Clarus Corporation, the parent of the Black Diamond, MaxTrax and Rhino-Rack brands, said that sales in the fourth quarter came in at $76.5 million compared to $73.8 million in the same year‐ago quarter. The small increase was said to be driven by strength in the Adventure segment due to success with OEM customers. This was partly offset by softness in the European region at Outdoor.

Sales in the Adventure segment, which houses Rhino-Rack, Tred Outdoors, and MaxTrax, increased 43 percent to $26.4 million, or $26.6 million on a constant-currency basis in Q4, compared to $18.5 million in the prior-year comp quarter, reflecting increasing sales in the Australian market and the benefit of the Tred Outdoors acquisition announced during the fourth quarter of 2023.

Sales in the Outdoor segment (Black Diamond) were $50.1 million, or $50.0 million on a constant-currency basis in Q4, compared to $55.3 million in the prior-year comp quarter. The decline is said to primarily reflect continuing challenging market conditions, particularly in Europe.

Gross margin in the fourth quarter was 28.9 percent of sales, compared to 37.2 percent in the year‐ago quarter. The sharp decrease in gross margin was said to be primarily due to $4.2 million of inventory reserve increases in the Outdoor segment. Adjusted gross margin in the fourth quarter was 29.0 percent of sales compared to 37.2 percent in the prior-year quarter related to the inventory step-up as a result of the Tred Outdoors acquisition.

Selling, general and administrative expenses in the fourth quarter were $30.7 million compared to $29.9 million in the prior-year comp quarter. The increase was said to be attributable to the Outdoor segment with higher legal and marketing expenses compared to the prior-year period.

The loss from continuing operations in the fourth quarter of 2023 was $7.2 million, or a loss of 19 cents per diluted share, compared to a loss from continuing operations of $83.3 million, or a loss of $2.25 per diluted share in the year-ago quarter.

The loss from continuing operations in the fourth quarter included $1.5 million of one-off charges relating to restructuring and transaction costs. The loss from continuing operations in the fourth quarter of 2022 included a non-cash impairment charge of $92.3 million in the Adventure segment.

Adjusted loss from continuing operations in the fourth quarter of 2023 was $2.8 million, or a loss of 7 cents per diluted share, compared to adjusted income from continuing operations of $4.3 million, or 11 cents per diluted share in the prior year quarter.

The Adjusted (loss) income from continuing operations excludes restructuring charges and transaction costs, as well as non-cash items such as amortization, stock-based compensation, inventory fair value of purchase accounting and impairment charges.

Adjusted EBITDA in the fourth quarter was negative $3.5 million, or an adjusted EBITDA margin of negative 4.5 percent, compared to positive EBITDA of $3.6 million, or an adjusted EBITDA margin of 4.9 percent, in the prior-year comp quarter. The decline in adjusted EBITDA was said to be primarily driven by continuing challenging market conditions at Outdoor, an increase in inventory reserves at Outdoor and higher legal and marketing expenses.

Net cash provided by operating activities for the three months ended December 31, 2023, was $14.5 million compared to $32.4 million in the prior-year quarter. Capital expenditures in the fourth quarter of 2023 were $1.2 million compared to $2.0 million in the prior year quarter. Free cash flow for the fourth quarter of 2023 was $13.3 million, compared to $30.3 million in the prior-year quarter.

Liquidity at December 31, 2023 vs. December 31, 2022

  • Cash and cash equivalents totaled $11.3 million compared to $12.0 million.
  • Total debt of $119.8 million compared to $139.0 million.

On February 29, 2024, approximately $135.0 million of long-term debt, interest and fees were repaid and the credit agreement was subsequently terminated.

Image courtesy Black Diamond