Clarus Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS CLARUS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except per share amounts) March 31, 2022 December 31, 2021 Assets Current assets Cash $ 16,451 $ 19,465 Accounts receivable, less allowance for credit losses of $ 1,283 and $ 811 69,530 66,180 Inventories 152,718 129,354 Prepaid and other current assets 12,838 11,831 Income tax receivable 258 116 Total current assets 251,795 226,946 Property and equipment, net 43,168 42,826 Other intangible assets, net 71,327 73,683 Indefinite-lived intangible assets 131,115 128,271 Goodwill 121,064 118,090 Deferred income taxes 22,456 22,433 Other long-term assets 20,157 19,578 Total assets $ 661,082 $ 631,827 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 34,098 $ 31,488 Accrued liabilities 30,176 27,473 Income tax payable 1,844 4,437 Current portion of long-term debt 12,103 9,585 Total current liabilities 78,221 72,983 Long-term debt, net 139,829 131,948 Deferred income taxes 36,892 35,280 Other long-term liabilities 23,034 21,448 Total liabilities 277,976 261,659 Stockholders' Equity Preferred stock, $ 0.0001 par value per share; 5,000 shares authorized; none issued - - Common stock, $ 0.0001 par value per share; 100,000 shares authorized; 41,272 and 41,105 issued and 37,210 and 37,094 outstanding, respectively 4 4 Additional paid in capital 666,489 662,996 Accumulated deficit ( 258,963 ) ( 263,342 ) Treasury stock, at cost ( 25,537 ) ( 24,440 ) Accumulated other comprehensive income (loss) 1,113 ( 5,050 ) Total stockholders' equity 383,106 370,168 Total liabilities and stockholders' equity $ 661,082 $ 631,827 See accompanying notes to condensed consolidated financial statements. ‎ 3 CLARUS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands, except per share amounts) Three Months Ended March 31, 2022 March 31, 2021 Sales Domestic sales $ 62,307 $ 47,573 International sales 50,969 27,758 Total sales 113,276 75,331 Cost of goods sold 69,024 48,281 Gross profit 44,252 27,050 Operating expenses Selling, general and administrative 34,175 20,885 Transaction costs 1,201 476 Contingent consideration expense 763 - Total operating expenses 36,139 21,361 Operating income 8,113 5,689 Other expense Interest expense, net ( 1,116 ) ( 238 ) Other, net ( 67 ) ( 140 ) Total other expense, net ( 1,183 ) ( 378 ) Income before income tax 6,930 5,311 Income tax expense (benefit) 1,621 ( 366 ) Net income 5,309 5,677 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment 6,077 ( 1,016 ) Unrealized gain on hedging activities 86 896 Other comprehensive income (loss) 6,163 ( 120 ) Comprehensive income $ 11,472 $ 5,557 Net income per share: Basic $ 0.14 $ 0.18 Diluted 0.13 0.17 Weighted average shares outstanding: Basic 37,161 31,283 Diluted 39,802 32,750 See accompanying notes to condensed consolidated financial statements. ‎ 4 CLARUS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended March 31, 2022 March 31, 2021 Cash Flows From Operating Activities: Net income $ 5,309 $ 5,677 Adjustments to reconcile net income to net cash used in operating activities: Depreciation of property and equipment 1,832 1,356 Amortization of other intangible assets 4,120 1,197 Amortization of debt issuance costs 170 82 Loss on disposition of property and equipment 9 - Noncash lease expense 694 331 Contingent consideration expense 754 - Stock-based compensation 3,367 1,524 Deferred income taxes 524 ( 697 ) Changes in operating assets and liabilities: Accounts receivable 437 66 Inventories ( 23,137 ) ( 2,388 ) Prepaid and other assets ( 856 ) ( 5,730 ) Accounts payable ( 2,101 ) ( 3,224 ) Accrued liabilities 820 ( 1,229 ) Income taxes ( 2,737 ) 517 Net cash used in operating activities ( 10,795 ) ( 2,518 ) Cash Flows From Investing Activities: Purchases of property and equipment ( 1,900 ) ( 1,347 ) Net cash used in investing activities ( 1,900 ) ( 1,347 ) Cash Flows From Financing Activities: Proceeds from revolving credit facilities 25,670 11,637 Repayments on revolving credit facilities ( 13,689 ) ( 16,565 ) Repayments on term loans ( 1,613 ) ( 1,000 ) Purchase of treasury stock ( 1,097 ) ( 651 ) Proceeds from exercise of stock options 126 166 Cash dividends paid ( 930 ) ( 783 ) Net cash provided by (used in) financing activities 8,467 ( 7,196 ) Effect of foreign exchange rates on cash 1,214 ( 203 ) Change in cash ( 3,014 ) ( 11,264 ) Cash, beginning of year 19,465 17,789 Cash, end of period $ 16,451 $ 6,525 Supplemental Disclosure of Cash Flow Information: Cash paid for income taxes $ 3,844 $ 75 Cash paid for interest $ 926 $ 161 Supplemental Disclosures of Non-Cash Investing and Financing Activities: Property and equipment purchased with accounts payable $ 425 $ 293 Lease liabilities arising from obtaining right of use assets $ 1,164 $ 3,539 See accompanying notes to condensed consolidated financial statements. ‎ 5 CLARUS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (In thousands, except per share amounts) Accumulated Additional Other Total Common Stock Paid-In Accumulated Treasury Stock Comprehensive Stockholders' Shares Amount Capital Deficit Shares Amount Income (Loss) Equity Balance, December 31, 2020 35,198 $ 4 $ 513,979 $ ( 286,100 ) ( 3,970 ) $ ( 23,789 ) $ 500 $ 204,594 Net income - - - 5,677 - - - 5,677 Other comprehensive loss - - - - - - ( 120 ) ( 120 ) Cash dividends ($ 0.025 per share) - - - ( 783 ) - - - ( 783 ) Purchase of treasury stock - - - - ( 41 ) ( 651 ) - ( 651 ) Stock-based compensation expense - - 1,524 - - - - 1,524 Proceeds from exercise of options 127 - 246 - - - - 246 Balance, March 31, 2021 35,325 $ 4 $ 515,749 $ ( 281,206 ) ( 4,011 ) $ ( 24,440 ) $ 380 $ 210,487 Accumulated Additional Other Total Common Stock Paid-In Accumulated Treasury Stock Comprehensive Stockholders' Shares Amount Capital Deficit Shares Amount Income (Loss) Equity Balance, December 31, 2021 41,105 $ 4 $ 662,996 $ ( 263,342 ) ( 4,011 ) $ ( 24,440 ) $ ( 5,050 ) $ 370,168 Net income - - - 5,309 - - - 5,309 Other comprehensive income - - - - - - 6,163 6,163 Cash dividends ($ 0.025 per share) - - - ( 930 ) - - - ( 930 ) Purchase of treasury stock - - - - ( 51 ) ( 1,097 ) - ( 1,097 ) Stock-based compensation expense - - 3,367 - - - - 3,367 Proceeds from exercise of options 167 - 126 - - - - 126 Balance, March 31, 2022 41,272 $ 4 $ 666,489 $ ( 258,963 ) ( 4,062 ) $ ( 25,537 ) $ 1,113 $ 383,106 See accompanying notes to condensed consolidated financial statements. 6 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands, except per share amounts) NOT E 1. 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 March 31, 2022 and December 31, 2021, and for the three months ended March 31, 2022 and 2021, 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 months ended March 31, 2022, are not necessarily indicative of the results to be obtained for the year ending December 31 , 2022. 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, 2021, filed with the Securities and Exchange Commission (the “SEC”) on March 7, 2022. Clarus, incorporated in Delaware in 1991, acquired Black Diamond Equipment, Ltd. (“Black Diamond Equipment”) in May 2010, and changed its name to Black Diamond, Inc. in January 2011. In October 2012, we acquired PIEPS Holding GmbH and its subsidiaries (collectively, “PIEPS”). On August 14, 2017, the Company changed its name from Black Diamond, Inc. to Clarus Corporation and its stock ticker symbol from “BDE” to “CLAR” on the NASDAQ stock exchange. On August 21, 2017, the Company acquired Sierra Bullets, L.L.C. (“Sierra”). On November 6, 2018, the Company acquired the assets of SKINourishment, Inc. (“SKINourishment”). On October 2, 2020, the Company completed the acquisition of certain assets and liabilities constituting the Barnes business (“Barnes”). On July 1, 2021, the Company completed the acquisition of Australia-based Rhino-Rack Holdings Pty Ltd (“Rhino-Rack”). On December 1, 2021, the Company completed the acquisition of Australia-based MaxTrax Australia Pty Ltd (“MAXTRAX”). Nature of Business 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® and MAXTRAX® brand names through outdoor specialty and online retailers, our own websites, distributors and original equipment manufacturers. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The more significant estimates relate to the fair value of net assets acquired in business combinations, excess or obsolete inventory, allowance for credit losses, contingent consideration liabilities, and valuation of deferred tax assets. We base our estimates on historical experience, projected future cash flows, and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates. Significant Accounting Policies Accounting Pronouncements not yet adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides temporary optional expedients and exceptions to existing guidance on contract modifications and hedge accounting to facilitate the market transition from existing reference rates, such as the London Inter-Bank Offered Rate (“LIBOR”) which is being phased out in 2021, to alternate reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The standard is currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022. Management will continue to evaluate the impact of the adoption and implementation of this standard, but currently management does not believe that the impact of transitioning from LIBOR to SOFR will have a material effect on the interest rates of the company . 7 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) NOTE 2. ACQUISITIONS MAXTRAX On November 26, 2021, Clarus entered into a Share and Unit Purchase Agreement (the “MAXTRAX Purchase Agreement”) to acquire Australia-based MaxTrax Australia Pty Ltd (“MAXTRAX”), which subsequently closed on December 1, 2021. 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 MAXTRAX (the “MAXTRAX Acquisition”). The Company acquired MAXTRAX for an aggregate purchase price of $AUD 49,744 (approximately $ 35,475 ), subject to a post-closing adjustment, comprised of $AUD 37,551 (approximately $ 26,780 ) cash, 107 shares of the Company’s common stock valued at $ 2,594 , and additional consideration described below. The MAXTRAX Purchase Agreement also provides for the payment of additional consideration in the form of shares of the Company’s common stock valued at $AUD 6,250 (approximately $ 4,457 ) split equally on June 30, 2022 and 2023. The MAXTRAX Purchase Agreement provides for the payment of additional contingent consideration up to $AUD 6,250 (approximately $ 4,457 ) in cash if certain future net sales thresholds are met during 2022 and 2023 (the “MAXTRAX Contingent Consideration”). The Company estimated the initial fair value of the MAXTRAX Contingent Consideration to be $AUD 2,307 (approximately $ 1,644 ) and has recorded this liability within accrued liabilities and other long-term liabilities. The acquisition was accounted for as a business combination. Rhino-Rack On May 30, 2021, Clarus entered into a Share Sale and Purchase Agreement (the “Purchase Agreement”) to acquire Australia-based Rhino-Rack Holdings Pty Ltd (“Rhino-Rack”), which subsequently closed on July 1, 2021. 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”). The Company acquired Rhino-Rack for an aggregate purchase price of approximately $AUD 269,696 (approximately $ 202,488 ), subject to a post-closing adjustment, comprised of approximately $AUD 191,249 (approximately $ 143,590 ) cash, 2,315 shares of the Company’s common stock valued at $ 55,333 , and additional contingent consideration described below. 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 “Rhino-Rack Contingent Consideration”). The Company estimated the initial fair value of the Rhino-Rack Contingent Consideration to be approximately $AUD 4,747 (approximately $ 3,565 ) and has recorded this liability within accrued liabilities. The acquisition was accounted for as a business combination. The Company believes the acquisitions of MAXTRAX and Rhino-Rack are 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 seek to acquire and grow businesses. 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 MAXTRAX and Rhino-Rack are based on the Company’s best estimates and assumptions as of the reporting date and are considered preliminary. Since our initial purchase price allocation for the MAXTRAX acquisition, we have increased the fair value of accrued liabilities assumed and goodwill by $ 741 . These adjustments were made after receiving certain information, which existed as of the date of acquisition, related to the fair value of assumed liabilities and such amounts were recorded during the first quarter of 2022. The fair value measurements of identifiable assets and liabilities, and the resulting goodwill related to the MAXTRAX and Rhino-Rack Acquisitions are subject to change and the final purchase price allocations could be different from the amounts presented below. We expect to finalize the valuations as soon as practicable, but not later than one year from the date of the acquisitions. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for MAXTRAX and Rhino-Rack is included in the Adventure segment. The goodwill consists largely of the growth and profitability expected from these acquisitions. 8 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) MAXTRAX Rhino-Rack December 1, 2021 July 1, 2021 Number of Shares Estimated Fair Value Number of Shares Estimated Fair Value Cash paid - $ 26,780 - $ 143,590 Issuance of shares of Clarus Corporation 107 2,594 2,315 55,333 Future issuance of shares of Clarus Corporation - 4,457 - - Contingent consideration - 1,644 - 3,565 Total purchase consideration 107 $ 35,475 2,315 $ 202,488 Assets acquired and liabilities assumed Assets Cash $ 1,869 $ 7,513 Accounts receivable 2,791 10,769 Inventories 1,819 27,046 Prepaid and other current assets 883 644 Property and equipment 139 4,619 Other intangible assets 10,341 55,400 Indefinite-lived intangible assets 10,555 72,800 Goodwill 15,199 78,347 Other long-term assets 979 11,468 Total assets 44,575 268,606 Liabilities Accounts payable and accrued liabilities 2,176 16,511 Income tax payable 251 3,413 Current portion of long-term debt - 607 Long-term debt - 2,107 Deferred income taxes 5,863 32,451 Other long-term liabilities 810 11,029 Total liabilities 9,100 66,118 Net Book Value Acquired $ 35,475 $ 202,488 The estimated fair value of inventory was recorded at expected sales price less cost to sell plus a reasonable profit margin for selling efforts. 9 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) In connection with the acquisitions, the Company acquired exclusive rights to MAXTRAX’s and Rhino-Rack’s 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 as of the acquisition dates, are as follows: MAXTRAX Rhino-Rack Average Average Gross Useful Life Gross Useful Life Intangibles subject to amortization Customer relationships $ 8,986 13.5 years $ 40,400 13.5 years Product technologies 1,355 7.0 years 15,000 10.0 years Intangibles not subject to amortization Trademarks 10,555 N/A 72,800 N/A $ 20,896 12.6 years $ 128,200 12.6 years The full amount of goodwill of $ 15,199 for MAXTRAX and $ 78,347 for Rhino-Rack is expected to be non-deductible for tax purposes. No pre-existing relationships existed between the Company and MAXTRAX and Rhino-Rack or their sellers prior to the acquisition. MAXTRAX and Rhino-Rack revenue and operating income are included in the Adventure segment. The following unaudited pro forma results are based on the individual historical results of the Company, MAXTRAX and Rhino-Rack, with adjustments to give effect as if the acquisitions and borrowings used to finance the acquisitions had occurred on January 1, 2020, 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 March 31, 2021 Sales $ 107,009 Net income $ 9,985 Net income per share - basic $ 0.32 Net income per share - diluted $ 0.30 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. 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. NOTE 3. INVENTORIES Inventories, as of March 31, 2022 and December 31, 2021, were as follows: March 31, 2022 December 31, 2021 Finished goods $ 106,916 $ 86,647 Work-in-process 10,046 10,336 Raw materials and supplies 35,756 32,371 $ 152,718 $ 129,354 10 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) NOTE 4. PROPERTY AND EQUIPMENT Property and equipment, net, as of March 31, 2022 and December 31, 2021, were as follows: March 31, 2022 December 31, 2021 Land $ 4,160 $ 4,160 Building and improvements 16,544 16,403 Furniture and fixtures 6,756 6,677 Computer hardware and software 8,374 7,512 Machinery and equipment 34,470 33,581 Construction in progress 4,435 4,312 74,739 72,645 Less accumulated depreciation ( 31,571 ) ( 29,819 ) $ 43,168 $ 42,826 Depreciation expense for the three months ended March 31, 2022 and 2021 was $ 1,832 and $ 1,356 , respectively. NOTE 5. GOODWILL AND INTANGIBLE ASSETS Goodwill The following table summarizes the balances in goodwill by segment: Outdoor Precision Sport Adventure Total Balance at December 31, 2021 $ - $ 26,715 $ 91,375 $ 118,090 Acquisition adjustment - - 741 741 Impact of foreign currency exchange rates - - 2,233 2,233 Balance at March 31, 2022 $ - $ 26,715 $ 94,349 $ 121,064 Indefinite Lived Intangible Assets The following table summarizes the changes in indefinite lived intangible assets: Balance at December 31, 2021 $ 128,271 Impact of foreign currency exchange rates 2,844 Balance at March 31, 2022 $ 131,115 Trademarks classified as indefinite-lived intangible assets by brand as of March 31, 2022 and December 31, 2021, were as follows: March 31, 2022 December 31, 2021 Black Diamond $ 19,600 $ 19,600 PIEPS 3,102 3,166 Sierra 18,900 18,900 Barnes 5,600 5,600 Rhino-Rack 72,801 70,278 MAXTRAX 11,112 10,727 $ 131,115 $ 128,271 11 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) Other Intangible Assets, net The following table summarizes the changes in gross other intangible assets: Gross balance at December 31, 2021 $ 104,681 Impact of foreign currency exchange rates 1,983 Gross balance at March 31, 2022 $ 106,664 Other intangible assets, net of amortization as of March 31, 2022 and December 31, 2021, were as follows: March 31, 2022 Gross Accumulated Amortization Net Weighted Average Useful Life Intangibles subject to amortization Customer relationships $ 81,533 $ ( 27,032 ) $ 54,501 13.8 years Product technologies 22,921 ( 6,634 ) 16,287 10.2 years Tradename / trademark 1,263 ( 724 ) 539 9.4 years Core technologies 947 ( 947 ) - 10.0 years $ 106,664 $ ( 35,337 ) $ 71,327 12.9 years December 31, 2021 Gross Accumulated Amortization Net Weighted Average Useful Life Customer relationships $ 80,078 $ ( 23,804 ) $ 56,274 13.8 years Product technologies 22,393 ( 5,557 ) 16,836 10.2 years Tradename / trademark 1,263 ( 690 ) 573 9.4 years Core technologies 947 ( 947 ) - 10.0 years $ 104,681 $ ( 30,998 ) $ 73,683 12.9 years Amortization expense for the three months ended March 31, 2022 and 2021, was $ 4,120 and $ 1,197 , respectively. Future amortization expense for other intangible assets as of March 31, 2021 is as follows: Years Ending December 31, Amortization Expense 2022 (excluding the three months ended March 31, 2022) $ 11,946 2023 13,714 2024 11,543 2025 9,334 2026 7,188 Thereafter 17,602 $ 71,327 12 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) NOTE 6. ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES Accrued liabilities as of March 31, 2022 and December 31, 2021, were as follows: March 31, 2022 December 31, 2021 Accrued payroll and related items $ 4,678 $ 5,029 Accrued bonus 2,972 3,615 Designated forward exchange contracts 92 - Accrued warranty 1,928 1,529 Current lease liabilities 2,998 2,824 Accrued commissions 972 811 Contingent consideration liabilities 2,980 2,791 Accrued excise tax 912 724 Other 12,644 10,150 $ 30,176 $ 27,473 Other long-term liabilities as of March 31, 2022 and December 31, 2021, were as follows: March 31, 2022 December 31, 2021 Long-term lease liability $ 15,764 $ 15,111 Deferred stock consideration for business acquisition 4,693 4,530 Contingent consideration liability 1,408 694 Other 1,169 1,113 $ 23,034 $ 21,448 NOTE 7. LONG-TERM DEBT Long-term debt as of March 31, 2022 and December 31, 2021, was as follows: March 31, 2022 December 31, 2021 Revolving credit facility (a) $ 30,481 $ 18,501 Other debt (b) 1,414 1,467 Term loan (c) 120,313 121,874 Debt issuance costs ( 276 ) ( 309 ) 151,932 141,533 Less current portion ( 12,103 ) ( 9,585 ) $ 139,829 $ 131,948 On January 3, 2022, the Company and certain of its direct and indirect subsidiaries (each, a “Loan Party” and, collectively, the “Loan Parties”) entered into Amendment No. 4 to the Credit Agreement (“Amendment No. 4”), as previously amended, with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (collectively, the “Credit Agreement”). Amendment No. 4, among other things, permits (i) the Company to borrow in Australian Dollars and New Zealand Dollars in order to support the operations of the Company in Australia and New Zealand and (ii) provides for addbacks to EBITDA, for debt covenant purposes, (as defined in the Credit Agreement) under the Credit Agreement for expenses relating to activities in respect of acquisitions, dispositions, investments and financings (whether or not these transactions are actually consummated). 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 . 13 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) All obligations under the Credit Agreement are secured by our subsidiary equity interests, as well as accounts receivable, inventory, intellectual property and certain other assets owned by the Company. The Credit Agreement contains restrictions on the Company’s ability to pay dividends or make distributions or other restricted payments if certain conditions in the Credit Agreement are not fulfilled . 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 March 31, 2022. (a) As of March 31, 2022, the Company had drawn $ 30,481 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 March 31, 2022 and December 31, 2021, the rate was 2.3750 %. (b) Foreign subsidiaries of the Company have a revolving credit facility and term debt with financial institutions which mature between August 22, 2022 and August 8, 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 March 31, 2022 the interest rates ranged between 1.3387 % and 4.9500 % and as of December 31, 2021 the interest rates ranged between 1.3387 % and 5.1651 %. The credit facilities are secured by certain assets of the foreign subsidiaries. (c) 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 March 31, 2022 and December 31, 2021, the rate was 2.3750 % and 2.3750 %, respectively. NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS The Company’s primary exchange rate risk management objective is to mitigate the uncertainty of anticipated cash flows attributable to changes in foreign currency exchange rates. The Company primarily focuses on mitigating changes in cash flows resulting from sales denominated in currencies other than the U.S. dollar. The Company manages this risk primarily by using currency forward and option contracts. If the anticipated transactions are deemed probable, the resulting relationships are formally designated as cash flow hedges. 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. At March 31, 2022, 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. At March 31, 2022, there was no such exposure to the counterparties. The Company’s exposure of counterparty credit risk is limited to the aggregate unrealized gain of $ 534 on all contracts at March 31, 2022. The Company’s derivative counterparties have strong credit ratings and as a result, the Company does not require collateral to facilitate transactions. The Company held the following contracts designated as hedging instruments as of March 31, 2022 and December 31, 2021: March 31, 2022 Notional Latest Amount Maturity Foreign exchange contracts - Canadian Dollars $ 16,440 February 2023 Foreign exchange contracts - Euros € 18,713 February 2023 Foreign exchange contracts - Australian Dollars $ 1,863 June 2022 December 31, 2021 Notional Latest Amount Maturity Foreign exchange contracts - Canadian Dollars $ 14,850 February 2023 Foreign exchange contracts - Euros € 20,104 February 2023 14 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) 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 (loss) and reclassified to sales in the period the underlying hedged transaction is recognized in earnings. Gains (losses) of $ 253 and $( 321 ) were reclassified to sales during the three months ended March 31, 2022 and 2021, respectively. The following table presents the balance sheet classification and fair value of derivative instruments as of March 31, 2022 and December 31, 2021: Classification March 31, 2022 December 31, 2021 Derivative instruments in asset positions: Designated forward exchange contracts Prepaid and other current assets $ 626 $ 491 Designated forward exchange contracts Other long-term assets $ - $ 20 Derivative instruments in liability positions: Designated forward exchange contracts Accrued liabilities $ 92 $ - Designated forward exchange contracts Other long-term liabilities $ - $ 24 NOTE 9. 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 March 31, 2022: Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Cash Flow Hedges Total Balance as of December 31, 2021 $ ( 5,241 ) $ 191 $ ( 5,050 ) Other comprehensive income before reclassifications 6,077 280 6,357 Amounts reclassified from other comprehensive income - ( 194 ) ( 194 ) Net current period other comprehensive income 6,077 86 6,163 Balance as of March 31, 2022 $ 836 $ 277 $ 1,113 The following table sets forth the changes in AOCI, net of tax, for the three months ended March 31, 2021: Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Cash Flow Hedges Total Balance as of December 31, 2020 $ 1,480 $ ( 980 ) $ 500 Other comprehensive income (loss) before reclassifications ( 1,016 ) 650 ( 366 ) Amounts reclassified from other comprehensive income (loss) - 246 246 Net current period other comprehensive income (loss) ( 1,016 ) 896 ( 120 ) Balance as of March 31, 2021 $ 464 $ ( 84 ) $ 380 15 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) The effects on net income of amounts reclassified from unrealized gains on cash flow hedges for foreign exchange contracts for the three months ended March 31, 2022 and 2021, were as follows: Gains (losses) reclassified from AOCI to the Condensed Consolidated Statements of Comprehensive Income Affected line item in the Condensed Consolidated Three Months Ended Statements of Comprehensive Income March 31, 2022 March 31, 2021 Foreign exchange contracts: Sales $ 253 $ ( 321 ) Less: Income tax expense (benefit) 59 ( 75 ) Amount reclassified, net of tax $ 194 $ ( 246 ) Total reclassifications from AOCI $ 194 $ ( 246 ) NOTE 10. FAIR VALUE MEASUREMENTS We measure certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: Level 1 - inputs to the valuation methodology are quoted market prices for identical assets or liabilities in active markets. Level 2 - inputs to the valuation methodology include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. 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 March 31, 2022 and December 31, 2021 were as follows: March 31, 2022 Level 1 Level 2 Level 3 Total Assets Designated forward exchange contracts $ - $ 626 $ - $ 626 $ - $ 626 $ - $ 626 Liabilities Designated forward exchange contracts $ - $ 92 $ - $ 92 Contingent consideration liabilities - - 4,388 4,388 $ - $ 92 $ 4,388 $ 4,480 December 31, 2021 Level 1 Level 2 Level 3 Total Assets Designated forward exchange contracts $ - $ 511 $ - $ 511 $ - $ 511 $ - $ 511 Liabilities Designated forward exchange contracts $ - $ 24 $ - $ 24 Contingent consideration liabilities - - 3,485 3,485 $ - $ 24 $ 3,485 $ 3,509 Derivative financial instruments are recorded at fair value based on current market pricing models. No nonrecurring fair value 16 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) measurements existed at March 31, 2022 and December 31, 2021. The Company estimated the fair value of contingent consideration liabilities using a series of call options. Significant unobservable inputs used in the valuation include discount rates ranging from 4.8 % to 8.0 %. Contingent consideration liabilities are remeasured at the estimated fair value at the end of each reporting period with the change in fair value recognized in contingent consideration expense in the accompanying condensed consolidated statements of comprehensive income 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. The following table summarizes the changes in contingent consideration liabilities: Balance at December 31, 2021 $ 3,485 Fair value adjustments 763 Impact of foreign currency exchange rates 140 Balance at March 31, 2022 $ 4,388 As the contingent consideration liabilities are remeasured to fair value each reporting period, significant increases or decreases in projected sales, 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 liabilities could change in future periods based on our ongoing evaluation of these significant unobservable inputs. NOTE 11. STOCKHOLDERS’ EQUITY On August 6, 2018, the Company announced that its Board of Directors approved the initiation of a quarterly cash dividend program of $ 0.025 per share of the Company’s common stock (the “Quarterly Cash Dividend”) or $ 0.10 per share on an annualized basis. The declaration and payment of future Quarterly Cash Dividends is subject to the discretion of and approval of the Company’s Board of Directors. On April 29, 2022 , the Company announced that its Board of Directors approved the payment on May 20, 2022 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 May 9, 2022 . NOTE 12. EARNINGS PER SHARE Basic earnings per share is computed by dividing earnings by the weighted average number of common shares outstanding during each period. Diluted earnings per share is computed by dividing earnings by the total of the weighted average number of shares of common stock outstanding during each period, plus the effect of dilutive outstanding stock options and unvested restricted stock grants. Potentially dilutive securities are excluded from the computation of diluted earnings per share if their effect is anti-dilutive to the loss from continuing operations. The following table is a reconciliation of basic and diluted shares of common stock outstanding used in the calculation of earnings per share: Three Months Ended March 31, 2022 March 31, 2021 Weighted average shares outstanding - basic 37,161 31,283 Effect of dilutive stock awards 2,435 1,467 Effect of dilutive deferred stock consideration for business acquisition 206 - Weighted average shares outstanding - diluted 39,802 32,750 Net income per share: Basic $ 0.14 $ 0.18 Diluted 0.13 0.17 For the three months ended March 31, 2022 and 2021, equity awards of 1,329 and 500 , respectively, were excluded from the calculation of earnings per share for these periods as they were anti-dilutive. 17 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) NOTE 13. STOCK-BASED COMPENSATION PLAN Under the Company’s current 2015 Stock Incentive Plan (the “2015 Plan”), the Company’s Board of Directors has flexibility to determine the type and amount of awards to be granted to eligible participants, who must be employees, directors, officers or consultants of the Company or its subsidiaries. The 2015 Plan allows for grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted units. The aggregate number of shares of common stock that may be granted through awards under the 2015 Plan to any employee in any calendar year may not exceed 500 shares. The 2015 Plan will continue in effect until December 2025 unless terminated sooner. Options Granted: During the three months ended March 31, 2022, the Company issued stock options for an aggregate of 353 shares under the 2015 Plan to directors and employees of the Company. Of the 353 options, 343 vest and become exercisable over a period of three years , and the remaining 10 vest immediately. All of the issued stock options 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: Options Granted During the Three Months Ended March 31, 2022 Number of options 343 10 Option vesting period 3 Years Immediate Grant price (per share) $ 21.83 - $ 27.65 $ 21.83 Dividend yield 0.36 % - 0.46 % 0.46 % Expected volatility (a) 38.6 % - 38.7 % 39.40 % Risk-free interest rate 1.46 % - 1.68 % 1.66 % Expected life (years) (b) 6.00 5.50 Weighted average fair value (per share) $ 8.24 - $ 10.41 $ 8.03 (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 history of employee award recipient. The grant date fair value of the stock options granted during the three months ended March 31, 2022, was $ 2,967 , which will be recognized over the vesting period of the options. Market Condition Restricted Shares Granted: On March 4, 2022, the Company issued and granted to certain employees restricted stock awards of 700 restricted shares under the 2015 Plan, of which 700 restricted shares will vest if, on or before March 4, 2032, the Fair Market Value (as defined in the Plan) of the Company’s common stock shall have equaled or exceeded $ 50.00 per share for twenty consecutive trading days. For computing the fair value of the restricted shares with a market condition, the fair value of the restricted stock award grant has been estimated as of the date of grant using the Monte-Carlo pricing model with the following assumptions: March 4, 2022 Number issued 700 Market condition vesting requirement $ 50.00 stock price target Grant price (per share) $ 21.83 Dividend yield 0.46 % Expected volatility 41.0 % Risk-free interest rate 1.74 % Weighted average fair value (per share) $ 15.37 18 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) Using these assumptions, the fair value of the market condition restricted stock awards granted on March 4, 2022, was approximately $ 10,761 and the expected term was 4.15 years. 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 March 31, 2022 and 2021 was $ 3,367 and $ 1,524 , respectively. For the three months ended March 31, 2022 and 2021, the majority of stock-based compensation costs were classified as selling, general and administrative expenses. As of March 31, 2022, there were 1,701 unvested stock options and unrecognized compensation cost of $ 7,904 related to unvested stock options, as well as 1,546 unvested restricted stock awards and unrecognized compensation costs of $ 13,083 related to unvested restricted stock awards. NOTE 14. COMMITMENTS AND CONTINGENCIES As a consumer goods manufacturer and distributor, the Company faces the risk of product liability and related lawsuits involving claims for substantial money damages, product recall actions and higher than anticipated rates of warranty returns or other returns of goods. The Company is therefore vulnerable to various personal injury and property damage lawsuits relating to its products and incidental to its business. The Company is involved in various legal disputes and other legal proceedings that arise from time to time in the ordinary course of business. Based on currently available information, the Company does not believe that it is reasonably possible that the disposition of any of the legal disputes the Company or its subsidiaries is currently involved in will have a material adverse effect upon the Company’s consolidated financial condition, results of operations or cash flows. There is a reasonable possibility of loss from contingencies in excess of the amounts accrued by the Company in the accompanying condensed consolidated balance sheets; however, the actual amounts of such possible losses cannot currently be reasonably estimated by the Company at this time. It is possible that, as additional information becomes available, the impact on the Company could have a different effect. NOTE 15. INCOME TAXES The Company’s U.S. 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. The difference between the Company’s estimated effective tax rate of 23.4 % for the three months ended March 31, 2022, and the U.S. federal statutory tax rate of 21 % were due to the impact of foreign earnings taxed at applicable statutory rates and permanent book to tax differences related to incentive stock options and officer compensation limitations. As of December 31, 2021, the Company’s gross deferred tax asset was $ 38,184 . The Company has recorded a valuation allowance of $ 4,378 , resulting in a net deferred tax asset of $ 33,806 , before deferred tax liabilities of $ 46,653 . The Company has provided a valuation allowance against a portion of the deferred tax assets as of March 31, 2022 and December 31, 2021, 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. 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. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and net operating loss and credit carryforwards expire. The estimates and judgments associated with the Company’s valuation allowance on deferred tax assets are considered critical due to the amount of deferred tax assets recorded by the Company on its consolidated balance sheet and the judgment required in determining the Company’s future taxable income. The need for a valuation allowance is reassessed at each interim reporting period. As of December 31, 2021, the Company had NOLs and research and experimentation credit for U.S. federal income tax purposes of $ 60,712 and $ 2,289 , respectively. The Company believes its U.S. Federal NOLs will substantially offset its future U.S. Federal income taxes until expiration. 19 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) NOLs available to offset taxable income, subject to compliance with Section 382 of the Code, begin to expire based upon the following schedule: Net Operating Loss Carryforward Expiration Dates December 31, 2021 Expiration Dates December 31, Net Operating Loss Amount 2022 $ 39,507 2023 5,712 2024 3,566 2025 and beyond 11,927 Total $ 60,712 NOTE 16. SEGMENT INFORMATION 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 . Certain significant selling and general and administrative expenses are not allocated to the segments including non-cash stock compensation expense. Each segment is described below:  Our Outdoor segment, which includes Black Diamond Equipment, PIEPS, and SKINourishment, is a global leader in designing, manufacturing, and marketing innovative outdoor engineered equipment and apparel for climbing, mountaineering, trail running, backpacking, skiing, and a wide range of other year-round outdoor recreation activities. Our Outdoor segment offers a broad range of products including: high-performance, activity-based apparel (such as shells, insulation, midlayers, pants and logowear); rock-climbing footwear and equipment (such as carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gear); technical backpacks and high-end day packs; trekking poles; headlamps and lanterns; gloves and mittens; and skincare and other sport-enhancing products. We also offer advanced skis, ski poles, ski skins, and snow safety products, including avalanche airbag systems, avalanche transceivers, shovels, and probes.  Our Precision Sport 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 Adventure segment, which includes Rhino-Rack and MAXTRAX, is a manufacturer of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, recovery boards 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 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. 20 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) Financial information for our segments, as well as revenue by geography, which the Company believes provides a meaningful depiction how the nature, timing and uncertainty of revenue are affected by economic factors, is as follows: Three Months Ended March 31, 2022 March 31, 2021 Sales to external customers: Outdoor Domestic sales $ 25,629 $ 25,760 International sales 25,893 26,036 Total Outdoor 51,522 51,796 Precision Sport Domestic sales 27,443 21,813 International sales 5,675 1,722 Total Precision Sport 33,118 23,535 Adventure Domestic sales 9,235 - International sales 19,401 - Total Adventure 28,636 - Total sales to external customers 113,276 75,331 Segment operating income: Outdoor 1,888 3,445 Precision Sport 11,780 5,962 Adventure 2,124 - Total segment operating income 15,792 9,407 Transaction costs ( 1,201 ) ( 476 ) Contingent consideration expense (763) - Corporate and other expenses ( 5,782 ) ( 3,382 ) Interest expense, net ( 1,116 ) ( 238 ) Income before income tax $ 6,930 $ 5,311 There were no intercompany sales between the Outdoor, Precision Sport, and Adventure segments for the periods presented. Total assets by segment, as of March 31, 2022 and December 31, 2021, were as follows: March 31, 2022 December 31, 2021 Outdoor $ 166,470 $ 166,751 Precision Sport 153,687 142,549 Adventure 316,869 298,364 Corporate 24,056 24,163 $ 661,082 $ 631,827 21 CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) Capital expenditures, depreciation and amortization by segment is as follows. Three Months Ended March 31, 2022 March 31, 2021 Capital expenditures: Outdoor $ 1,236 $ 692 Precision Sport 450 655 Adventure 214 - Total capital expenditures $ 1,900 $ 1,347 Depreciation: Outdoor $ 817 $ 713 Precision Sport 781 643 Adventure 234 - Total depreciation $ 1,832 $ 1,356 Amortization: Outdoor $ 255 $ 259 Precision Sport 692 938 Adventure 3,173 - Total amortization $ 4,120 $ 1,197 NOTE 17. SUBSEQUENT EVENTS Debt On April 18, 2022 (the “Effective Date”), the Company entered into an Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A. (the “Restated Credit Agreement”). The Restated Credit Agreement provides for borrowings of up to $ 300,000 under a secured revolving credit facility (the “Revolving Loans”) (including up to $ 5,000 for letters of credit), and borrowings of up to $ 125,000 under a secured term loan facility (the “Term Loans”). The Restated Credit Agreement also permits the Company, subject to certain requirements, to arrange with lenders for an aggregate of up to $ 175,000 of additional revolving and/or term loan commitments (both of which are currently uncommitted), for potential aggregate revolving and term loan commitments under the Restated Credit Agreement of up to $ 600,000 . The Restated Credit Agreement matures on April 18, 2027 (the “Maturity Date”), at which time the revolving commitments thereunder will terminate and all outstanding Revolving Loans and Term Loans, together with all accrued and unpaid interest thereon, must be repaid. The Term Loans were fully drawn on the Effective Date and cannot be reborrowed. The Restated Credit Agreement provides for quarterly amortization payments of the Term Loans on the last business day of each March, June, September and December, commencing on June 30, 2022. Through and including the payment due on March 31, 2023, the scheduled amortization payment is $ 1,563 per quarter, and each scheduled amortization payment due thereafter through the Maturity Date is $ 3,125 per quarter. The applicable rate for these borrowings will range from 0.50 % to 1.625 % per annum, in the case of alternate base rate borrowings, and 1.50 % to 2.625 % per annum, in the case of term benchmark borrowings. The applicable rate was initially 0.875 % per annum, in the case of alternate base rate borrowings, and 1.875 % per annum, in the case of term benchmark borrowings, however, these initial applicable rates may be adjusted from time to time based upon the level of the Company’s consolidated total leverage ratio. 22 CLARUS CORPORATION MANAGEMENT DISCUSSION AND ANALYSIS (in thousands, except per share amounts)