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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: September 30, 2020

or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________ to _________

Commission File Number: 001-34767

CLARUS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

58-1972600

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

2084 East 3900 South

Salt Lake City, Utah

84124

(Address of principal executive offices)

(Zip code)

(801) 278-5552

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  x No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

¨

Non-accelerated filer

¨

Accelerated filer

x

Smaller reporting company

¨  

Emerging growth company

¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $.0001 per share

CLAR

NASDAQ Global Select Market

As of November 4, 2020, there were 31,063,094 shares of common stock, par value $0.0001, outstanding.


 

INDEX

CLARUS CORPORATION

PART I

FINANCIAL INFORMATION

Page

Item 1.

Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets – September 30, 2020 and December 31, 2019

3

Condensed Consolidated Statements of Comprehensive Income – Three months ended September 30, 2020 and 2019

4

Condensed Consolidated Statements of Comprehensive (Loss) Income – Nine months ended September 30, 2020 and 2019

5

Condensed Consolidated Statements of Cash Flows – Nine months ended September 30, 2020 and 2019

6

Condensed Consolidated Statements of Stockholders’ Equity – Three and nine months ended September 30, 2020 and 2019

7

Notes to Condensed Consolidated Financial Statements

9

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

32

Item 4.

Controls and Procedures

32

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

33

Item 1A.

Risk Factors

33

Item 6.

Exhibits

35

Signature Page

36

 

 

 

2


 

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 

  

CLARUS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

September 30, 2020

December 31, 2019

Assets

Current assets

Cash

$

17,027

$

1,703

Accounts receivable, less allowance for credit losses and

doubtful accounts of $1,460 and $494, respectively

42,582

41,628

Inventories

64,897

73,432

Prepaid and other current assets

4,544

3,787

Income tax receivable

532

322

Total current assets

129,582

120,872

Property and equipment, net

22,691

22,919

Other intangible assets, net

13,610

15,816

Indefinite lived intangible assets

41,772

41,630

Goodwill

18,090

18,090

Deferred income taxes

8,728

7,904

Other long-term assets

33,365

3,034

Total assets

$

267,838

$

230,265

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable and accrued liabilities

$

29,157

$

24,304

Income tax payable

489

260

Current portion of long-term debt

4,000

-

Total current liabilities

33,646

24,564

Long-term debt

37,062

22,670

Deferred income taxes

1,219

1,224

Other long-term liabilities

624

615

Total liabilities

72,551

49,073

Stockholders' Equity

Preferred stock, $.0001 par value per share; 5,000

shares authorized; none issued

-

-

Common stock, $.0001 par value per share; 100,000 shares authorized;

35,021 and 33,615 issued and 31,051 and 29,760 outstanding, respectively

4

3

Additional paid in capital

511,331

492,353

Accumulated deficit

(292,393)

(288,592)

Treasury stock, at cost

(23,789)

(22,269)

Accumulated other comprehensive income (loss)

134

(303)

Total stockholders' equity

195,287

181,192

Total liabilities and stockholders' equity

$

267,838

$

230,265

See accompanying notes to condensed consolidated financial statements.

 


 

3


 

 

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

September 30, 2020

September 30, 2019

Sales

Domestic sales

$

34,686

$

28,794

International sales

29,805

31,409

Total sales

64,491

60,203

Cost of goods sold

42,822

39,646

Gross profit

21,669

20,557

Operating expenses

Selling, general and administrative

18,674

16,443

Transaction costs

1,440

37

Total operating expenses

20,114

16,480

Operating income

1,555

4,077

Other income (expense)

Interest expense, net

(232)

(353)

Other, net

449

(420)

Total other income (expense), net

217

(773)

Income before income tax

1,772

3,304

Income tax expense (benefit)

589

(188)

Net income

1,183

3,492

Other comprehensive income, net of tax:

Foreign currency translation adjustment

807

(726)

Unrealized (loss) gain on hedging activities

(600)

759

Other comprehensive income

207

33

Comprehensive income

$

1,390

$

3,525

Net income per share:

Basic

$

0.04

$

0.12

Diluted

0.04

0.11

Weighted average shares outstanding:

Basic

29,983

29,876

Diluted

30,986

31,077

See accompanying notes to condensed consolidated financial statements.

 


 

4


 

 

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)

(In thousands, except per share amounts)

Nine Months Ended

September 30, 2020

September 30, 2019

Sales

Domestic sales

$

83,493

$

87,805

International sales

64,567

80,610

Total sales

148,060

168,415

Cost of goods sold

97,243

109,810

Gross profit

50,817

58,605

Operating expenses

Selling, general and administrative

50,537

51,215

Restructuring charge

-

13

Transaction costs

1,870

124

Total operating expenses

52,407

51,352

Operating (loss) income

(1,590)

7,253

Other expense

Interest expense, net

(800)

(978)

Other, net

324

(260)

Total other expense, net

(476)

(1,238)

(Loss) income before income tax

(2,066)

6,015

Income tax benefit

(542)

(570)

Net (loss) income

(1,524)

6,585

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment

773

(869)

Unrealized (loss) gain on hedging activities

(336)

171

Other comprehensive income (loss)

437

(698)

Comprehensive (loss) income

$

(1,087)

$

5,887

Net (loss) income per share:

Basic

$

(0.05)

$

0.22

Diluted

(0.05)

0.21

Weighted average shares outstanding:

Basic

29,854

29,841

Diluted

29,854

30,999

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, 2020

September 30, 2019

Cash Flows From Operating Activities:

Net (loss) income

$

(1,524)

$

6,585

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation of property and equipment

3,405

3,332

Amortization of other intangible assets

2,290

2,665

Amortization of debt issuance costs

230

206

Loss on disposition of property and equipment

32

62

Noncash lease expense

563

501

Stock-based compensation

5,433

2,246

Deferred income taxes

(885)

(551)

Changes in operating assets and liabilities:

Accounts receivable

(541)

(6,480)

Inventories

9,477

(9,310)

Prepaid and other assets

(971)

3

Accounts payable and accrued liabilities

3,530

6,559

Income taxes

9

(183)

Net cash provided by operating activities

21,048

5,635

Cash Flows From Investing Activities:

Deposit for business acquisition

(30,500)

-

Proceeds from disposition of property and equipment

327

20

Purchase of property and equipment

(3,606)

(2,838)

Net cash used in investing activities

(33,779)

(2,818)

Cash Flows From Financing Activities:

Proceeds from revolving credit facilities

49,265

106,934

Repayments on revolving credit facilities

(50,014)

(104,088)

Repayments of financing and capital leases

(1,000)

(31)

Proceeds from issuance of long-term debt

20,000

-

Payment of debt issuance costs

(44)

(680)

Purchase of treasury stock

(1,520)

(4,167)

Proceeds from exercise of stock options

862

896

Cash dividends paid

(744)

(2,243)

Proceeds from the sale of common stock

11,476