What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-07-31 · 122 added, 124 removed, 209 unchanged (54% of the section changed)

9 unchanged sentences

disruption and volatility in the global currency, capital and credit markets;

the impact of changes in tariffs, tax laws, global trade policies as well as instability and volatility in global markets;

the financial strength of retail economies and the Company’s customers;

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our ability to obtain additional capital and funding on acceptable terms to meet our financial obligations as well as to support our business operations and growth strategy;

and any material differences in the actual financial results of the Company’s past and future acquisitions and dispositions, including the impact of such transactions and any related recognition of impairment or other charges, such as the recent impairment recognized in the Outdoor segment, on the Company’s future earnings per share.

More information on potential factors that could affect the

any material differences in the actual financial results of the Company’s past and future acquisitions and dispositions, including the impact of such transactions and any related recognition of impairment or other charges, such as the recent impairment recognized in the Outdoor

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

Company’s financial results is included from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10 K, Quarterly Reports on Form 10 Q and Current Reports on Form 8 K.

segment, on the Company’s future earnings per share;

and other risks and uncertainties set forth in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, which are incorporated herein by reference.

More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to the Company as of the date of this Quarterly Report on Form 10-Q, and speak only as of the date hereof.

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On February 29, 2024, the Company completed the sale of all of the equity associated with the Company’s Precision Sport segment, comprised of the Company’s subsidiaries Sierra and Barnes, pursuant to a Purchase and Sale Agreement dated as of December 29, 2023 (the “Precision Sport Purchase Agreement”).

Under the terms of the Precision Sport Purchase Agreement, the Company received net proceeds of approximately $37,871 in cash, after payment of certain fees and settlement of the Restated Credit Agreement, for all of the equity associated with the Company’s Precision Sport segment.

The activities of the Precision Sport segment have been segregated and reported as discontinued operations for all periods

Under the terms of the Precision Sport Purchase Agreement, the Company received net proceeds of approximately $37,871 in cash, after payment of certain fees and

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

settlement of the Restated Credit Agreement, for all of the equity associated with the Company’s Precision Sport segment.

The activities of the Precision Sport segment have been segregated and reported as discontinued operations for all periods presented.

See Note 3 to our condensed consolidated financial statements for financial information regarding discontinued operations.

On July 11, 2025, the Company completed the sale of Black Diamond Austria GmbH and its operating subsidiary, PIEPS GmbH (together, “PIEPS”), to a private investment firm for a total purchase price of €7,800 (approximately $8,400), including cash and assumed debt.

On July 11, 2025, the Company completed the sale of Black Diamond Austria GmbH and its operating subsidiary, PIEPS GmbH (together, “PIEPS”), to a private investment firm for a total purchase price of €7,825 (approximately $9,124), including cash held at PIEPS of $1,311.

The transaction was effected pursuant to a Share Purchase and Transfer Agreement entered into on May 8, 2025, by BD European Holdings, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company.

See Note 4 to our condensed consolidated financial statements for financial information regarding assets and liabilities held for sale.

See Note 1 to our condensed consolidated financial statements for additional information.

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 July 30, 2025, the Company announced that its Board of Directors approved the payment on August 20, 2025 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 11, 2025.

On November 5, 2025, the Company announced that its Board of Directors approved the payment on November 26, 2025 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 17, 2025.

Restructuring

Starting in 2023, the Company began incurring expenses to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs.

During the three months ended June 30, 2025 and 2024, the Company incurred $161 and $161, respectively, and during the six months ended June 30, 2025 and 2024, the Company incurred $334 and $531, respectively, of restructuring charges related to these actions.

During the three months ended September 30, 2025 and 2024, the Company incurred $155 and $478, respectively, and during the nine months ended September 30, 2025 and 2024, the Company incurred $489 and $1,009, respectively, of restructuring charges related to these actions.

The Company has incurred $5,660 of cumulative restructuring charges since the commencement of our restructuring actions in 2023.

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Results of Operations

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The following presents a discussion of operations for the three months ended June 30, 2025, compared with the three months ended June 30, 2024.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The following presents a discussion of operations for the three months ended September 30, 2025, compared with the three months ended September 30, 2024.

Three Months Ended

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Domestic sales

7 unchanged sentences

Legal costs and regulatory matter expenses

Impairment of indefinite-lived intangible assets

Total operating expenses

Operating loss

Other (expense) income

Interest income, net

Total other income, net

Total other (expense) income, net

Loss before income tax

Income tax benefit

Total sales decreased $1,237, or 2.2%, to $55,247 during the three months ended June 30, 2025, compared to total sales of $56,484 during the three months ended June 30, 2024.

The decrease in sales was attributable to a decrease in sales at the Adventure segment of $1,712, partially offset by an increase in sales at the Outdoor segment of $475.

Total sales increased $2,232, or 3.3%, to $69,347 during the three months ended September 30, 2025, compared to total sales of $67,115 during the three months ended September 30, 2024.

The increase in sales was attributable to an increase in sales at the Adventure segment of $2,831, partially offset by a decrease in sales at the Outdoor segment of $599.

CLARUS CORPORATION

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(in thousands, except per share amounts)

Sales in the Outdoor segment were reduced by $99 due to foreign exchange impact from the strengthening of the U.S.

dollar primarily against the euro during the three months ended June 30, 2025, compared to the prior period.

Sales in the Outdoor segment increased by $245 due to foreign exchange impact from the weakening of the U.S.

dollar primarily against the euro during the three months ended September 30, 2025, compared to the prior period.

Sales in the Adventure segment were reduced by $399 due to foreign exchange impact from the strengthening of the U.S.

dollar against the Australian dollar during the three months ended June 30, 2025, compared to the prior period.

Sales in the Adventure segment decreased due to significantly lower demand from global original equipment manufacturer (“OEM”) customers and a challenging wholesale market in Australia for Rhino-Rack, partially offset by a $2,099 increase from the RockyMounts acquisition and higher promotional sales in North America.

Sales in the Outdoor segment increased due to a shift in timing for independent global distributor (“IGD”) revenues into the three months ended June 30, 2025, partially offset by decreases in our direct-to-consumer channels in both North America and Europe.

Domestic sales increased $1,790, or 7.8%, to $24,724 during the three months ended June 30, 2025, compared to domestic sales of $22,934 during the three months ended June 30, 2024.

The increase in sales was attributable to an increase in sales at the Adventure segment of $2,053, partially offset by a decrease in sales at the Outdoor segment of $263.

International sales decreased $3,027, or 9.0%, to $30,523 during the three months ended June 30, 2025, compared to international sales of $33,550 during the three months ended June 30, 2024.

The decrease in sales was attributable to a decrease in sales at the Adventure segment of $3,765, partially offset by an increase in sales at the Outdoor segment of $738.

dollar against the Australian dollar during the three months ended September 30, 2025, compared to the prior period.

Sales in the Adventure segment increased due to a favorable wholesale market in Australia for Rhino-Rack and a $1,510 increase from the RockyMounts acquisition, primarily in North America.

Sales in the Outdoor segment decreased due to a shift in timing for independent global distributor revenues into the three months ended June 30, 2025, lower global direct-to-consumer revenue of $908, and lower PIEPS revenue of $953 due to the sale of PIEPS in July 2025, partially offset by an increase in global wholesale revenue of $2,946, compared to the prior period.

Domestic sales increased $3,896, or 16.0%, to $28,261 during the three months ended September 30, 2025, compared to domestic sales of $24,365 during the three months ended September 30, 2024.

The increase in sales was attributable to an increase in sales at the Outdoor and Adventure segments of $2,436 and $1,460, respectively.

International sales decreased $1,664, or 3.9%, to $41,086 during the three months ended September 30, 2025, compared to international sales of $42,750 during the three months ended September 30, 2024.

The decrease in sales was attributable to a decrease in sales at the Outdoor segment of $3,035, partially offset by an increase in sales at the Adventure segment of $1,371.

Cost of Goods Sold

Cost of goods sold decreased $511, or 1.4%, to $35,567 during the three months ended June 30, 2025, compared to cost of goods sold of $36,078 during the three months ended June 30, 2024.

Gross profit decreased $726, or 3.6%, to $19,680 during the three months ended June 30, 2025, compared to gross profit of $20,406 during the three months ended June 30, 2024.

Gross margin was 35.6% during the three months ended June 30, 2025, compared to a gross margin of 36.1% during the three months ended June 30, 2024.

Gross margin during the three months ended June 30, 2025, decreased compared to the prior year as a result of lower volumes and an unfavorable product mix at the Adventure segment.

Specifically, the unfavorable product mix at Adventure was primarily driven by promotional sales efforts in North America.

This combined with lower wholesale volume at Rhino-Rack in Australia drove the decline in gross margin compared to the three months ended June 30, 2024.

These decreases were partially offset by higher volumes and a favorable product mix at the Outdoor segment during the three months ended June 30, 2025 compared to prior year.

Cost of goods sold increased $1,363, or 3.1%, to $44,981 during the three months ended September 30, 2025, compared to cost of goods sold of $43,618 during the three months ended September 30, 2024.

Gross profit increased $869, or 3.7%, to $24,366 during the three months ended September 30, 2025, compared to gross profit of $23,497 during the three months ended September 30, 2024.

Gross margin was 35.1% during the three months ended September 30, 2025, compared to a gross margin of 35.0% during the three months ended September 30, 2024.

Gross margin during the three months ended September 30, 2025, increased compared to the prior year as a result of higher volumes at the Adventure segment and a favorable product mix at the Outdoor segment.

These increases were partially offset by an unfavorable product mix within the Adventure segment, impacts due to tariffs imposed by the United States for both segments, and lower volumes at the Outdoor segment due to the sale of PIEPS in July 2025.

Specifically, the unfavorable product mix at Adventure was primarily driven by higher RockyMounts sales in North America.

Additionally, losses on foreign currency cash flow hedges were $641 during the three months ended September 30, 2025, which negatively impacted gross margin.

Selling, General and Administrative

Selling, general, and administrative expenses decreased $1,171, or 4.2%, to $26,910 during the three months ended June 30, 2025, compared to selling, general and administrative expenses of $28,081 during the three months ended June 30, 2024.

Selling, general and administrative expenses at the Outdoor segment decreased by $70 primarily as a result of lower employee-related costs and other expense reduction initiatives to manage costs.

Selling, general, and administrative expenses decreased $1,725, or 6.2%, to $26,155 during the three months ended September 30, 2025, compared to selling, general and administrative expenses of $27,880 during the three months ended September 30, 2024.

Selling, general and administrative expenses at the Outdoor segment decreased by $1,200 primarily as a result of lower employee-related costs, lower costs from PIEPS due to the sale in July 2025, and other expense reduction initiatives to manage costs.

Selling, general and administrative expenses at the Adventure segment decreased by $592 primarily as a result of lower marketing, amortization, and employee-related costs, combined with other expense reduction initiatives.

Additionally, Corporate costs decreased $484 due to lower outside service and employee-related costs.

These decreases were partially offset by an increase in Corporate costs of $67 due to higher outside service costs, partially offset by lower employee-related costs.

CLARUS CORPORATION

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Restructuring Charges

Restructuring charges were $161 during the three months ended June 30, 2025, compared to restructuring charges of $161 during the three months ended June 30, 2024.

The restructuring charges incurred during the three months ended June 30, 2025, relate to benefits provided to employees who were terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization.

Restructuring charges were $155 during the three months ended September 30, 2025, compared to restructuring charges of $478 during the three months ended September 30, 2024.

The restructuring charges incurred during the three months ended September 30, 2025, relate to benefits provided to employees who were terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization.

Transaction Costs

Transaction costs increased to $108 during the three months ended June 30, 2025, compared to transaction costs of $27 during the three months ended June 30, 2024, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Transaction costs increased to $436 during the three months ended September 30, 2025, compared to transaction costs of $103 during the three months ended September 30, 2024, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Contingent Consideration Benefit

Contingent consideration benefit decreased to $0 during the three months ended June 30, 2025, compared to a contingent consideration benefit of $125 during the three months ended June 30, 2024, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisition of TRED in 2023.

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

Legal Costs and Regulatory Matter Expenses

Legal costs and regulatory matter expenses increased to $1,837 during the three months ended June 30, 2025, compared to legal costs and regulatory matter expenses of $399 during the three months ended June 30, 2024, which consisted of expenses related to the Company’s specific legal matters.

Legal costs and regulatory matter expenses increased to $1,001 during the three months ended September 30, 2025, compared to legal costs and regulatory matter expenses of $394 during the three months ended September 30, 2024, which consisted of expenses related to the Company’s specific legal matters.

See Note 16 to our condensed consolidated financial statements for financial information regarding specific legal matters.

Impairment of Indefinite-Lived Intangible Assets

Impairment of indefinite-lived intangible assets increased to $1,565 during the three months ended June 30, 2025, compared to impairment of indefinite-lived intangible assets of $0 during the three months ended June 30, 2024.

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

Interest Income, net

Interest income, net decreased to $153 during the three months ended June 30, 2025, compared to interest income, net of $455 during the three months ended June 30, 2024.

The decrease in interest income recognized during the three months ended June 30, 2025, was due to lower interest rates on lower cash balances, compared to the prior period.

Other, net, changed by $1,069, or 258.2%, to $1,483 during the three months ended June 30, 2025, compared to other, net of $414 during the three months ended June 30, 2024.

The change in other, net, was primarily attributable to an increase in remeasurement gains recognized on the Company’s foreign denominated accounts receivable and accounts payable.

The change was partially offset by losses in mark-to-market adjustments on non-hedged foreign currency contracts during the three months ended June 30, 2025.

CLARUS CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

Income tax benefit decreased by $944, or 53.2%, to $831 during the three months ended June 30, 2025, compared to $1,775 during the same period in 2024.

Our effective income tax rate was a benefit of 9.0% for the three months ended June 30, 2025, and differed compared to the statutory tax rates primarily due to the impact of valuation allowance, stock compensation, and research and experimentation expenditures and credits.

For the three months ended June 30, 2024, our effective income tax rate was a benefit of 24.4% and differed compared to the statutory tax rates primarily due to the impact of stock compensation and research and experimentation expenditures and credits.

Interest income, net decreased to $108 during the three months ended September 30, 2025, compared to interest income, net of $373 during the three months ended September 30, 2024.

The decrease in interest income recognized during the three months ended September 30, 2025, was due to lower interest rates on lower cash balances, compared to the prior period.

Other, net, changed by $2,107, or 181.0%, to ($943) during the three months ended September 30, 2025, compared to other, net of $1,164 during the three months ended September 30, 2024.

The change in other, net, was primarily attributable to an increase in remeasurement losses recognized on the Company’s foreign denominated accounts receivable and accounts payable.

The change was partially offset by gains in mark-to-market adjustments on non-hedged foreign currency contracts during the three months ended September 30, 2025.

Income tax benefit increased by $1,580, or 238.0%, to a benefit of $2,244 during the three months ended September 30, 2025, compared to a benefit of $664 during the same period in 2024.

Our effective income tax rate was a benefit of 58.1% for the three months ended September 30, 2025, and differed compared to the statutory tax rates primarily due to the impact of valuation allowance, changes in uncertain tax positions, stock compensation, and research and experimentation expenditures and credits.

For the three months ended September 30, 2024, our effective income tax rate was a benefit of 17.4% and differed compared to the statutory tax rates primarily due to the impact of stock compensation and research and experimentation expenditures and credits.

CLARUS CORPORATION

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(in thousands, except per share amounts)

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The following presents a discussion of operations for the six months ended June 30, 2025, compared with the six months ended June 30, 2024.

Six Months Ended

June 30, 2025

June 30, 2024

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The following presents a discussion of operations for the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024.

Nine Months Ended

September 30, 2025

September 30, 2024

Domestic sales

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Operating loss

Other income (expense)

Interest income, net

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Net (loss) income

Total sales decreased $10,115, or 8.0%, to $115,680 during the six months ended June 30, 2025, compared to total sales of $125,795 during the six months ended June 30, 2024.

Total sales decreased $7,883, or 4.1%, to $185,027 during the nine months ended September 30, 2025, compared to total sales of $192,910 during the nine months ended September 30, 2024.

The decrease in sales was attributable to a decrease in sales at the Adventure and Outdoor segments of $5,059 and $2,824, respectively.

3 unchanged sentences

Sales in the Outdoor segment were reduced by $551 due to foreign exchange impact from the strengthening of the U.S.

dollar primarily against the euro during the six months ended June 30, 2025, compared to the prior period.

dollar primarily against the euro during the nine months ended September 30, 2025, compared to the prior period.

Sales in the Adventure segment were reduced by $1,331 due to foreign exchange impact from the strengthening of the U.S.

dollar against the Australian dollar during the six months ended June 30, 2025, compared to the prior period.

Sales in the Adventure segment decreased due to significantly lower demand from global original equipment manufacturer (“OEM”) customers and a challenging wholesale market in Australia for both Rhino-Rack and MAXTRAX, combined with a prior year large wholesale customer in North America not reoccurring in the six months ended June 30, 2025, partially offset by a $3,441 increase from the RockyMounts acquisition.

Sales in the Outdoor segment decreased due to our product simplification and SKU rationalization strategy across Black Diamond and decreases in our direct-to-consumer channels in both North America and Europe, partially offset by higher apparel revenue during the six months ended June 30, 2025.

Domestic sales decreased $1,685, or 3.3%, to $49,533 during the six months ended June 30, 2025, compared to domestic sales of $51,218 during the six months ended June 30, 2024.

The decrease in sales was attributable to a decrease in sales at the Outdoor segment of $3,199, partially offset by an increase in sales at the Adventure segment of $1,514.

International sales decreased $8,430, or 11.3%, to $66,147 during the six months ended June 30, 2025, compared to international sales of $74,577 during the six months ended June 30, 2024.

The decrease in sales was attributable to a decrease in sales at the Adventure segment of $9,404, partially offset by an increase in sales at the Outdoor segment of $974.

dollar against the Australian dollar during the nine months ended September 30, 2025, compared to the prior period.

Sales in the Adventure segment decreased due to significantly lower demand from global original equipment manufacturer customers and a challenging wholesale market in Australia for both Rhino-Rack and MAXTRAX, combined with a prior year large wholesale customer in North America not reoccurring in the nine months ended September 30, 2025, partially offset by a $4,951 increase from the RockyMounts acquisition.

Sales in the Outdoor segment decreased due to lower independent global distributor revenue, lower global direct-to-consumer revenue of $2,557, and lower PIEPS revenue of $539 due to the sale of PIEPS in July 2025, partially offset by an increase in global wholesale revenue of $1,364, compared to the prior period.

Domestic sales increased $2,211, or 2.9%, to $77,794 during the nine months ended September 30, 2025, compared to domestic sales of $75,583 during the nine months ended September 30, 2024.

The increase in sales was attributable to a increase in sales at the Adventure segment of $2,974, partially offset by a decrease in sales at the Outdoor segment of $763.

International sales decreased $10,094, or 8.6%, to $107,233 during the nine months ended September 30, 2025, compared to international sales of $117,327 during the nine months ended September 30, 2024.

The decrease in sales was attributable to a decrease in sales at the Adventure and Outdoor segments of $8,033 and $2,061, respectively.

Cost of Goods Sold

Cost of goods sold decreased $5,332, or 6.6%, to $75,206 during the six months ended June 30, 2025, compared to cost of goods sold of $80,538 during the six months ended June 30, 2024.

Gross profit decreased $4,783, or 10.6%, to $40,474 during the six months ended June 30, 2025, compared to gross profit of $45,257 during the six months ended June 30, 2024.

Gross margin was 35.0% during the six months ended June 30, 2025, compared to a gross margin of 36.0% during the six months ended June 30, 2024.

Gross margin during the six months ended June 30, 2025, decreased compared to the prior year as a result of lower volumes and unfavorable product mix at the Outdoor and Adventure segments.

Specifically, the unfavorable product mix at Outdoor was related to high levels of discontinued merchandise that was sold, including the vast majority of the remaining Per- and Polyfluoroalkyl Substances (“PFAS”) inventory.

The unfavorable product mix at Adventure was primarily driven by promotional sales efforts in North America.

This combined with lower wholesale volume at both Rhino-Rack and MAXTRAX in Australia drove the decline in gross margin compared to the six months ended June 30, 2024.

Cost of goods sold decreased $3,969, or 3.2%, to $120,187 during the nine months ended September 30, 2025, compared to cost of goods sold of $124,156 during the nine months ended September 30, 2024.

Gross profit decreased $3,914, or 5.7%, to $64,840 during the nine months ended September 30, 2025, compared to gross profit of $68,754 during the nine months ended September 30, 2024.

Gross margin was 35.0% during the nine months ended September 30, 2025, compared to a gross margin of 35.6% during the nine months ended September 30, 2024.

Gross margin during the nine months ended September 30, 2025, decreased compared to the prior year as a result of lower volumes at the Outdoor and Adventure segments, impacts due to tariffs imposed by the United States for both segments, and an unfavorable product mix at Adventure segment.

Specifically, the unfavorable product mix at Adventure was primarily driven by promotional sales efforts in North America and higher RockyMounts revenue.

This combined with lower wholesale volume at both Rhino-Rack and MAXTRAX in Australia drove the decline in gross margin compared to the nine months ended September 30, 2024.

Additionally, losses on foreign currency cash flow hedges were $1,068 during the nine months ended September 30, 2025, which negatively impacted gross margin.

These were partially offset by a favorable product mix at the Outdoor segment due to our simplification initiatives.

Selling, General and Administrative

Selling, general, and administrative expenses decreased $2,770, or 4.9%, to $53,526 during the six months ended June 30, 2025, compared to selling, general and administrative expenses of $56,296 during the six months ended June 30, 2024.

Selling, general and administrative expenses at the Outdoor segment decreased by $1,112 primarily as a result of lower digital marketing and employee-related costs, as well as lower retail expenses due to store closures and other expense reduction initiatives to manage costs.

Selling, general and administrative expenses at the Adventure segment decreased by $963 primarily as a result of lower marketing, amortization, and employee-related costs, combined with other expense reduction initiatives, partially offset by a write-off of internally developed software during the six months ended June 30, 2025.

Additionally, Corporate costs decreased $695 due to lower outside service and employee-related costs.

Selling, general, and administrative expenses decreased $4,495, or 5.3%, to $79,681 during the nine months ended September 30, 2025, compared to selling, general and administrative expenses of $84,176 during the nine months ended September 30, 2024.

Selling, general and administrative expenses at the Outdoor segment decreased by $2,318 primarily as a result of lower digital marketing and employee-related costs, lower costs from PIEPS due to the sale in July 2025, as well as lower retail expenses due to store closures and other expense reduction initiatives to manage costs.

Selling, general and administrative expenses at the Adventure segment decreased by $1,555 primarily as a result of lower marketing, amortization, and employee-related costs, combined with other expense reduction initiatives, partially offset by a write-

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

off of internally developed software during the nine months ended September 30, 2025.

Additionally, Corporate costs decreased $622 due to lower outside service and employee-related costs.

Restructuring Charges

Restructuring charges decreased to $334 during the six months ended June 30, 2025, compared to restructuring charges of $531 during the six months ended June 30, 2024.

The restructuring charges incurred during the six months ended June 30, 2025 relate to benefits provided to employees who were terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization of $304 and lease exit and contract termination costs of $30.

Restructuring charges decreased to $489 during the nine months ended September 30, 2025, compared to restructuring charges of $1,009 during the nine months ended September 30, 2024.

The restructuring charges incurred during the nine months ended September 30, 2025 relate to benefits provided to employees who were terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization of $459 and lease exit and contract termination costs of $30.

Transaction Costs

Transaction costs increased to $250 during the six months ended June 30, 2025, compared to transaction costs of $65 during the six months ended June 30, 2024, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Transaction costs increased to $686 during the nine months ended September 30, 2025, compared to transaction costs of $168 during the nine months ended September 30, 2024, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Contingent Consideration Benefit

Contingent consideration benefit decreased to $0 during the six months ended June 30, 2025, compared to a contingent consideration benefit of $125 during the six months ended June 30, 2024, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisition of TRED in 2023.

Contingent consideration benefit increased to $355 during the nine months ended September 30, 2025, compared to a contingent consideration benefit of $125 during the nine months ended September 30, 2024, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisitions of TRED in 2023 and RockyMounts in December 2024.

Legal Costs and Regulatory Matter Expenses

Legal costs and regulatory matter expenses decreased to $2,462 during the six months ended June 30, 2025, compared to legal costs and regulatory matter expenses of $3,401 during the six months ended June 30, 2024, which consisted of expenses related to the Company’s specific legal matters.

Legal costs and regulatory matter expenses decreased to $3,463 during the nine months ended September 30, 2025, compared to legal costs and regulatory matter expenses of $3,795 during the nine months ended September 30, 2024, which consisted of expenses related to the Company’s specific legal matters.

See Note 16 to our condensed consolidated financial statements for financial information regarding specific legal matters.

Impairment of Indefinite-Lived Intangible Assets

Impairment of indefinite-lived intangible assets increased to $1,565 during the six months ended June 30, 2025, compared to impairment of indefinite-lived intangible assets of $0 during the six months ended June 30, 2024.

Impairment of indefinite-lived intangible assets increased to $1,565 during the nine months ended September 30, 2025, compared to impairment of indefinite-lived intangible assets of $0 during the nine months ended September 30, 2024.

Interest Income, net

Interest income, net decreased to $410 during the six months ended June 30, 2025, compared to interest income, net of $825 during the six months ended June 30, 2024.

The decrease in interest income recognized during the six months ended June 30, 2025, was due to lower interest rates on lower cash balances, compared to the prior period.

Other, net, changed by $2,437, or 492.3%, to $1,942 during the six months ended June 30, 2025, compared to other, net of ($495) during the six months ended June 30, 2024.

The change in other, net, was primarily attributable to an increase in remeasurement gains recognized on the Company’s foreign denominated accounts receivable and accounts payable.

The change was partially offset by losses in mark-to-market adjustments on non-hedged foreign currency contracts during the six months ended June 30, 2025.

Interest income, net decreased to $518 during the nine months ended September 30, 2025, compared to interest income, net of $1,198 during the nine months ended September 30, 2024.

The decrease in interest income recognized during the nine months ended September 30, 2025, was due to lower interest rates on lower cash balances, compared to the prior period.

Other, net, changed by $330, or 49.3%, to $999 during the nine months ended September 30, 2025, compared to other, net of $669 during the nine months ended September 30, 2024.

The change in other, net, was primarily attributable to an increase in remeasurement gains recognized on the Company’s foreign denominated accounts receivable and accounts

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

Income tax benefit decreased by $993, or 37.8%, to $1,633 during the six months ended June 30, 2025, compared to $2,626 during the same period in 2024.

Our effective income tax rate was a benefit of 10.7% for the six months ended June 30, 2025, and differed compared to the statutory tax rates primarily due to the impact of valuation allowance, stock compensation, and research and experimentation expenditures and credits.

For the six months ended June 30, 2024, our effective income tax rate was a benefit of 18.0%, and differed compared to the statutory tax rates primarily due to the impact of stock compensation and research and experimentation expenditures and credits.

The change was partially offset by losses in mark-to-market adjustments on non-hedged foreign currency contracts during the nine months ended September 30, 2025.

Income tax benefit increased by $587, or 17.8%, to $3,877 during the nine months ended September 30, 2025, compared to $3,290 during the same period in 2024.

Our effective income tax rate was a benefit of 20.2% for the nine months ended September 30, 2025, and differed compared to the statutory tax rates primarily due to the impact of valuation allowance, changes in uncertain tax positions, stock compensation, and research and experimentation expenditures and credits.

For the nine months ended September 30, 2024, our effective income tax rate was a benefit of 17.9%, and differed compared to the statutory tax rates primarily due to the impact of stock compensation and research and experimentation expenditures and credits.

Discontinued Operations

Net income from discontinued operations was $0 during the six months ended June 30, 2025, compared to net income from discontinued operations of $28,346 during the six months ended June 30, 2024.

The change in net income from discontinued operations is due to the sale of the Precision Sport segment occurring during the six months ended June 30, 2024.

There was no activity in discontinued operations during the six months ended June 30, 2025.

Net income from discontinued operations was $0 during the nine months ended September 30, 2025, compared to net income from discontinued operations of $28,346 during the nine months ended September 30, 2024.

The change in net income from discontinued operations is due to the sale of the Precision Sport segment occurring during the nine months ended September 30, 2024.

There was no activity in discontinued operations during the nine months ended September 30, 2025.

Liquidity and Capital Resources

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Our primary ongoing funding requirements are for working capital, expansion of our operations (both organically and through acquisitions) and general corporate needs, as well as investing in the various brands.

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Additionally, long-term contractual obligations are also currently expected to be funded from cash from operations and net proceeds from the sale of the Precision Sport segment after the settlement of the Restated Credit Agreement.

At June 30, 2025, we had total cash of $28,474, compared to total cash of $45,359 at December 31, 2024.

At June 30, 2025, the Company had $4,931 of the $28,474 in cash held by foreign entities, of which $3,917 is considered permanently reinvested.

The following presents a discussion of cash flows for the condensed consolidated six months ended June 30, 2025 compared with the condensed consolidated six months ended June 30, 2024.

Six Months Ended

June 30, 2025

June 30, 2024

At September 30, 2025, we had total cash of $29,508, compared to total cash of $45,359 at December 31, 2024.

At September 30, 2025, the Company had $5,902 of the $29,508 in cash held by foreign entities, of which $3,540 is considered permanently reinvested.

CLARUS CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

The following presents a discussion of cash flows for the condensed consolidated nine months ended September 30, 2025 compared with the condensed consolidated nine months ended September 30, 2024.

Nine Months Ended

September 30, 2025

September 30, 2024

Net cash used in operating activities

Net cash (used in) provided by investing activities

Net cash provided by investing activities

Net cash used in financing activities

3 unchanged sentences

Cash, end of period

CLARUS CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

Net Cash From Operating Activities

Net cash used in operating activities was $11,497 during the six months ended June 30, 2025, compared to net cash used in operating activities of $15,527 during the six months ended June 30, 2024.

The change in net cash used in operating activities during 2025 is primarily due to the gain on sale of $40,585 during the six months ended June 30, 2024 related to the disposition of the Precision Sport segment.

This impact was partially offset by a decrease in net income and deferred income taxes, and an increase in cash outflows related to working capital during the six months ended June 30, 2025, compared to the same period in 2024.

Free cash flow, defined as net cash used in operating activities less capital expenditures, of $14,541 was used during the six months ended June 30, 2025 compared to $19,002 used during the same period in 2024.

Net cash used in operating activities was $17,234 during the nine months ended September 30, 2025, compared to net cash used in operating activities of $23,870 during the nine months ended September 30, 2024.

The change in net cash used in operating activities during 2025 is primarily due to the gain on sale of $40,585 during the nine months ended September 30, 2024 related to the disposition of the Precision Sport segment and a decrease in cash outflows related to working capital compared to the same period in 2024.

These impacts were partially offset by a decrease in net income and deferred income taxes compared to the same period in 2024.

Free cash flow, defined as net cash used in operating activities less capital expenditures, of $21,493 was used during the nine months ended September 30, 2025 compared to $28,395 used during the same period in 2024.

The Company believes that the non-GAAP measure, free cash flow, provides an understanding of the capital required by the Company to expand its asset base.

A reconciliation of free cash flows to the nearest comparable GAAP financial measure is set forth below:

Six Months Ended

June 30, 2025

June 30, 2024

Nine Months Ended

September 30, 2025

September 30, 2024

Net cash used in operating activities

2 unchanged sentences

Net Cash From Investing Activities

Net cash (used in) provided by investing activities was ($2,990) during the six months ended June 30, 2025, compared to net cash provided by investing activities of $172,162 during the six months ended June 30, 2024.

The change in cash (used in) provided by investing activities during the six months ended June 30, 2025 is primarily due to the cash received related to the disposition of the Precision Sport segment during the six months ended June 30, 2024.

Net cash provided by investing activities was $3,624 during the nine months ended September 30, 2025, compared to net cash provided by investing activities of $171,144 during the nine months ended September 30, 2024.

The change in cash provided by investing activities during the nine months ended September 30, 2025 is primarily due to the cash received related to the disposition of the Precision Sport segment during the nine months ended September 30, 2024.

Net Cash From Financing Activities

Net cash used in financing activities was $1,962 during the six months ended June 30, 2025, compared to net cash used in financing activities of $121,602 during the six months ended June 30, 2024.

The change in net cash used in financing activities during the six months ended June 30, 2025, compared to the same period in 2024 was primarily due to the settlement of all outstanding borrowings on our revolving credit facility and term debt under the Restated Credit Agreement during the six months ended June 30, 2024.

Net cash used in financing activities was $2,922 during the nine months ended September 30, 2025, compared to net cash used in financing activities of $122,281 during the nine months ended September 30, 2024.

The change in net cash used in financing activities during the nine months ended September 30, 2025, compared to the same period in 2024 was primarily due to the settlement of all outstanding borrowings on our revolving credit facility and term debt under the Restated Credit Agreement during the nine months ended September 30, 2024.

CLARUS CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

Net Operating Loss

8 unchanged sentences

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

CLARUS CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

Credit Agreement

7 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 2. Management’s Discussion and Analysis