Clarus Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS ​ CLARUS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 December 31, 2024 Assets ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ Cash $ 29,508 ​ $ 45,359 Accounts receivable, less allowance for ​ ​ ​ ​ ​ credit losses of $ 1,254 and $ 1,271 ​ 51,755 ​ ​ 43,678 Inventories ​ 86,546 ​ ​ 82,278 Prepaid and other current assets ​ 5,330 ​ ​ 5,555 Income tax receivable ​ 1,700 ​ ​ 910 Total current assets ​ 174,839 ​ ​ 177,780 ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 18,582 ​ ​ 17,606 Other intangible assets, net ​ 25,577 ​ ​ 31,516 Indefinite-lived intangible assets ​ 45,212 ​ ​ 46,750 Goodwill ​ 3,804 ​ ​ 3,804 Deferred income taxes ​ 36 ​ ​ 36 Other long-term assets ​ 15,020 ​ ​ 16,602 Total assets $ 283,070 ​ $ 294,094 ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ Accounts payable $ 10,610 ​ $ 11,873 Accrued liabilities ​ 24,883 ​ ​ 22,276 Income tax payable ​ 47 ​ ​ - Current portion of long-term debt ​ 1,980 ​ ​ 1,888 Total current liabilities ​ 37,520 ​ ​ 36,037 ​ ​ ​ ​ ​ ​ Deferred income taxes ​ 8,485 ​ ​ 12,210 Other long-term liabilities ​ 11,260 ​ ​ 12,754 Total liabilities ​ 57,265 ​ ​ 61,001 ​ ​ ​ ​ ​ ​ 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; 43,054 and 43,004 issued and 38,402 and 38,362 outstanding, respectively ​ 4 ​ ​ 4 Additional paid in capital ​ 702,160 ​ ​ 697,592 Accumulated deficit ​ ( 425,032 ) ​ ​ ( 406,857 ) Treasury stock, at cost ​ ( 33,156 ) ​ ​ ( 33,114 ) Accumulated other comprehensive loss ​ ( 18,171 ) ​ ​ ( 24,532 ) Total stockholders’ equity ​ 225,805 ​ ​ 233,093 Total liabilities and stockholders’ equity $ 283,070 ​ $ 294,094 ​ See accompanying notes to condensed consolidated financial statements . ​ 3 Table of Contents CLARUS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ September 30, 2025 September 30, 2024 ​ ​ ​ ​ ​ ​ Sales ​ ​ ​ ​ ​ Domestic sales $ 28,261 ​ $ 24,365 International sales ​ 41,086 ​ ​ 42,750 Total sales ​ 69,347 ​ ​ 67,115 ​ ​ ​ ​ ​ ​ Cost of goods sold ​ 44,981 ​ ​ 43,618 Gross profit ​ 24,366 ​ ​ 23,497 ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ Selling, general and administrative ​ 26,155 ​ ​ 27,880 Restructuring charges ​ 155 ​ ​ 478 Transaction costs ​ 436 ​ ​ 103 Contingent consideration benefit ​ ( 355 ) ​ ​ - Legal costs and regulatory matter expenses ​ 1,001 ​ ​ 394 ​ ​ ​ ​ ​ ​ Total operating expenses ​ 27,392 ​ ​ 28,855 ​ ​ ​ ​ ​ ​ Operating loss ​ ( 3,026 ) ​ ​ ( 5,358 ) ​ ​ ​ ​ ​ ​ Other (expense) income ​ ​ ​ ​ ​ Interest income, net ​ 108 ​ ​ 373 Other, net ​ ( 943 ) ​ ​ 1,164 ​ ​ ​ ​ ​ ​ Total other (expense) income, net ​ ( 835 ) ​ ​ 1,537 ​ ​ ​ ​ ​ ​ Loss before income tax ​ ( 3,861 ) ​ ​ ( 3,821 ) Income tax benefit ​ ( 2,244 ) ​ ​ ( 664 ) Net loss ​ ( 1,617 ) ​ ​ ( 3,157 ) ​ ​ ​ ​ ​ ​ Other comprehensive income, net of tax: ​ ​ ​ ​ ​ Foreign currency translation adjustment ​ 850 ​ ​ 3,665 Unrealized gain (loss) on hedging activities ​ 868 ​ ​ ( 185 ) Other comprehensive income ​ 1,718 ​ ​ 3,480 Comprehensive income $ 101 ​ $ 323 ​ ​ ​ ​ ​ ​ Net loss per share: ​ ​ ​ ​ ​ Basic $ ( 0.04 ) ​ $ ( 0.08 ) Diluted ​ ( 0.04 ) ​ ​ ( 0.08 ) ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: ​ ​ ​ ​ ​ Basic ​ 38,402 ​ ​ 38,352 Diluted ​ 38,402 ​ ​ 38,352 ​ See accompanying notes to condensed consolidated financial statements. ​ ​ ​ ​ ​ ​ ​ 4 Table of Contents CLARUS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ September 30, 2025 ​ September 30, 2024 ​ ​ ​ ​ ​ ​ Sales ​ ​ ​ ​ ​ Domestic sales $ 77,794 ​ $ 75,583 International sales ​ 107,233 ​ ​ 117,327 Total sales ​ 185,027 ​ ​ 192,910 ​ ​ ​ ​ ​ ​ Cost of goods sold ​ 120,187 ​ ​ 124,156 Gross profit ​ 64,840 ​ ​ 68,754 ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ Selling, general and administrative ​ 79,681 ​ ​ 84,176 Restructuring charges ​ 489 ​ ​ 1,009 Transaction costs ​ 686 ​ ​ 168 Contingent consideration benefit ​ ( 355 ) ​ ​ ( 125 ) Legal costs and regulatory matter expenses ​ 3,463 ​ ​ 3,795 Impairment of indefinite-lived intangible assets ​ 1,565 ​ ​ - ​ ​ ​ ​ ​ ​ Total operating expenses ​ 85,529 ​ ​ 89,023 ​ ​ ​ ​ ​ ​ Operating loss ​ ( 20,689 ) ​ ​ ( 20,269 ) ​ ​ ​ ​ ​ ​ Other income ​ ​ ​ ​ ​ Interest income, net ​ 518 ​ ​ 1,198 Other, net ​ 999 ​ ​ 669 ​ ​ ​ ​ ​ ​ Total other income, net ​ 1,517 ​ ​ 1,867 ​ ​ ​ ​ ​ ​ Loss before income tax ​ ( 19,172 ) ​ ​ ( 18,402 ) Income tax benefit ​ ( 3,877 ) ​ ​ ( 3,290 ) Loss from continuing operations ​ ( 15,295 ) ​ ​ ( 15,112 ) ​ ​ ​ ​ ​ ​ Discontinued operations, net of tax ​ - ​ ​ 28,346 ​ ​ ​ ​ ​ ​ Net (loss) income ​ ( 15,295 ) ​ ​ 13,234 ​ ​ ​ ​ ​ ​ Other comprehensive income, net of tax: ​ ​ ​ ​ ​ Foreign currency translation adjustment ​ 7,244 ​ ​ 1,167 Unrealized (loss) gain on hedging activities ​ ( 883 ) ​ ​ 187 Other comprehensive income ​ 6,361 ​ ​ 1,354 Comprehensive (loss) income $ ( 8,934 ) ​ $ 14,588 ​ ​ ​ ​ ​ ​ Loss from continuing operations per share: ​ ​ ​ ​ ​ Basic $ ( 0.40 ) ​ $ ( 0.39 ) Diluted ​ ( 0.40 ) ​ ​ ( 0.39 ) ​ ​ ​ ​ ​ ​ Net (loss) income per share: ​ ​ ​ ​ ​ Basic $ ( 0.40 ) ​ $ 0.35 Diluted ​ ( 0.40 ) ​ ​ 0.35 ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: ​ ​ ​ ​ ​ Basic ​ 38,390 ​ ​ 38,286 Diluted ​ 38,390 ​ ​ 38,286 ​ See accompanying notes to condensed consolidated financial statements . ​ 5 Table of Contents CLARUS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ September 30, 2025 September 30, 2024 Cash Flows From Operating Activities: ​ ​ ​ ​ ​ Net (loss) income $ ( 15,295 ) ​ $ 13,234 Adjustments to reconcile net (loss) income to net cash used in operating activities: ​ ​ ​ ​ ​ Depreciation of property and equipment ​ 2,654 ​ ​ 3,051 Amortization of other intangible assets ​ 6,586 ​ ​ 7,316 Impairment of indefinite-lived intangible assets ​ 1,565 ​ ​ - Loss (gain) on sale of businesses ​ 410 ​ ​ ( 40,585 ) Accretion of notes payable ​ 92 ​ ​ - Amortization of debt issuance costs ​ - ​ ​ 1,209 Loss (gain) on disposition of property and equipment ​ 424 ​ ​ ( 138 ) Noncash lease expense ​ 2,673 ​ ​ 2,284 Contingent consideration benefit ​ ( 355 ) ​ ​ ( 125 ) Stock-based compensation ​ 4,568 ​ ​ 4,258 Deferred income taxes ​ ( 4,428 ) ​ ​ 3,441 Changes in operating assets and liabilities, net of disposition: ​ ​ ​ ​ ​ Accounts receivable ​ ( 7,951 ) ​ ​ 778 Inventories ​ ( 5,359 ) ​ ​ ( 4,703 ) Prepaid and other assets ​ ( 763 ) ​ ​ ( 543 ) Accounts payable ​ ( 1,493 ) ​ ​ ( 7,940 ) Accrued liabilities ​ 147 ​ ​ ( 4,549 ) Income taxes ​ ( 709 ) ​ ​ ( 858 ) Net cash used in operating activities ​ ( 17,234 ) ​ ​ ( 23,870 ) ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: ​ ​ ​ ​ ​ Proceeds from sale of businesses, net of cash ​ 7,813 ​ ​ 175,674 Proceeds from disposition of property and equipment ​ 70 ​ ​ 245 Purchase of intangible assets ​ - ​ ​ ( 250 ) Purchases of property and equipment ​ ( 4,259 ) ​ ​ ( 4,525 ) Net cash provided by investing activities ​ 3,624 ​ ​ 171,144 ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: ​ ​ ​ ​ ​ Proceeds from revolving credit facilities ​ - ​ ​ 31,205 Repayments on revolving credit facilities ​ - ​ ​ ( 41,580 ) Repayments on term loans and other debt ​ - ​ ​ ( 109,463 ) Proceeds from issuance of term loans and other debt ​ - ​ ​ 49 Purchase of treasury stock ​ ( 42 ) ​ ​ ( 185 ) Proceeds from exercise of options ​ - ​ ​ 565 Cash dividends paid ​ ( 2,880 ) ​ ​ ( 2,872 ) Net cash used in financing activities ​ ( 2,922 ) ​ ​ ( 122,281 ) ​ ​ ​ ​ ​ ​ Effect of foreign exchange rates on cash ​ 681 ​ ​ 82 ​ ​ ​ ​ ​ ​ Change in cash ​ ( 15,851 ) ​ ​ 25,075 Cash, beginning of year ​ 45,359 ​ ​ 11,324 Cash, end of period $ 29,508 ​ $ 36,399 ​ ​ ​ ​ ​ ​ Supplemental Disclosure of Cash Flow Information: ​ ​ ​ ​ ​ Cash paid for income taxes $ 871 ​ $ 2,284 Cash paid for interest $ 16 ​ $ 1,947 Supplemental Disclosures of Non-Cash Investing and Financing Activities: ​ ​ ​ ​ ​ Purchases of property and equipment incurred but not paid $ 77 ​ $ 131 Lease liabilities arising from obtaining right-of-use assets $ 485 ​ $ 991 ​ See accompanying notes to condensed consolidated financial statements. ​ ​ 6 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 Loss Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2023 ​ ​ 42,761 ​ $ 4 ​ $ 691,198 ​ $ ( 350,739 ) ​ ​ ( 4,612 ) ​ $ ( 32,929 ) ​ $ ( 15,414 ) ​ $ 292,120 Net income ​ ​ - ​ ​ - ​ ​ - ​ ​ 21,884 ​ ​ - ​ ​ - ​ ​ - ​ ​ 21,884 Other comprehensive loss ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,671 ) ​ ​ ( 3,671 ) Cash dividends ($ 0.025 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 956 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 956 ) Purchase of treasury stock ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 30 ) ​ ​ ( 185 ) ​ ​ - ​ ​ ( 185 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 1,183 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,183 Proceeds from exercise of options ​ ​ 117 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - Balance, March 31, 2024 ​ ​ 42,878 ​ $ 4 ​ $ 692,381 ​ $ ( 329,811 ) ​ ​ ( 4,642 ) ​ $ ( 33,114 ) ​ $ ( 19,085 ) ​ $ 310,375 Net loss ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 5,493 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 5,493 ) Other comprehensive income ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,545 ​ ​ 1,545 Cash dividends ($ 0.025 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 957 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 957 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 1,528 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,528 Proceeds from exercise of options ​ ​ 62 ​ ​ - ​ ​ 285 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 285 Balance, June 30, 2024 ​ ​ 42,940 ​ $ 4 ​ $ 694,194 ​ $ ( 336,261 ) ​ ​ ( 4,642 ) ​ $ ( 33,114 ) ​ $ ( 17,540 ) ​ $ 307,283 Net loss ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,157 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,157 ) Other comprehensive income ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 3,480 ​ ​ 3,480 Cash dividends ($ 0.025 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 959 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 959 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 1,547 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,547 Proceeds from exercise of options ​ ​ 64 ​ ​ - ​ ​ 280 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 280 Balance, September 30, 2024 ​ ​ 43,004 ​ $ 4 ​ $ 696,021 ​ $ ( 340,377 ) ​ ​ ( 4,642 ) ​ $ ( 33,114 ) ​ $ ( 14,060 ) ​ $ 308,474 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 Loss Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2024 ​ ​ 43,004 ​ $ 4 ​ $ 697,592 ​ $ ( 406,857 ) ​ ​ ( 4,642 ) ​ $ ( 33,114 ) ​ $ ( 24,532 ) ​ $ 233,093 Net loss ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 5,244 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 5,244 ) Other comprehensive income ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 973 ​ ​ 973 Cash dividends ($ 0.025 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 959 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 959 ) Purchase of treasury stock ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 10 ) ​ ​ ( 42 ) ​ ​ - ​ ​ ( 42 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 1,469 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,469 Proceeds from exercise of options ​ ​ 50 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - Balance, March 31, 2025 ​ ​ 43,054 ​ $ 4 ​ $ 699,061 ​ $ ( 413,060 ) ​ ​ ( 4,652 ) ​ $ ( 33,156 ) ​ $ ( 23,559 ) ​ $ 229,290 Net loss ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 8,434 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 8,434 ) Other comprehensive income ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 3,670 ​ ​ 3,670 Cash dividends ($ 0.025 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 961 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 961 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 1,555 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,555 Balance, June 30, 2025 ​ ​ 43,054 ​ $ 4 ​ $ 700,616 ​ $ ( 422,455 ) ​ ​ ( 4,652 ) ​ $ ( 33,156 ) ​ $ ( 19,889 ) ​ $ 225,120 Net loss ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 1,617 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 1,617 ) Other comprehensive income ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,718 ​ ​ 1,718 Cash dividends ($ 0.025 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 960 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 960 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 1,544 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,544 Balance, September 30, 2025 ​ ​ 43,054 ​ $ 4 ​ $ 702,160 ​ $ ( 425,032 ) ​ ​ ( 4,652 ) ​ $ ( 33,156 ) ​ $ ( 18,171 ) ​ $ 225,805 ​ See accompanying notes to condensed consolidated financial statements . ​ ​ ​ 8 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands, except per share amounts) ​ NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements of Clarus Corporation and its subsidiaries (which may be collectively referred to as the “Company,” “Clarus,” “we,” “us” or “our”) as of September 30, 2025 and December 31, 2024 and for the three and nine months ended September 30, 2025 and 2024, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), instructions to the Quarterly Report on Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments, except otherwise disclosed) necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be obtained for the year ending December 31, 2025. 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, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2025. 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 enthusiast markets. 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®, Rhino-Rack®, MAXTRAX®, and TRED Outdoors® brand names through outdoor specialty and online retailers, our own websites, distributors and original equipment manufacturers. We believe that our portfolio of iconic brands is well-positioned for sustainable, long-term growth underpinned by industry trends across the outdoor and adventure sport end markets. Sale of PIEPS On May 8, 2025, BD European Holdings, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, entered into a Share Purchase and Transfer Agreement (the “Share Purchase Agreement”) to sell all of the issued and outstanding shares of Black Diamond Austria GmbH, together with its operating subsidiary, PIEPS GmbH (collectively, “PIEPS”). On July 11, 2025, the Company completed the sale of PIEPS, which was included in the Company’s Outdoor segment, to a private investment firm for a total purchase price of € 7,825 (approximately $ 9,124 ), including cash held at PIEPS of $ 1,311 , pursuant to the Share Purchase Agreement. The Company recognized a pre-tax loss on sale of $ 410 , which is included in other , net in the condensed consolidated statements of comprehensive (loss) income. We determined that the sale of the PIEPS business does not represent a strategic shift that had or will have a major effect on the condensed consolidated statements of comprehensive (loss) income, and therefore results were not classified as discontinued operations. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. We continually evaluate our estimates and assumptions including those related to revenue recognition, income taxes and valuation of long-lived assets, goodwill and indefinite-lived intangible assets, and other intangible assets. We base our estimates on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates. ​ 9 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Restricted Cash ​ Included within cash in the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, is restricted cash of $ 1,497 and $ 1,397 , respectively, primarily related to a long-term lease agreement. Cash is restricted when withdrawal or general use is contractually or legally restricted. ​ Recent Accounting Pronouncements Accounting Pronouncements issued and not yet adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires a public entity to disclose in its rate reconciliation table additional categories of information about federal, state and foreign income taxes and provide more details about the reconciling items in some categories if items meet a quantitative threshold. The guidance will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. All entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The guidance is effective for public business entities for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the enhanced disclosure requirements, however it does not anticipate a material change to the consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires a public entity to disclose, in the notes to the financial statements, specified information about certain costs and expenses on an annual and interim basis. The guidance will require all entities to disclose the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. The guidance also requires disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. All entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the enhanced disclosure requirements, however it does not anticipate a material change to the consolidated financial statements. ​ ​ NOTE 2. ACQUISITIONS RockyMounts On December 5, 2024, Clarus and its wholly-owned subsidiary, Rhino-Rack USA LLC, entered into an Asset Purchase Agreement (the “RockyMounts Purchase Agreement”) with RockyMounts, Inc. (the “Seller” or “RockyMounts”) and Robert C. Noyes, pursuant to which the Company (i) acquired certain assets and liabilities of the Seller constituting the RockyMounts business, including equipment, inventory, intellectual property (including exclusive use of the brand name ROCKYMOUNTS and the tradename ROCKY MOUNTS INC.), software, domain names and social media accounts, and (ii) assumed certain liabilities related to the RockyMounts assets, including all liabilities and obligations of the Seller under the Assigned Contracts (as defined in the RockyMounts Purchase Agreement), arising or to be performed after the closing of the acquisition pursuant to the RockyMounts Purchase Agreement. Pursuant to the RockyMounts Purchase Agreement, the purchase price paid for the RockyMounts assets was up to $ 8,000 , which includes (i) $ 4,000 paid in cash at closing, subject to adjustment as set forth in the RockyMounts Purchase 10 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Agreement, (ii) the issuance of a promissory note by Rhino-Rack USA LLC in favor of the Seller in the original principal amount of $ 2,000 , payable on the one-year anniversary of the closing of the RockyMounts Purchase Agreement, and (iii) the payment of additional contingent consideration of up to $ 2,000 in cash if certain future net sales thresholds are met for the years endings December 31, 2025 and December 31, 2026, respectively (the “RockyMounts Contingent Consideration”). The Company has estimated the initial fair value of the RockyMounts Contingent Consideration to be $ 609 and has recorded this liability within accrued liabilities and other long-term liabilities. See Note 11 for discussion regarding the valuation of the RockyMounts Contingent Consideration as of September 30, 2025. The acquisition was accounted for as a business combination. The Company believes the acquisition of RockyMounts provides the Company with a greater combined global revenue base, profitability and free cash flows, and access to increased liquidity to further 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 RockyMounts are based on the Company’s best estimates and assumptions as of the reporting date and are considered preliminary. The fair value measurements of identifiable assets and liabilities, and the resulting goodwill related to the RockyMounts acquisition 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 acquisition. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for RockyMounts is included in the Adventure segment. The goodwill consists largely of the growth and profitability expected from this acquisition. ​ 11 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ ​ ​ ​ ​ RockyMounts ​ December 5, 2024 ​ Estimated Fair Value ​ ​ ​ Cash paid $ 3,840 ​ ​ ​ Seller Note ​ 1,878 ​ ​ ​ Contingent consideration ​ 609 ​ ​ ​ Total purchase consideration $ 6,327 ​ ​ ​ Assets acquired and liabilities assumed ​ ​ Assets ​ ​ Accounts receivable $ 160 Inventories ​ 928 Prepaid and other current assets ​ 85 Property and equipment ​ 97 Other intangible assets ​ 2,366 Goodwill ​ 2,741 Total assets ​ 6,377 ​ ​ ​ Liabilities ​ ​ Accounts payable and accrued liabilities $ 50 Total liabilities ​ 50 ​ ​ ​ Net Book Value Acquired $ 6,327 ​ The estimated fair value of inventory was recorded at expected sales price less cost to sell plus a reasonable profit margin for selling efforts. In connection with the acquisition, the Company acquired exclusive rights to RockyMounts’ trademarks, customer relationships, product technologies, and tradenames. The amounts assigned to each class of intangible asset, other than goodwill acquired, and the related average useful lives are as follows: ​ ​ ​ ​ ​ ​ ​ RockyMounts ​ ​ ​ Average ​ Gross Useful Life ​ ​ ​ ​ ​ Intangibles subject to amortization ​ ​ ​ ​ Customer relationships $ 1,138 ​ 3.0 years Product technologies ​ 374 ​ 3.0 years Tradenames ​ 622 ​ 3.0 years Non-compete agreements ​ 232 ​ 5.0 years ​ $ 2,366 ​ 3.2 years ​ The full amount of goodwill of $ 2,741 at RockyMounts is expected to be deductible for tax purposes. No pre-existing relationships existed between the Company and RockyMounts or their sellers prior to the acquisition. RockyMounts 12 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ revenue and operating income are included in the Adventure segment. Total revenue and net income of RockyMounts from the date of acquisition to December 31, 2024 were not material to the Company’s consolidated financial statements. ​ NOTE 3. DISCONTINUED OPERATIONS On February 29, 2024, the Company and Everest/Sapphire Acquisition, LLC, its wholly-owned subsidiary, completed the sale to Bullseye Acquisitions, LLC, an affiliate of JDH Capital Company, of all of the equity associated with the Company’s Precision Sport segment, which is comprised of the Company’s subsidiaries Sierra and Barnes, pursuant to a Purchase and Sale Agreement dated as of December 29, 2023, by and among, Bullseye Acquisitions, LLC, Everest/Sapphire Acquisition, LLC and the Company (the “Precision Sport Purchase Agreement”). The Precision Sport segment engaged in the business of designing, developing, manufacturing, and marketing bullets and ammunition to the military, law enforcement, and commercial/consumer markets. Under the terms of the Precision Sport Purchase Agreement, the Buyer agreed to pay $ 175,000 in cash, which is subject to a customary working capital adjustment. The Company received $ 175,674 in cash under the terms of the Precision Sport Purchase Agreement, which included a preliminary working capital adjustment. As of December 31, 2024, the working capital adjustment had been finalized, with no changes from the preliminary working capital adjustment. The Company recognized a pre-tax gain on such sale of $ 40,585 . The activities of the Precision Sport segment have been segregated and reported as discontinued operations for the nine months ended September 30, 2024. There was no activity in discontinued operations during the three months ended September 30, 2024. Summarized results of discontinued operations for the Precision Sport segment are as follows: ​ ​ ​ ​ ​ Nine Months Ended ​ September 30, 2024 ​ ​ ​ Sales $ 10,585 Cost of goods sold ​ ( 6,543 ) Selling, general and administrative ​ ( 2,062 ) Restructuring charges ​ ( 3 ) Transaction costs ​ ( 3,440 ) Interest expense, net ​ ( 2,455 ) Other, net ​ ( 38 ) ​ ​ ​ Loss from operations of discontinued operations ​ ( 3,956 ) Gain on sale of discontinued operations ​ 40,585 ​ ​ ​ Income from discontinued operations before taxes ​ 36,629 Income tax expense ​ 8,283 Income from discontinued operations, net of tax $ 28,346 ​ In connection with the sale of the Precision Sport segment, all interest expense related to outstanding debt that was required to be repaid with the proceeds received from the sale pursuant to the terms of the Company’s credit facility is allocated to discontinued operations in our condensed consolidated financial statements for the nine months ended September 30, 2024. 13 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Summarized cash flow information for the Precision Sport segment discontinued operations are as follows: ​ ​ ​ ​ ​ Nine Months Ended ​ September 30, 2024 ​ ​ ​ Stock-based compensation $ 5 Purchase of property and equipment $ 886 ​ ​ NOTE 4. INVENTORIES Inventories, as of September 30, 2025 and December 31, 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 December 31, 2024 Finished goods $ 80,994 ​ $ 72,329 Work-in-process ​ 282 ​ ​ 234 Raw materials and supplies ​ 5,270 ​ ​ 9,715 ​ $ 86,546 ​ $ 82,278 ​ ​ NOTE 5. PROPERTY AND EQUIPMENT Property and equipment, net, as of September 30, 2025 and December 31, 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 December 31, 2024 ​ ​ ​ ​ ​ ​ Land $ 2,850 ​ $ 2,850 Building and improvements ​ 7,840 ​ ​ 5,891 Furniture and fixtures ​ 5,313 ​ ​ 4,958 Computer hardware and software ​ 8,712 ​ ​ 8,380 Machinery and equipment ​ 17,135 ​ ​ 16,795 Construction in progress ​ 3,282 ​ ​ 3,412 ​ ​ 45,132 ​ ​ 42,286 Less accumulated depreciation ​ ( 26,550 ) ​ ​ ( 24,680 ) ​ $ 18,582 ​ $ 17,606 ​ Depreciation expense for continuing operations for the three months ended September 30, 2025 and 2024 was $ 894 and $ 980 , respectively, and for the nine months ended September 30, 2025 and 2024 was $ 2,654 and $ 3,051 , respectively. ​ ​ 14 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ NOTE 6. GOODWILL AND INTANGIBLE ASSETS Goodwill The following table summarizes the balances in goodwill by segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor Adventure Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill $ 29,507 ​ $ 96,966 ​ $ 126,473 Accumulated goodwill impairments ​ ( 29,507 ) ​ ​ ( 88,335 ) ​ ​ ( 117,842 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2024 $ - ​ $ 3,804 ​ $ 3,804 ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2025 $ - ​ $ 3,804 ​ $ 3,804 ​ Indefinite-Lived Intangible Assets The following table summarizes the changes in indefinite-lived intangible assets: ​ ​ ​ ​ Balance at December 31, 2024 $ 46,750 ​ ​ ​ Decrease due to impairment ​ ( 1,565 ) Decrease due to sale of PIEPS ​ ( 1,704 ) Impact of foreign currency exchange rates ​ 1,731 ​ ​ ​ Balance at September 30, 2025 $ 45,212 ​ Management performs an interim indefinite-lived intangible asset impairment assessment whenever events or circumstances make it more likely than not that an impairment may have occurred, such as a significant adverse change in the business climate or a decision to sell or dispose of the asset. If the carrying value of the indefinite-lived asset is higher than its fair value, the asset is deemed to be impaired and the impairment charge is estimated as the difference. The Company calculates the fair value of its indefinite-lived intangible assets using the income approach, specifically the relief-from-royalty method. The relief-from-royalty method is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. Internally forecasted revenues, which the Company believes reasonably approximate market participant assumptions, are multiplied by a royalty rate to arrive at the estimated net after tax cost savings. The royalty rate used in the analysis is based on an analysis of empirical, market-derived royalty rates for comparable intangible assets. Our discounted cash flow estimates use discount rates that correspond to a weighted-average cost of capital consistent with a market-participant view. The discount rates are consistent with those used for investment decisions and take into account our future operating plans and strategies. As described above, we determined that a triggering event had occurred during the quarter ended June 30, 2025, with respect to certain indefinite-lived intangible assets within our Outdoor reporting unit, which required that we perform a quantitative assessment. We assessed the fair value of the specific indefinite-lived intangible assets using the relief-from-royalty method described above. As a result of this assessment, the carrying value of the PIEPS trademark recorded within 15 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ our Outdoor reporting unit exceeded its estimated related fair value, thus an impairment of the PIEPS trademark of $ 1,565 was recorded. If we do not achieve the results reflected in the forecasted estimates utilized in our impairment assessments, or if there are changes to market assumptions, our valuation of the reporting unit, including related indefinite-lived intangible assets, could be adversely affected, and we may be required to impair a portion or all of the related goodwill, indefinite-lived intangibles, and other long-lived assets which would adversely affect our operating results in the period of impairment. Trademarks classified as indefinite-lived intangible assets by brand as of September 30, 2025 and December 31, 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 December 31, 2024 Black Diamond $ 19,600 ​ $ 19,600 PIEPS ​ - ​ ​ 2,899 Rhino-Rack ​ 21,221 ​ ​ 20,093 MAXTRAX ​ 4,391 ​ ​ 4,158 ​ $ 45,212 ​ $ 46,750 ​ Other Intangible Assets, net The following table summarizes the changes in gross other intangible assets: ​ ​ ​ ​ Gross balance at December 31, 2024 $ 77,960 ​ ​ ​ Decrease due to sale of PIEPS ​ ( 4,712 ) Impact of foreign currency exchange rates ​ 3,496 ​ ​ ​ Gross balance at September 30, 2025 $ 76,744 ​ Other intangible assets, net of amortization as of September 30, 2025 and December 31, 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 ​ Gross Accumulated Amortization Net Weighted Average Useful Life Intangibles subject to amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ 58,496 ​ $ ( 39,477 ) ​ $ 19,019 ​ ​ 13.7 years Product technologies ​ 15,679 ​ ​ ( 11,134 ) ​ ​ 4,545 ​ ​ 9.3 years Tradenames ​ 2,337 ​ ​ ( 517 ) ​ ​ 1,820 ​ ​ 9.6 years Non-compete agreements ​ 232 ​ ​ ( 39 ) ​ ​ 193 ​ ​ 5.0 years ​ $ 76,744 ​ $ ( 51,167 ) ​ $ 25,577 ​ ​ 12.6 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 16 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ ​ December 31, 2024 ​ Gross Accumulated Amortization Net Weighted Average Useful Life ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ 58,737 ​ $ ( 35,715 ) ​ $ 23,022 ​ ​ 13.6 years Product technologies ​ 16,745 ​ ​ ( 10,528 ) ​ ​ 6,217 ​ ​ 9.9 years Tradenames ​ 2,246 ​ ​ ( 197 ) ​ ​ 2,049 ​ ​ 9.5 years Core technologies ​ 232 ​ ​ ( 4 ) ​ ​ 228 ​ ​ 5.0 years ​ $ 77,960 ​ $ ( 46,444 ) ​ $ 31,516 ​ ​ 12.7 years ​ Amortization expense for continuing operations for the three months ended September 30, 2025 and 2024, was $ 2,149 and $ 2,416 , respectively, and for the nine months ended September 30, 2025 and 2024 was $ 6,586 and $ 7,316 , respectively. Future amortization expense for other intangible assets as of September 30, 2025 is as follows: ​ ​ ​ ​ ​ Years Ending December 31, Amortization Expense 2025 (excluding the nine months ended September 30, 2025) ​ $ 2,158 2026 ​ ​ 6,834 2027 ​ ​ 4,904 2028 ​ ​ 3,437 2029 ​ ​ 2,587 2030 ​ ​ 1,871 Thereafter ​ ​ 3,786 ​ ​ $ 25,577 ​ ​ ​ ​ NOTE 7. ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES Accrued liabilities as of September 30, 2025 and December 31, 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 December 31, 2024 ​ ​ ​ ​ ​ ​ Accrued payroll and related items $ 3,368 ​ $ 4,054 Accrued bonus ​ 2,110 ​ ​ 1,866 Designated forward exchange contracts ​ 1,143 ​ ​ - Accrued warranty ​ 1,515 ​ ​ 2,212 Current lease liabilities ​ 3,298 ​ ​ 3,470 Accrued commissions ​ 1,071 ​ ​ 376 Sales returns and rebates ​ 3,603 ​ ​ 2,145 Contingent consideration liabilities ​ - ​ ​ 355 Accrued CPSC regulatory matter ​ 2,500 ​ ​ 2,500 Accrued legal expenses ​ 1,403 ​ ​ 436 Restructuring liabilities ​ 13 ​ ​ 541 Other ​ 4,859 ​ ​ 4,321 ​ $ 24,883 ​ $ 22,276 ​ 17 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Other long-term liabilities as of September 30, 2025 and December 31, 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 December 31, 2024 ​ ​ ​ ​ ​ ​ Long-term lease liabilities $ 9,717 ​ $ 11,288 Contingent consideration liabilities ​ 254 ​ ​ 254 Other ​ 1,289 ​ ​ 1,212 ​ $ 11,260 ​ $ 12,754 ​ ​ ​ ​ NOTE 8. LONG-TERM DEBT Long-term debt as of September 30, 2025 and December 31, 2024, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 December 31, 2024 ​ ​ ​ ​ ​ ​ Revolving credit facility (a) $ - ​ $ - Other debt (b) ​ 1,980 ​ ​ 1,888 Term loan (c) ​ - ​ ​ - ​ ​ 1,980 ​ ​ 1,888 Less current portion ​ ( 1,980 ) ​ ​ ( 1,888 ) ​ $ - ​ $ - ​ (a) On February 29, 2024, upon the closing of the disposition of the Precision Sport segment, the Company terminated and paid off amounts outstanding under the revolving credit facility, and pursuant to the Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto (the “Restated Credit Agreement”), in full. The Company paid interest monthly on any borrowings on the Restated Credit Agreement. (b) On December 5, 2024, pursuant to the RockyMounts Purchase Agreement, Clarus and its wholly-owned subsidiary, Rhino-Rack USA LLC, issued a promissory note in favor of RockyMounts, Inc. in the principal amount of $ 2,000 , payable on December 5, 2025. Imputed interest is included within the principal amount and the fair value of the note was $ 1,878 on the date of issuance. As of September 30, 2025 and December 31, 2024, the borrowing rate was 6.5 % . (c) On February 29, 2024, upon the closing of the disposition of the Precision Sport segment, the Company terminated and paid off amounts outstanding under the term loan in full. The Company paid interest monthly on any borrowings on the Restated Credit Agreement. ​ ​ NOTE 9. DERIVATIVE FINANCIAL INSTRUMENTS The Company’s primary exchange rate risk management objective is to attempt 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. 18 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ At September 30, 2025, the Company’s derivative contracts had remaining maturities of less than one year . The counterparties to these transactions had both long-term and short-term investment grade credit ratings. The maximum net exposure of the Company’s credit risk to the counterparties is generally limited to the aggregate unrealized loss of all contracts with that counterparty, which was $ 1,143 as of September 30, 2025. The Company’s exposure of counterparty credit risk is limited to the aggregate unrealized gain on all contracts. As of September 30, 2025, there was no such exposure to the counterparties. 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 September 30, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ September 30, 2025 ​ Notional Latest ​ Amount ​ Maturity ​ ​ ​ ​ Foreign exchange contracts - Canadian Dollars $ 3,938 ​ February 2026 Foreign exchange contracts - Euros € 9,938 ​ February 2026 ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Notional Latest ​ Amount ​ Maturity ​ ​ ​ ​ Foreign exchange contracts - Canadian Dollars $ 1,379 ​ February 2025 Foreign exchange contracts - Euros € 6,711 ​ August 2025 ​ 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 loss and reclassified to sales in the period the underlying hedged transaction is recognized in earnings. Gains (losses) of ($ 641 ) and $ 14 were reclassified to sales during the three months ended September 30, 2025 and 2024, respectively, and ($ 1,068 ) and $ 231 were reclassified to sales during the nine months ended September 30, 2025 and 2024, respectively. The following table presents the balance sheet classification and fair value of derivative instruments as of September 30, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Classification September 30, 2025 December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ Derivative instruments in asset positions: ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts Prepaid and other current assets ​ $ - ​ $ 600 ​ ​ ​ ​ ​ ​ ​ ​ Derivative instruments in liability positions: ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts Accrued liabilities ​ $ 1,143 ​ $ - ​ ​ ​ ​ 19 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ NOTE 10. ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss (“AOCI”) primarily consists of foreign currency translation adjustments and changes in our forward foreign exchange contracts. The following table sets forth the changes in AOCI, net of tax, for the three months ended September 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Cash Flow Hedges Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2025 $ ( 18,464 ) ​ $ ( 1,425 ) ​ $ ( 19,889 ) Other comprehensive income before reclassifications ​ 850 ​ ​ 384 ​ ​ 1,234 Amounts reclassified from other comprehensive income ​ - ​ ​ 484 ​ ​ 484 Net current period other comprehensive income ​ 850 ​ ​ 868 ​ ​ 1,718 Balance as of September 30, 2025 $ ( 17,614 ) ​ $ ( 557 ) ​ $ ( 18,171 ) ​ The following table sets forth the changes in AOCI, net of tax, for the three months ended September 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Cash Flow Hedges Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2024 $ ( 17,721 ) ​ $ 181 ​ $ ( 17,540 ) Other comprehensive income (loss) before reclassifications ​ 3,665 ​ ​ ( 174 ) ​ ​ 3,491 Amounts reclassified from other comprehensive income (loss) ​ - ​ ​ ( 11 ) ​ ​ ( 11 ) Net current period other comprehensive income (loss) ​ 3,665 ​ ​ ( 185 ) ​ ​ 3,480 Balance as of September 30, 2024 $ ( 14,056 ) ​ $ ( 4 ) ​ $ ( 14,060 ) ​ The following table sets forth the changes in AOCI, net of tax, for the nine months ended September 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Cash Flow Hedges Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2024 $ ( 24,858 ) ​ $ 326 ​ $ ( 24,532 ) Other comprehensive income (loss) before reclassifications ​ 7,244 ​ ​ ( 1,689 ) ​ ​ 5,555 Amounts reclassified from other comprehensive income (loss) ​ - ​ ​ 806 ​ ​ 806 Net current period other comprehensive income (loss) ​ 7,244 ​ ​ ( 883 ) ​ ​ 6,361 Balance as of September 30, 2025 $ ( 17,614 ) ​ $ ( 557 ) ​ $ ( 18,171 ) ​ 20 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ The following table sets forth the changes in AOCI, net of tax, for the nine months ended September 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Cash Flow Hedges Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2023 $ ( 15,223 ) ​ $ ( 191 ) ​ $ ( 15,414 ) Other comprehensive income before reclassifications ​ 1,167 ​ ​ 365 ​ ​ 1,532 Amounts reclassified from other comprehensive income (loss) ​ - ​ ​ ( 178 ) ​ ​ ( 178 ) Net current period other comprehensive income ​ 1,167 ​ ​ 187 ​ ​ 1,354 Balance as of September 30, 2024 $ ( 14,056 ) ​ $ ( 4 ) ​ $ ( 14,060 ) ​ The effects on net income of amounts reclassified from unrealized gains (losses) on cash flow hedges for foreign exchange contracts for the three and nine months ended September 30, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains (losses) reclassified from AOCI to the Consolidated Statements of Comprehensive (Loss) Income Affected line item in the Consolidated Three Months Ended ​ Nine Months Ended Statements of Comprehensive (Loss) Income September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Foreign exchange contracts: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales $ ( 641 ) ​ $ 14 ​ $ ( 1,068 ) ​ $ 231 Less: Income tax (benefit) expense ​ ( 157 ) ​ ​ 3 ​ ​ ( 262 ) ​ ​ 53 Amount reclassified, net of tax $ ( 484 ) ​ $ 11 ​ $ ( 806 ) ​ $ 178 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassifications from AOCI $ ( 484 ) ​ $ 11 ​ $ ( 806 ) ​ $ 178 ​ ​ ​ ​ NOTE 11. 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. 21 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Items Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 ​ Level 1 Level 2 Level 3 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts ​ $ - ​ $ - ​ $ - ​ $ - ​ ​ $ - ​ $ - ​ $ - ​ $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts ​ $ - ​ $ 1,143 ​ $ - ​ $ 1,143 Contingent consideration liabilities ​ $ - ​ $ - ​ $ 254 ​ $ 254 ​ ​ $ - ​ $ 1,143 ​ $ 254 ​ $ 1,397 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Level 1 Level 2 Level 3 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts ​ $ - ​ $ 600 ​ $ - ​ $ 600 ​ ​ $ - ​ $ 600 ​ $ - ​ $ 600 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration liabilities ​ $ - ​ $ - ​ $ 609 ​ $ 609 ​ ​ $ - ​ $ - ​ $ 609 ​ $ 609 ​ Derivative financial instruments are recorded at fair value based on current market pricing models. The Company estimated the initial fair value of the contingent consideration liabilities primarily using the Monte-Carlo pricing model. Significant unobservable inputs used in the valuation of contingent consideration liabilities related to the acquisition of RockyMounts included a discount rate of 13.0 %. Contingent consideration liabilities are subsequently remeasured at the estimated fair value at the end of each reporting period using financial projections of the acquired company, such as sales-based milestones and estimated probabilities of achievement, with the change in fair value recognized in contingent consideration benefit in the accompanying consolidated statements of comprehensive (loss) 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. 22 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ The following table summarizes the changes in contingent consideration liabilities: ​ ​ ​ ​ ​ RockyMounts ​ ​ ​ Balance at December 31, 2024 $ 609 ​ ​ ​ Fair value adjustments ​ ( 355 ) ​ ​ ​ Balance at September 30, 2025 $ 254 ​ 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 could 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. The net sales threshold required for the payment of the TRED contingent consideration was not met during the measurement period ended June 30, 2025. As of September 30, 2025, the net sales threshold required for the payment of the 2025 portion of the RockyMounts contingent consideration is not expected to be met during the measurement period ending December 31, 2025. ​ NOTE 12. 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 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 . ​ ​ NOTE 13. EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is computed by dividing earnings (loss) by the weighted average number of common shares outstanding during each period. Diluted earnings (loss) per share is computed by dividing earnings (loss) 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 (loss) per share if their effect is anti-dilutive to the loss from continuing operations. 23 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ The following table is a reconciliation of basic and diluted shares of common stock outstanding used in the calculation of earnings (loss) per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - basic ​ 38,402 ​ ​ 38,352 ​ ​ 38,390 ​ ​ 38,286 Effect of dilutive stock awards ​ - ​ ​ - ​ ​ - ​ ​ - Weighted average shares outstanding - diluted ​ 38,402 ​ ​ 38,352 ​ ​ 38,390 ​ ​ 38,286 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from continuing operations per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic $ ( 0.04 ) ​ $ ( 0.08 ) ​ $ ( 0.40 ) ​ $ ( 0.39 ) Diluted ​ ( 0.04 ) ​ ​ ( 0.08 ) ​ ​ ( 0.40 ) ​ ​ ( 0.39 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from discontinued operations per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic $ - ​ $ - ​ $ - ​ $ 0.74 Diluted ​ - ​ ​ - ​ ​ - ​ ​ 0.74 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic $ ( 0.04 ) ​ $ ( 0.08 ) ​ $ ( 0.40 ) ​ $ 0.35 Diluted ​ ( 0.04 ) ​ ​ ( 0.08 ) ​ ​ ( 0.40 ) ​ ​ 0.35 ​ For the three months ended September 30, 2025 and 2024, equity awards of 4,685 and 5,762 , respectively, and for the nine months ended September 30, 2025 and 2024, equity awards of 4,531 and 5,217 , respectively, were excluded from the calculation of earnings (loss) per share for these periods as they were anti-dilutive. ​ ​ NOTE 14. STOCK-BASED COMPENSATION PLAN On May 29, 2025, at the Company’s 2025 Annual Meeting, stockholders approved the Clarus Corporation Amended and Restated 2015 Stock Incentive Plan (the “Amended and Restated 2015 Plan”), which had previously been adopted by the Board of Directors on April 16, 2025, subject to such approval. The Amended and Restated 2015 Plan amends and restates the Clarus Corporation 2015 Stock Incentive Plan (the “2015 Plan”), originally approved by stockholders on December 11, 2015. Upon stockholder approval of the Amended and Restated 2015 Plan, the 2015 Plan was terminated, and no further awards will be granted under it. Any remaining shares available for grant under the 2015 Plan were canceled. However, 4,232 shares subject to outstanding awards previously granted under the 2015 Plan will remain available for issuance pursuant to their existing terms. ​ Under the Amended and Restated 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 Amended and Restated 2015 Plan allows for grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted stock unit awards. Unless earlier terminated as provided therein, the Amended and Restated 2015 Plan will terminate on the tenth (10th) anniversary of the effective date of the Amended and Restated 2015 Plan. ​ 24 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Options Granted: ​ During the nine months ended September 30, 2025, the Company issued stock option awards for an aggregate of 630 shares of Common Stock under the Amended and Restated 2015 Plan and the 2015 Plan to directors and employees of the Company. Of the 630 stock options, 500 stock options shall vest and become exercisable one year from the date of the grant, 50 stock options shall vest and become exercisable over a period of three years from the date of the grant, and 80 stock options shall vest and become exercisable in four equal consecutive quarterly tranches from the date of grant. 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 Nine Months Ended September 30, 2025 ​ ​ ​ ​ Number of options ​ 630 Option vesting period ​ 1 - 3 Years Grant price (per share) ​ $ 3.21 - $ 4.02 Dividend yield ​ 2.49 % - 3.12 % Expected volatility (a) ​ 50.6 % - 53.2 % Risk-free interest rate ​ 4.01 % - 4.17 % Expected life (years) (b) ​ 5.50 - 6.69 Weighted average fair value (per share) ​ $ 1.32 - $ 1.74 ​ (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 nine months ended September 30, 2025 was $ 1,046 , which will be recognized over the vesting period of the options. During the nine months ended September 30, 2025, the Company did no t issue any restricted stock unit awards under the Amended and Restated 2015 Plan and the 2015 Plan to directors and employees of the Company. The total non-cash stock compensation expense for continuing operations related to grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted stock unit awards recorded by the Company for the three months ended September 30, 2025 and 2024 was $ 1,544 and $ 1,547 , respectively, and for the nine months ended September 30, 2025 and 2024 was $ 4,568 and $ 4,253 , respectively. For the three and nine months ended September 30, 2025 and 2024, the majority of stock-based compensation costs were classified as selling, general and administrative expenses. As of September 30, 2025, there were 1,053 unvested stock options and unrecognized compensation cost of $ 1,180 related to unvested stock options, as well as 1,050 unvested restricted stock unit awards and unrecognized compensation costs of $ 1,639 related to unvested restricted stock unit awards. ​ ​ NOTE 15. 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 25 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ 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. The Company accrues for restructuring costs when they are probable and reasonably estimable. These costs include severance costs, exit costs, and other restructuring costs and are included in restructuring charges in the condensed consolidated statements of comprehensive (loss) income. Severance costs primarily consist of severance benefits through payroll continuation, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs. Other costs consist primarily of costs related to the discontinuance of certain product lines and are distinguishable and directly attributable to the Company’s restructuring initiative and not a result of external market factors associated with the ongoing business. We estimate that we will continue to incur restructuring costs related to employee-related costs and facility exit costs during the year ending December 31, 2025; however, the Company cannot estimate the total amount expected to be incurred as cost reduction actions continue to be evaluated. The Company anticipates completing these restructuring activities in the year ending December 31, 2025. The following table summarizes the restructuring charges, payments and the remaining liabilities related to restructuring costs at September 30, 2025, which are included within accrued liabilities in the condensed consolidated balance sheets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor ​ Adventure ​ Corporate ​ Total Balance at December 31, 2024 ​ $ 541 ​ $ - ​ $ - ​ $ 541 Charges to expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee termination benefits ​ ​ 102 ​ ​ 357 ​ ​ - ​ ​ 459 Exit costs ​ ​ 30 ​ ​ - ​ ​ - ​ ​ 30 Total restructuring charges ​ $ 132 ​ $ 357 ​ $ - ​ $ 489 Cash payments and non-cash charges: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash payments ​ ​ ( 660 ) ​ ​ ( 357 ) ​ ​ - ​ ​ ( 1,017 ) Balance at September 30, 2025 ​ $ 13 ​ $ - ​ $ - ​ $ 13 ​ ​ ​ NOTE 16. COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS 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. Anticipated costs related to litigation matters are accrued when it is both probable that a liability has been incurred and the amount can be reasonably estimated. 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 position, results of operations or cash flows, except for the U.S. Consumer Product Safety Commission (“CPSC”) and Department of Justice matters discussed below. 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. It is possible that, as additional information becomes available, the Company may subsequently determine that it may incur losses from such contingencies materially in excess of the amounts initially accrued by the Company which could have a material adverse effect on the Company’s liquidity, stock price, consolidated financial position, results of operations and/or cash flows. See Part II, Item 1. “Legal Proceedings.” ​ 26 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Legal expenses incurred in the ordinary course of business are included in selling, general, and administrative expenses in the consolidated statements of comprehensive (loss) income except as described below. ​ U.S. Consumer Product Safety Commission In January 2021, Black Diamond Equipment, Ltd. (“BDEL”) wrote to the U.S. Consumer Product Safety Commission (“CPSC”) outlining its new cradle solution for certain models of its avalanche beacon transceivers to prevent such transceivers from switching unexpectedly out of “send” mode. The proposed new cradle solution was designed to improve transceiver safety by locking the transceiver into “send” mode prior to use so that it would not switch unexpectedly out of “send” mode. BDEL also requested approval for the CPSC Fast-Track Program for a voluntary product recall to implement this cradle solution. The CPSC approved the recall and entered into a Corrective Action Plan agreement with BDEL in March 2021. BDEL received a letter from the CPSC, dated October 28, 2021, stating that the CPSC is investigating whether BDEL has timely complied with the reporting requirements of Section 15(b) of the Consumer Protection Safety Act and related regulations regarding certain models of avalanche transceivers switching unexpectedly out of “send” mode. Separately, on April 21, 2022, BDEL filed a Section 15(b) report and applied for Fast-Track consideration for a voluntary recall, consisting of free repair or replacement of such malfunctioning models of avalanche transceivers, which would not switch from “send” mode to “search” mode due to an electronic malfunction in the reed switch or foil. The CPSC approved the recall and entered into a Corrective Action Plan agreement with BDEL in August 2022. BDEL received a letter from the CPSC, dated January 17, 2023, stating that the CPSC is investigating whether BDEL has timely complied with the reporting requirements of Section 15(b) of the Consumer Protection Safety Act and related regulations regarding the malfunction in the reed switch or foil in certain models of avalanche transceivers switching out of “search” mode. BDEL responded to the CPSC’s investigation by letter dated March 31, 2023, accompanied with documents responsive to the CPSC’s requests. The CPSC asked for further clarification and documents, and BDEL sent a responsive letter accompanied by additional documents on June 23, 2023. On September 6, 2023, the CPSC requested further clarification and information regarding the reed switch issue, to which BDEL responded on October 6, 2023 and October 13, 2023. By letters dated October 12, 2023 and December 18, 2023, respectively, BDEL was notified by the CPSC that the agency staff had concluded that BDEL failed to timely meet its statutory reporting obligations under the Consumer Product Safety Act with respect to certain models of avalanche transmitters distributed by BDEL switching unexpectedly out of “send” mode and certain models of avalanche transmitters distributed by BDEL not switching from “send” mode into “search” mode, that BDEL made a material misrepresentation in a report to the CPSC, and that the agency staff intends to recommend that the CPSC impose civil monetary penalties of $ 16,135 and $ 9,000 , respectively, for the two matters described above. On November 20, 2023 and February 8, 2024, respectively, BDEL submitted a comprehensive response disputing the CPSC’s findings and conclusions in the October 12, 2023 and December 18, 2023 letters, including the amount of any potential penalties. The CPSC ultimately disagreed with our position and the agency voted to refer the matter to the U.S. Department of Justice for further proceedings. The Company and BDEL intend to strongly contest and vigorously defend against any claims which may be asserted against them by the Department of Justice or the CPSC. John C. Walbrecht, the former President of BDEL and the Company, received a letter from the CPSC dated June 25, 2024 alleging that in his personal capacity he knowingly violated the Consumer Product Safety Act by failing to timely report the occurrence resulting in beacons switching unexpectedly out of “send” mode. The staff of the CPSC recommended a $ 5,000 fine against Mr. Walbrecht personally. Pursuant to the Company’s by-laws, the Company has agreed to indemnify Mr. Walbrecht and pay his legal fees in connection with the occurrences described above, and he has provided an undertaking to the Company that the Company will be entitled to recover those expenses if it is ultimately determined that he was not entitled to indemnification. On August 26, 2024, Mr. Walbrecht’s independent counsel responded to the CPSC, denying the allegations of its June 25, 2024, letter and rejecting its demand for a penalty. 27 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ On January 23, 2025, the Company and BDEL were each served with grand jury subpoenas from the United States Department of Justice requiring the production of documents relating to avalanche transmitters distributed by BDEL. The Company and BDEL are cooperating with this investigation. On March 13, 2025, the Company received a letter from the CPSC requesting various categories of documents and information in connection with an investigation into whether BDEL sold products that were subject to a recall. The Company has cooperated with that investigation, substantially completed document production, and delivered a narrative explanatory letter to the CPSC on June 18, 2025. The Company has heard nothing further from the CPSC regarding the matters in the CPSC’s March 13, 2025 letter. Based on currently available information, the Company believes an unfavorable outcome with the CPSC is probable, however, we cannot reasonably estimate on what terms this matter will be resolved with the CPSC or the U.S. Department of Justice. During the year ended December 31, 2024, the Company recorded a liability of $ 2,500 representing the low end of the range of our estimated exposure. The Company does not have a better estimate of the loss; therefore the low-end of the range was recorded as an accrued liability during the first quarter of 2024 and a corresponding expense is included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive (loss) income. We believe it is reasonably possible that a change in our ability to estimate the amount of loss could occur in the near term and that the change in the estimate could be material. In addition, as this matter is ongoing, the Company is currently unable to predict its duration, resources required or outcome, or the impact it may have on the Company’s liquidity, financial condition, results of operations and/or cash flows. Any penalties imposed by the CPSC or other regulators could be costly to us and could damage our business and reputation as well as have a material adverse effect on the Company’s liquidity, stock price, consolidated financial position, results of operations and/or cash flows. During the three months ended September 30, 2025 and 2024, the Company incurred legal expenses of $ 322 and $ 194 , respectively, and during the nine months ended September 30, 2025 and 2024, the Company incurred legal expenses of $ 2,050 and $ 579 , respectively, in efforts to resolve this matter. These legal expenses are included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive (loss) income. Clarus Corporation v. HAP Trading, LLC and Harsh A. Padia On September 23, 2022, the Company filed a lawsuit in the United States District Court for the Southern District of New York against HAP Trading, LLC and Harsh A. Padia (“HAP Trading”), seeking disgorgement of profits from transactions in the Company’s common stock and related derivative securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended. On March 14, 2025, the Court issued an Opinion and Order granting the defendants’ motion for summary judgment on the ground that they qualified for the market making exemption under Section 16(d) of the Exchange Act. On April 11, 2025, the Company filed a timely Notice of Appeal and filed its opening brief on July 18, 2025. Clarus Corporation v. Caption Management, LLC, et al. On March 8, 2024, the Company filed a lawsuit in the United States District Court for the Southern District of New York against Caption Management, LLC, Caption Partners II LP, Caption GP, LLC, William Cooper and Jason Strasser (“Caption Management”), seeking disgorgement of short-swing profits from transactions in the Company’s stock and related derivative securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended. Defendants filed a motion to dismiss and on March 24, 2025, the Court issued an Order and Opinion denying the motion to dismiss and directing the defendants to answer the Complaint and proceed to discovery. ​ 28 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ During the three months ended September 30, 2025 and 2024, the Company incurred legal expenses of $ 679 and $ 200 , respectively, and during the nine months ended September 30, 2025 and 2024, the Company incurred legal expenses of $ 1,413 and $ 716 , respectively, in the efforts to bring the cases against HAP Trading and Caption Management to trial. These legal expenses are included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive (loss) income. ​ ​ NOTE 17. INCOME TAXES The Company’s U.S. federal statutory tax rate is 21 % and its foreign operations have statutory tax rates of approximately 23 % in Austria, 28 % in New Zealand, and 30 % in Australia. The difference between the Company’s estimated effective tax rate benefit of 58.1 % for the three months ended September 30, 2025, and the U.S. federal statutory tax rate of 21 % was primarily due to the impact of valuation allowance, changes in uncertain tax positions, stock compensation, and research and experimentation expenditures and credits in the third quarter of 2025. The difference between the Company’s estimated effective tax rate benefit of 20.2 % for the nine months ended September 30, 2025, and the U.S. federal statutory tax rate of 21 % was primarily due to the impact of valuation allowance, changes in uncertain tax positions, stock compensation, and research and experimentation expenditures and credits in the first three quarters of 2025. As of December 31, 2024, the Company’s gross deferred tax asset was $ 35,658 . The Company has recorded a valuation allowance of $ 23,344 , resulting in a net deferred tax asset of $ 12,314 , before deferred tax liabilities of $ 24,488 . As of September 30, 2025 and December 31, 2024, the Company has provided a full valuation allowance against all of the U.S. deferred tax assets because the ultimate realization of those assets did not meet the more-likely-than-not criteria. Part of the Company’s deferred tax assets consist of net operating loss carryforwards (“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 sheets 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, 2024, the Company had NOLs and research and experimentation credit for U.S. federal income tax purposes of $ 0 and $ 5,439 , respectively. ​ On July 4, 2025, H.R.1 (the “Tax Reform Act of 2025”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions. The legislation did not have a material impact on our income tax expense or our financial position, results of operations, or cash flows for the three months ended September 30, 2025, and we do not expect it to materially change our effective income tax rate for 2025. ​ ​ ​ ​ 29 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ NOTE 18. SEGMENT INFORMATION We operate our business structure within two segments. These segments are defined based on the internal financial reporting used by our chief operating decision maker (“CODM”) to allocate resources and assess performance. The Company’s CODM is the Executive Chairman and Director (Principal Executive Officer). The CODM allocates resources based on revenue and operating income primarily through the annual budget and periodic forecasting process. The CODM considers budget-to-actual variances when making decisions about allocating capital and personnel to the segments. Corporate costs consist of corporate office expenses including compensation, benefits, non-cash stock compensation expense, transaction costs, and other administrative costs, as well as charges related to certain legal and regulatory matters, that are managed at a corporate level and are not included within segment results when evaluating performance or allocating resources. Each segment is described below: ● Prior to its sale on July 11, 2025, PIEPS was included in our Outdoor segment alongside Black Diamond Equipment. Our Outdoor segment 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; and gloves and mittens. We also offer advanced skis, ski poles, ski skins, and snow safety products, including avalanche airbag systems, avalanche transceivers, shovels, and probes. ● Our Adventure segment, which includes Rhino-Rack, MAXTRAX, and TRED, is a manufacturer of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, recovery boards, bicycle racks, and accessories in Australia and New Zealand and a growing presence in the United States and Europe. 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. 30 Table of Contents 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 September 30, 2025 ​ Outdoor ​ Adventure ​ Total Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 24,140 ​ $ 4,121 ​ $ 28,261 International sales ​ 24,548 ​ ​ 16,538 ​ ​ 41,086 Total sales ​ 48,688 ​ ​ 20,659 ​ ​ 69,347 Cost of goods sold ​ 31,174 ​ ​ 13,807 ​ ​ ​ Selling, general and administrative ​ 13,556 ​ ​ 8,774 ​ ​ ​ Restructuring charges ​ 1 ​ ​ 154 ​ ​ ​ Transaction costs ​ 414 ​ ​ - ​ ​ ​ Contingent consideration benefit ​ - ​ ​ ( 355 ) ​ ​ ​ Legal costs and regulatory matter expenses ​ 322 ​ ​ - ​ ​ ​ Segment operating income (loss) $ 3,221 ​ $ ( 1,721 ) ​ $ 1,500 Corporate costs ​ ​ ​ ​ ​ ​ ​ ( 4,526 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ 108 Other, net ​ ​ ​ ​ ​ ​ ​ ( 943 ) Loss before income tax ​ ​ ​ ​ ​ ​ $ ( 3,861 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2024 ​ Outdoor ​ Adventure ​ Total Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 21,704 ​ $ 2,661 ​ $ 24,365 International sales ​ 27,583 ​ ​ 15,167 ​ ​ 42,750 Total sales ​ 49,287 ​ ​ 17,828 ​ ​ 67,115 Cost of goods sold ​ 31,060 ​ ​ 10,680 ​ ​ ​ PFAS and other inventory reserves ​ 1,878 ​ ​ - ​ ​ ​ Selling, general and administrative ​ 14,756 ​ ​ 9,366 ​ ​ ​ Restructuring charges ​ 189 ​ ​ 289 ​ ​ ​ Legal costs and regulatory matter expenses ​ 194 ​ ​ - ​ ​ ​ Segment operating income (loss) $ 1,210 ​ $ ( 2,507 ) ​ $ ( 1,297 ) Corporate costs ​ ​ ​ ​ ​ ​ ​ ( 4,061 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ 373 Other, net ​ ​ ​ ​ ​ ​ ​ 1,164 Loss before income tax ​ ​ ​ ​ ​ ​ $ ( 3,821 ) ​ 31 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2025 ​ Outdoor ​ Adventure ​ Total Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 63,455 ​ $ 14,339 ​ $ 77,794 International sales ​ 66,217 ​ ​ 41,016 ​ ​ 107,233 Total sales ​ 129,672 ​ ​ 55,355 ​ ​ 185,027 Cost of goods sold ​ 83,957 ​ ​ 35,620 ​ ​ ​ Inventory fair value of purchase accounting ​ - ​ ​ 120 ​ ​ ​ Other inventory reserves ​ 490 ​ ​ - ​ ​ ​ Selling, general and administrative ​ 41,807 ​ ​ 26,551 ​ ​ ​ Restructuring charges ​ 132 ​ ​ 357 ​ ​ ​ Transaction costs ​ 570 ​ ​ 40 ​ ​ ​ Contingent consideration benefit ​ - ​ ​ ( 355 ) ​ ​ ​ Legal costs and regulatory matter expenses ​ 2,050 ​ ​ - ​ ​ ​ Impairment of indefinite-lived intangible assets ​ 1,565 ​ ​ - ​ ​ ​ Segment operating loss $ ( 899 ) ​ $ ( 6,978 ) ​ $ ( 7,877 ) Corporate costs ​ ​ ​ ​ ​ ​ ​ ( 12,812 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ 518 Other, net ​ ​ ​ ​ ​ ​ ​ 999 Loss before income tax ​ ​ ​ ​ ​ ​ $ ( 19,172 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2024 ​ Outdoor ​ Adventure ​ Total Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 64,218 ​ $ 11,365 ​ $ 75,583 International sales ​ 68,278 ​ ​ 49,049 ​ ​ 117,327 Total sales ​ 132,496 ​ ​ 60,414 ​ ​ 192,910 Cost of goods sold ​ 84,306 ​ ​ 36,527 ​ ​ ​ PFAS and other inventory reserves ​ 3,323 ​ ​ - ​ ​ ​ Selling, general and administrative ​ 44,125 ​ ​ 28,106 ​ ​ ​ Restructuring charges ​ 559 ​ ​ 450 ​ ​ ​ Contingent consideration benefit ​ - ​ ​ ( 125 ) ​ ​ ​ Legal costs and regulatory matter expenses ​ 3,079 ​ ​ - ​ ​ ​ Segment operating loss $ ( 2,896 ) ​ $ ( 4,544 ) ​ $ ( 7,440 ) Corporate costs ​ ​ ​ ​ ​ ​ ​ ( 12,829 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ 1,198 Other, net ​ ​ ​ ​ ​ ​ ​ 669 Loss before income tax ​ ​ ​ ​ ​ ​ $ ( 18,402 ) ​ There were no intercompany sales between the Outdoor and Adventure segments for the periods presented. 32 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Total assets by segment, as of September 30, 2025 and December 31, 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor ​ ​ ​ ​ ​ ​ $ 145,970 ​ $ 137,062 Adventure ​ ​ ​ ​ ​ ​ ​ 118,020 ​ ​ 120,063 Corporate ​ ​ ​ ​ ​ ​ ​ 19,080 ​ ​ 36,969 ​ ​ ​ ​ ​ ​ ​ $ 283,070 ​ $ 294,094 ​ Capital expenditures, depreciation and amortization by segment is as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Capital expenditures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor $ 1,081 ​ $ 563 ​ $ 3,868 ​ $ 2,070 Adventure ​ 134 ​ ​ 487 ​ ​ 391 ​ ​ 1,554 Total capital expenditures $ 1,215 ​ $ 1,050 ​ $ 4,259 ​ $ 3,624 Depreciation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor $ 550 ​ $ 640 ​ $ 1,590 ​ $ 1,974 Adventure ​ 344 ​ ​ 340 ​ ​ 1,064 ​ ​ 1,077 Total depreciation $ 894 ​ $ 980 ​ $ 2,654 ​ $ 3,051 Amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor $ 222 ​ $ 286 ​ $ 750 ​ $ 857 Adventure ​ 1,927 ​ ​ 2,130 ​ ​ 5,836 ​ ​ 6,459 Total amortization $ 2,149 ​ $ 2,416 ​ $ 6,586 ​ $ 7,316 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 33 Table of Contents CLARUS CORPORATION MANAGEMENT DISCUSSION AND ANALYSIS (in thousands, except per share amounts) ​