Clarus Corp

Previous wording

Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, the overall level of consumer demand for our products; the highly competitive nature of our markets and the potential for rapid or significant changes in consumer preferences; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; the potential impact of the uncertain macroeconomic environment on our financial results, including, but not limited to, the effects of sustained global inflationary pressures and interest rates, potential economic slowdowns or recessions, trade restrictions and regulatory changes, and global supply chain disruptions; the effect of inflation on our business, including any future pricing actions taken in an effort to mitigate the effects of inflation and potential impacts on our revenue, operating margins and net income; disruption and volatility in the global currency, capital and credit markets; the impact of changes in tariffs, tax laws, global trade policies as well as instability and volatility in global markets; the financial strength of retail economies and the Company’s customers; the Company’s ability to implement its business strategy; our ability to accurately forecast demand and manage inventory levels, including the risk of excess or obsolete inventory, increased discounting, or lost sales; the Company’s ability to execute and integrate acquisitions, as well as to complete dispositions and effectively manage the associated separation and transition risks, including those related to the recent sale of PIEPS; the Company’s exposure to product liability or product warranty claims and other loss contingencies, including, without limitation, recalls and liability claims relating to certain avalanche beacon transceivers distributed by BDEL; disruptions and other impacts to the Company’s business, as a result of an outbreak of disease or similar public health threat, and government actions and restrictive measures implemented in response; stability of the Company’s manufacturing facilities and suppliers, as well as consumer demand for our products, in light of disease epidemics and health-related concerns; disruptions in our supply chain, third-party logistics providers, or distribution facilities; the impact that global climate change trends may have on the Company and its suppliers and customers, increased focus on sustainability issues as a result of global climate change; regulatory or market responses to global climate change; compliance costs and potential liabilities related to environmental requirements, including those associated with Per- and Polyfluoroalkyl Substances (PFAS); the Company’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, o…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, the overall level of consumer demand for our products; the highly competitive nature of our markets and the potential for rapid or significant changes in consumer preferences; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; the potential impact of the uncertain macroeconomic environment on our financial results, including, but not limited to, the effects of sustained global inflationary pressures and interest rates, potential economic slowdowns or recessions, trade restrictions and regulatory changes, and global supply chain disruptions; the effect of inflation on our business, including any future pricing actions taken in an effort to mitigate the effects of inflation and potential impacts on our revenue, operating margins and net income; disruption and volatility in the global currency, capital and credit markets; the impact of changes in tariffs, tax laws, global trade policies as well as instability and volatility in global markets; the financial strength of retail economies and the Company’s customers; the Company’s ability to implement its business strategy; our ability to accurately forecast demand and manage inventory levels, including the risk of excess or obsolete inventory, increased discounting, or lost sales; the Company’s ability to execute and integrate acquisitions, as well as to complete dispositions and effectively manage the associated separation and transition risks, including those related to the prior sale of PIEPS; the Company’s exposure to product liability or product warranty claims and other loss contingencies, including, without limitation, recalls and liability claims relating to certain avalanche beacon transceivers distributed by BDEL; disruptions and other impacts to the Company’s business, as a result of an outbreak of disease or similar public health threat, and government actions and restrictive measures implemented in response; stability of the Company’s manufacturing facilities and suppliers, as well as consumer demand for our products, in light of disease epidemics and health-related concerns; disruptions in our supply chain, third-party logistics providers, or distribution facilities; the impact that global climate change trends may have on the Company and its suppliers and customers, increased focus on sustainability issues as a result of global climate change; regulatory or market responses to global climate change; compliance costs and potential liabilities related to environmental requirements, including those associated with Per- and Polyfluoroalkyl Substances (PFAS); the Company’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, or…

Excerpt shortened here; the source contains the full paragraph.

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, 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.

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 prior 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

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.

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 September 30, 2026 and 2025, the Company incurred $196 and $155, respectively, and during the nine months ended September 30, 2026 and 2025, the Company incurred $1,189 and $489, respectively, of restructuring charges related to these actions. The Company has incurred $7,327 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 $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.

Current wording

Total sales increased $1,871, or 2.7%, to $71,218 during the three months ended September 30, 2026, compared to total sales of $69,347 during the three months ended September 30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $6,042, partially offset by a decrease in sales at the Adventure segment of $4,171.

Previous 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.

Current wording

Sales in the Outdoor segment increased by $306 due to foreign exchange impact from the weakening of the U.S. dollar primarily against the euro during the three months ended September 30, 2026, compared to the prior period. Sales in the Adventure segment increased by $850 due to foreign exchange impact from the weakening of the U.S. dollar against the Australian dollar during the three months ended September 30, 2026, compared to the prior period.

Previous 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.

Current wording

Sales in the Outdoor segment increased due to increases in global wholesale revenue of $4,474, independent global distributor revenue of $1,324, and global direct-to-consumer revenue of $329, partially offset by lower PIEPS revenue of $85 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 for Rhino-Rack and MAXTRAX.

Previous 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.

Current wording

Domestic sales increased $2,259, or 8.0%, to $30,520 during the three months ended September 30, 2026, compared to domestic sales of $28,261 during the three months ended September 30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $2,313, partially offset by a decrease in sales at the Adventure segment of $54.

Previous 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.

Current wording

International sales decreased $388, or 0.9%, to $40,698 during the three months ended September 30, 2026, compared to international sales of $41,086 during the three months ended September 30, 2025. The decrease in sales was attributable to a decrease in sales at the Adventure segment of $4,117, partially offset by an increase in sales at the Outdoor segment of $3,729.

Previous wording

Cost of goods sold decreased $6,883, or 19.4%, to $28,684 during the three months ended June 30, 2026, compared to cost of goods sold of $35,567 during the three months ended June 30, 2025. During the three months ended June 30, 2026, the Outdoor segment received IEEPA tariff refunds of $6,142 which were recognized as a benefit to cost of goods sold and drove the significant decrease from the prior year. The Company previously recognized amounts paid for such tariffs within cost of goods sold.

Current wording

Cost of goods sold decreased $2,953, or 6.6%, to $42,028 during the three months ended September 30, 2026, compared to cost of goods sold of $44,981 during the three months ended September 30, 2025. During the three months ended September 30, 2026, the Adventure and Outdoor segments received IEEPA tariff refunds of $495 and $69, respectively, which were recognized as a benefit to cost of goods sold and contributed to the decrease from the prior year. The Company previously recognized amounts paid for such tariffs within cost of goods sold.

Previous 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.

Current wording

Gross profit increased $4,824, or 19.8%, to $29,190 during the three months ended September 30, 2026, compared to gross profit of $24,366 during the three months ended September 30, 2025. Gross margin was 41.0% during the three months ended September 30, 2026, compared to a gross margin of 35.1% during the three months ended September 30, 2025. Gross margin during the three months ended September 30, 2026, increased compared to the prior year as a result of receiving the IEEPA tariff refunds of $564, higher volumes and a favorable product mix at the Outdoor segment. These increases were partially offset by lower volume at the Adventure segment. Excluding the IEEPA tariff refunds, gross margin would have been 40.2% for the three months ended September 30, 2026.

Previous wording

Selling, general, and administrative expenses decreased $2,607, or 9.7%, to $24,303 during the three months ended June 30, 2026, compared to selling, general and administrative expenses of $26,910 during the three months ended June 30, 2025. Selling, general and administrative expenses at the Adventure segment decreased by $605 primarily as a result of lower marketing, depreciation, amortization, and employee-related costs. The Outdoor segment also experienced decreases of $420 primarily as a result of lower costs from PIEPS due to the sale in July 2025, partially offset by higher marketing expenses. Additionally, Corporate costs decreased by $1,582 due to lower outside service and employee-related costs.

Current wording

Selling, general, and administrative expenses decreased $882, or 3.4%, to $25,273 during the three months ended September 30, 2026, compared to selling, general and administrative expenses of $26,155 during the three months ended September 30, 2025. Selling, general and administrative expenses at the Adventure segment decreased by $369 primarily as a result of lower marketing, depreciation, amortization, and employee-related costs. Additionally, Corporate costs decreased by $1,368 due to lower outside service and employee-related costs. These decreases were partially offset by increases at the Outdoor segment of $855 primarily due to higher sales expenses, partially offset by lower amortization costs.

Previous 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.

Current wording

Restructuring charges were $196 during the three months ended September 30, 2026, compared to restructuring charges of $155 during the three months ended September 30, 2025. The restructuring charges incurred during the three months ended September 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 $126 and athlete sponsorship contract termination costs of $70.

Previous 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.

Current wording

Transaction costs decreased to $323 during the three months ended September 30, 2026, compared to transaction costs of $436 during the three months ended September 30, 2025, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Previous wording

Contingent consideration benefit increased to $254 during the three months ended June 30, 2026, compared to a contingent consideration benefit of $0 during the three months ended June 30, 2025, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisition of RockyMounts in 2024.

Current wording

Contingent consideration benefit decreased to $0 during the three months ended September 30, 2026, compared to a contingent consideration benefit of $355 during the three months ended September 30, 2025, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisition of RockyMounts in 2024.

Previous wording

Legal and regulatory matter (benefit) costs changed by $3,136, or 170.7%, to a benefit of $1,299 during the three months ended June 30, 2026, compared to legal and regulatory matter costs of $1,837 during the three months ended June 30, 2025. The benefit reflects the Company’s reversal of an accrued liability for the regulatory matter with the United States Consumer Product Safety Commission partially offset by expenses related to the Company’s specific legal matters. See Note 14 to our condensed consolidated financial statements for financial information regarding specific legal matters.

Current wording

Legal and regulatory matter costs decreased by $938, or 93.7%, to $63 during the three months ended September 30, 2026, compared to legal and regulatory matter costs of $1,001 during the three months ended September 30, 2025, which consisted of expenses related to the Company’s specific legal matters. See Note 14 to our condensed consolidated financial statements for financial information regarding specific legal matters.

Previous 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.

Current wording

Interest income, net decreased to $86 during the three months ended September 30, 2026, compared to interest income, net of $108 during the three months ended September 30, 2025. The decrease in interest income recognized during the three months ended September 30, 2026, was due to lower interest rates on lower cash balances, compared to the prior period.

Previous wording

Other, net, changed by $1,391, or 93.8%, to $92 during the three months ended June 30, 2026, compared to other, net of $1,483 during the three months ended June 30, 2025. The change in other, net, was primarily attributable to a decrease in remeasurement gains recognized on the Company’s foreign denominated accounts receivable and accounts payable and a decrease in miscellaneous gains. The change was partially offset by a decrease in losses on mark-to-market adjustments on non-hedged foreign currency contracts during the three months ended June 30, 2026.

Current wording

Other, net, changed by $1,208, or 128.1%, to $265 during the three months ended September 30, 2026, compared to other, net of ($943) during the three months ended September 30, 2025. The change in other, net, was primarily attributable to a decrease in miscellaneous losses and a decrease in remeasurement losses recognized on the Company’s foreign denominated accounts receivable and accounts payable. The change was partially offset by a decrease in gains on mark-to-market adjustments on non-hedged foreign currency contracts during the three months ended September 30, 2026.

Previous 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.

Current wording

Income tax expense (benefit) changed by $2,668, or 118.9%, to an expense of $424 during the three months ended September 30, 2026, compared to a benefit of $2,244 during the same period in 2025. Our effective income tax rate was 11.5% for the three months ended September 30, 2026, and differed compared to the statutory tax rates primarily due to the Company’s U.S. pre-tax income, which includes the discrete tariff refunds, being offset by a corresponding change in the U.S. valuation allowance and R&D credits. These differences are partially offset by Australian losses that receive no tax benefit due to a full valuation allowance, and by income in foreign jurisdictions with statutory rates above 21%. For the three months ended September 30, 2025, our effective income tax rate was a benefit of 58.1% and differed compared

Previous wording

The following presents a discussion of operations for the six months ended June 30, 2026, compared with the six months ended June 30, 2025.

Current wording

The following presents a discussion of operations for the nine months ended September 30, 2026, compared with the nine months ended September 30, 2025.

Previous wording

Total sales increased $2,414, or 2.1%, to $118,094 during the six months ended June 30, 2026, compared to total sales of $115,680 during the six months ended June 30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $3,664, partially offset by a decrease in sales at the Adventure segment of $1,250.

Current wording

Total sales increased $4,285, or 2.3%, to $189,312 during the nine months ended September 30, 2026, compared to total sales of $185,027 during the nine months ended September 30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $9,706, partially offset by a decrease in sales at the Adventure segment of $5,421.

Previous wording

Sales in the Outdoor segment increased by $2,514 due to foreign exchange impact from the weakening of the U.S. dollar primarily against the euro during the six months ended June 30, 2026, compared to the prior period. Sales in the Adventure segment increased by $2,270 due to foreign exchange impact from the weakening of the U.S. dollar against the Australian dollar during the six months ended June 30, 2026, compared to the prior period.

Current wording

Sales in the Outdoor segment increased by $2,820 due to foreign exchange impact from the weakening of the U.S. dollar primarily against the euro during the nine months ended September 30, 2026, compared to the prior period. Sales in the

Previous wording

Sales in the Outdoor segment increased due to increases in global wholesale revenue of $5,645 and independent global distributor revenue of $658, partially offset by lower PIEPS revenue of $1,962 due to the sale of PIEPS in July 2025 and lower global direct-to-consumer revenue of $677, compared to the prior period. Sales in the Adventure segment decreased due to an unfavorable wholesale market in North America, partially offset by strength in the wholesale Australian market for Rhino-Rack and MAXTRAX during the first quarter of 2026.

Current wording

Sales in the Outdoor segment increased due to increases in global wholesale revenue of $10,119 and independent global distributor revenue of $1,982, partially offset by lower PIEPS revenue of $2,047 due to the sale of PIEPS in July 2025 and lower global direct-to-consumer revenue of $348, compared to the prior period. Sales in the Adventure segment decreased due to an unfavorable wholesale market in Australia and North America.

Previous wording

Domestic sales decreased $131, or 0.3%, to $49,402 during the six months ended June 30, 2026, compared to domestic sales of $49,533 during the six months ended June 30, 2025. The decrease in sales was attributable to a decrease in sales at the Adventure segment of $1,911, partially offset by an increase in sales at the Outdoor segment of $1,780.

Current wording

Domestic sales increased $2,128, or 2.7%, to $79,922 during the nine months ended September 30, 2026, compared to domestic sales of $77,794 during the nine months ended September 30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $4,093, partially offset by a decrease in sales at the Adventure segment of $1,965.

Previous wording

International sales increased $2,545, or 3.8%, to $68,692 during the six months ended June 30, 2026, compared to international sales of $66,147 during the six months ended June 30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor and Adventure segments of $1,884 and $661, respectively.

Current wording

International sales increased $2,157, or 2.0%, to $109,390 during the nine months ended September 30, 2026, compared to international sales of $107,233 during the nine months ended September 30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $5,613, partially offset by a decrease in sales at the Adventure segment of $3,456.

Previous wording

Cost of goods sold decreased $7,347, or 9.8%, to $67,859 during the six months ended June 30, 2026, compared to cost of goods sold of $75,206 during the six months ended June 30, 2025. During the six months ended June 30, 2026, the Outdoor segment received IEEPA tariff refunds of $6,142 which were recognized as a benefit to cost of goods sold and drove the significant decrease from the prior year. The Company previously recognized amounts paid for such tariffs within cost of goods sold.

Current wording

Cost of goods sold decreased $10,300, or 8.6%, to $109,887 during the nine months ended September 30, 2026, compared to cost of goods sold of $120,187 during the nine months ended September 30, 2025. During the nine months ended September 30, 2026, the Outdoor and Adventure segments received IEEPA tariff refunds of $6,211 and $495, respectively, which were recognized as a benefit to cost of goods sold and drove the significant decrease from the prior year. The Company previously recognized amounts paid for such tariffs within cost of goods sold.

Previous wording

Gross profit increased $9,761, or 24.1%, to $50,235 during the six months ended June 30, 2026, compared to gross profit of $40,474 during the six months ended June 30, 2025. Gross margin was 42.5% during the six months ended June 30, 2026, compared to a gross margin of 35.0% during the six months ended June 30, 2025. Gross margin during the six 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. The volume increases at the Outdoor segment were partially offset by lower volumes due to the sale of PIEPS in July 2025. Additionally, the overall increases were partially offset by lower volume at the Adventure segment.

Current wording

Gross profit increased $14,585, or 22.5%, to $79,425 during the nine months ended September 30, 2026, compared to gross profit of $64,840 during the nine months ended September 30, 2025. Gross margin was 42.0% during the nine months ended September 30, 2026, compared to a gross margin of 35.0% during the nine months ended September 30, 2025. Gross margin during the nine months ended September 30, 2026, increased compared to the prior year as a result of receiving the IEEPA tariff refunds of $6,706, higher volumes and a favorable product mix at the Outdoor segment, as well as a favorable product mix at the Adventure segment. The volume increases at the Outdoor segment were partially offset by lower volumes due to the sale of PIEPS in July 2025. Additionally, the overall increases were partially offset by lower volume at the Adventure segment. Excluding the IEEPA tariff refunds, gross margin would have been 38.4% for the nine months ended September 30, 2026.

Previous 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.

Current wording

Selling, general, and administrative expenses decreased $3,528, or 4.4%, to $76,153 during the nine months ended September 30, 2026, compared to selling, general and administrative expenses of $79,681 during the nine months ended September 30, 2025. Selling, general and administrative expenses at the Adventure segment decreased by $1,419 primarily as a result of lower marketing, depreciation, amortization, and employee-related costs. Additionally, Corporate costs decreased by $3,287 due to lower outside service and employee-related costs. These decreases were partially offset by increases at the Outdoor segment of $1,178 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 $140 during the three months ended June 30, 2026, compared to restructuring charges of $161 during the three months ended June 30, 2025. The restructuring charges incurred during the three 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.

Current wording

Restructuring charges were $1,189 during the nine months ended September 30, 2026, compared to restructuring charges of $489 during the nine months ended September 30, 2025. The restructuring charges incurred during the nine months ended September 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 $799 and athlete sponsorship contract termination costs of $390.

Previous wording

Transaction costs decreased to $44 during the six months ended June 30, 2026, compared to transaction costs of $250 during the six months ended June 30, 2025, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Current wording

Transaction costs decreased to $367 during the nine months ended September 30, 2026, compared to transaction costs of $686 during the nine months ended September 30, 2025, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Previous wording

Contingent consideration benefit increased to $254 during the six months ended June 30, 2026, compared to a contingent consideration benefit of $0 during the six months ended June 30, 2025, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisition of RockyMounts in 2024.

Current wording

Contingent consideration benefit decreased to $254 during the nine months ended September 30, 2026, compared to a contingent consideration benefit of $355 during the nine months ended September 30, 2025, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisition of RockyMounts in 2024.

Previous 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.

Current wording

Legal and regulatory matter costs decreased to $143 during the nine months ended September 30, 2026, compared to legal and regulatory matter costs of $3,463 during the nine months ended September 30, 2025, which consisted of expenses related to the Company’s specific legal matters. The expenses during the nine months ended September 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

Impairment of indefinite-lived intangible assets decreased to $0 during the three months ended June 30, 2026, compared to impairment of indefinite-lived intangible assets of $1,565 during the three months ended June 30, 2025. Based on the results of the Company’s impairment analysis completed as of June 30, 2025, the Company determined that certain indefinite-lived intangible assets, specifically the PIEPS trademark, were impaired and recognized charges of $1,565 during the three months ended June 30, 2025.

Current wording

Impairment of indefinite-lived intangible assets decreased to $0 during the nine months ended September 30, 2026, compared to impairment of indefinite-lived intangible assets of $1,565 during the nine months ended September 30, 2025. Based on the results of the Company’s impairment analysis completed as of June 30, 2025, the Company determined that certain indefinite-lived intangible assets, specifically the PIEPS trademark, were impaired and recognized charges of $1,565 during the nine months ended September 30, 2025.

Previous wording

Interest income, net decreased to $172 during the six months ended June 30, 2026, compared to interest income, net of $410 during the six months ended June 30, 2025. The decrease in interest income recognized during the six months ended June 30, 2026, was due to lower interest rates on lower cash balances, compared to the prior period.

Current wording

Interest income, net decreased to $258 during the nine months ended September 30, 2026, compared to interest income, net of $518 during the nine months ended September 30, 2025. The decrease in interest income recognized during the nine months ended September 30, 2026, was due to lower interest rates on lower cash balances, compared to the prior period.

Previous 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.

Current wording

Other, net, changed by $2,266, or 226.8%, to $3,265 during the nine months ended September 30, 2026, compared to other, net of $999 during the nine months ended September 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 nine months ended September 30, 2026.

Previous wording

Income tax expense (benefit) changed by $1,878, or 115.0%, to an expense of $245 during the six months ended June 30, 2026, compared to a benefit of $1,633 during the same period in 2025. Our effective income tax rate was 14.7% for the six 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 six months ended June 30, 2025, our effective income tax rate was a benefit of 10.7% 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 $4,546, or 117.3%, to an expense of $669 during the nine months ended September 30, 2026, compared to a benefit of $3,877 during the same period in 2025. Our effective income tax rate was 12.5% for the nine months ended September 30, 2026, and differed compared to the statutory tax rates primarily due to the Company’s U.S. pre-tax income, which includes the discrete tariff refunds, being offset by a corresponding change in the U.S. valuation allowance and R&D credits. These differences are partially offset by Australian losses that receive no tax benefit due to a full valuation allowance, and by income in foreign jurisdictions with statutory rates above 21%. For the nine months ended September 30, 2025, our effective income tax rate was a benefit of 20.2% and differed compared to the statutory tax rates primarily due to the impact of valuation allowance, changes in uncertain tax positions, stock compensation, and research and experimentation expenditures and credits.

Previous wording

Our primary ongoing funding requirements are for working capital, expansion of our operations organically, and general corporate needs, as well as investing in the various brands. We plan to fund these activities through a combination of our current cash balances and future operating cash flows. We believe that our liquidity requirements and contractual obligations for at least the next 12 months will be adequately covered by our current cash balances and cash provided by operations. Additionally, long-term contractual obligations are also currently expected to be funded from our current cash balances and cash from operations.

Current wording

Our primary ongoing funding requirements are for working capital, expansion of our operations organically, and general corporate needs, as well as investing in the various brands. We plan to fund these activities through a combination of our current cash balances and future operating cash flows. We believe that our liquidity requirements and contractual obligations for at least the next 12 months will be adequately covered by our current cash balances and cash provided by operations. Additionally, long-term contractual obligations are also currently expected to be funded from our current cash balances and cash from operations. Because we have no credit facility, our liquidity depends on cash on hand and operating cash flows. We expect operating cash flows to improve in the fourth quarter of 2026 compared to the third quarter, but if that improvement does not occur, we may need financing. We cannot determine at this time the terms, conditions or availability of such financing.

Previous 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.

Current wording

At September 30, 2026, we had total cash and restricted cash of $22,734, compared to total cash and restricted cash of $38,195 at December 31, 2025. At September 30, 2026, the Company had $6,534 of the $22,734 in cash and restricted cash held by foreign entities, of which $4,739 is considered permanently reinvested.

Previous 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.

Current wording

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

Previous 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.

Current wording

Net cash used in operating activities was $8,605 during the nine months ended September 30, 2026, compared to net cash used in operating activities of $17,234 during the nine months ended September 30, 2025. The change in net cash used in operating activities during 2026 is primarily due to an increase in net income, partially offset by an increase in cash outflows related to working capital compared to the same period in 2025.

Previous 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:

Current wording

Free cash flow, defined as net cash used in operating activities less capital expenditures, of $12,450 was used during the nine months ended September 30, 2026 compared to $21,493 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 flow to the most directly comparable GAAP financial measure is set forth below: