in the Company's Annual Report on
Form 10-K, and/or Quarterly Reports on Form 10-Q, as well as in the
Company’s Current Reports on Form 8-K. All forward-looking
statements included in this press release are based upon
information available to the Company as of the date of this press
release and speak only as of the date hereof. We assume no
obligation to update any forward-looking statements to reflect
events or circumstances after the date of this press release.
Company
Contacts:
Aaron J. KuehneExecutive Vice President and Chief Operating
OfficerTel 1‐801‐993‐1364Aaron.kuehne@claruscorp.com
Michael J. YatesChief Financial OfficerTel
1‐801-993‐1304mike.yates@claruscorp.com
Investor Relations
Contact:
Gateway Group, Inc. Cody SlachTel
1‐949‐574‐3860CLAR@gatewayir.com
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
(In
thousands, except per share amounts) |
|
|
|
|
|
|
March 31, 2023 |
|
|
|
December 31, 2022 |
|
Assets |
|
|
|
|
|
Current
assets |
|
|
|
|
|
Cash |
$ |
10,310 |
|
|
$ |
12,061 |
|
Accounts receivable, less allowance for |
|
|
|
|
|
credit losses of $1,437 and $1,211 |
|
68,230 |
|
|
|
66,553 |
|
Inventories |
|
145,756 |
|
|
|
147,072 |
|
Prepaid and other current assets |
|
9,845 |
|
|
|
9,899 |
|
Income tax receivable |
|
3,209 |
|
|
|
3,034 |
|
Total current assets |
|
237,350 |
|
|
|
238,619 |
|
|
|
|
|
|
|
Property and
equipment, net |
|
42,197 |
|
|
|
43,010 |
|
Other
intangible assets, net |
|
51,482 |
|
|
|
55,255 |
|
Indefinite-lived intangible assets |
|
82,444 |
|
|
|
82,901 |
|
Goodwill |
|
62,704 |
|
|
|
62,993 |
|
Deferred
income taxes |
|
18,168 |
|
|
|
17,912 |
|
Other
long-term assets |
|
20,414 |
|
|
|
17,455 |
|
Total assets |
$ |
514,759 |
|
|
$ |
518,145 |
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Accounts payable |
$ |
25,252 |
|
|
$ |
27,052 |
|
Accrued liabilities |
|
22,125 |
|
|
|
25,170 |
|
Income tax payable |
|
684 |
|
|
|
421 |
|
Current portion of long-term debt |
|
12,562 |
|
|
|
11,952 |
|
Total current liabilities |
|
60,623 |
|
|
|
64,595 |
|
|
|
|
|
|
|
Long-term
debt, net |
|
124,444 |
|
|
|
127,082 |
|
Deferred
income taxes |
|
18,226 |
|
|
|
18,506 |
|
Other
long-term liabilities |
|
18,574 |
|
|
|
15,854 |
|
Total liabilities |
|
221,867 |
|
|
|
226,037 |
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
Preferred
stock, $0.0001 par value per share; 5,000 |
|
|
|
|
|
shares authorized; none issued |
|
- |
|
|
|
- |
|
Common
stock, $0.0001 par value per share; 100,000 shares authorized; |
|
|
|
|
|
41,791 and 41,637 issued and 37,190 and 37,048 outstanding,
respectively |
|
4 |
|
|
|
4 |
|
Additional
paid in capital |
|
680,673 |
|
|
|
679,339 |
|
Accumulated
deficit |
|
(336,175 |
) |
|
|
(336,843 |
) |
Treasury
stock, at cost |
|
(32,825 |
) |
|
|
(32,707 |
) |
Accumulated
other comprehensive loss |
|
(18,785 |
) |
|
|
(17,685 |
) |
Total stockholders' equity |
|
292,892 |
|
|
|
292,108 |
|
Total liabilities and stockholders' equity |
$ |
514,759 |
|
|
$ |
518,145 |
|
CLARUS
CORPORATION |
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
(In
thousands, except per share amounts) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, 2023 |
|
|
|
March 31, 2022 |
|
|
|
|
|
|
|
Sales |
|
|
|
|
|
Domestic sales |
$ |
44,916 |
|
|
$ |
62,307 |
|
International sales |
|
52,468 |
|
|
|
50,969 |
|
Total sales |
|
97,384 |
|
|
|
113,276 |
|
|
|
|
|
|
|
Cost of
goods sold |
|
61,363 |
|
|
|
69,024 |
|
Gross profit |
|
36,021 |
|
|
|
44,252 |
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
Selling, general and administrative |
|
32,819 |
|
|
|
34,175 |
|
Transaction costs |
|
74 |
|
|
|
1,201 |
|
Contingent consideration (benefit) expense |
|
(1,565 |
) |
|
|
763 |
|
|
|
|
|
|
|
Total operating expenses |
|
31,328 |
|
|
|
36,139 |
|
|
|
|
|
|
|
Operating
income |
|
4,693 |
|
|
|
8,113 |
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
Interest expense, net |
|
(2,746 |
) |
|
|
(1,116 |
) |
Other, net |
|
85 |
|
|
|
(67 |
) |
|
|
|
|
|
|
Total other expense, net |
|
(2,661 |
) |
|
|
(1,183 |
) |
|
|
|
|
|
|
Income
before income tax |
|
2,032 |
|
|
|
6,930 |
|
Income tax
expense |
|
434 |
|
|
|
1,621 |
|
Net
income |
$ |
1,598 |
|
|
$ |
5,309 |
|
|
|
|
|
|
|
Net income
per share: |
|
|
|
|
|
Basic |
$ |
0.04 |
|
|
$ |
0.14 |
|
Diluted |
|
0.04 |
|
|
|
0.13 |
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
Basic |
|
37,137 |
|
|
|
37,161 |
|
Diluted |
|
38,109 |
|
|
|
39,802 |
|
CLARUS
CORPORATION |
RECONCILIATION FROM GROSS PROFIT TO ADJUSTED GROSS
PROFIT |
AND ADJUSTED
GROSS MARGIN |
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED |
|
|
|
|
March 31, 2023 |
|
|
|
March 31, 2022 |
|
|
|
|
|
|
|
|
Gross profit as reported |
$ |
36,021 |
|
|
Gross profit as reported |
|
|
44,252 |
|
Plus impact
of inventory fair value adjustment |
|
- |
|
|
Plus impact
of inventory fair value adjustment |
|
|
269 |
|
Adjusted
gross profit |
$ |
36,021 |
|
|
Adjusted
gross profit |
|
$ |
44,521 |
|
|
|
|
|
|
|
|
|
Gross margin
as reported |
|
37.0 |
% |
|
Gross margin
as reported |
|
|
39.1 |
% |
|
|
|
|
|
|
|
|
Adjusted
gross margin |
|
37.0 |
% |
|
Adjusted
gross margin |
|
|
39.3 |
% |
CLARUS
CORPORATION |
RECONCILIATION FROM NET INCOME TO NET INCOME BEFORE
NON-CASH ITEMS, ADJUSTED |
NET INCOME
BEFORE NON-CASH ITEMS AND RELATED EARNINGS PER DILUTED
SHARE |
(In
thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Per Diluted |
|
|
|
|
|
|
Per Diluted |
|
|
|
March 31, 2023 |
|
|
|
Share |
|
|
|
March 31, 2022 |
|
|
|
Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
1,598 |
|
|
$ |
0.04 |
|
|
$ |
5,309 |
|
|
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of intangibles |
|
3,276 |
|
|
|
0.09 |
|
|
|
4,120 |
|
|
|
0.10 |
|
Depreciation |
|
1,791 |
|
|
|
0.05 |
|
|
|
1,832 |
|
|
|
0.05 |
|
Amortization
of debt issuance costs |
|
232 |
|
|
|
0.01 |
|
|
|
170 |
|
|
|
0.00 |
|
Stock-based
compensation |
|
1,334 |
|
|
|
0.04 |
|
|
|
3,367 |
|
|
|
0.08 |
|
Inventory
fair value of purchase accounting |
|
- |
|
|
|
- |
|
|
|
269 |
|
|
|
0.01 |
|
Income tax
expense |
|
434 |
|
|
|
0.01 |
|
|
|
1,621 |
|
|
|
0.04 |
|
Cash paid
for income taxes |
|
(350 |
) |
|
|
(0.01 |
) |
|
|
(3,844 |
) |
|
|
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income
before non-cash items |
$ |
8,315 |
|
|
$ |
0.22 |
|
|
$ |
12,844 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction
costs |
|
74 |
|
|
|
0.00 |
|
|
|
1,201 |
|
|
|
0.03 |
|
Contingent
consideration (benefit) expense |
|
(1,565 |
) |
|
|
(0.04 |
) |
|
|
763 |
|
|
|
0.02 |
|
State cash
taxes on adjustments |
|
27 |
|
|
|
0.00 |
|
|
|
(43 |
) |
|
|
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income before non-cash items |
$ |
6,851 |
|
|
$ |
0.18 |
|
|
$ |
14,765 |
|
|
$ |
0.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CLARUS
CORPORATION |
RECONCILIATION FROM NET INCOME TO EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION, AND AMORTIZATION (EBITDA), EBITDA MARGIN,
ADJUSTED EBITDA, AND ADJUSTED EBITDA MARGIN |
(In
thousands) |
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, 2023 |
|
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
1,598 |
|
|
$ |
5,309 |
|
|
|
|
|
|
|
Income tax
expense |
|
434 |
|
- |
- |
1,621 |
|
Other,
net |
|
(85 |
) |
- |
- |
67 |
|
Interest
expense, net |
|
2,746 |
|
- |
- |
1,116 |
|
|
|
|
|
|
|
Operating
income |
|
4,693 |
|
|
|
8,113 |
|
|
|
|
|
|
|
Depreciation |
|
1,791 |
|
|
|
1,832 |
|
Amortization
of intangibles |
|
3,276 |
|
|
|
4,120 |
|
|
|
|
|
|
|
EBITDA |
|
9,760 |
|
|
|
14,065 |
|
|
|
|
|
|
|
Transaction
costs |
|
74 |
|
|
|
1,201 |
|
Contingent
consideration (benefit) expense |
|
(1,565 |
) |
|
|
763 |
|
Inventory
fair value of purchase accounting |
|
- |
|
|
|
269 |
|
Stock-based
compensation |
|
1,334 |
|
|
|
3,367 |
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
9,603 |
|
|
$ |
19,665 |
|
|
|
|
|
|
|
Sales |
$ |
97,384 |
|
|
$ |
113,276 |
|
|
|
|
|
|
|
EBITDA
margin |
|
10.0 |
% |
|
|
12.4 |
% |
Adjusted
EBITDA margin |
|
9.9 |
% |
|
|
17.4 |
% |
Clarus (NASDAQ:CLAR)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Clarus (NASDAQ:CLAR)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024