Clarus Corporation — Second Quarter 2026 Earnings Summary

Financial Performance

• Consolidated sales were $56.2 million, up 1.6% from $55.2 million in the second quarter of 2025.
• Gross margin was 48.9% compared to 35.6% in the prior year quarter, a 1,090 basis point increase driven by a $6.1 million refund of International Emergency Economic Powers Act (IEEPA) tariffs recorded as an offset to cost of goods sold.
• Net income was $4.7 million (8.4% margin, $0.12 per diluted share) compared to a net loss of $8.4 million (15.3% loss margin, $(0.22) per diluted share) in the prior year quarter.
• Adjusted net income was $6.8 million ($0.18 per diluted share) compared to an adjusted net loss of $(3.1) million ($(0.08) per diluted share) in the prior year quarter.
• Adjusted EBITDA was $7.6 million (13.6% margin) compared to an adjusted EBITDA loss of $(4.4) million ((8.0)% margin) in the prior year quarter.
• Net cash provided by operating activities was $1.7 million compared to a use of $(9.4) million in the prior year quarter.
• Free cash flow was $0.6 million compared to an outflow of $(11.3) million in the prior year quarter.
• Capital expenditures were $1.1 million compared to $1.9 million in the prior year quarter.
• Cash and cash equivalents totaled $28.9 million at June 30, 2026, down from $36.7 million at December 31, 2025.
• The balance sheet was debt-free at the end of both periods.
• Selling, general and administrative expenses were $24.3 million compared to $26.9 million in the prior year quarter.

Guidance and Future Outlook

• Full-year 2026 sales are expected to range between $245 million and $255 million.
• Full-year 2026 adjusted EBITDA is expected to range between approximately $12 million and $13 million, representing a 5.0% adjusted EBITDA margin at the mid-point.
• Full-year 2026 free cash flow is now expected to be $6 million.
• Full-year 2026 capital expenditures are expected to remain between $6 million and $7 million.
• Third quarter 2026 sales are expected to range between $66 million and $68 million.
• Third quarter 2026 adjusted EBITDA is expected to be approximately $3 million.
• The company does not provide net income or net cash provided by operating activities guidance for 2026.

Business Segments and Product Lines

• Outdoor segment sales increased 8.5% to $39.8 million from $36.7 million in the prior year quarter.
• Adventure segment sales decreased 11.9% to $16.4 million from $18.6 million in the prior year quarter.
• Outdoor segment revenue growth was driven by increases in global wholesale, independent global distributor, and global direct-to-consumer revenues, partially offset by lower PIEPS revenue due to the sale of PIEPS in July 2025.
• Adventure segment sales decline was due to an unfavorable wholesale market in Australia and North America for Rhino-Rack and MAXTRAX, partially offset by favorable foreign exchange.
• The three largest Outdoor categories (Mountain, Climb, and Apparel) drove 95% of total segment revenues.
• Apparel sales in the Outdoor segment increased for the fifth consecutive quarter.
• Adventure segment gross margin improved 420 basis points year-over-year driven by price growth and better segmentation across the retailer base.
• The company completed the bolt-on acquisition of ONWRD Supply Co. brand and related assets in June 2026, integrating the brand into Rhino-Rack USA operations in Colorado.

Market and Competitive Landscape

• The company noted geopolitical and macroeconomic headwinds but remains confident in its positioning.
• The Outdoor segment performed well in a challenging market.
• The company is shifting toward a full-price premium model with cleaner inventory and less discounting.

Risks and Challenges

• The company faces geopolitical and macroeconomic headwinds.
• The review of strategic alternatives has no deadline or definitive timetable, and there is no assurance it will result in any transaction.
• Actual results could differ materially from forward-looking statements due to risks related to the strategic review and other factors described in public reports.

Management Commentary and Tone

• Executive Chairman Warren Kanders stated that second quarter results reflected disciplined execution of the simplification strategy.
• Management noted that underlying performance was solid with encouraging signs of progress across both segments.
• Kanders highlighted that the IEEPA tariff refund lifted earnings and gross margin, but the team's focus on high-volume, high-margin products in the Outdoor segment is paying off.
• Management expressed confidence that Black Diamond is positioned to capitalize on growth opportunities ahead.
• The company remains committed to unlocking intrinsic value in both segments and maximizing long-term shareholder value.

Other Key Points

• The company repurchased 153,331 shares of common stock for approximately $0.4 million (average price of $2.92 per share) during the quarter.
• Approximately $42.4 million remains under the $50 million stock repurchase program.
• The Board of Directors initiated a comprehensive review of strategic alternatives to enhance shareholder value, including potential sale of the business or other transactions.
• Jefferies LLC continues to assist the company with evaluating strategic alternatives.
• The company sold the PIEPS brand in July 2025.
• The company will hold a conference call on August 6, 2026, at 5:00 p.m. Eastern time.