Clarus Corp said it expects sales in the fourth quarter of 2020 to be approximately $75.0 million, a 23 percent increase compared to $61.0 million in the fourth quarter of 2019.
This includes a revenue contribution of approximately $6.5 million from the Barnes brand of bullets, an acquisition Clarus completed on October 2, 2020. Excluding Barnes, the company’s sales are expected to increase 12 percent year-over-year in the fourth quarter of 2020 on an organic basis. These anticipated results exceed the fourth-quarter sales outlook the company provided on November 9, 2020, which expected sales to range between $67.5 million and $69.0 million.
Adjusted EBITDA in the fourth quarter of 2020 is expected to be approximately $10.5 million, a 50 percent increase compared to $7.0 million in the fourth quarter of 2019.
For the full year 2020, Clarus expects sales to be approximately $223.0 million compared to $229.4 million in 2019. The slight year-over-year decrease reflects the impacts of the COVID-19-related demand freeze in Black Diamond during the first two quarters of 2020, which was partially offset by heightened demand in Sierra throughout the year and the robust fourth-quarter contribution from Barnes.
Adjusted EBITDA in 2020 is expected to be approximately $22.0 million compared to $22.7 million in 2019.
“Today’s preliminary results demonstrate the continued strength of our well-diversified brand portfolio,” said John Walbrecht, Clarus’ president. “Our sales growth, which we expect to flow through to adjusted EBITDA growth at an even higher rate, is a testament to the success and resilience of our ‘superfan’ brand strategy. Barnes, in particular, has outperformed our expectations in its first few months on our platform. As we continue the integration process, we remain confident in our ability to leverage Barnes’ industry-leading technology and product innovation to drive growth and build a leading specialty premium bullet and ammunition platform.
“In our Black Diamond business, our commitment to preserving brand equity as we execute on our ‘innovate & accelerate’ playbook has allowed us to adeptly navigate a dynamic retail environment. I am proud of our team’s dedication and flexibility throughout the past year, and we will continue working to maximize the profitability of our brands and the value we create for our shareholders.”
Clarus said because the company has not completed its year-end closing process, it does not have sufficient information to provide a reconciliation of the non-GAAP measure adjusted EBITDA to a comparable GAAP financial measure such as net income. As a result, the company believes it is relevant to provide the following GAAP financial measures for the fourth quarter of 2020: depreciation and amortization of $3.2 million, stock-based compensation of $1.4 million, transaction costs of $0.6 million, and inventory fair value of purchase accounting of $0.4 million.
Clarus said its preliminary financial results for the quarter and year ended December 31, 2020 are based solely on information currently available to management and are unaudited. Actual results presented may vary materially from these preliminary estimates.
The company expects to release its fourth quarter and full-year 2020 results in early March.
Photo courtesy Barnes
