c277-20230331x10q

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: March 31, 2023

¨ 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 April 26, 2023, there were 37,190,302 shares of common stock, par value $0.0001, outstanding.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


CLARUS CORPORATION
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

See accompanying notes to condensed consolidated financial statements.

‎


CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE 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

Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment		(1,021)		6,077
Unrealized (loss) gain on hedging activities		(79)		86
Other comprehensive (loss) income		(1,100)		6,163
Comprehensive income	$	498	$	11,472

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

See accompanying notes to condensed consolidated financial statements.

‎


CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)


		Three Months Ended
		March 31, 2023		March 31, 2022
	Cash Flows From Operating Activities:
	Net income	$	1,598	$	5,309
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
	Depreciation of property and equipment		1,791		1,832
	Amortization of other intangible assets		3,276		4,120
	Amortization of debt issuance costs		232		170
	Loss on disposition of property and equipment		5		9
	Noncash lease expense		690		694
	Contingent consideration (benefit) expense		(1,565)		754
	Stock-based compensation		1,334		3,367
	Deferred income taxes		(105)		524
	Changes in operating assets and liabilities:
	Accounts receivable		(2,797)		437
	Inventories		1,341		(23,137)
	Prepaid and other assets		(153)		(856)
	Accounts payable		90		(2,101)
	Accrued liabilities		(2,612)		820
	Income taxes		74		(2,737)
	Net cash provided by (used in) operating activities		3,199		(10,795)

	Cash Flows From Investing Activities:
	Proceeds from disposition of property and equipment		88		-
	Purchases of property and equipment		(1,471)		(1,900)
	Net cash used in investing activities		(1,383)		(1,900)

	Cash Flows From Financing Activities:
	Proceeds from revolving credit facilities		11,731		25,670
	Repayments on revolving credit facilities		(12,153)		(13,689)
	Repayments on term loans		(1,668)		(1,613)
	Purchase of treasury stock		(118)		(1,097)
	Proceeds from exercise of options		-		126
	Cash dividends paid		(930)		(930)
	Net cash (used in) provided by financing activities		(3,138)		8,467

	Effect of foreign exchange rates on cash		(429)		1,214

	Change in cash		(1,751)		(3,014)
	Cash, beginning of year		12,061		19,465
	Cash, end of period	$	10,310	$	16,451

	Supplemental Disclosure of Cash Flow Information:
	Cash paid for income taxes	$	350	$	3,844
	Cash paid for interest	$	2,586	$	926
	Supplemental Disclosures of Non-Cash Investing and Financing Activities:
	Property and equipment purchased with accounts payable	$	202	$	425
	Lease liabilities arising from obtaining right of use assets	$	3,941	$	1,164

See accompanying notes to condensed consolidated financial statements.

‎

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		Income (Loss)		Equity

Balance, December 31, 2021		41,105	$	4	$	662,996	$	(263,342)		(4,011)	$	(24,440)	$	(5,050)	$	370,168
Net income		-		-		-		5,309		-		-		-		5,309
Other comprehensive income		-		-		-		-		-		-		6,163		6,163
Cash dividends ($0.025 per share)		-		-		-		(930)		-		-		-		(930)
Purchase of treasury stock		-		-		-		-		(51)		(1,097)		-		(1,097)
Stock-based compensation expense		-		-		3,367		-		-		-		-		3,367
Proceeds from exercise of options		167		-


PART I	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets – March 31, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Comprehensive Income – Three months ended March 31, 2023 and 2022	4
	Condensed Consolidated Statements of Cash Flows – Three months ended March 31, 2023 and 2022	5
	Condensed Consolidated Statements of Stockholders’ Equity – Three months ended March 31, 2023 and 2022	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 6.	Exhibits	31
Signature Page		32