Nov 5, 2026, 4:24 PM ETConsumer Cyclical

Clarus Corporation — Third Quarter 2026 Earnings Summary

CLARCLARUS CORP

Financial Performance

Consolidated sales reached $71.2 million, a 2.7% increase compared to $69.3 million in the same quarter of 2025.
Gross margin improved to 41.0% from 35.1% in the prior year quarter, including an approximately 80 basis point benefit from the recovery of IEEPA tariffs.
Net income was $3.3 million (4.6% margin, $0.09 per diluted share), reversing a net loss of $1.6 million (2.3% margin, $0.04 per diluted share) in the prior year quarter.
Adjusted net income rose to $5.7 million ($0.15 per diluted share) from $0.4 million ($0.01 per diluted share) in the prior year quarter.
Adjusted EBITDA increased to $6.8 million (9.6% margin) from $1.8 million (2.6% margin) in the prior year quarter.
Net cash used in operating activities was $6.2 million, compared to $5.7 million in the prior year quarter, 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 quarter.
Capital expenditures remained flat at $1.2 million compared to the prior year quarter.

Full-year 2026 sales guidance was raised to a range of $251 million to $255 million, up from the prior outlook of $245 million to $255 million.
Full-year 2026 adjusted EBITDA guidance was raised to a range of approximately $15 million to $17 million, up from $12 million to $13 million.
Full-year 2026 free cash flow is now expected to be break even, compared to a prior outlook of $6 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.
Capital expenditures for the full year 2026 are expected to remain between $6 million and $7 million.
The Company does not provide guidance for net income or net cash provided by operating activities due to the difficulty in forecasting certain expenses and working capital changes.

The Outdoor segment sales increased 12.4% to $54.7 million, driven by growth in global wholesale, independent global distributor, and global direct-to-consumer revenues.
The Adventure segment sales decreased 20.2% to $16.5 million, 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 quarter.
Adjusted EBITDA for the Adventure segment was $0.8 million, up from $0.3 million in the prior year quarter.
Gross margin improvements were attributed to higher volumes and favorable product mix at the Outdoor segment, partially offset by lower volume at the Adventure segment.
Selling, general, and administrative expenses decreased to $25.3 million from $26.2 million, driven by lower marketing, depreciation, amortization, and employee-related costs at the Adventure segment and lower outside service and employee-related costs at Corporate.

The Company operates in outdoor enthusiast markets with brands including Black Diamond, Rhino-Rack, MAXTRAX, TRED Outdoors, RockyMounts, and Onwrd.
Sales growth in the Outdoor segment was supported by increases across global wholesale, independent global distributor, and direct-to-consumer channels.
The Adventure segment faced headwinds specifically in the Australian wholesale market.

The Company is conducting a comprehensive strategic review of alternatives, including potential sale of all or part of the business, with no deadline or assurance of a transaction.
Forward-looking statements involve risks and uncertainties, including the timing and outcome of the strategic review and its potential impact on business operations.
Actual results may differ materially from forward-looking statements due to risks described in the Company's public reports, including Form 10-K and Form 10-Q.
The Company cannot forecast net income or net cash provided by operating activities without unreasonable effort due to certain expenses, gains, and changes in working capital.

Executive Chairman Warren Kanders stated the company delivered strong results reflecting progress against strategic priorities to simplify the business, sharpen product focus, and improve operating efficiency.
Management highlighted that gross margins are now north of 40% at both segments, driving significant year-over-year growth in net income and adjusted EBITDA.
Management expressed confidence in business fundamentals and a constructive outlook for the remainder of 2026, citing continued positive momentum across Outdoor and Adventure segments.
The improvement in profitability reflects the benefits of a reduced cost structure and prioritization of highest-volume and highest-margin products.

The Company received approximately $0.6 million in refunds related to previously paid International Emergency Economic Powers Act (IEEPA) tariffs, recorded as an offset to cost of goods sold.
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 as of September 30, 2026, down from $36.7 million as of December 31, 2025.
Jefferies LLC continues to assist the Company with its strategic review.
A conference call to discuss results was scheduled for November 5, 2026, at 5:00 p.m. Eastern time.
The Company will no longer add back Legal costs, regulatory matter expenses, or Other inventory reserves to Adjusted EBITDA beginning in the first quarter of 2026.