clar-20220331x10q

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, 2022

¨ 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 May 4, 2022, there were 37,224,109 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, 2022		December 31, 2021
Assets
Current assets
Cash	$	16,451	$	19,465
Accounts receivable, less allowance for
credit losses of $1,283 and $811		69,530		66,180
Inventories		152,718		129,354
Prepaid and other current assets		12,838		11,831
Income tax receivable		258		116
Total current assets		251,795		226,946

Property and equipment, net		43,168		42,826
Other intangible assets, net		71,327		73,683
Indefinite-lived intangible assets		131,115		128,271
Goodwill		121,064		118,090
Deferred income taxes		22,456		22,433
Other long-term assets		20,157		19,578
Total assets	$	661,082	$	631,827

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	34,098	$	31,488
Accrued liabilities		30,176		27,473
Income tax payable		1,844		4,437
Current portion of long-term debt		12,103		9,585
Total current liabilities		78,221		72,983

Long-term debt, net		139,829		131,948
Deferred income taxes		36,892		35,280
Other long-term liabilities		23,034		21,448
Total liabilities		277,976		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;
41,272 and 41,105 issued and 37,210 and 37,094 outstanding, respectively		4		4
Additional paid in capital		666,489		662,996
Accumulated deficit		(258,963)		(263,342)
Treasury stock, at cost		(25,537)		(24,440)
Accumulated other comprehensive income (loss)		1,113		(5,050)
Total stockholders' equity		383,106		370,168
Total liabilities and stockholders' equity	$	661,082	$	631,827

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, 2022		March 31, 2021

Sales
Domestic sales	$	62,307	$	47,573
International sales		50,969		27,758
Total sales		113,276		75,331

Cost of goods sold		69,024		48,281
Gross profit		44,252		27,050

Operating expenses
Selling, general and administrative		34,175		20,885
Transaction costs		1,201		476
Contingent consideration expense		763		-

Total operating expenses		36,139		21,361

Operating income		8,113		5,689

Other expense
Interest expense, net		(1,116)		(238)
Other, net		(67)		(140)

Total other expense, net		(1,183)		(378)

Income before income tax		6,930		5,311
Income tax expense (benefit)		1,621		(366)
Net income		5,309		5,677

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		6,077		(1,016)
Unrealized gain on hedging activities		86		896
Other comprehensive income (loss)		6,163		(120)
Comprehensive income	$	11,472	$	5,557

Net income per share:
Basic	$	0.14	$	0.18
Diluted		0.13		0.17

Weighted average shares outstanding:
Basic		37,161		31,283
Diluted		39,802		32,750

See accompanying notes to condensed consolidated financial statements.

‎


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

		Three Months Ended
		March 31, 2022		March 31, 2021
	Cash Flows From Operating Activities:
	Net income	$	5,309	$	5,677
	Adjustments to reconcile net income to net cash used in operating activities:
	Depreciation of property and equipment		1,832		1,356
	Amortization of other intangible assets		4,120		1,197
	Amortization of debt issuance costs		170		82
	Loss on disposition of property and equipment		9		-
	Noncash lease expense		694		331
	Contingent consideration expense		754		-
	Stock-based compensation		3,367		1,524
	Deferred income taxes		524		(697)
	Changes in operating assets and liabilities:
	Accounts receivable		437		66
	Inventories		(23,137)		(2,388)
	Prepaid and other assets		(856)		(5,730)
	Accounts payable		(2,101)		(3,224)
	Accrued liabilities		820		(1,229)
	Income taxes		(2,737)		517
	Net cash used in operating activities		(10,795)		(2,518)

	Cash Flows From Investing Activities:
	Purchases of property and equipment		(1,900)		(1,347)
	Net cash used in investing activities		(1,900)		(1,347)

	Cash Flows From Financing Activities:
	Proceeds from revolving credit facilities		25,670		11,637
	Repayments on revolving credit facilities		(13,689)		(16,565)
	Repayments on term loans		(1,613)		(1,000)
	Purchase of treasury stock		(1,097)		(651)
	Proceeds from exercise of stock options		126		166
	Cash dividends paid		(930)		(783)
	Net cash provided by (used in) financing activities		8,467		(7,196)

	Effect of foreign exchange rates on cash		1,214		(203)

	Change in cash		(3,014)		(11,264)
	Cash, beginning of year		19,465		17,789
	Cash, end of period	$	16,451	$	6,525

	Supplemental Disclosure of Cash Flow Information:
	Cash paid for income taxes	$	3,844	$	75
	Cash paid for interest	$	926	$	161
	Supplemental Disclosures of Non-Cash Investing and Financing Activities:
	Property and equipment purchased with accounts payable	$	425	$	293
	Lease liabilities arising from obtaining right of use assets	$	1,164	$	3,539

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, 2020		35,198	$	4	$	513,979	$	(286,100)		(3,970)	$	(23,789)	$	500	$	204,594
Net income		-		-		-		5,677		-		-		-		5,677
Other comprehensive loss		-		-		-		-		-		-		(120)		(120)
Cash dividends ($0.025 per share)		-		-		-		(783)		-		-		-		(783)
Purchase of treasury stock		-		-		-		-		(41)		(651)		-		(651)
Stock-based compensation expense		-		-		1,524		-		-		-		-		1,524
Proceeds from exercise of options		127		-		246		-


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

	Condensed Consolidated Balance Sheets – March 31, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Comprehensive Income – Three months ended March 31, 2022 and 2021	4
	Condensed Consolidated Statements of Cash Flows – Three months ended March 31, 2022 and 2021	5
	Condensed Consolidated Statements of Stockholders’ Equity – Three months ended March 31, 2022 and 2021	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 6.	Exhibits	33
Signature Page		34