clar-20200630x10q

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, 2020

¨ 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 August 5, 2020, there were 29,888,200 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)

	June 30, 2020		December 31, 2019
Assets
Current assets
Cash	$	21,538	$	1,703
Accounts receivable, less allowance for credit losses and
doubtful accounts of $1,474 and $494, respectively		23,895		41,628
Inventories		72,514		73,432
Prepaid and other current assets		4,363		3,787
Income tax receivable		387		322
Total current assets		122,697		120,872

Property and equipment, net		22,720		22,919
Other intangible assets, net		14,279		15,816
Indefinite lived intangible assets		41,634		41,630
Goodwill		18,090		18,090
Deferred income taxes		8,743		7,904
Other long-term assets		2,570		3,034
Total assets	$	230,733	$	230,265

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	$	19,151	$	24,304
Income tax payable		96		260
Current portion of long-term debt		4,000		-
Total current liabilities		23,247		24,564

Long-term debt		26,521		22,670
Deferred income taxes		1,071		1,224
Other long-term liabilities		334		615
Total liabilities		51,173		49,073

Stockholders' Equity
Preferred stock, $.0001 par value; 5,000
shares authorized; none issued		-		-
Common stock, $.0001 par value; 100,000 shares authorized;
33,757 and 33,615 issued and 29,888 and 29,760 outstanding, respectively		3		3
Additional paid in capital		494,793		492,353
Accumulated deficit		(292,757)		(288,592)
Treasury stock, at cost		(22,406)		(22,269)
Accumulated other comprehensive loss		(73)		(303)
Total stockholders' equity		179,560		181,192
Total liabilities and stockholders' equity	$	230,733	$	230,265

See accompanying notes to condensed consolidated financial statements.

‎


CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except per share amounts)

	Three Months Ended
	June 30, 2020		June 30, 2019

Sales
Domestic sales	$	20,259	$	28,422
International sales		9,755		18,572
Total sales		30,014		46,994

Cost of goods sold		19,378		31,002
Gross profit		10,636		15,992

Operating expenses
Selling, general and administrative		14,493		17,192
Transaction costs		180		41

Total operating expenses		14,673		17,233

Operating loss		(4,037)		(1,241)

Other income (expense)
Interest expense, net		(257)		(315)
Other, net		406		183

Total other income (expense), net		149		(132)

Loss before income tax		(3,888)		(1,373)
Income tax benefit		(1,145)		(679)
Net loss		(2,743)		(694)

Other comprehensive loss, net of tax:
Foreign currency translation adjustment		367		230
Unrealized loss on hedging activities		(549)		(499)
Other comprehensive loss		(182)		(269)
Comprehensive loss	$	(2,925)	$	(963)

Net loss per share:
Basic	$	(0.09)	$	(0.02)
Diluted		(0.09)		(0.02)

Weighted average shares outstanding:
Basic		29,817		29,898
Diluted		29,817		29,898

See accompanying notes to condensed consolidated financial statements.

‎

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CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)
(In thousands, except per share amounts)

	Six Months Ended
	June 30, 2020		June 30, 2019

Sales
Domestic sales	$	48,807	$	59,011
International sales		34,762		49,201
Total sales		83,569		108,212

Cost of goods sold		54,421		70,164
Gross profit		29,148		38,048

Operating expenses
Selling, general and administrative		31,863		34,772
Restructuring charge		-		13
Transaction costs		430		87

Total operating expenses		32,293		34,872

Operating (loss) income		(3,145)		3,176

Other expense
Interest expense, net		(568)		(625)
Other, net		(125)		160

Total other expense, net		(693)		(465)

(Loss) income before income tax		(3,838)		2,711
Income tax benefit		(1,131)		(382)
Net (loss) income		(2,707)		3,093

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		(34)		(143)
Unrealized gain (loss) on hedging activities		264		(588)
Other comprehensive income (loss)		230		(731)
Comprehensive (loss) income	$	(2,477)	$	2,362

Net (loss) income per share:
Basic	$	(0.09)	$	0.10
Diluted		(0.09)		0.10

Weighted average shares outstanding:
Basic		29,789		29,824
Diluted		29,789		30,961

See accompanying notes to condensed consolidated financial statements.

‎


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

		Six Months Ended
		June 30, 2020		June 30, 2019
	Cash Flows From Operating Activities:
	Net (loss) income	$	(2,707)	$	3,093
	Adjustments to reconcile net (loss) income to net cash provided by operating activities:
	Depreciation of property and equipment		2,265		2,242
	Amortization of intangible assets		1,537		1,777
	Amortization of debt issuance costs		154		132
	(Gain) loss on disposition of property and equipment		(1)		49
	Noncash lease expense		364		333
	Stock-based compensation		1,229		1,568
	Deferred income taxes		(1,081)		50
	Changes in operating assets and liabilities:
	Accounts receivable		17,662		3,291
	Inventories		969		(8,150)
	Prepaid and other assets		(149)		(105)
	Accounts payable and accrued liabilities		(5,569)		5,973
	Income taxes		(231)		(581)
	Net cash provided by operating activities		14,442		9,672

	Cash Flows From Investing Activities:
	Proceeds from disposition of property and equipment		3		1
	Purchase of property and equipment		(2,021)		(1,994)
	Net cash used in investing activities		(2,018)		(1,993)

	Cash Flows From Financing Activities:
	Proceeds from revolving credit facilities		21,089		75,854
	Repayments on revolving credit facilities		(33,264)		(81,266)
	Repayments of financing and capital leases		-		(31)
	Proceeds from issuance of long-term debt		20,000		-
	Payment of debt issuance costs		(44)		(557)
	Purchase of treasury stock		(137)		(1,505)
	Proceeds from exercise of stock options		497		804
	Cash dividends paid		(744)		(1,494)
	Net cash provided by (used in) financing activities		7,397		(8,195)

	Effect of foreign exchange rates on cash		14		(1)

	Change in cash		19,835


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

	Condensed Consolidated Balance Sheets – June 30, 2020 and December 31, 2019	3
	Condensed Consolidated Statements of Comprehensive Loss – Three months ended June 30, 2020 and 2019	4
	Condensed Consolidated Statements of Comprehensive (Loss) Income – Six months ended June 30, 2020 and 2019	5
	Condensed Consolidated Statements of Cash Flows – Six months ended June 30, 2020 and 2019	6
	Condensed Consolidated Statements of Stockholders’ Equity – Three and six months ended June 30, 2020 and 2019	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
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