Clarus Corp

Previous wording

economic risks; the Company’s ability to maintain a quarterly dividend; our ability to obtain additional capital and funding on acceptable terms to meet our financial obligations as well as to support our business operations and growth initiatives; any material differences in the actual financial results of the Company’s past and future acquisitions and dispositions, including the impact of such transactions and any related recognition of impairment or other charges, such as the recent impairments recognized in the Outdoor and Adventure segments and the potential that we may be required to take additional write-downs or write-offs, restructuring charges, impairment charges, or other charges in the future, on the Company’s future earnings per share; the Company’s review of strategic alternatives, including the timing and outcome of the review, whether the review results in any transaction or other strategic outcome, and the potential impact of the review on the Company’s business and operations; and other risks and uncertainties set forth in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, which are incorporated herein by reference. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to the Company as of the date of this Quarterly Report on Form 10-Q, and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

Current wording

economic risks; the Company’s ability to maintain a quarterly dividend; our ability to obtain additional capital and funding on acceptable terms to meet our financial obligations as well as to support our business operations and growth initiatives; any material differences in the actual financial results of the Company’s past and future acquisitions and dispositions, including the impact of such transactions and any related recognition of impairment or other charges, such as the recent impairments recognized in the Outdoor and Adventure segments and the potential that we may be required to take additional write-downs or write-offs, restructuring charges, impairment charges, or other charges in the future, on the Company’s future earnings per share; the Company’s review of strategic alternatives, including the timing and outcome of the review, whether the review results in any transaction or other strategic outcome, whether and when the Company provides further updates, and the potential impact of the review on the Company’s business and operations; and other risks and uncertainties set forth in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, which are incorporated herein by reference. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to the Company as of the date of this Quarterly Report on Form 10-Q, and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

Previous wording

On August 21, 2017, the Company acquired Sierra Bullets, L.L.C. (“Sierra”). On October 2, 2020, the Company completed the acquisition of certain assets and liabilities constituting the Barnes business (“Barnes”). On July 1, 2021, the Company completed the acquisition of Australia-based Rhino-Rack Holdings Pty Ltd (“Rhino-Rack”). On December 1, 2021, the

Current wording

On July 1, 2021, the Company completed the acquisition of Australia-based Rhino-Rack Holdings Pty Ltd (“Rhino-Rack”). On December 1, 2021, the Company completed the acquisition of Australia-based MaxTrax Australia Pty Ltd

Previous wording

Company completed the acquisition of Australia-based MaxTrax Australia Pty Ltd (“MAXTRAX”). On October 9, 2023, the Company completed the acquisition of Australia-based TRED Outdoors Pty Ltd. (“TRED”). On December 5, 2024, the Company completed the acquisition of certain assets and liabilities constituting the RockyMounts business (“RockyMounts”).

Current wording

(“MAXTRAX”). On October 9, 2023, the Company completed the acquisition of Australia-based TRED Outdoors Pty Ltd. (“TRED”). On December 5, 2024, the Company completed the acquisition of certain assets and liabilities constituting the RockyMounts business (“RockyMounts”). On June 18, 2026, the Company completed the acquisition of certain assets and liabilities constituting the ONWRD business (“ONWRD”).

Previous wording

Starting in 2023, the Company began incurring expenses to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs. During the three months ended March 31, 2026 and 2025, the Company incurred $853 and $173, respectively, of restructuring charges related to these actions. The Company has incurred $6,991 of cumulative restructuring charges since the commencement of our restructuring actions in 2023. The Company accrues for restructuring costs when they are probable and reasonably estimable. Restructuring costs include severance costs, exit costs, and other restructuring costs and are included in Restructuring charges in the condensed consolidated statements of comprehensive loss. Severance costs primarily consist of severance benefits through payroll continuation, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs. Other costs consist primarily of costs related to the discontinuance of certain product lines and are distinguishable and directly attributable to the Company’s restructuring initiative and not a result of external market factors associated with the ongoing business. We estimate that we will 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; however, the timing and scope of these actions may change, and additional actions may be taken, depending on business conditions and other factors.

Current wording

Starting in 2023, the Company began incurring expenses to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs. During the three months ended June 30, 2026 and 2025, the Company incurred $140 and $161, respectively, and during the six months ended June 30, 2026 and 2025, the Company incurred $993 and $334, respectively, of restructuring charges related to these actions. The Company has incurred $7,131 of cumulative restructuring charges since the commencement of our restructuring actions in 2023. The Company accrues for restructuring costs when they are probable and reasonably estimable. Restructuring costs include severance costs, exit costs, and other restructuring costs and are included in Restructuring charges in the condensed consolidated statements of comprehensive income (loss). Severance costs primarily consist of severance benefits through payroll continuation, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs. Other costs consist primarily of costs related to the discontinuance of certain product lines and are distinguishable and directly attributable to the Company’s restructuring initiative and not a result of external market factors associated with the ongoing business. We estimate that we will 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; however, the timing and scope of these actions may change, and additional actions may be taken, depending on business conditions and other factors.

Previous wording

Total sales increased $1,505, or 2.5%, to $61,938 during the three months ended March 31, 2026, compared to total sales of $60,433 during the three months ended March 31, 2025. The increase in sales was attributable to an increase in sales at the Adventure and Outdoor segments of $956 and $549, respectively.

Current wording

Total sales increased $909, or 1.6%, to $56,156 during the three months ended June 30, 2026, compared to total sales of $55,247 during the three months ended June 30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $3,115, partially offset by a decrease in sales at the Adventure segment of $2,206.

Previous wording

Sales in the Outdoor segment increased by $1,646 due to foreign exchange impact from the weakening of the U.S. dollar primarily against the euro during the three months ended March 31, 2026, compared to the prior period. Sales in the Adventure segment increased by $1,249 due to foreign exchange impact from the weakening of the U.S. dollar against the Australian dollar during the three months ended March 31, 2026, compared to the prior period.

Current wording

Sales in the Outdoor segment increased by $867 due to foreign exchange impact from the weakening of the U.S. dollar primarily against the euro during the three months ended June 30, 2026, compared to the prior period. Sales in the Adventure segment increased by $1,022 due to foreign exchange impact from the weakening of the U.S. dollar against the Australian dollar during the three months ended June 30, 2026, compared to the prior period.

Previous wording

Sales in the Adventure segment increased due to a favorable wholesale market in Australia for Rhino-Rack and MAXTRAX, partially offset by decreases in North America. Sales in the Outdoor segment increased due to increases in global wholesale revenue of $2,936 and independent global distributor revenue of $286, partially offset by lower PIEPS revenue of $1,767 due to the sale of PIEPS in July 2025 and lower global direct-to-consumer revenue of $905, compared to the prior period.

Current wording

Sales in the Outdoor segment increased due to increases in global wholesale revenue of $2,709, independent global distributor revenue of $372, and global direct-to-consumer revenue of $228, partially offset by lower PIEPS revenue of $195 due to the sale of PIEPS in July 2025, compared to the prior period. Sales in the Adventure segment decreased due to an unfavorable wholesale market in Australia and North America for Rhino-Rack and MAXTRAX.

Previous wording

Domestic sales increased $71, or 0.3%, to $24,880 during the three months ended March 31, 2026, compared to domestic sales of $24,809 during the three months ended March 31, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $879, partially offset by a decrease in sales at the Adventure segment of $808.

Current wording

Domestic sales decreased $202, or 0.8%, to $24,522 during the three months ended June 30, 2026, compared to domestic sales of $24,724 during the three months ended June 30, 2025. The decrease in sales was attributable to a decrease in sales at the Adventure segment of $1,102, partially offset by an increase in sales at the Outdoor segment of $900.

Previous wording

International sales increased $1,434, or 4.0%, to $37,058 during the three months ended March 31, 2026, compared to international sales of $35,624 during the three months ended March 31, 2025. The increase in sales was attributable to an increase in sales at the Adventure segment of $1,764, partially offset by a decrease in sales at the Outdoor segment of $330.

Current wording

International sales increased $1,111, or 3.6%, to $31,634 during the three months ended June 30, 2026, compared to international sales of $30,523 during the three months ended June 30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $2,214, partially offset by a decrease in sales at the Adventure segment of $1,103.

Previous wording

Gross profit increased $1,969, or 9.5%, to $22,763 during the three months ended March 31, 2026, compared to gross profit of $20,794 during the three months ended March 31, 2025. Gross margin was 36.8% during the three months ended March 31, 2026, compared to a gross margin of 34.4% during the three months ended March 31, 2025. Gross margin during the three months ended March 31, 2026, increased compared to the prior year as a result of higher volumes and a favorable product mix at both the Adventure and Outdoor segments. The volume increases at the Outdoor segment were partially offset by lower volumes due to the sale of PIEPS in July 2025.

Current wording

Gross profit increased $7,792, or 39.6%, to $27,472 during the three months ended June 30, 2026, compared to gross profit of $19,680 during the three months ended June 30, 2025. Gross margin was 48.9% during the three months ended June 30, 2026, compared to a gross margin of 35.6% during the three months ended June 30, 2025. Gross margin during the three months ended June 30, 2026, increased compared to the prior year as a result of receiving the IEEPA tariff refunds of $6,142, higher volumes and a favorable product mix at the Outdoor segment, as well as a favorable product mix at the Adventure segment. These increases were partially offset by lower volume at the Adventure segment.

Previous wording

Transaction costs decreased to $22 during the three months ended March 31, 2026, compared to transaction costs of $142 during the three months ended March 31, 2025, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Current wording

Transaction costs decreased to $22 during the three months ended June 30, 2026, compared to transaction costs of $108 during the three months ended June 30, 2025, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Previous wording

Interest income, net decreased to $88 during the three months ended March 31, 2026, compared to interest income, net of $257 during the three months ended March 31, 2025. The decrease in interest income recognized during the three months ended March 31, 2026, was due to lower interest rates on lower cash balances, compared to the prior period.

Current wording

Interest income, net decreased to $84 during the three months ended June 30, 2026, compared to interest income, net of $153 during the three months ended June 30, 2025. The decrease in interest income recognized during the three months ended June 30, 2026, was due to lower interest rates on lower cash balances, compared to the prior period.

Previous wording

Income tax expense (benefit) changed by $1,025, or 127.8%, to an expense of $223 during the three months ended March 31, 2026, compared to a benefit of $802 during the same period in 2025. Our effective income tax rate was -7.3% for the three months ended March 31, 2026, and differed compared to the statutory tax rates primarily due to the impact of jurisdictional losses in the U.S. and Australia that presently do not provide future tax benefit. For the three months ended March 31, 2025, our effective income tax rate was a benefit of 13.3% and differed compared to the statutory tax rates primarily due to the impact of valuation allowance, stock compensation, and research and experimentation expenditures and credits.

Current wording

Income tax expense (benefit) changed by $853, or 102.6%, to an expense of $22 during the three months ended June 30, 2026, compared to a benefit of $831 during the same period in 2025. Our effective income tax rate was 0.5% for the three months ended June 30, 2026, and differed compared to the statutory tax rates primarily due to the impact of jurisdictional losses in the U.S. and Australia that presently do not provide future tax benefit. For the three months ended June 30, 2025, our effective income tax rate was a benefit of 9.0% and differed compared to the statutory tax rates primarily due to the impact of valuation allowance, stock compensation, and research and experimentation expenditures and credits.

Previous wording

Selling, general, and administrative expenses decreased $39, or 0.1%, to $26,577 during the three months ended March 31, 2026, compared to selling, general and administrative expenses of $26,616 during the three months ended March 31, 2025. Selling, general and administrative expenses at the Adventure segment decreased by $445 primarily as a result of lower marketing, depreciation, amortization, and employee-related costs. Additionally, Corporate costs decreased by $337 due to lower outside service and employee-related costs. These decreases were partially offset by increases at the Outdoor segment of $743 primarily as a result of higher outside service, depreciation, and employee-related costs, partially offset by lower costs from PIEPS due to the sale in July 2025, and lower amortization expense.

Current wording

Selling, general, and administrative expenses decreased $2,646, or 4.9%, to $50,880 during the six months ended June 30, 2026, compared to selling, general and administrative expenses of $53,526 during the six months ended June 30, 2025. Selling, general and administrative expenses at the Adventure segment decreased by $1,050 primarily as a result of lower marketing, depreciation, amortization, and employee-related costs. Additionally, Corporate costs decreased by $1,919 due to lower outside service and employee-related costs. These decreases were partially offset by increases at the Outdoor segment of $323 primarily as a result of higher outside service, depreciation, and employee-related costs, partially offset by lower costs from PIEPS due to the sale in July 2025, and lower amortization expense.

Previous wording

Restructuring charges were $853 during the three months ended March 31, 2026, compared to restructuring charges of $173 during the three months ended March 31, 2025. The restructuring charges incurred during the three months ended March 31, 2026, relate to benefits provided to employees who were terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization of $533 and athlete sponsorship contract termination costs of $320.

Current wording

Restructuring charges were $993 during the six months ended June 30, 2026, compared to restructuring charges of $334 during the six months ended June 30, 2025. The restructuring charges incurred during the six months ended June 30, 2026, relate to benefits provided to employees who were terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization of $673 and athlete sponsorship contract termination costs of $320.

Previous wording

Legal costs and regulatory matter expenses increased to $1,379 during the three months ended March 31, 2026, compared to legal costs and regulatory matter expenses of $625 during the three months ended March 31, 2025, which consisted of expenses related to the Company’s specific legal matters. See Note 13 to our condensed consolidated financial statements for financial information regarding specific legal matters.

Current wording

Legal and regulatory matter costs decreased to $80 during the six months ended June 30, 2026, compared to legal and regulatory matter costs of $2,462 during the six months ended June 30, 2025, which consisted of expenses related to the Company’s specific legal matters. The expenses during the six months ended June 30, 2026 were offset by the Company’s reversal of an accrued liability for the regulatory matter with the United States Consumer Product Safety Commission. See Note 14 to our condensed consolidated financial statements for financial information regarding specific legal matters.

Previous wording

Other, net, changed by $2,449, or 533.6%, to $2,908 during the three months ended March 31, 2026, compared to other, net of $459 during the three months ended March 31, 2025. The change in other, net, was primarily attributable to miscellaneous gains related to the Company’s various legal matters and gains in mark-to-market adjustments on non-hedged foreign currency contracts. The change was partially offset by a decrease in remeasurement gains recognized on the Company’s foreign denominated accounts receivable and accounts payable during the three months ended March 31, 2026.

Current wording

Other, net, changed by $1,058, or 54.5%, to $3,000 during the six months ended June 30, 2026, compared to other, net of $1,942 during the six months ended June 30, 2025. The change in other, net, was primarily attributable to miscellaneous gains related to the Company’s various legal matters and gains in mark-to-market adjustments on non-hedged foreign currency contracts. The change was partially offset by a decrease in remeasurement gains recognized on the Company’s foreign denominated accounts receivable and accounts payable during the six months ended June 30, 2026.

Previous wording

At March 31, 2026, we had total cash and restricted cash of $31,725, compared to total cash and restricted cash of $38,195 at December 31, 2025. At March 31, 2026, the Company had $10,866 of the $31,725 in cash and restricted cash held by foreign entities, of which $9,475 is considered permanently reinvested.

Current wording

At June 30, 2026, we had total cash and restricted cash of $30,857, compared to total cash and restricted cash of $38,195 at December 31, 2025. At June 30, 2026, the Company had $7,901 of the $30,857 in cash and restricted cash held by foreign entities, of which $6,721 is considered permanently reinvested.

Previous wording

The following presents a discussion of cash flows for the condensed consolidated three months ended March 31, 2026 compared with the condensed consolidated three months ended March 31, 2025.

Current wording

The following presents a discussion of cash flows for the condensed consolidated six months ended June 30, 2026 compared with the condensed consolidated six months ended June 30, 2025.

Previous wording

Net cash used in operating activities was $4,133 during the three months ended March 31, 2026, compared to net cash used in operating activities of $2,073 during the three months ended March 31, 2025. The change in net cash used in operating activities during 2026 is primarily due to an increase in cash outflows related to working capital compared to the same period in 2025. These impacts were partially offset by a decrease in net loss and an increase in deferred income taxes compared to the same period in 2025.

Current wording

Net cash used in operating activities was $2,393 during the six months ended June 30, 2026, compared to net cash used in operating activities of $11,497 during the six months ended June 30, 2025. The change in net cash used in operating activities during 2026 is primarily due to an increase in net income and an increase in deferred income taxes compared to the same period in 2025. These impacts were partially offset by a decrease in stock based compensation, a decrease in impairment of indefinite-lived intangible assets, and an increase in cash outflows related to working capital compared to the same period in 2025.

Previous wording

Free cash flow, defined as net cash used in operating activities less capital expenditures, of $5,691 was used during the three months ended March 31, 2026 compared to $3,254 used during the same period in 2025. The Company believes that the non-GAAP measure, free cash flow, provides an understanding of the capital required by the Company to expand its asset base. A reconciliation of free cash flows to the nearest comparable GAAP financial measure is set forth below:

Current wording

non-GAAP measure, free cash flow, provides an understanding of the capital required by the Company to expand its asset base. A reconciliation of free cash flow to the most directly comparable GAAP financial measure is set forth below:

Previous wording

Net cash used in investing activities was $1,530 during the three months ended March 31, 2026, compared to net cash used in investing activities of $1,181 during the three months ended March 31, 2025. The change in cash used in investing activities during the three months ended March 31, 2026 is primarily due to an increase in purchases of property and equipment compared to the same period in 2025.

Current wording

Net cash used in investing activities was $3,009 during the six months ended June 30, 2026, compared to net cash used in investing activities of $2,990 during the six months ended June 30, 2025. The change in cash used in investing activities during the six months ended June 30, 2026 is primarily due to an increase in outflows related to the purchase of businesses and a decrease in proceeds from the disposition of property and equipment compared to the same period in 2025. These impacts were partially offset by a decrease in purchases of property and equipment compared to the same period in 2025.

Previous wording

Net cash used in financing activities was $993 during the three months ended March 31, 2026, compared to net cash used in financing activities of $1,001 during the three months ended March 31, 2025. The change in net cash used in financing activities during the three months ended March 31, 2026 is primarily due to a decrease in purchases of treasury stock compared to the same period in 2025.

Current wording

Net cash used in financing activities was $2,401 during the six months ended June 30, 2026, compared to net cash used in financing activities of $1,962 during the six months ended June 30, 2025. The change in net cash used in financing activities during the six months ended June 30, 2026 is primarily due to an increase in purchases of treasury stock compared to the same period in 2025.