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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: June 30, 2022

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)

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

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

As of July 27, 2022, there were 37,374,595 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 – June 30, 2022 and December 31, 2021

3

Condensed Consolidated Statements of Comprehensive (Loss) Income – Three months ended June 30, 2022 and 2021

4

Condensed Consolidation Statements of Comprehensive (Loss) Income – Six months ended June 30, 2022 and 2021

5

Condensed Consolidated Statements of Cash Flows – Six months ended June 30, 2022 and 2021

6

Condensed Consolidated Statements of Stockholders’ Equity – Three and six months ended June 30, 2022 and 2021

7

Notes to Condensed Consolidated Financial Statements

9

Item 2.

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

27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

37

Item 4.

Controls and Procedures

37

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

38

Item 6.

Exhibits

39

Signature Page

40

 

 

 

2


 

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

  

CLARUS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

June 30, 2022

December 31, 2021

Assets

Current assets

Cash

$

13,888

$

19,465

Accounts receivable, less allowance for

credit losses of $1,288 and $811

70,560

66,180

Inventories

153,056

129,354

Prepaid and other current assets

12,733

11,831

Income tax receivable

624

116

Total current assets

250,861

226,946

Property and equipment, net

42,916

42,826

Other intangible assets, net

63,029

73,683

Indefinite-lived intangible assets

123,851

128,271

Goodwill

115,658

118,090

Deferred income taxes

22,367

22,433

Other long-term assets

19,329

19,578

Total assets

$

638,011

$

631,827

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

31,476

$

31,488

Accrued liabilities

27,103

27,473

Income tax payable

1,723

4,437

Current portion of long-term debt

8,871

9,585

Total current liabilities

69,173

72,983

Long-term debt, net

140,739

131,948

Deferred income taxes

33,445

35,280

Other long-term liabilities

21,628

21,448

Total liabilities

264,985

261,659

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;

41,328 and 41,105 issued and 37,266 and 37,094 outstanding, respectively

4

4

Additional paid in capital

670,586

662,996

Accumulated deficit

(256,130)

(263,342)

Treasury stock, at cost

(25,537)

(24,440)

Accumulated other comprehensive loss

(15,897)

(5,050)

Total stockholders' equity

373,026

370,168

Total liabilities and stockholders' equity

$

638,011

$

631,827

See accompanying notes to condensed consolidated financial statements.

 


 

3


 

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

June 30, 2022

June 30, 2021

Sales

Domestic sales

$

64,073

$

51,876

International sales

50,860

21,433

Total sales

114,933

73,309

Cost of goods sold

71,251

45,288

Gross profit

43,682

28,021

Operating expenses

Selling, general and administrative

35,444

20,704

Transaction costs

821

649

Contingent consideration benefit

(374)

-

Total operating expenses

35,891

21,353

Operating income

7,791

6,668

Other expense

Interest expense, net

(1,728)

(212)

Other, net

(1,343)

(4,461)

Total other expense, net

(3,071)

(4,673)

Income before income tax

4,720

1,995

Income tax expense

956

155

Net income

3,764

1,840

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment

(17,632)

295

Unrealized gain on hedging activities

622

108

Other comprehensive (loss) income

(17,010)

403

Comprehensive (loss) income

$

(13,246)

$

2,243

Net income per share:

Basic

$

0.10

$

0.06

Diluted

0.09

0.06

Weighted average shares outstanding:

Basic

37,235

31,367

Diluted

39,697

33,190

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)

Six Months Ended

June 30, 2022

June 30, 2021

Sales

Domestic sales

$

126,380

$

99,449

International sales

101,829

49,191

Total sales

228,209

148,640

Cost of goods sold

140,275

93,569

Gross profit

87,934

55,071

Operating expenses

Selling, general and administrative

69,619

41,589

Transaction costs

2,022

1,125

Contingent consideration expense

389

-

Total operating expenses

72,030

42,714

Operating income

15,904

12,357

Other expense

Interest expense, net

(2,844)

(450)

Other, net

(1,410)

(4,601)

Total other expense, net

(4,254)

(5,051)

Income before income tax

11,650

7,306

Income tax expense (benefit)

2,577

(211)

Net income

9,073

7,517

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment

(11,555)

(721)

Unrealized gain on hedging activities

708

1,004

Other comprehensive (loss) income

(10,847)

283

Comprehensive (loss) income

$

(1,774)

$

7,800

Net income per share:

Basic

$

0.24

$

0.24

Diluted

0.23

0.23

Weighted average shares outstanding:

Basic

37,199

31,325

Diluted

39,751

32,970

See accompanying notes to condensed consolidated financial statements.

 

 

5


 

 

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Six Months Ended

June 30, 2022

June 30, 2021

Cash Flows From Operating Activities:

Net income

$

9,073

$

7,517

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

Depreciation of property and equipment

3,709

2,705

Amortization of other intangible assets

8,057

2,394

Amortization of debt issuance costs

361

162

Loss (gain) on disposition of property and equipment

18

(8)

Noncash lease expense

1,652

698

Contingent consideration expense

365

-

Stock-based compensation

6,922

3,350

Deferred income taxes

276

(710)

Changes in operating assets and liabilities:

Accounts receivable

(11,825)

(1,243)

Inventories

(26,237)

(14,874)

Prepaid and other assets

(380)

(6,575)

Accounts payable

5,288

2,434

Accrued liabilities

(443)

4,375

Income taxes

(3,112)

137

Net cash (used in) provided by operating activities

(6,276)

362

Cash Flows From Investing Activities:

Proceeds from disposition of property and equipment

298

25

Purchases of property and equipment

(4,072)

(3,225)

Net cash used in investing activities

(3,774)

(3,200)

Cash Flows From Financing Activities:

Proceeds from revolving credit facilities

61,933

15,217

Repayments on revolving credit facilities

(54,961)

(20,684)

Repayments on term loans

(123,542)

(2,000)

Proceeds from issuance of term loans

125,000

-

Payment of debt issuance costs

(1,210)

-

Purchase of treasury stock

(1,097)

(651)

Proceeds from exercise of stock options

668

1,652

Cash dividends paid

(1,861)

(1,565)

Net cash provided by (used in) financing activities

4,930

(8,031)

Effect of foreign exchange rates on cash

(457)

(138)

Change in cash

(5,577)

(11,007)

Cash, beginning of year

19,465

17,789

Cash, end of period

$

13,888

$

6,782

Supplemental Disclosure of Cash Flow Information: