What changed in this filing

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Item 1. Financial Statements

2021-11-08 compared with 2021-08-02 · 306 added, 215 removed, 479 unchanged (52% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

June 30, 2021

September 30, 2021

December 31, 2020

29 unchanged sentences

Treasury stock, at cost

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Total stockholders'

2 unchanged sentences

CLARUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands, except per share amounts)

Three Months Ended

June 30, 2021

June 30, 2020

September 30, 2021

September 30, 2020

Domestic sales

5 unchanged sentences

Total operating expenses

Operating income (loss)

Operating (loss) income

Other (expense) income

1 unchanged sentence

Total other (expense) income, net

Income (loss) before income tax

Income tax expense (benefit)

Net income (loss)

Other comprehensive income (loss), net of tax:

(Loss) income before income tax

Income tax (benefit) expense

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment

Unrealized gain (loss) on hedging activities

Other comprehensive income (loss)

Comprehensive income (loss)

Net income (loss) per share:

Other comprehensive (loss) income

Comprehensive (loss) income

Net income per share:

Weighted average shares outstanding:

3 unchanged sentences

(In thousands, except per share amounts)

Six Months Ended

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

Domestic sales

12 unchanged sentences

Net income (loss)

Other comprehensive income, net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment

Unrealized gain on hedging activities

Other comprehensive income

Unrealized gain (loss) on hedging activities

Other comprehensive (loss) income

Comprehensive income (loss)

5 unchanged sentences

(In thousands)

Six Months Ended

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

Cash Flows From Operating Activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Depreciation of property and equipment

5 unchanged sentences

Deferred income taxes

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of acquisition:

Accounts receivable

1 unchanged sentence

Accounts payable and accrued liabilities

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Cash Flows From Investing Activities:

Purchase of business, net of cash received

Deposit for business acquisition

Proceeds from disposition of property and equipment

4 unchanged sentences

Repayments on revolving credit facilities

Repayments on term note

Proceeds from issuance of term note

Repayments on term notes

Proceeds from issuance of term notes

Payment of debt issuance costs

2 unchanged sentences

Cash dividends paid

Net cash (used in) provided by financing activities

Proceeds from the sale of common stock

Common stock issuance costs

Net cash provided by financing activities

Effect of foreign exchange rates on cash

6 unchanged sentences

Supplemental Disclosures of Non-Cash Investing and Financing Activities:

Stock issued for business acquisition

Contingent consideration for business acquisition

Property and equipment purchased with accounts payable

21 unchanged sentences

Balance, June 30, 2020

Other comprehensive income

Stock dividends ($ 0.025 per share)

Purchase of treasury stock

Stock-based compensation expense

Proceeds from exercise of options

Issuance of common stock, net of issuance costs

Balance, September 30, 2020

Treasury Stock

14 unchanged sentences

Balance, June 30, 2021

Other comprehensive income

Cash dividends ($ 0.025 per share)

Stock-based compensation expense

Shares issued in business acquisition

Balance, September 30, 2021

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of Clarus Corporation and subsidiaries (which may be referred to as the “Company,” “Clarus,” “we,” “us” or “our”) as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X.

The accompanying unaudited condensed consolidated financial statements of Clarus Corporation and subsidiaries (which may be referred to as the “Company,” “Clarus,” “we,” “us” or “our”) as of September 30, 2021 and December 31, 2020 and for the three and nine months ended September 30, 2021 and 2020, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments, except otherwise disclosed) necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included.

The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be obtained for the year ending December 31, 2021.

The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be obtained for the year ending December 31, 2021.

These interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2021.

10 unchanged sentences

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

See Note 16 for a more detailed explanation of the acquisition.

Nature of Business

Headquartered in Salt Lake City, Utah, Clarus, a company focused on the outdoor and consumer industries, is seeking opportunities to acquire and grow businesses that can generate attractive shareholder returns.

The Company has net operating tax loss carryforwards which it is seeking to redeploy to maximize shareholder value.

Clarus’ primary business is as a leading designer, developer, manufacturer and distributor of outdoor equipment and lifestyle products focused on the climb, ski, mountain, sport and skincare markets.

The Company’s products are principally sold under the Black Diamond®, Sierra®, Barnes®, PIEPS® and SKINourishment® brand names through outdoor specialty and online retailers, distributors and original equipment manufacturers throughout the U.S.

and internationally.

Headquartered in Salt Lake City, Utah, we are a global leading designer, developer, manufacturer and distributor of best-in-class outdoor equipment and lifestyle products focused on the outdoor and consumer enthusiast markets.

Our mission is to identify, acquire and grow outdoor “super fan” brands through our unique “innovate and accelerate” strategy.

We define a “super fan” brand as a brand that creates the world’s pre-eminent, performance-defining product that the best-in-class user cannot live without.

Each of our brands has a long history of continuous product innovation for core and everyday users alike.

The Company’s products are principally sold globally under the Black Diamond®, Sierra®, Barnes® and Rhino-Rack® brand names through outdoor specialty and online retailers, our own websites, distributors and original equipment manufacturers.

Our portfolio of iconic brands is well-positioned for sustainable, long-term growth underpinned by powerful industry trends across the outdoor and adventure sport end markets.

Through our Black Diamond, PIEPS, and SKINourishment brands, we offer a broad range of products including:

8 unchanged sentences

Through our Sierra and Barnes brands, we manufacture a wide range of high-performance bullets and ammunition for both rifles and pistols that are used for precision target shooting, hunting and military and law enforcement purposes.

Rhino-Rack is a leading manufacturer of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers and accessories with leading market share in Australia and New Zealand and a growing presence in the United States.

Use of Estimates

16 unchanged sentences

Management will continue its assessment and monitor regulatory developments during the LIBOR transition period.

On September 30, 2020, Sierra entered into an Asset Purchase Agreement (the “Barnes Asset Purchase Agreement”) with Remington Outdoor Company, Inc.

and certain of its subsidiaries (the “Seller”), pursuant to which Sierra agreed to (i) acquire certain assets of the Seller constituting the Barnes business (“Barnes”), including equipment, inventory, intellectual property (including exclusive use of Barnes’ intellectual property in the all-copper and powdered metallurgy ammunition fields as well as its trademarks) and a leasehold interest in certain real property located in Mona, Utah (collectively, the “Barnes Purchased Assets”) and (ii) assume certain liabilities related to the Barnes Purchased Assets in a transaction to be effected in Seller’s bankruptcy proceeding under Chapter 11 of title 11 of the United States Code, §§ 101 et seq.

(the “Bankruptcy Code”) which commenced on July 27, 2020 in the United States Bankruptcy Court for the Northern District of Alabama (the “Bankruptcy Court”).

Pursuant to the Barnes Asset Purchase Agreement, the purchase price to be paid for the Barnes Purchased Assets is $ 30,500 (the “Barnes Purchase Price”).

On October 2, 2020, Sierra completed the acquisition of the Barnes Purchased Assets.

On May 30, 2021, Clarus, through Oscar Aluminium Pty Ltd (the “Buyer”), an indirect wholly-owned Australian subsidiary of the Company, entered into a Share Sale and Purchase Agreement (the “Purchase Agreement”) to acquire Australia-based Rhino-Rack Holdings Pty Ltd (“Rhino-Rack”).

On July 1, 2021, the transactions contemplated by the Purchase Agreement were consummated.

All United States dollar amounts contained herein are based on the exchange rates in effect for Australian dollars ($AUD) and the market value of the Company’s common stock at the time of closing of the acquisition of Rhino-Rack (the “Rhino-Rack Acquisition”).

Under the terms of the Purchase Agreement, the Buyer acquired Rhino-Rack for an aggregate purchase price of approximately $AUD 269,097 (approximately $ 202,038 ), subject to a post-closing adjustment.

The purchase price was comprised of approximately $AUD 190,650 (approximately $ 143,140 ) cash, 2,315,121 shares of the Company’s common stock valued at $ 55,333 , and additional contingent consideration described below.

The shares of the Company’s common stock issued are subject to a lock-up agreement restricting sales for 180 days from the closing of the Acquisition.

The Purchase Agreement also provides for the payment of additional contingent consideration up to approximately $AUD 10,000 (approximately $ 7,508 ) if certain future net sales thresholds are met (the “Contingent Consideration”).

The Company estimated the fair value of the Contingent Consideration to be approximately $AUD 4,747 (approximately $ 3,565 ).

The acquisition was accounted for as a business combination.

Acquisition-related costs for the Rhino-Rack Acquisition, which were included in transaction costs during the three and nine months ended September 30, 2021 were $ 7,866 and $ 8,643 , respectively.

The Company believes the acquisition of Rhino-Rack is expected to provide the Company with a greater combined global revenue base, increased gross margins, profitability and free cash flows, and access to increased liquidity to further acquire and grow businesses.

On September 30, 2020, Sierra entered into an Asset Purchase Agreement (the “Barnes Asset Purchase Agreement”) to acquire certain assets and assume certain liabilities constituting the Barnes business (“Barnes”).

Pursuant to the Barnes Asset Purchase Agreement, the purchase price to be paid for Barnes is $ 30,500 .

On October 2, 2020, Sierra completed the acquisition of Barnes.

The acquisition was accounted for as a business combination.

The Company believes the acquisition of Barnes is expected to provide the Company with a greater combined global revenue base, increased gross margins, profitability and free cash flows, and access to increased liquidity to further acquire and grow businesses.

3 unchanged sentences

The following table is a reconciliation to the fair value of the purchase consideration and how the purchase consideration is allocated to assets acquired and liabilities assumed which have been estimated at their fair values.

The fair value estimates for the purchase price allocation for Rhino-Rack are based on the Company’s best estimates and assumptions as of the reporting date and are considered preliminary.

The fair value measurements of identifiable assets and liabilities, and the resulting goodwill related to the Rhino-Rack Acquisition are subject to change and the final purchase price allocation could be different from the amounts presented below.

We expect to finalize the valuation as soon as practicable, but not later than one year from the date of the Rhino-Rack Acquisition.

The fair value measurements for the acquisition of Barnes have been completed.

The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill.

Goodwill is included in the Sierra segment.

Goodwill for Rhino-Rack is included in the Rhino-Rack segment and goodwill for Barnes is included in the Sierra segment.

The goodwill consists largely of the synergies expected from combining operations of both acquisitions.

October 2, 2020

Number of Shares

Estimated Fair Value

Issuance of shares of Clarus Corporation

Contingent consideration

Total purchase consideration

Assets acquired and liabilities assumed

Accounts receivable, net

Prepaid and other current assets

4 unchanged sentences

Accounts payable and accrued liabilities

Income tax payable

Current portion of long-term debt

Long-term debt

Deferred income taxes

Other long-term liabilities

2 unchanged sentences

The estimated fair value of inventory was recorded at expected sales price less cost to sell plus a reasonable profit margin for selling efforts.

In connection with the acquisition, the Company acquired exclusive rights to Barnes’ trademarks, customer relationships, and product technologies.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

In connection with the acquisitions, the Company acquired exclusive rights to Rhino-Rack’s and Barnes’ trademarks, customer relationships, and product technologies.

The amounts assigned to each class of intangible asset, other than goodwill acquired, and the related average useful lives are as follows:

3 unchanged sentences

Intangibles not subject to amortization

The goodwill consists largely of the synergies expected from combining operations.

Although the Company is electing to treat the acquisition of Rhino-Rack as a purchase of assets for tax purposes, from an income tax perspective, there is no tax deduction provided for intangibles in Australia.

As a result, deferred tax liabilities have been set up for the finite and indefinite-lived assets.

From a capital base perspective, deferred tax assets established through purchase accounting have been fully offset by a corresponding valuation allowance.

Furthermore, the full amount of goodwill of $ 85,127 is expected to be non-deductible for tax purposes.

No pre-existing relationships existed between the Company and the Rhino-Rack sellers prior to the acquisition.

Rhino-Rack revenue and operating income are included in the Rhino-Rack segment.

Total revenue of $ 19,625 and net income of $ 5,453 of Rhino-Rack were included in the Company’s condensed consolidated statements of comprehensive income (loss) from the date of acquisition to September 30, 2021.

The acquisition of Barnes is treated as a purchase of assets for tax purposes.

1 unchanged sentence

Furthermore, the full amount of goodwill recorded of $ 8,625 is expected to be deductible for tax purposes.

No pre-existing relationships existed between the Company and the Sellers prior to the acquisition.

No pre-existing relationships existed between the Company and the Barnes sellers prior to the acquisition.

Barnes revenue and operating income were included in the Sierra segment.

The following unaudited pro forma results are based on the individual historical results of the Company, Rhino-Rack and Barnes, with adjustments to give effect as if the acquisitions and borrowings used to finance the acquisitions had occurred on January 1, 2020 for Rhino-Rack and January 1, 2019 for Barnes, after giving effect to certain adjustments, including the amortization of intangible assets, depreciation of fixed assets, interest expense and taxes and assumes the purchase price was allocated to the assets purchased and liabilities assumed based on their fair market values at the date of purchase.

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Net income per share - basic

Net income per share - diluted

The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred had the transactions been consummated as of January 1, 2020 for Rhino-Rack or January 1, 2019 for Barnes.

Furthermore, such pro forma information is not necessarily indicative of future operating results of the combined companies and should not be construed as representative of the operating results of the combined companies for any future dates or periods.

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

The following unaudited pro forma results are based on the individual historical results of the Company and Barnes, with adjustments to give effect as if the acquisition and borrowings used to finance the acquisition had occurred on January 1, 2019, after giving effect to certain adjustments including the amortization of intangible assets, depreciation of fixed assets, interest expense and taxes and assumes the purchase price was allocated to the assets purchased and liabilities assumed based on their fair market values at the date of purchase.

Three Months Ended

Six Months Ended

June 30, 2020

Net loss per share - basic

Net loss per share - diluted

Inventories, as of June 30, 2021 and December 31, 2020, were as follows:

June 30, 2021

Inventories, as of September 30, 2021 and December 31, 2020, were as follows:

September 30, 2021

December 31, 2020

3 unchanged sentences

PROPERTY AND EQUIPMENT

Property and equipment, net, as of June 30, 2021 and December 31, 2020, were as follows:

June 30, 2021

Property and equipment, net, as of September 30, 2021 and December 31, 2020, were as follows:

September 30, 2021

December 31, 2020

5 unchanged sentences

Less accumulated depreciation

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Depreciation expense for the three months ended September 30, 2021 and 2020 was $ 1,631 and $ 1,140 , respectively, and for the nine months ended September 30, 2021 and 2020 was $ 4,336 and $ 3,405 , respectively.

GOODWILL AND INTANGIBLE ASSETS

2 unchanged sentences

Balance at December 31, 2020

Balance at June 30, 2021

Increase due to acquisition of Rhino-Rack

Impact of foreign currency exchange rates

Balance at September 30, 2021

Indefinite Lived Intangible Assets

1 unchanged sentence

Balance at December 31, 2020

Increase due to acquisition of Rhino-Rack

Impact of foreign currency exchange rates

Balance at June 30, 2021

Balance at September 30, 2021

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Other Intangible Assets, net

1 unchanged sentence

Gross balance at December 31, 2020

Increase due to acquisition of Rhino-Rack

Impact of foreign currency exchange rates

Gross balance at June 30, 2021

Other intangible assets, net of amortization as of June 30, 2021 and December 31, 2020, were as follows:

June 30, 2021

Gross balance at September 30, 2021

Other intangible assets, net of amortization as of September 30, 2021 and December 31, 2020, were as follows:

September 30, 2021

Accumulated Amortization

Weighted Average Useful Life

Intangibles subject to amortization

Customer relationships

Product technologies

Tradename / trademark

Core technologies

December 31, 2020

Customer lists and relationships

Accumulated Amortization

Weighted Average Useful Life

Customer relationships

Product technologies

1 unchanged sentence

Core technologies

Less accumulated amortization

Amortization expense for the three months ended September 30, 2021 and 2020 was $ 3,577 and $ 753 , respectively, and for the nine months ended September 30, 2021 and 2020 was $ 5,971 and $ 2,290 , respectively.

Future amortization expense for other intangible assets as of September 30, 2021 is as follows:

Years Ending December 31,

Amortization Expense

2021 (excluding the nine months ended September 30, 2021)

LONG-TERM DEBT

Long-term debt as of September 30, 2021 and December 31, 2020, was as follows:

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

LONG-TERM DEBT

Long-term debt as of June 30, 2021 and December 31, 2020, was as follows:

June 30, 2021

September 30, 2021

December 31, 2020

Revolving credit facility (a)

Foreign credit facilities (b)

Other debt (b)

Term note (c)

Debt issuance costs

Less current portion

(a) As of June 30, 2021, the Company had drawn $ 10,112 on the $ 60,000 revolving commitment that was available under the credit agreement with JPMorgan Chase Bank, N.A., with a maturity date of May 3, 2024.

(a) As of September 30, 2021, the Company had drawn $ 65,412 on the $ 100,000 revolving commitment that was available under the credit agreement, as amended, with JPMorgan Chase Bank, N.A., with a maturity date of May 3, 2024.

The Company pays interest monthly on any borrowings on the Credit Agreement.

As of June 30, 2021 and December 31, 2020, the rate was 1.6250 % and 2.0625 %, respectively.

As of September 30, 2021 and December 31, 2020, the rate was 1.6250 % and 2.0625 %, respectively.

On July 1, 2021, the Company and certain of its direct and indirect subsidiaries (each, a “Loan Party” and, collectively, the “Loan Parties”) entered into Amendment No.

3 (“Amendment No.

3”) to that certain Credit Agreement, dated May 3, 2019, as amended by Amendment No.

1 dated May 28, 2019 and Amendment No.

2 dated November 12, 2020, with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (collectively, the “Credit Agreement”).

The Credit Agreement as amended by Amendment No.

3 increased the aggregate amount of the term loan facility thereunder to $ 125,000 and increased the maximum amount of the revolving loan facility thereunder to $ 100,000 .

The Credit Agreement continues to permit the Loan Parties, subject to certain requirements, to arrange with lenders for an aggregate of up to $ 50,000 of additional revolving and/or term loan commitments (both of which are currently uncommitted), for potential aggregate revolving and term loan commitments under the Credit Agreement of up to $ 275,000 .

Amendment No.

3 provides for additional subsidiaries of the Company to guarantee and provide collateral for the loans under the Credit Agreement, including certain of its newly formed or newly acquired Australian subsidiaries in connection with the Rhino-Rack Acquisition.

Amendment No.

3 also removed the previously agreed upon ability of the Company to issue debt securities that may be convertible into equity interests of the Company in an aggregate principal amount of up to $ 125,000 and also increased the maximum consolidated total leverage ratio permitted under the Credit Agreement to 4.25 :1.00.

Amendment No.

3 did not change the maturity date which remains May 3, 2024.

All obligations under the Credit Agreement are secured by 100 % of our domestic, and 65 % of our foreign, subsidiary equity interests, as well as accounts receivable, inventory, intellectual property and certain other assets owned by the Company.

1 unchanged sentence

The Credit Agreement also includes other customary affirmative and negative covenants, including financial covenants relating to the Company’s consolidated total leverage ratio and fixed charge coverage ratio.

The Company was in compliance with the debt covenants set forth in the Credit Agreement as of June 30, 2021.

(b) A foreign subsidiary of the Company has a revolving credit facility with a financial institution which matures on March 31, 2022.

The foreign subsidiary pays interest monthly on any borrowings on the credit facility.

As of June 30, 2021 and December 31, 2020, the rate was 1.3387 % and 1.3387 %, respectively.

The Company was in compliance with the debt covenants set forth in the Credit Agreement as of September 30, 2021.

(b) Foreign subsidiaries of the Company have a revolving credit facility and term debt with financial institutions which mature between October 16, 2021 and July 27, 2024.

The foreign subsidiaries pay interest monthly on any borrowings on the credit facilities as well as monthly payments on the term debt.

As of September 30, 2021, the interest rates ranged between 1.3387 % and 5.1651 % and as of December 31, 2020 was 1.3387 %.

The credit facilities are secured by certain assets of the foreign subsidiaries.

(c) Under the Credit Agreement, the Company had access to a term loan facility that was available for drawdown until May 3, 2020.

On April 30, 2020, the Company borrowed $ 20,000 under such term loan facility.

The Company is required to repay the term loan through quarterly payments of $ 1,000 each beginning with September 30, 2020, and any remaining obligations will be repaid in full on the maturity date of the Credit Agreement of May 3, 2024.

On July 1, 2021, under Amendment No.

3, the aggregate amount of the term loan facility was increased to $ 125,000 and the term loan was fully borrowed at the closing of Amendment No.

The Company is required to repay the term loan through quarterly payments of $ 1,563 each beginning with September 30, 2021, increasing to $ 3,125 each beginning with September 30, 2022, and any remaining obligations will be repaid in full on the maturity date of the Credit Agreement of May 3, 2024.

The Company pays interest monthly on any borrowings on the Credit Agreement.

As of June 30, 2021 and December 31, 2020, the rate was 1.6250 % and 2.0625 %, respectively.

As of September 30, 2021 and December 31, 2020, the rate was 1.6250 % and 2.0625 %, respectively.

As part of the Rhino-Rack Acquisition, the Company assumed certain current and long-term debt of approximately $ 2,252 which was settled during the three months ended September 30, 2021.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

DERIVATIVE FINANCIAL INSTRUMENTS

4 unchanged sentences

The Company accounts for these contracts as cash flow hedges and tests effectiveness by determining whether changes in the expected cash flow of the derivative offset, within a range, changes in the expected cash flow of the hedged item.

As of June 30, 2021, the Company held currency forward contracts to mitigate currency fluctuations related to the cash purchase price of Rhino-Rack totaling AUD 193,650 with a maturity date of July 1, 2021.

These contracts are not designated as accounting hedges and the changes in fair value of the instruments are recognized in earnings.

During the three and six months ended June 30, 2021, losses of $( 4,513 ) were recorded in other, net expense.

At June 30, 2021, the Company’s derivative contracts had remaining maturities of less than one year.

During the nine months ending September 30, 2021, the Company held currency forward contracts to mitigate currency fluctuations related to the estimated cash purchase price of Rhino-Rack totaling AUD 193,650 with a maturity date of July 1, 2021.

These contracts were not designated as accounting hedges and the changes in fair value of the instruments are recognized in earnings.

During the three and nine months ended September 30, 2021, gains (losses) of $ 232 and $( 4,281 ) were recorded in other, net expense, respectively.

At September 30, 2021, the Company’s derivative contracts had remaining maturities of less than one year.

The counterparties to these transactions had both long-term and short-term investment grade credit ratings.

The maximum net exposure of the Company’s credit risk to the counterparties is generally limited to the aggregate unrealized loss of all contracts with that counterparty, which is $ 4,684 as of June 30, 2021.

The Company’s exposure of counterparty credit risk is limited to the aggregate unrealized gain on all contracts.

At June 30, 2021, there was no such exposure to the counterparties.

The maximum net exposure of the Company’s credit risk to the counterparties is generally limited to the aggregate unrealized loss of all contracts with that counterparty.

At September 30, 2021, there was no such exposure to the counterparties.

The Company’s exposure of counterparty credit risk is limited to the aggregate unrealized gain of $ 639 on all contracts at September 30, 2021.

The Company’s derivative counterparties have strong credit ratings and as a result, the Company does not require collateral to facilitate transactions.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

The Company held the following contracts designated as hedging instruments as of June 30, 2021 and December 31, 2020:

June 30, 2021

The Company held the following contracts designated as hedging instruments as of September 30, 2021 and December 31, 2020:

September 30, 2021

Foreign exchange contracts - Canadian Dollars

February 2022

Foreign exchange contracts - Euros

February 2022

December 31, 2020

4 unchanged sentences

For contracts that qualify as effective hedge instruments, the effective portion of gains and losses resulting from changes in fair value of the instruments are included in accumulated other comprehensive income and reclassified to sales in the period the underlying hedged transaction is recognized in earnings.

Gains (losses) of $( 422 ) and $ 294 were reclassified to sales during the three months ended June 30, 2021 and 2020, respectively, and $( 743 ) and $ 582 were reclassified to sales during the six months ended June 30, 2021 and 2020, respectively.

The following table presents the balance sheet classification and fair value of derivative instruments as of June 30, 2021 and December 31, 2020:

Gains (losses) of $ 201 and $( 376 ) were reclassified to sales during the three months ended September 30, 2021 and 2020, respectively, and $( 542 ) and $ 206 were reclassified to sales during the nine months ended September 30, 2021 and 2020, respectively.

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

The following table presents the balance sheet classification and fair value of derivative instruments as of September 30, 2021 and December 31, 2020:

Classification

June 30, 2021

September 30, 2021

December 31, 2020

5 unchanged sentences

Accounts payable and accrued liabilities

Undesignated forward exchange contracts

Accounts payable and accrued liabilities

Designated forward exchange contracts

Other long-term liabilities

ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income (“AOCI”) primarily consists of foreign currency translation adjustments and changes in our forward foreign exchange contracts.

The following table sets forth the changes in AOCI, net of tax, for the three months ended June 30, 2021:

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) (“AOCI”) primarily consists of foreign currency translation adjustments and changes in our forward foreign exchange contracts.

The following table sets forth the changes in AOCI, net of tax, for the three months ended September 30, 2021:

Foreign Currency Translation Adjustments

Unrealized Gains (Losses) on Cash Flow Hedges

Balance as of March 31, 2021

Other comprehensive income (loss) before reclassifications

Amounts reclassified from other comprehensive income

Net current period other comprehensive income

Balance as of June 30, 2021

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

The following table sets forth the changes in AOCI, net of tax, for the three months ended June 30, 2020:

Other comprehensive (loss) income before reclassifications

Amounts reclassified from other comprehensive income

Net current period other comprehensive (loss) income

Balance as of September 30, 2021

The following table sets forth the changes in AOCI, net of tax, for the three months ended September 30, 2020:

Foreign Currency Translation Adjustments

Unrealized Gains (Losses) on Cash Flow Hedges

Balance as of March 31, 2020

Balance as of June 30, 2020

Other comprehensive income (loss) before reclassifications

Amounts reclassified from other comprehensive income

Amounts reclassified from other comprehensive loss

Net current period other comprehensive income (loss)

Balance as of June 30, 2020

The following table sets forth the changes in AOCI, net of tax, for the six months ended June 30, 2021:

Balance as of September 30, 2020

The following table sets forth the changes in AOCI, net of tax, for the nine months ended September 30, 2021:

Foreign Currency Translation Adjustments

4 unchanged sentences

Net current period other comprehensive (loss) income

Balance as of June 30, 2021

The following table sets forth the changes in AOCI, net of tax, for the six months ended June 30, 2020:

Balance as of September 30, 2021

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

The following table sets forth the changes in AOCI, net of tax, for the nine months ended September 30, 2020:

Foreign Currency Translation Adjustments

1 unchanged sentence

Balance as of December 31, 2019

Other comprehensive (loss) income before reclassifications

Other comprehensive income (loss) before reclassifications

Amounts reclassified from other comprehensive loss

Net current period other comprehensive (loss) income

Balance as of June 30, 2020

The effects on net income of amounts reclassified from unrealized gains on cash flow hedges for foreign exchange contracts for the three and six months ended June 30, 2021 and 2020, were as follows:

Net current period other comprehensive income (loss)

Balance as of September 30, 2020

The effects on net income of amounts reclassified from unrealized gains on cash flow hedges for foreign exchange contracts for the three and nine months ended September 30, 2021 and 2020, were as follows:

Gains (losses) reclassified from AOCI to the Consolidated Statements of Comprehensive Income (Loss)

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Three Months Ended

Six Months Ended

Nine Months Ended

Statements of Comprehensive Income (Loss)

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Foreign exchange contracts:

Income tax (benefit) expense

Income tax expense (benefit)

Amount reclassified, net of tax

Total reclassifications from AOCI

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

FAIR VALUE MEASUREMENTS

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Level 3 - inputs to the valuation methodology are based on prices or valuation techniques that are unobservable.

Assets and liabilities measured at fair value on a recurring basis at June 30, 2021 and December 31, 2020 were as follows:

June 30, 2021

CLARUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(in thousands, except per share amounts)

Assets and liabilities measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020 were as follows:

September 30, 2021

Designated forward exchange contracts

Undesignated forward exchange contracts

Contingent consideration liability

December 31, 2020

2 unchanged sentences

Derivative financial instruments are recorded at fair value based on current market pricing models.

No nonrecurring fair value measurements existed at June 30, 2021 and December 31, 2020.

No nonrecurring fair value measurements existed at September 30, 2021 and December 31, 2020.

As part of the Rhino-Rack Acquisition, the Purchase Agreement provided for the payment of Contingent Consideration of approximately $ 7,508 if certain future net sales thresholds are met through June 30, 2022.

Using a series of call options, the Company estimated the fair value of the Contingent Consideration to be approximately $ 3,565 as of July 1, 2021.

Significant unobservable inputs used in the valuation include a discount rate of 4.8 %.

The Contingent Consideration liability is remeasured at the estimated fair value at the end of each reporting period with the change in fair value recognized within operating income (loss) in the accompanying condensed consolidated statements of comprehensive income (loss) for such period.

We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements.

There were no impacts to operating income (loss) for the three and nine months ended September 30, 2021 related to the remeasurement of the Contingent Consideration liability as there were no significant changes to the fair value.

The Contingent Consideration liability changed due to the effect of foreign exchange by $ 155 resulting in an ending balance as of September 30, 2021 of $ 3,410 which is recorded in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets.

As the Contingent Consideration liability is remeasured to fair value each reporting period, significant increases or decreases in projected revenue, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement.

Our determination of fair value of the Contingent Consideration liability could change in future periods based up our ongoing evaluation of these significant unobservable inputs.

Any such change will be recorded to operating income (loss) in our consolidated statements of income (loss).

STOCKHOLDERS’ EQUITY

3 unchanged sentences

On October 19, 2020, the Company announced that its Board of Directors approved the reinstatement of its Quarterly Cash Dividend.

On July 30, 2021 , the Company announced that its Board of Directors approved the payment on August 20, 2021 of the Quarterly Cash Dividend of $ 0.025 to the record holders of shares of the Company’s common stock as of the close of business on August 9, 2021 .

On October 29, 2021 , the Company announced that its Board of Directors approved the payment on November 19, 2021 of the Quarterly Cash Dividend of $ 0.025 to the record holders of shares of the Company’s common stock as of the close of business on November 8, 2021 .

CLARUS CORPORATION

7 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Weighted average shares outstanding - basic

2 unchanged sentences

Net income (loss) per share:

For the three months ended June 30, 2021 and 2020, equity awards of 1,034 and 4,633 , respectively, and for the six months ended June 30, 2021 and 2020, equity awards of 1,017 and 4,590 , respectively, were anti-dilutive and therefore not included in the calculation of earnings (loss) per share for these periods.

For the three months ended September 30, 2021 and 2020, equity awards of 1,000 and 927 , respectively, and for the nine months ended September 30, 2021 and 2020, equity awards of 1,011 and 4,384 , respectively, were excluded from the calculation of earnings (loss) per share for these periods as they were anti-dilutive.

STOCK-BASED COMPENSATION PLAN

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Options Granted:

During the six months ended June 30, 2021, the Company issued stock options for an aggregate of 500 shares under the 2015 Plan to directors and employees of the Company.

The options issued during the six months ended June 30, 2021 generally vest and become exercisable over a period of one to three years and expire ten years from the date of the grant.

During the nine months ended September 30, 2021, the Company issued stock options for an aggregate of 500 shares under the 2015 Plan to directors and employees of the Company.

The options issued during the nine months ended September 30, 2021 generally vest and become exercisable over a period of one to three years and expire ten years from the date of the grant.

For computing the fair value of the stock-based awards, the fair value of each option grant has been estimated as of the date of grant using the Black-Scholes option-pricing model with the following assumptions:

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(a) Expected volatility is based upon the Company’s historical volatility.

(b) The expected term was determined based upon the underlying terms of the awards and the category and employment

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

history of employee award recipient.

The grant date fair value of the stock options granted during the six months ended June 30, 2021 was $ 3,239 , which will be recognized over the vesting period of the options.

(b) The expected term was determined based upon the underlying terms of the awards and the category and employment history of employee award recipient.

The grant date fair value of the stock options granted during the nine months ended September 30, 2021 was $ 3,239 , which will be recognized over the vesting period of the options.

Market Condition Restricted Shares Granted:

11 unchanged sentences

Using these assumptions, the fair value of the market condition restricted stock awards granted on May 28, 2021 was approximately $ 7,230 .

The total non-cash stock compensation expense related to restricted stock, stock options and stock awards recorded by the Company for the three months ended June 30, 2021 and 2020 was $ 1,826 and $ 616 , respectively, and for the six months ended June 30, 2021 and 2020 was $ 3,350 and $ 1,229 , respectively.

For the three and six months ended June 30, 2021 and 2020, the majority of stock-based compensation costs were classified as selling, general and administrative expenses.

As of June 30, 2021, there were 2,143 unvested stock options and unrecognized compensation cost of $ 8,508 related to unvested stock options, as well as 1,000 unvested restricted stock awards and unrecognized compensation costs of $ 8,300 related to unvested restricted stock awards.

The total non-cash stock compensation expense related to restricted stock, stock options and stock awards recorded by the Company for the three months ended September 30, 2021 and 2020 was $ 3,064 and $ 4,204 , respectively, and for the nine months ended September 30, 2021 and 2020 was $ 6,414 and $ 5,433 , respectively.

For the three and nine months ended September 30, 2021 and 2020, the majority of stock-based compensation costs were classified as selling, general and administrative expenses.

As of September 30, 2021, there were 2,014 unvested stock options and unrecognized compensation cost of $ 7,384 related to unvested stock options, as well as 1,000 unvested restricted stock awards and unrecognized compensation costs of $ 6,359 related to unvested restricted stock awards.

COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

The Company’s U.S.

federal statutory tax rate of 21 % and its foreign operations that are considered to be permanently reinvested have statutory tax rates of approximately 25 %.

The differences between the Company’s estimated effective tax rates of 7.8 % and ( 2.9 )% for the three and six months ended June 30, 2021 and the U.S.

federal statutory tax rate of 21 % were due to a release of valuation allowance for the current year expected utilization

federal statutory tax rate of 21 % and its foreign operations have statutory tax rates of approximately 25 % in Austria, 28 % in New Zealand, and 30 % in Australia.

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

of net operating loss carryforwards (“NOLs”) and a stock compensation tax windfall, which were partially offset by permanent book to tax differences related to incentive stock options and officer compensation limitations.

The differences between the Company’s estimated effective tax rates of ( 419.0 )% and ( 104.7 )% for the three and nine months ended September 30, 2021 and the U.S.

federal statutory tax rate of 21 % were due to a release of valuation allowance of net operating loss carryforwards (“NOLs”), which was partially offset by permanent book to tax differences related to incentive stock options and officer compensation limitations.

As of December 31, 2020, the Company’s gross deferred tax asset was $ 40,538 .

The Company has recorded a valuation allowance of $ 22,348 , resulting in a net deferred tax asset of $ 18,190 , before deferred tax liabilities of $ 8,304 .

The Company has provided a valuation allowance against a portion of the deferred tax assets as of June 30, 2021 and December 31, 2020, because the ultimate realization of those assets did not meet the more-likely-than-not criteria.

The Company has provided a valuation allowance against a portion of the deferred tax assets as of September 30, 2021 and December 31, 2020, because the ultimate realization of those assets did not meet the more-likely-than-not criteria.

The majority of the Company’s deferred tax assets consist of NOLs for federal tax purposes.

If a change in control were to occur, these could be limited under Section 382 of the Internal Revenue Code of 1986 (“Code”), as amended.

During the three months ended September 30, 2021, the Company filed a change in accounting method which increased taxable income and the ability to utilize NOLs.

As a result, an additional valuation allowance of $ 6,003 was released increasing the income tax benefit for the three and nine months ended September 30, 2021.

This method change resulted in decreasing the NOLs available to offset taxable income as of December 31, 2020 by $ 10,317 .

In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

16 unchanged sentences

SEGMENT INFORMATION

We operate our business structure within two segments.

We operate our business structure within three segments.

These segments are defined based on the internal financial reporting used by our chief operating decision maker to allocate resources and assess performance .

11 unchanged sentences

We also offer advanced skis, ski poles, ski skins, and snow safety products, including avalanche airbag systems, avalanche transceivers, shovels, and probes.

 Our Sierra segment, which includes Sierra and Barnes, includes two iconic American manufacturers of a wide range of high-performance bullets and ammunition for both rifles and pistols.

These bullets are used for precision target shooting, hunting and military and law enforcement purposes .

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

As noted above, the Company has a wide variety of technical outdoor equipment and lifestyle products focused on the climb, ski, mountain and sport product categories that are sold to a variety of customers in multiple end markets.

 Our Sierra segment, which includes Sierra and Barnes, includes two iconic American manufacturers of a wide range of high-performance bullets and ammunition for both rifles and pistols.

These bullets are used for precision target shooting, hunting and military and law enforcement purposes .

 Our Rhino-Rack segment, which includes Rhino-Rack, is a manufacturer of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers and accessories in Australia and New Zealand and a growing presence in the United States.

As noted above, the Company has a wide variety of technical outdoor equipment and lifestyle products focused on the climb, ski, mountain, sport and adventure product categories that are sold to a variety of customers in multiple end markets.

While there are multiple products sold, the terms and nature of revenue recognition policy is similar for all segments.

The sport product category represents the Sierra segment revenue.

We divide our product offerings into four primary categories of climb, mountain, ski and sport.

The sport product category represents the Sierra segment revenue and the adventure product category represents the Rhino-Rack segment revenue.

We divide our product offerings into five primary categories of climb, mountain, ski, sport and adventure.

Revenue by category as a percentage of total consolidated revenues is as follows:

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Financial information for our segments is as follows:

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Sales to external customers:

5 unchanged sentences

International sales

Domestic sales

International sales

Total Rhino-Rack

Total sales to external customers

Segment operating income (loss):

Segment operating income:

Black Diamond

Total segment operating income (loss)

Total segment operating income

Transaction costs

1 unchanged sentence

Interest expense, net

Income (loss) before income tax

There were no intercompany sales between the Black Diamond and Sierra segments for the periods presented.

Total assets by segment, as of June 30, 2021 and December 31, 2020, were as follows:

June 30, 2021

December 31, 2020

Black Diamond

(Loss) income before income tax

There were no intercompany sales between the Black Diamond, Sierra and Rhino-Rack segments for the periods presented.

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

Total assets by segment, as of September 30, 2021 and December 31, 2020, were as follows:

September 30, 2021

December 31, 2020

Black Diamond

Capital expenditures, depreciation and amortization by segment is as follows.

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Capital expenditures:

7 unchanged sentences

Total amortization

SUBSEQUENT EVENTS

Rhino-Rack Acquisition

On May 30, 2021, Oscar Aluminium Pty Ltd (the “Buyer”), an indirect wholly-owned Australian subsidiary of the Company, entered into a Share Sale and Purchase Agreement (the “Purchase Agreement”) to acquire Rhino-Rack, a leading manufacturer of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, and accessories.

On July 1, 2021, the transactions contemplated by the Purchase Agreement were consummated.

Pursuant to the terms of the Purchase Agreement, by and among the Buyer, the Company, Cropley Nominees Pty Ltd (the “Seller”), Richard Cropley, Hugh Cropley and Oliver Cropley, the Buyer acquired Rhino-Rack for an aggregate purchase price of approximately $AUD 273,000 (approximately $ 205,000 ), subject to post-closing adjustment.

The purchase price consideration was comprised of approximately $AUD 194,000 (approximately $ 145,000 ) cash and 2,315,121 shares of the Company’s common stock.

The Purchase Agreement also provides for the payment to the Seller of additional consideration of approximately $AUD 10,000 (approximately $ 8,000 ) if certain future net sales thresholds are met.

The shares of the Company’s common stock issued to the Seller are subject to a lock-up agreement restricting sales for 180 days from the closing of the Rhino-Rack Acquisition.

Based upon the timing of the Rhino-Rack Acquisition, the initial accounting is not yet complete as the Company gathers additional information related to the assets acquired and liabilities assumed.

The Company is in the process of obtaining third-party valuations of certain intangible assets.

The preliminary application of acquisition accounting to the assets acquired and liabilities assumed, as well as the results of operations of Rhino-Rack, will first be reflected in the Company's consolidated financial results as of and for the three and nine months ending September 30, 2021.

The operating results of Rhino-Rack are expected to be included within a new segment called Rhino-Rack.

Acquisition-related costs for the Rhino-Rack Acquisition, which were included in transaction costs during the three and six months ended June 30, 2021 were $ 777 .

Additionally, on July 1, 2021, the Company recorded a liability in the amount of $ 1,750 owed to Kanders & Company, Inc.

RELATED PARTY TRANSACTIONS

As part of the Rhino-Rack Acquisition, on July 1, 2021, the Company recorded a liability in the amount of $ 1,750 owed to Kanders & Company, Inc.

(“Kanders & Company”) in consideration of the significant support received by the Company from Kanders & Company in sourcing, structuring, performing due diligence and negotiating the Rhino-Rack Acquisition.

This amount was paid during the three months ended September 30, 2021.

Kanders, the Company’s Executive Chairman of the Board of Directors, is a member of the Board of Directors and sole stockholder of Kanders & Company.

Credit Agreement

In connection with, among other things, partially funding the Rhino-Rack Acquisition, on July 1, 2021, the Company and certain of its direct and indirect subsidiaries (each, a “Loan Party” and, collectively, the “Loan Parties”) entered into Amendment No.

3 (“Amendment No.

3”) to that certain Credit Agreement, dated May 3, 2019, as amended by Amendment No.

1 dated May 28, 2019 and Amendment No.

2 dated November 12, 2020, with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (collectively, the “Credit Agreement”).

Additionally, at closing of Amendment No.

3 on July 1, 2021, the Company recorded a liability in the amount of $ 250 owed to Kanders & Company in consideration of the significant support received by the Company from Kanders & Company in sourcing, structuring, and negotiating Amendment No.

This amount was paid during the three months ended September 30, 2021.

During the three months ended September 30, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with three existing stockholders of the Company.

Pursuant to the Purchase Agreement, the Company sold its common stock in a registered direct offering (the “Offering”).

Upon the Company’s closing of the Offering, the Company paid a fee in the amount of $ 250 to Kanders & Company, which were deducted from the net proceeds, in consideration of the significant support received by the Company from Kanders & Company in sourcing, structuring, and negotiating the Offering.

As of September 30, 2020, the Company recorded a liability in the amount of $ 500 owed to Kanders & Company, which is included in transaction costs, in consideration of the significant support received by the Company from Kanders & Company in sourcing, structuring, performing due diligence and negotiating the acquisition of Barnes.

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

The Credit Agreement as amended by Amendment No.

3 increased the aggregate amount of the term loan facility thereunder to $ 125,000 and increased the maximum amount of the revolving loan facility thereunder to $ 100,000 .

The term loan facility was fully borrowed at the closing of Amendment No.

3 on July 1, 2021 in connection with the Rhino-Rack Acquisition.

Amendment No.

3 did not change the maturity date which remains May 3, 2024 .

Additionally, on July 1, 2021, the Company recorded a liability in the amount of $ 250 owed to Kanders & Company in consideration of the significant support received by the Company from Kanders & Company in sourcing, structuring, and negotiating Amendment No.

SUBSEQUENT EVENTS

Public Offering of Common Stock

On October 26, 2021, the Company entered into an underwriting agreement with BofA Securities, Inc., as representative of the several underwriters named therein (the “Underwriters”), relating to the public offer and sale of 2,750 shares of the Company’s common stock at a price to the public of $ 27.00 per share.

The Underwriters received an underwriting discount of 6 %, or $ 1.62 per share, in connection with the sale of the shares of Common Stock in the offering.

In addition, the Company granted the Underwriters a 30-day option to purchase up to 413 additional shares of common stock on the same terms and conditions.

On October 29, 2021, the Underwriters exercised that option in full.

The net proceeds to the Company from the offering, including the Underwriters’ exercise of their 30-day option but before expenses and after deducting the applicable underwriting discounts and commissions, were approximately $ 80,264 .

The Company intends to use a portion of the net proceeds of the offering for the repayment in full of approximately $ 65,000 in aggregate principal amount under the revolving loan facility available pursuant to the Credit Agreement and the remaining portion of the net proceeds from the offering for general corporate purposes, including capital expenditures and potential acquisitions.

The closing of the offering of 2,750 shares of common stock occurred on October 29, 2021, and the closing of the Underwriters’ 30-day option to purchase 413 shares of common stock occurred on November 2, 2021.

On October 29, 2021, the Company recorded a liability in the amount of $ 500 owed to Kanders & Company in consideration of the significant support received by the Company from Kanders & Company in sourcing, structuring, and negotiating the offering.

CLARUS CORPORATION

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements