Clarus Corp

Clarus Corporation is a global leading designer, developer, manufacturer and distributor of best-in-class outdoor equipment and lifestyle products focused on the outdoor enthusiast markets. The Company's products are principally sold globally under the Black Diamond, Rhino-Rack, MAXTRAX, TRED Outdoors, and RockyMounts brand names through outdoor specialty and online retailers, its own websites, distributors and original equipment manufacturers. The Company believes its portfolio of iconic brands is well-positioned for sustainable, long-term growth underpinned by industry trends across the outdoor and adventure sport end markets. Select factors driving acceleration include increasing adoption of outdoor lifestyles and focus on health and wellness, the rise of overlanding and off-roading, and climbing verticals becoming mainstream. The 2020 Tokyo Olympics marked the first time sport climbing debuted in an Olympic stadium, and the 2024 Paris Summer Olympics featured four sport climbing events, which doubled the number of medaled sport climbing events from the 2020 games.

The Company competes with niche, privately-owned companies as well as a number of brands owned by large, multinational companies. In the Outdoor segment, products compete with companies such as The North Face, Patagonia, La Sportiva, Prana, Hestra, Osprey, Arc’Teryx, Petzl, and Mammut. In the Adventure segment, products compete with companies such as Thule, Dometic, Yakima, and Front Runner. In certain categories, the Company competes with large wholesale customers such as REI, Mountain Equipment Co-op and Decathlon, which manufacture, market and distribute their own products under private labels. The members of the Board of Directors and executive officers, including Mr. Warren Kanders, beneficially own approximately 23.5% ¹ of outstanding common stock as of March 5, 2026, which the Company believes aligns interests with stockholders. The Company's debt-free capital structure as of December 31, 2025 provides capacity to fund future growth.

The Company generates revenue through the design, development, manufacturing, and distribution of outdoor equipment and lifestyle products. Revenue is recognized when a contract exists with a customer that specifies goods and services at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. Sales are made on normal and customary short-term credit terms or upon delivery of point-of-sale transactions. The Company does not have long-term contracts that are satisfied over time. The Company markets and distributes products in over 50 countries, primarily through independent specialty stores and specialty chains, premium sporting goods and outdoor recreation stores, distributors and original equipment manufacturers in the United States, Canada, Europe, Middle East, Asia, Australia, New Zealand, Africa, and South America. The Company also sells products directly to customers through its various websites.

The Outdoor segment is led by Black Diamond, an established global leader in high-performance, activity-based climbing, skiing, and technical mountain sports equipment. The Outdoor segment offers a broad range of products including high-performance, activity-based apparel (such as shells, insulation, midlayers, pants, and logowear); rock-climbing footwear and equipment (such as carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gear); technical backpacks and high-end day packs; trekking poles; headlamps and lanterns; and gloves and mittens. The segment also offers advanced skis, ski poles, ski skins, and snow safety products, including avalanche airbag systems, avalanche transceivers, shovels, and probes. Black Diamond has received over 500 industry awards over five years, including over 225 product awards in 2025 alone ². The Adventure segment is comprised of Rhino-Rack, MAXTRAX, TRED, and RockyMounts. Rhino-Rack, founded in 1992, is a globally-recognized designer and distributor of highly-engineered automotive roof racks, trays, bars, and other accessories. MAXTRAX, founded in 2005, offers high-quality overlanding and off-road vehicle recovery and extraction tracks. TRED, founded in 2012, offers high-quality, reliable outdoor and recovery gear for the offroad, 4x4 automotive touring, camping and caravanning markets. RockyMounts, founded in 1993, is known for making well designed and dependable premium bicycle racks and other accessories compatible with vehicles of all sizes.

The Company's growth strategies include achieving sustainable, profitable growth organically through targeted growth initiatives, including simplification of certain products, product lines and business units to drive targeted growth and margin improvement. The Company intends to create new and innovative products, increase consumer and retailer awareness and demand, and build stronger emotional brand connections across an increasing number of geographic markets. Growth initiatives include expansion in international markets, where the European alpine market is currently significantly larger than the U.S. market and is highly fragmented by country, with no clear leader across Europe. Rhino-Rack has a leading market position in its home markets of Australia and New Zealand, with opportunities to grow in the U.S., Europe, the Middle East and other Asia-Pacific countries, where the Company believes the brand currently has less than 1% market share ³.

On February 29, 2024, the Company completed the sale of all of the equity associated with the Precision Sport segment, which was comprised of Sierra Bullets, L.L.C. and Barnes Bullets – Mona, LLC, for $175,000 ⁴ in cash, receiving $175,674 ⁵ in cash under the terms of the Purchase Agreement. On July 11, 2025, the Company completed the sale of PIEPS, which was included in the Outdoor segment, for a total purchase price of €7,825,000 ⁶ (approximately $9,124,000 ⁷), including cash held at PIEPS of $1,311,000 ⁸. On December 5, 2024, the Company completed the acquisition of certain assets and liabilities constituting the RockyMounts business for up to $8,000 ⁹, which included $4,000 ¹⁰ paid in cash at closing, the issuance of a promissory note in the original principal amount of $2,000 ¹¹, and additional contingent consideration of up to $2,000 ¹² in cash if certain future net sales thresholds are met. On October 9, 2023, the Company completed the acquisition of TRED Outdoors Pty Ltd. for an aggregate purchase price of AUD 10,741 ¹³ (approximately $6,849 ¹⁴), comprised of AUD 8,875 ¹⁵ (approximately $5,659 ¹⁶) cash, 179 ¹⁷ shares of common stock valued at $1,069 ¹⁸, and additional contingent consideration. The Company has incurred $6,138,000 ¹⁹ of cumulative restructuring charges since the commencement of restructuring actions in 2023. During the years ended December 31, 2025, 2024, and 2023, the Company incurred $967,000 ²⁰, $1,948,000 ²¹, and $3,223,000 ²², respectively, of restructuring charges. In 2025, 2024 and 2023, total Quarterly Cash Dividends were $3,840,000 ²³, $3,831,000 ²⁴, and $3,750,000 ²⁵, respectively. As of December 31, 2025, the Company had a stock repurchase program with $42,829,217 ²⁶ available.

Total sales decreased 5.2% to $250,440 ²⁷ during the year ended December 31, 2025, compared to $264,315 ²⁸ during the year ended December 31, 2024. Gross profit decreased 10.4% to $82,976 ²⁹ from $92,619 ³⁰, and gross margin was 33.1% ³¹ compared to 35.0% ³² in the prior year. Loss from continuing operations was $46,556 ³³ compared to a loss of $88,437 ³⁴ in the prior year. Net loss was $46,556 ³⁵ compared to a net loss of $52,287 ³⁶ in the prior year. Diluted loss per share from continuing operations was $1.21 ³⁷ compared to $2.31 ³⁸ in the prior year. Net cash used in operating activities was $4,746 ³⁹ during the year ended December 31, 2025, compared to $7,300 ⁴⁰ during the year ended December 31, 2024. Free cash flow, defined as net cash used in operating activities less capital expenditures, was negative $9,908 ⁴¹ during the year ended December 31, 2025, compared to negative $14,039 ⁴² during the same period in 2024.

The Company believes there is a significant opportunity to expand the global presence and penetration of each of its brands. The European alpine market is currently significantly larger than the U.S. market and is highly fragmented by country, with no clear leader across Europe. The Company has been able to gain market share by emphasizing its Black Diamond brand, positioning it as a global brand with American roots. Rhino-Rack is based in Sydney, Australia, bringing a leading market position in its home markets of Australia and New Zealand, with opportunities to grow in the U.S., Europe, the Middle East and other Asia-Pacific countries, where the Company believes that the brand currently has less than 1% market share .

The Company intends to create new and innovative products, increase consumer and retailer awareness and demand for its products, and build stronger emotional brand connections with consumers over time across an increasing number of geographic markets. The Company continues to seek to improve its existing product lines by expanding its offerings into new niche categories, and by incorporating innovative industrial design, engineering and performance tolerances into its products. The Company believes the credibility and authenticity of its brands expands its potential market beyond committed outdoor athletes to outdoor generalists who desire to lead active, outdoor-focused lifestyles.

The Company's growth strategies include achieving sustainable, profitable growth organically through the execution of targeted growth initiatives, including simplification of certain products, product lines and business units to drive targeted growth and margin improvement. Gross margin during the year ended December 31, 2025 decreased compared to the prior year as a result of lower volumes at the Outdoor and Adventure segments, impacts due to tariffs imposed by the United States for both segments, and an unfavorable product mix and increases of inventory reserve expenses at the Adventure segment. These were partially offset by a favorable product mix at the Outdoor segment due to the Company's simplification initiatives.

The Company expects to incur additional employee-related and facility exit restructuring costs in 2026; however, the Company cannot estimate the total amount expected to be incurred at this time as cost reduction actions continue to be evaluated. The Company currently anticipates completing these restructuring activities in 2026. The Company's Black Diamond Equipment and Rhino-Rack manufacturing and distribution operations are ISO 9001–2015 certified and are audited annually by an independent certifying agency. The Company designs and assesses its cybersecurity program based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF and AI Risk Management Framework) and seeks to follow industry best practices.

The Company's debt-free capital structure as of December 31, 2025 provides it with the capacity to fund future growth. The Company had a stock repurchase program with $42,829,217 available as of December 31, 2025. On August 6, 2018, the Company announced that its Board of Directors approved the initiation of a Quarterly Cash Dividend program of $0.025 ⁴³ per share of the Company's common stock or $0.10 ⁴⁴ per share on an annualized basis. On March 4, 2026, the Company announced that its Board of Directors approved the payment on March 25, 2026 of the Quarterly Cash Dividend of $0.025 ⁴⁵ to the record holders of shares of the Company's common stock as of the close of business on March 16, 2026. Research and development costs for continuing operations were $11,928 ⁴⁶, $12,171 ⁴⁷, and $12,740 ⁴⁸ for the years ended December 31, 2025, 2024, and 2023, respectively. Purchases of property and equipment were $5,162 ⁴⁹ during the year ended December 31, 2025, compared to $6,739 ⁵⁰ during the year ended December 31, 2024.

The Company faces risks related to its dependence on the strength of retail economies in various parts of the world, primarily in North America, Europe, Australia and to a lesser extent, Asia, Central and South America. Approximately 58% ⁵¹ of the Company's sales for the year ended December 31, 2025 were earned in international markets. The Company's international operations expose it to changing global conditions and legal and regulatory requirements, including tariffs, trade restrictions, and anti-corruption and sanctions laws such as the FCPA. The Company's products are subject to increasingly stringent and complex domestic and foreign product labeling and performance and safety standards, laws and other regulations. The Company cannot predict whether quotas, duties, taxes, exchange controls, current or future trade wars or other restrictions will be imposed by the United States, China, Canada and Mexico or other countries upon the import or export of its products.

The Company's operations are sensitive to changes in global cultural, political, and financial market conditions, as well as potential changes in regulations, legislation, and government policies. The conflicts between Russia and Ukraine and the Middle East, and the potential for these and other geopolitical conflicts to expand or intensify, could have a material adverse effect on the Company's operations, results of operations, financial condition, liquidity and business outlook. The Company's business depends on the strength of the retail economies in various parts of the world, which are affected primarily by factors such as consumer demand and the condition of the retail industry, which, in turn, are affected by general economic conditions and specific events such as natural disasters, terrorist attacks, and political unrest.

Many of the Company's products are used in inherently risky outdoor pursuits and have given rise to product liability or product warranty claims and other loss contingencies, including recalls and liability claims relating to BDEL's avalanche beacon transceivers. The CPSC staff has recommended that the CPSC impose civil monetary penalties of $16,135,000 ⁵² and $9,000,000 ⁵³ for two separate matters, and the U.S. Department of Justice has commenced a criminal investigation. The Company recorded a liability of $2,500,000 ⁵⁴ representing the low end of the range of estimated exposure. The Company's business depends on the strength of retail economies, and approximately 58% of sales for the year ended December 31, 2025 were earned in international markets, exposing the Company to tariffs, trade restrictions, and foreign currency fluctuations. The Company has recognized significant impairment charges, including $30,000,000 ⁵⁵ of impairment of indefinite-lived intangible assets and goodwill in the Adventure reporting unit during the year ended December 31, 2025, and may be required to take future write-downs. The Company's markets are highly competitive and subject to dramatic changes in consumer preferences, and the Company faces risks related to disruptions in its supply chain, third-party logistics providers, or distribution facilities.

Management's message emphasizes that the Company's portfolio of iconic brands is well-positioned for sustainable, long-term growth underpinned by powerful industry trends across the outdoor and adventure sport end markets. The Company's growth strategies are to achieve sustainable, profitable growth organically through the execution of targeted growth initiatives, including simplification of certain products, product lines and business units to drive targeted growth and margin improvement. The Company intends to create new and innovative products, increase consumer and retailer awareness and demand for its products, and build stronger emotional brand connections with consumers over time across an increasing number of geographic markets. Management highlights the Company's debt-free capital structure as of December 31, 2025 as providing capacity to fund future growth.