Clarus Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated sales reached $71.2 million for the quarter, a 2.7% increase from $69.3 million in the year-ago period.
• Gross margin improved to 41.0% from 35.1% in the prior year quarter, including an 80 basis point benefit from $0.6 million in IEEPA tariff refunds recorded as an offset to cost of goods sold.
• Net income was $3.3 million (4.6% margin, $0.09 per diluted share), compared to a net loss of $1.6 million (2.3% margin, $0.04 per diluted share) in the prior year.
• Adjusted net income was $5.7 million ($0.15 per diluted share), up from $0.4 million ($0.01 per diluted share) in the prior year.
• Adjusted EBITDA was $6.8 million (9.6% margin), compared to $1.8 million (2.6% margin) in the prior year.
• Selling, general, and administrative expenses were $25.3 million, down from $26.2 million in the prior year.
• Net cash used in operating activities was $6.2 million, compared to $5.7 million in the prior year, primarily due to increased accounts receivable at the Outdoor segment.
• Free cash flow was an outflow of $7.4 million, compared to an outflow of $6.9 million in the prior year.
• Capital expenditures were $1.2 million, consistent with the prior year quarter.

Guidance and Future Outlook:

• Full-year 2026 sales guidance raised to a range of $251 million to $255 million (previously $245 million to $255 million).
• Full-year 2026 adjusted EBITDA guidance raised to a range of approximately $15 million to $17 million (previously $12 million to $13 million).
• Full-year 2026 free cash flow is now expected to be break even, compared to a prior expectation of $6 million.
• Capital expenditures for 2026 remain guided between $6 million and $7 million.
• Fourth quarter 2026 sales are expected to range between $62 million and $66 million.
• Fourth quarter 2026 adjusted EBITDA is expected to be approximately $3 million.

Business Segments and Product Lines:

• Outdoor segment sales increased 12.4% to $54.7 million from $48.7 million in the prior year, driven by growth in global wholesale, independent global distributor, and direct-to-consumer revenues.
• Adventure segment sales decreased 20.2% to $16.5 million from $20.7 million in the prior year, impacted by an unfavorable wholesale market in Australia for Rhino-Rack and MAXTRAX, partially offset by favorable foreign exchange.
• Adjusted EBITDA for the Outdoor segment was $8.0 million, up from $4.4 million in the prior year.
• Adjusted EBITDA for the Adventure segment was $0.8 million, up from $0.3 million in the prior year.
• Gross margin at both segments exceeded 40% in the third quarter.

Market and Competitive Landscape:

• The company operates in the outdoor enthusiast markets with brands including Black Diamond, Rhino-Rack, MAXTRAX, TRED Outdoors, RockyMounts, and Onwrd.
• The Adventure segment faced headwinds specifically in the Australian wholesale market.

Risks and Challenges:

• The Board of Directors is conducting a comprehensive review of strategic alternatives, including potential sale of all or part of the business, with no deadline or definitive timetable.
• Forward-looking statements involve risks and uncertainties, including the timing and outcome of the strategic review and potential impacts on business and operations.
• The company does not provide net income or net cash provided by operating activities guidance due to the inability to forecast certain expenses, gains, and changes in working capital without unreasonable effort.

Management Commentary and Tone:

• Executive Chairman Warren Kanders stated the company delivered strong third-quarter results reflecting progress on strategic priorities to simplify the business, sharpen product focus, and improve operating efficiency.
• Management highlighted that the reduction in cost structure and prioritization of high-volume and high-margin products are driving profitability.
• The company expressed confidence in business fundamentals and a constructive outlook for the remainder of 2026, citing continued positive momentum across Outdoor and Adventure segments.

Other Key Points:

• The company received approximately $0.6 million in refunds related to previously paid International Emergency Economic Powers Act (IEEPA) tariffs.
• The balance sheet was debt-free at the end of both the current quarter and the prior year-end.
• Cash and cash equivalents totaled $20.8 million at September 30, 2026, down from $36.7 million at December 31, 2025.
• Jefferies LLC continues to serve as the financial advisor for the ongoing strategic review.
• A conference call was held on November 5, 2026, at 5:00 p.m. Eastern time to discuss results.