What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-06 · 105 added, 193 removed, 138 unchanged (68% of the section changed)

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We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.

Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, the overall level of consumer demand on our products;

the highly competitive nature of our markets and the potential for rapid or significant changes in consumer preferences;

general economic conditions and other factors affecting consumer confidence, preferences, and behavior;

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the Company’s ability to implement its business strategy;

our ability to accurately forecast demand and manage inventory levels, including the risk of excess or obsolete inventory, increased discounting, or lost sales;

the Company’s ability to execute and integrate acquisitions, as well as to complete dispositions and effectively manage the associated separation and transition risks, including those related to the recent sale of PIEPS;

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stability of the Company’s manufacturing facilities and suppliers, as well as consumer demand for our products, in light of disease epidemics and health-related concerns;

disruptions in our supply chain, third-party logistics providers, or distribution facilities;

the impact that global climate change trends may have on the Company and its suppliers and customers, increased focus on sustainability issues as a result of global climate change;

regulatory or market responses to global climate change;

compliance costs and potential liabilities related to environmental requirements, including those associated with Per- and Polyfluoroalkyl Substances (PFAS);

the Company’s ability to protect patents, trademarks and other intellectual property rights;

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the ability of our information technology systems or information security systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes;

our ability to properly maintain, protect, repair or upgrade our information technology systems or information security systems, or problems with our transitioning to upgraded or replacement systems;

our ability to properly maintain, protect, repair or upgrade our information technology systems or information security systems, or problems arising in connection with our transition to upgraded or replacement systems;

the impact of adverse publicity about the Company and/or its brands and products, including without limitation, through social media or in connection with brand damaging events and/or public perception;

the potential impact of the Consumer Products Safety Commission’s and the U.S.

the potential impact of the Consumer Product Safety Commission’s and the U.S.

Department of Justice’s investigations related to BDEL’s reporting obligations under the Consumer Product Safety Act in connection with BDEL’s recall of certain models of its avalanche transceivers on our business, results of operations, and financial condition;

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our ability to utilize our net operating loss carryforwards;

changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks;

the Company’s ability to maintain a quarterly dividend;

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;

changes in tax laws and liabilities, tariffs, legal, regulatory, political and

CLARUS CORPORATION

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(in thousands, except per share amounts)

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

economic risks;

the Company’s ability to maintain a quarterly dividend;

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 initiatives;

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 impairments recognized in the Outdoor and Adventure segments and the potential that we may be required to take additional write-downs or write-offs, restructuring charges, impairment charges, or other charges in the future, on the Company’s future earnings per share;

the Company’s review of strategic alternatives, including the timing and outcome of the review, whether the review results in any transaction or other strategic outcome, and the potential impact of the review on the Company’s business and operations;

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, 2025, which are incorporated herein by reference.

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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.

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

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

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Each of our brands represents a unique customer value proposition.

Supported by six decades of proven innovation, our Black Diamond brand is an established global leader in high-performance, activity-based climbing, skiing, and technical mountain sports equipment.

Supported by six decades of proven innovation, Black Diamond is an established global leader in high-performance, activity-based climbing, skiing, and technical mountain sports equipment.

The brand is synonymous with premium performance, safety and reliability.

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Founded in 2005, our MAXTRAX brand offers high-quality overlanding and off-road vehicle recovery and extraction tracks for the overland and off-road market.

Similarly, our TRED brand, founded in 2012, is a trusted brand for key retailers and distributors in the overlanding and off-road vehicle recovery market.

Similarly, TRED, founded in 2012, is a trusted brand for key retailers and distributors in the overlanding and off-road vehicle recovery market.

Founded in 1993, our RockyMounts brand is known for making well designed and dependable premium bicycle racks and other accessories compatible with vehicles of all sizes.

Clarus, incorporated in Delaware in 1991, acquired Black Diamond Equipment, Ltd.

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

On December 1, 2021, the Company completed the acquisition of Australia-based MaxTrax Australia Pty Ltd (“MAXTRAX”).

On October 9, 2023, the Company completed the acquisition of Australia-based TRED Outdoors Pty Ltd.

On December 5, 2024, the Company completed the acquisition of certain assets and liabilities constituting the RockyMounts business (“RockyMounts”).

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

On December 1, 2021, the

CLARUS CORPORATION

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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 €7,825 (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 1 to our condensed consolidated financial statements for additional information.

Company completed the acquisition of Australia-based MaxTrax Australia Pty Ltd (“MAXTRAX”).

On October 9, 2023, the Company completed the acquisition of Australia-based TRED Outdoors Pty Ltd.

On December 5, 2024, the Company completed the acquisition of certain assets and liabilities constituting the RockyMounts business (“RockyMounts”).

On February 29, 2024, the Company completed the sale of all of the equity associated with the Company’s Precision Sport segment, which was comprised of the Company’s subsidiaries Sierra Bullets, L.L.C.

(“Sierra”) and Barnes Bullets – Mona, LLC (“Barnes”), pursuant to a Purchase and Sale Agreement dated as of December 29, 2023.

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.

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.

On May 6, 2026, the Company announced that its Board of Directors approved the payment on May 27, 2026 of the Quarterly Cash Dividend of $0.025 to the record holders of shares of the Company’s common stock as of the close of business on May 18, 2026.

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 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.

During the three months ended March 31, 2026 and 2025, the Company incurred $853 and $173, respectively, of restructuring charges related to these actions.

The Company has incurred $6,991 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.

Restructuring costs include severance costs, exit costs, and other restructuring costs and are included in Restructuring charges in the condensed consolidated statements of comprehensive loss.

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.

We estimate that we will incur additional employee-related and facility exit restructuring costs in 2026;

however, the Company cannot estimate the total amount expected to be incurred at this time as cost reduction actions continue to be evaluated.

The Company currently anticipates completing these restructuring activities in 2026;

however, the timing and scope of these actions may change, and additional actions may be taken, depending on business conditions and other factors.

Critical Accounting Policies and Use of Estimates

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Actual results could differ from these estimates.

There have been no significant changes to our critical accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2024.

CLARUS CORPORATION

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There have been no significant changes to our critical accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

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Results of Operations

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 March 31, 2026 Compared to Three Months Ended March 31, 2025

The following presents a discussion of operations for the three months ended March 31, 2026, compared with the three months ended March 31, 2025.

Three Months Ended

September 30, 2025

September 30, 2024

Domestic sales

International sales

Cost of goods sold

Operating expenses

Selling, general and administrative

Restructuring charges

Transaction costs

Contingent consideration benefit

Legal costs and regulatory matter expenses

Total operating expenses

Operating loss

Other (expense) income

Interest income, net

Total other (expense) income, net

Loss before income tax

Income tax benefit

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

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

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 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 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 $1,725, 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.

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

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

Restructuring Charges

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 $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 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 $1,001 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.

Interest Income, net

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

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

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

March 31, 2026

March 31, 2025

Domestic sales

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Transaction costs

Contingent consideration benefit

Legal costs and regulatory matter expenses

Impairment of indefinite-lived intangible assets

Total operating expenses

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Loss before income tax

Income tax benefit

Loss from continuing operations

Discontinued operations, net of tax

Net (loss) income

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.

Income tax expense (benefit)

Total sales increased $1,505, or 2.5%, to $61,938 during the three months ended March 31, 2026, compared to total sales of $60,433 during the three months ended March 31, 2025.

The increase in sales was attributable to an increase in sales at the Adventure and Outdoor segments of $956 and $549, respectively.

CLARUS CORPORATION

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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 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 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.

Sales in the Outdoor segment increased by $1,646 due to foreign exchange impact from the weakening of the U.S.

dollar primarily against the euro during the three months ended March 31, 2026, compared to the prior period.

Sales in the Adventure segment increased by $1,249 due to foreign exchange impact from the weakening of the U.S.

dollar against the Australian dollar during the three months ended March 31, 2026, compared to the prior period.

Sales in the Adventure segment increased due to a favorable wholesale market in Australia for Rhino-Rack and MAXTRAX, partially offset by decreases in North America.

Sales in the Outdoor segment increased due to increases in global wholesale revenue of $2,936 and independent global distributor revenue of $286, partially offset by lower PIEPS revenue of $1,767 due to the sale of PIEPS in July 2025 and lower global direct-to-consumer revenue of $905, compared to the prior period.

Domestic sales increased $71, or 0.3%, to $24,880 during the three months ended March 31, 2026, compared to domestic sales of $24,809 during the three months ended March 31, 2025.

The increase in sales was attributable to an increase in sales at the Outdoor segment of $879, partially offset by a decrease in sales at the Adventure segment of $808.

International sales increased $1,434, or 4.0%, to $37,058 during the three months ended March 31, 2026, compared to international sales of $35,624 during the three months ended March 31, 2025.

The increase in sales was attributable to an increase in sales at the Adventure segment of $1,764, partially offset by a decrease in sales at the Outdoor segment of $330.

Cost of Goods Sold

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.

Cost of goods sold decreased $464, or 1.2%, to $39,175 during the three months ended March 31, 2026, compared to cost of goods sold of $39,639 during the three months ended March 31, 2025.

Gross profit increased $1,969, or 9.5%, to $22,763 during the three months ended March 31, 2026, compared to gross profit of $20,794 during the three months ended March 31, 2025.

Gross margin was 36.8% during the three months ended March 31, 2026, compared to a gross margin of 34.4% during the three months ended March 31, 2025.

Gross margin during the three months ended March 31, 2026, increased compared to the prior year as a result of higher volumes and a favorable product mix at both the Adventure and Outdoor segments.

The volume increases at the Outdoor segment were partially offset by lower volumes due to the sale of PIEPS in July 2025.

Selling, General and Administrative

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-

Selling, general, and administrative expenses decreased $39, or 0.1%, to $26,577 during the three months ended March 31, 2026, compared to selling, general and administrative expenses of $26,616 during the three months ended March 31, 2025.

Selling, general and administrative expenses at the Adventure segment decreased by $445 primarily as a result of lower marketing, depreciation, amortization, and employee-related costs.

Additionally, Corporate costs decreased by $337 due to lower outside service and employee-related costs.

These decreases were partially offset by increases at the Outdoor segment of $743 primarily as a result of higher outside service, depreciation, and employee-related costs, partially offset by lower costs from PIEPS due to the sale in July 2025, and lower amortization expense.

CLARUS CORPORATION

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(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 $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.

Restructuring charges were $853 during the three months ended March 31, 2026, compared to restructuring charges of $173 during the three months ended March 31, 2025.

The restructuring charges incurred during the three months ended March 31, 2026, 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 $533 and athlete sponsorship contract termination costs of $320.

Transaction Costs

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 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.

Transaction costs decreased to $22 during the three months ended March 31, 2026, compared to transaction costs of $142 during the three months ended March 31, 2025, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

Legal Costs and Regulatory Matter Expenses

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.

Legal costs and regulatory matter expenses increased to $1,379 during the three months ended March 31, 2026, compared to legal costs and regulatory matter expenses of $625 during the three months ended March 31, 2025, which consisted of expenses related to the Company’s specific legal matters.

See Note 13 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 nine months ended September 30, 2025, compared to impairment of indefinite-lived intangible assets of $0 during the nine months ended September 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 nine months ended September 30, 2025.

Interest Income, net

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

Interest income, net decreased to $88 during the three months ended March 31, 2026, compared to interest income, net of $257 during the three months ended March 31, 2025.

The decrease in interest income recognized during the three months ended March 31, 2026, was due to lower interest rates on lower cash balances, compared to the prior period.

Other, net, changed by $2,449, or 533.6%, to $2,908 during the three months ended March 31, 2026, compared to other, net of $459 during the three months ended March 31, 2025.

The change in other, net, was primarily attributable to miscellaneous gains related to the Company’s various legal matters and gains in mark-to-market adjustments on non-hedged foreign currency contracts.

The change was partially offset by a decrease in remeasurement gains recognized on the Company’s foreign denominated accounts receivable and accounts payable during the three months ended March 31, 2026.

Income tax expense (benefit) changed by $1,025, or 127.8%, to an expense of $223 during the three months ended March 31, 2026, compared to a benefit of $802 during the same period in 2025.

Our effective income tax rate was -7.3% for the three months ended March 31, 2026, and differed compared to the statutory tax rates primarily due to the impact of jurisdictional losses in the U.S.

and Australia that presently do not provide future tax benefit.

For the three months ended March 31, 2025, our effective income tax rate was a benefit of 13.3% 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.

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

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 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

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.

We plan to fund these activities through a combination of our future operating cash flows and net proceeds from the sale of our Precision Sport segment.

Upon the closing of the sale of the Precision Sport segment, the Company terminated and settled all outstanding borrowings on our revolving credit facility and term debt under the Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto (the “Restated Credit Agreement”).

We believe that our liquidity requirements and contractual obligations for at least the next 12 months will be adequately covered by cash provided by operations and the net proceeds from the sale of the Precision Sport segment after the settlement of the Restated Credit Agreement.

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 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

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

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

We plan to fund these activities through a combination of our current cash balances and future operating cash flows.

We believe that our liquidity requirements and contractual obligations for at least the next 12 months will be adequately covered by our current cash balances and cash provided by operations.

Additionally, long-term contractual obligations are also currently expected to be funded from our current cash balances and cash from operations.

At March 31, 2026, we had total cash and restricted cash of $31,725, compared to total cash and restricted cash of $38,195 at December 31, 2025.

At March 31, 2026, the Company had $10,866 of the $31,725 in cash and restricted cash held by foreign entities, of which $9,475 is considered permanently reinvested.

The following presents a discussion of cash flows for the condensed consolidated three months ended March 31, 2026 compared with the condensed consolidated three months ended March 31, 2025.

Three Months Ended

March 31, 2026

March 31, 2025

Net cash used in operating activities

Net cash provided by investing activities

Net cash used in investing activities

Net cash used in financing activities

Effect of foreign exchange rates on cash

Change in cash

Cash, beginning of year

Cash, end of period

Effect of foreign exchange rates on cash and restricted cash

Change in cash and restricted cash

Cash and restricted cash, beginning of year

Cash and restricted cash, end of period

Net Cash From Operating Activities

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.

Net cash used in operating activities was $4,133 during the three months ended March 31, 2026, compared to net cash used in operating activities of $2,073 during the three months ended March 31, 2025.

The change in net cash used in operating activities during 2026 is primarily due to an increase in cash outflows related to working capital compared to the same period in 2025.

These impacts were partially offset by a decrease in net loss and an increase in deferred income taxes compared to the same period in 2025.

Free cash flow, defined as net cash used in operating activities less capital expenditures, of $5,691 was used during the three months ended March 31, 2026 compared to $3,254 used during the same period in 2025.

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:

Nine Months Ended

September 30, 2025

September 30, 2024

Three Months Ended

March 31, 2026

March 31, 2025

Net cash used in operating activities

1 unchanged sentence

Free cash flow

Net Cash From Investing Activities

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 $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

1 unchanged sentence

(in thousands, except per share amounts)

Net Cash From Investing Activities

Net cash used in investing activities was $1,530 during the three months ended March 31, 2026, compared to net cash used in investing activities of $1,181 during the three months ended March 31, 2025.

The change in cash used in investing activities during the three months ended March 31, 2026 is primarily due to an increase in purchases of property and equipment compared to the same period in 2025.

Net Cash From Financing Activities

Net cash used in financing activities was $993 during the three months ended March 31, 2026, compared to net cash used in financing activities of $1,001 during the three months ended March 31, 2025.

The change in net cash used in financing activities during the three months ended March 31, 2026 is primarily due to a decrease in purchases of treasury stock compared to the same period in 2025.

Net Operating Loss

9 unchanged sentences

Credit Agreement

Upon the closing of the sale of the Precision Sport segment on February 29, 2024, the Company terminated and settled all outstanding borrowings on our revolving credit facility and term debt under the Restated Credit Agreement.

As of March 31, 2026, the Company maintained no credit facilities.

Off-Balance Sheet Arrangements

4 unchanged sentences

There has not been any material change in the market risk disclosure contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

CLARUS CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

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