Clarus Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS ​ CLARUS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ December 31, 2025 Assets ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ Cash $ 29,809 ​ $ 36,691 Accounts receivable, less allowance for ​ ​ ​ ​ ​ credit losses of $ 1,200 and $ 1,121 ​ 48,368 ​ ​ 44,839 Inventories ​ 82,190 ​ ​ 83,028 Prepaid and other current assets ​ 5,000 ​ ​ 5,457 Income tax receivable ​ 1,511 ​ ​ 1,407 Total current assets ​ 166,878 ​ ​ 171,422 ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 18,859 ​ ​ 18,255 Other intangible assets, net ​ 22,291 ​ ​ 23,761 Indefinite-lived intangible assets ​ 19,600 ​ ​ 19,600 Deferred income taxes ​ 55 ​ ​ 55 Other long-term assets ​ 15,581 ​ ​ 15,935 Total assets $ 243,264 ​ $ 249,028 ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ Accounts payable $ 13,510 ​ $ 15,907 Accrued liabilities ​ 24,140 ​ ​ 24,403 Income tax payable ​ 334 ​ ​ 179 Total current liabilities ​ 37,984 ​ ​ 40,489 ​ ​ ​ ​ ​ ​ Deferred income taxes ​ 1,412 ​ ​ 1,418 Other long-term liabilities ​ 10,211 ​ ​ 10,728 Total liabilities ​ 49,607 ​ ​ 52,635 ​ ​ ​ ​ ​ ​ 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; 43,104 and 43,054 issued and 38,441 and 38,402 outstanding, respectively ​ 4 ​ ​ 4 Additional paid in capital ​ 704,641 ​ ​ 703,487 Accumulated deficit ​ ( 461,509 ) ​ ​ ( 457,253 ) Treasury stock, at cost ​ ( 33,188 ) ​ ​ ( 33,156 ) Accumulated other comprehensive loss ​ ( 16,291 ) ​ ​ ( 16,689 ) Total stockholders’ equity ​ 193,657 ​ ​ 196,393 Total liabilities and stockholders’ equity $ 243,264 ​ $ 249,028 ​ See accompanying notes to condensed consolidated financial statements . ​ 3 Table of Contents CLARUS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ March 31, 2026 ​ March 31, 2025 ​ ​ ​ ​ ​ ​ Sales ​ ​ ​ ​ ​ Domestic sales $ 24,880 ​ $ 24,809 International sales ​ 37,058 ​ ​ 35,624 Total sales ​ 61,938 ​ ​ 60,433 ​ ​ ​ ​ ​ ​ Cost of goods sold ​ 39,175 ​ ​ 39,639 Gross profit ​ 22,763 ​ ​ 20,794 ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ Selling, general and administrative ​ 26,577 ​ ​ 26,616 Restructuring charges ​ 853 ​ ​ 173 Transaction costs ​ 22 ​ ​ 142 Legal costs and regulatory matter expenses ​ 1,379 ​ ​ 625 ​ ​ ​ ​ ​ ​ Total operating expenses ​ 28,831 ​ ​ 27,556 ​ ​ ​ ​ ​ ​ Operating loss ​ ( 6,068 ) ​ ​ ( 6,762 ) ​ ​ ​ ​ ​ ​ Other income ​ ​ ​ ​ ​ Interest income, net ​ 88 ​ ​ 257 Other, net ​ 2,908 ​ ​ 459 ​ ​ ​ ​ ​ ​ Total other income, net ​ 2,996 ​ ​ 716 ​ ​ ​ ​ ​ ​ Loss before income tax ​ ( 3,072 ) ​ ​ ( 6,046 ) Income tax expense (benefit) ​ 223 ​ ​ ( 802 ) Net loss ​ ( 3,295 ) ​ ​ ( 5,244 ) ​ ​ ​ ​ ​ ​ Other comprehensive income, net of tax: ​ ​ ​ ​ ​ Foreign currency translation adjustment ​ 398 ​ ​ 1,717 Unrealized loss on hedging activities ​ - ​ ​ ( 744 ) Other comprehensive income ​ 398 ​ ​ 973 Comprehensive loss $ ( 2,897 ) ​ $ ( 4,271 ) ​ ​ ​ ​ ​ ​ Net loss per share: ​ ​ ​ ​ ​ Basic $ ( 0.09 ) ​ $ ( 0.14 ) Diluted ​ ( 0.09 ) ​ ​ ( 0.14 ) ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: ​ ​ ​ ​ ​ Basic ​ 38,408 ​ ​ 38,366 Diluted ​ 38,408 ​ ​ 38,366 ​ See accompanying notes to condensed consolidated financial statements . ​ 4 Table of Contents CLARUS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ March 31, 2026 ​ ​ ​ March 31, 2025 Cash Flows From Operating Activities: ​ ​ ​ ​ ​ Net loss $ ( 3,295 ) ​ $ ( 5,244 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ Depreciation of property and equipment ​ 987 ​ ​ 883 Amortization of other intangible assets ​ 1,937 ​ ​ 2,224 Accretion of notes payable ​ - ​ ​ 31 (Gain) loss on disposition of property and equipment ​ ( 28 ) ​ ​ 348 Noncash lease expense ​ 882 ​ ​ 906 Stock-based compensation ​ 1,154 ​ ​ 1,469 Deferred income taxes ​ ( 152 ) ​ ​ ( 978 ) Changes in operating assets and liabilities, net of dispositions: ​ ​ ​ ​ ​ Accounts receivable ​ ( 3,675 ) ​ ​ 1,121 Inventories ​ 600 ​ ​ ( 4,203 ) Prepaid and other assets ​ 656 ​ ​ ( 746 ) Accounts payable ​ ( 2,404 ) ​ ​ 3,662 Accrued liabilities ​ ( 872 ) ​ ​ ( 1,165 ) Income taxes ​ 77 ​ ​ ( 381 ) Net cash used in operating activities ​ ( 4,133 ) ​ ​ ( 2,073 ) ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: ​ ​ ​ ​ ​ Proceeds from disposition of property and equipment ​ 28 ​ ​ - Purchases of property and equipment ​ ( 1,558 ) ​ ​ ( 1,181 ) Net cash used in investing activities ​ ( 1,530 ) ​ ​ ( 1,181 ) ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: ​ ​ ​ ​ ​ Purchase of treasury stock ​ ( 32 ) ​ ​ ( 42 ) Cash dividends paid ​ ( 961 ) ​ ​ ( 959 ) Net cash used in financing activities ​ ( 993 ) ​ ​ ( 1,001 ) ​ ​ ​ ​ ​ ​ Effect of foreign exchange rates on cash and restricted cash ​ 186 ​ ​ 211 ​ ​ ​ ​ ​ ​ Change in cash and restricted cash ​ ( 6,470 ) ​ ​ ( 4,044 ) Cash and restricted cash, beginning of year ​ 38,195 ​ ​ 45,359 Cash and restricted cash, end of period $ 31,725 ​ $ 41,315 ​ ​ ​ ​ ​ ​ Supplemental Disclosure of Cash Flow Information: ​ ​ ​ ​ ​ Cash paid for income taxes $ 176 ​ $ 449 Cash paid for interest $ - ​ $ 6 Supplemental Disclosures of Non-Cash Investing and Financing Activities: ​ ​ ​ ​ ​ Purchases of property and equipment incurred but not paid $ 75 ​ $ 386 Lease liabilities arising from obtaining right-of-use assets $ - ​ $ 372 ​ See accompanying notes to condensed consolidated financial statements . ​ ​ 5 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ Total ​ ​ Common Stock ​ Paid-In ​ Accumulated ​ Treasury Stock ​ Comprehensive ​ Stockholders’ ​ ​ Shares ​ ​ ​ Amount ​ ​ ​ Capital ​ ​ ​ Deficit ​ ​ ​ Shares ​ ​ ​ Amount ​ ​ ​ Loss ​ ​ ​ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2025 ​ ​ 43,054 ​ $ 4 ​ $ 703,487 ​ $ ( 457,253 ) ​ ​ ( 4,652 ) ​ $ ( 33,156 ) ​ $ ( 16,689 ) ​ $ 196,393 Net loss ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,295 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 3,295 ) Other comprehensive income ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 398 ​ ​ 398 Cash dividends ($ 0.025 per share) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 961 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 961 ) Purchase of treasury stock ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 11 ) ​ ​ ( 32 ) ​ ​ - ​ ​ ( 32 ) Stock-based compensation expense ​ ​ - ​ ​ - ​ ​ 1,154 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,154 Shares issued from restricted stock units ​ ​ 50 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - Balance, March 31, 2026 ​ ​ 43,104 ​ $ 4 ​ $ 704,641 ​ $ ( 461,509 ) ​ ​ ( 4,663 ) ​ $ ( 33,188 ) ​ $ ( 16,291 ) ​ $ 193,657 ​ See accompanying notes to condensed consolidated financial statements . ​ ​ ​ 6 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 March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025, 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 as otherwise disclosed) necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included. The results for the three months ended March 31, 2026 are not necessarily indicative of the results to be obtained for the year ending December 31, 2026. 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, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 5, 2026. 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®, TRED Outdoors®, and RockyMounts® 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. 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, 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. ​ 7 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Restricted Cash ​ Restricted cash primarily includes cash and highly liquid instruments that are used as collateral for certain lease agreements which will affect the amount of cash the Company has available for other uses. Restricted cash is recorded in Other long-term assets on the condensed consolidated balance sheets. The following table provides a reconciliation of cash and restricted cash reported within the condensed consolidated balance sheets to the condensed consolidated statements of cash flows as of March 31, 2026 and December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ December 31, 2025 Cash $ 29,809 ​ $ 36,691 Restricted cash included in Other long-term assets ​ 1,916 ​ ​ 1,504 Total cash and restricted cash shown in the statements of cash flows $ 31,725 ​ $ 38,195 ​ Recent Accounting Pronouncements Accounting Pronouncements issued and not yet adopted 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. INVENTORIES Inventories, as of March 31, 2026 and December 31, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ December 31, 2025 Finished goods $ 78,430 ​ $ 79,584 Work-in-process ​ 146 ​ ​ 338 Raw materials and supplies ​ 3,614 ​ ​ 3,106 ​ $ 82,190 ​ $ 83,028 ​ ​ 8 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ NOTE 3. PROPERTY AND EQUIPMENT Property and equipment, net, as of March 31, 2026 and December 31, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ Land $ 2,850 ​ $ 2,850 Building and improvements ​ 7,997 ​ ​ 8,356 Furniture and fixtures ​ 5,144 ​ ​ 5,194 Computer hardware and software ​ 9,309 ​ ​ 8,278 Machinery and equipment ​ 16,496 ​ ​ 16,246 Construction in progress ​ 1,718 ​ ​ 968 ​ ​ 43,514 ​ ​ 41,892 Less accumulated depreciation ​ ( 24,655 ) ​ ​ ( 23,637 ) ​ $ 18,859 ​ $ 18,255 ​ Depreciation expense for the three months ended March 31, 2026 and 2025 was $ 987 and $ 883 , respectively. ​ ​ NOTE 4. GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill by segment as of March 31, 2026 and December 31, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor ​ ​ ​ Adventure ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross value of goodwill ​ $ 29,507 ​ $ 96,966 ​ $ 126,473 Accumulated goodwill impairments adjusted for impact of foreign currency exchange rates ​ ​ ( 29,507 ) ​ ​ ( 96,966 ) ​ ​ ( 126,473 ) ​ ​ $ - ​ $ - ​ $ - ​ Indefinite-Lived Intangible Assets Trademarks classified as indefinite-lived intangible assets of $ 19,600 as of March 31, 2026 and December 31, 2025 were all related to the Black Diamond brand. Other Intangible Assets, net The following table summarizes the changes in gross other intangible assets: ​ ​ ​ ​ ​ Gross balance at December 31, 2025 ​ $ 77,740 ​ ​ ​ ​ Impact of foreign currency exchange rates ​ ​ 1,306 ​ ​ ​ ​ Gross balance at March 31, 2026 ​ $ 79,046 ​ 9 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Other intangible assets, net of amortization as of March 31, 2026 and December 31, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ Gross ​ ​ ​ Accumulated Amortization ​ ​ ​ Net ​ ​ ​ Weighted Average Useful Life Intangibles subject to amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ 60,117 ​ $ ( 43,388 ) ​ $ 16,729 ​ ​ 13.7 years Product technologies ​ 16,289 ​ ​ ( 12,562 ) ​ ​ 3,727 ​ ​ 9.3 years Tradenames ​ 2,408 ​ ​ ( 743 ) ​ ​ 1,665 ​ ​ 9.7 years Non-compete agreements ​ 232 ​ ​ ( 62 ) ​ ​ 170 ​ ​ 5.0 years ​ $ 79,046 ​ $ ( 56,755 ) ​ $ 22,291 ​ ​ 12.6 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ Gross ​ ​ ​ Accumulated Amortization ​ ​ ​ Net ​ ​ ​ Weighted Average Useful Life ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships $ 59,197 ​ $ ( 41,439 ) ​ $ 17,758 ​ ​ 13.7 years Product technologies ​ 15,943 ​ ​ ( 11,862 ) ​ ​ 4,081 ​ ​ 9.3 years Tradenames ​ 2,368 ​ ​ ( 628 ) ​ ​ 1,740 ​ ​ 9.6 years Core technologies ​ 232 ​ ​ ( 50 ) ​ ​ 182 ​ ​ 5.0 years ​ $ 77,740 ​ $ ( 53,979 ) ​ $ 23,761 ​ ​ 12.6 years ​ Amortization expense for the three months ended March 31, 2026 and 2025, was $ 1,937 and $ 2,224 , respectively. Future amortization expense for other intangible assets as of March 31, 2026 is as follows: ​ ​ ​ ​ ​ Years Ending December 31, ​ ​ ​ Amortization Expense 2026 (excluding the three months ended March 31, 2026) ​ $ 5,125 2027 ​ ​ 5,066 2028 ​ ​ 3,562 2029 ​ ​ 2,680 2030 ​ ​ 1,938 2031 ​ ​ 1,391 Thereafter ​ ​ 2,529 ​ ​ $ 22,291 ​ ​ ​ ​ 10 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ NOTE 5. ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES Accrued liabilities as of March 31, 2026 and December 31, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ Accrued payroll and related items $ 3,099 ​ $ 2,837 Accrued bonus ​ 1,021 ​ ​ 2,005 Designated forward exchange contracts ​ - ​ ​ 358 Accrued warranty ​ 1,377 ​ ​ 1,480 Current lease liabilities ​ 2,710 ​ ​ 3,021 Accrued commissions ​ 794 ​ ​ 576 Sales returns and rebates ​ 2,826 ​ ​ 3,300 Contingent consideration liabilities ​ 254 ​ ​ 254 Accrued CPSC regulatory matter ​ 2,500 ​ ​ 2,500 Accrued legal expenses ​ 1,401 ​ ​ 1,183 Restructuring liabilities ​ 344 ​ ​ 407 Other ​ 7,814 ​ ​ 6,482 ​ $ 24,140 ​ $ 24,403 ​ Other long-term liabilities as of March 31, 2026 and December 31, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ Long-term lease liabilities $ 8,725 ​ $ 9,266 Other ​ 1,486 ​ ​ 1,462 ​ $ 10,211 ​ $ 10,728 ​ ​ ​ ​ NOTE 6. DERIVATIVE FINANCIAL INSTRUMENTS The Company’s primary exchange rate risk management objective was to attempt to mitigate the uncertainty of anticipated cash flows attributable to changes in foreign currency exchange rates. The Company primarily focused on mitigating changes in cash flows resulting from sales denominated in currencies other than the U.S. dollar. The Company managed this risk primarily by using currency forward and option contracts. If the anticipated transactions were deemed probable, the resulting relationships were formally designated as cash flow hedges. The Company accounted for these contracts as cash flow hedges and tested 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. The Company maintained no derivative contracts as of March 31, 2026. The Company held the following contracts designated as hedging instruments as of December 31, 2025: ​ ​ ​ ​ ​ ​ December 31, 2025 ​ Notional ​ ​ ​ Latest ​ Amount ​ Maturity ​ ​ ​ ​ Foreign exchange contracts - Canadian Dollars $ 1,208 ​ February 2026 Foreign exchange contracts - Euros € 3,134 ​ February 2026 ​ 11 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ For contracts that qualify as effective hedge instruments, the effective portion of gains and losses resulting from changes in fair value of the instruments are included in accumulated other comprehensive loss and reclassified to sales in the period the underlying hedged transaction is recognized in earnings. Gains of $ 0 and $ 76 were reclassified to sales during the three months ended March 31, 2026 and 2025, respectively. The following table presents the balance sheet classification and fair value of derivative instruments as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ Classification ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ Derivative instruments in liability positions: ​ ​ ​ ​ Designated forward exchange contracts Accrued liabilities ​ $ 358 ​ ​ ​ ​ NOTE 7. 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 March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign Currency Translation Adjustments ​ ​ ​ Unrealized Gains (Losses) on Cash Flow Hedges ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2025 $ ( 16,686 ) ​ $ ( 3 ) ​ $ ( 16,689 ) Current period other comprehensive income ​ 398 ​ ​ - ​ ​ 398 Balance as of March 31, 2026 $ ( 16,288 ) ​ $ ( 3 ) ​ $ ( 16,291 ) ​ The following table sets forth the changes in AOCI, net of tax, for the three months ended March 31, 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 ​ 1,717 ​ ​ ( 687 ) ​ ​ 1,030 Amounts reclassified from other comprehensive income (loss) ​ - ​ ​ ( 57 ) ​ ​ ( 57 ) Net current period other comprehensive income (loss) ​ 1,717 ​ ​ ( 744 ) ​ ​ 973 Balance as of March 31, 2025 $ ( 23,141 ) ​ $ ( 418 ) ​ $ ( 23,559 ) ​ 12 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ There were no unrealized gains on cash flow hedges for foreign exchange contracts for the three months ended March 31, 2026. The effects on net income of amounts reclassified from unrealized gains on cash flow hedges for foreign exchange contracts for the three months ended March 31, 2025, were as follows: ​ ​ ​ ​ ​ Gains reclassified from AOCI to the Consolidated Statements of Comprehensive Loss Affected line item in the Consolidated Three Months Ended Statements of Comprehensive Loss March 31, 2025 Foreign exchange contracts: ​ ​ Sales $ 76 Less: Income tax expense ​ 19 Amount reclassified, net of tax $ 57 ​ ​ ​ Total reclassifications from AOCI $ 57 ​ ​ ​ ​ NOTE 8. 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. Items Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis at March 31, 2026 and December 31, 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration liabilities ​ $ - ​ $ - ​ $ 254 ​ $ 254 ​ ​ $ - ​ $ - ​ $ 254 ​ $ 254 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Designated forward exchange contracts ​ $ - ​ $ 358 ​ $ - ​ $ 358 Contingent consideration liabilities ​ ​ - ​ ​ - ​ ​ 254 ​ ​ 254 ​ ​ $ - ​ $ 358 ​ $ 254 ​ $ 612 ​ 13 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ Derivative financial instruments are recorded at fair value based on current market pricing models. Pursuant to the purchase of RockyMounts during the year ended December 31, 2024, the purchase price paid for the RockyMounts assets included the payment of additional contingent consideration of up to $ 2,000 in cash if certain net sales thresholds are met for the years ending December 31, 2025 and December 31, 2026, respectively. 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 for such period. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. The following table summarizes the changes in contingent consideration liabilities: ​ ​ ​ ​ ​ RockyMounts ​ ​ ​ Balance at December 31, 2025 $ 254 ​ ​ ​ Fair value adjustments ​ - ​ ​ ​ Balance at March 31, 2026 $ 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 2025 portion of the RockyMounts contingent consideration was not met during the measurement period ended December 31, 2025. ​ NOTE 9. 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 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 . ​ ​ NOTE 10. 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 net loss. 14 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 ​ March 31, 2026 ​ ​ ​ March 31, 2025 ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - basic ​ 38,408 ​ ​ 38,366 Effect of dilutive stock awards ​ - ​ ​ - Weighted average shares outstanding - diluted ​ 38,408 ​ ​ 38,366 ​ ​ ​ ​ ​ ​ Net loss per share: ​ ​ ​ ​ ​ Basic $ ( 0.09 ) ​ $ ( 0.14 ) Diluted ​ ( 0.09 ) ​ ​ ( 0.14 ) ​ For the three months ended March 31, 2026 and 2025, equity awards of 4,533 and 4,265 , respectively, were excluded from the calculation of earnings (loss) per share for these periods as they were anti-dilutive. ​ ​ NOTE 11. 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. ​ During the three months ended March 31, 2026, the Company did no t issue any stock options or restricted stock unit awards under the Amended and Restated 2015 Plan to directors and employees of the Company. The total non-cash stock compensation expense 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 March 31, 2026 and 2025 was $ 1,154 and $ 1,469 , respectively. For the three months ended March 31, 2026 and 2025, the majority of stock-based compensation costs were classified as selling, general and administrative expenses. As of March 31, 2026, there were 50 unvested stock options and unrecognized compensation cost of $ 56 related to unvested stock options, as well as 1,000 unvested restricted stock unit awards and unrecognized compensation costs of $ 250 related to unvested restricted stock unit awards. ​ ​ 15 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ NOTE 12. 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 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. 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 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. The following table summarizes the restructuring charges, payments and the remaining liabilities related to restructuring costs at March 31, 2026, which are included within accrued liabilities in the condensed consolidated balance sheets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outdoor ​ Adventure ​ Corporate ​ Total Balance at December 31, 2025 ​ $ 407 ​ $ - ​ $ - ​ $ 407 Charges to expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee termination benefits ​ ​ 473 ​ ​ 60 ​ ​ - ​ ​ 533 Exit costs ​ ​ 320 ​ ​ - ​ ​ - ​ ​ 320 Total restructuring charges ​ $ 793 ​ $ 60 ​ $ - ​ $ 853 Cash payments and non-cash charges: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash payments ​ ​ ( 856 ) ​ ​ ( 60 ) ​ ​ - ​ ​ ( 916 ) Balance at March 31, 2026 ​ $ 344 ​ $ - ​ $ - ​ $ 344 ​ ​ ​ NOTE 13. 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, 16 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ stock price, consolidated financial position, results of operations and/or cash flows. See Part II, Item 1. “Legal Proceedings.” ​ Legal expenses incurred in the ordinary course of business are included in selling, general, and administrative expenses in the consolidated statements of comprehensive loss except as described below. ​ U.S. Consumer Product Safety Commission In January 2021, Black Diamond Equipment, Ltd. (“BDEL”) filed a Section 15(b) report with 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, 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 17 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ 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. On January 23, 2025, in connection with a criminal investigation, 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 the investigation and have produced all relevant documents. The DOJ has sent letters to Mr. Walbrecht and Rick Vance (BDEL’s former Director of Quality) advising them that they are targets in its investigation of possible criminal conduct. The DOJ has since served two subpoenas upon a current and former employee of BDEL for grand jury testimony, as well as grand jury subpoenas for documents to an advisory entity and to the Company’s former public relations firm and asked to speak with the successor to Mr. Vance’s position. The Company’s Board of Directors has approved indemnity and payment of legal fees for current and former employees subpoenaed by the DOJ, in the same manner and subject to the same conditions described above for Mr. Walbrecht. 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. On January 28, 2026, the CPSC closed its investigation into this specific matter without taking further action. 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 was included in legal costs and regulatory matter expenses in the consolidated statements of comprehensive loss. 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 March 31, 2026 and 2025, the Company incurred legal expenses of $ 802 and $ 578 , 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. 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 the appeal was argued before the United States Court of Appeals for the Second Circuit on February 12, 2026. The Court of Appeals has invited the Securities and Exchange Commission (“SEC”) 18 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ to submit an amicus curiae brief, but the SEC declined to do so. We are currently waiting for the Court of Appeals to issue its decision. Williams v. Caption Management, LLC, et al. / Clarus Corporation v. Caption Management, LLC, et al. On February 12, 2024, a stockholder of the Company filed a lawsuit against Caption Management LLC and related entities (“Caption Management”) in the United States District Court for the Southern District of New York, seeking disgorgement of short-swing profits for violations of Section 16(b) of the Securities Exchange Act of 1934. The Company is named as a nominal defendant and any recovery in the case will inure to the benefit of the Company. On March 8, 2024, the Company filed its own lawsuit against these same defendants for disgorgement of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934, as amended. On February 10, 2026, the Court granted the Company’s motion to dismiss the stockholder action without prejudice on the ground that it was duplicative of the Company’s direct action against the same defendants alleging the same Section 16(b) violations. On February 24, 2026, the Company entered into a settlement agreement with Caption Management to resolve the Company’s claims. Under the terms of the settlement agreement, Caption Management paid the Company an undisclosed sum in exchange for, among other things, mutual releases and dismissal of the claims with prejudice. The settlement resolves the Company’s claims against Caption Management without any admission of liability or wrongdoing by any party. On April 11, 2026, the stockholder’s attorney whose case was dismissed filed a lawsuit against the Company in the New York State Supreme Court seeking legal fees for his role in bringing an action against Caption. The Company intends to defend that action and argue that any fees he may recover are limited to services performed prior to the Company’s direct action against Caption. During the three months ended March 31, 2026 and 2025, the Company incurred legal expenses of $ 577 and $ 47 , 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. ​ ​ NOTE 14. 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 of - 7.3 % for the three months ended March 31, 2026, and the U.S. federal statutory tax rate of 21 % was primarily due to the impact of jurisdictional losses in the U.S. and Australia that presently do not provide future tax benefit. As of December 31, 2025, the Company’s gross deferred tax asset was $ 40,300 . The Company has recorded a valuation allowance of $ 29,315 , resulting in a net deferred tax asset of $ 10,985 , before deferred tax liabilities of $ 12,348 . As of March 31, 2026 and December 31, 2025, 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 19 Table of Contents CLARUS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) (in thousands, except per share amounts) ​ 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, 2025, the Company had NOLs and research and experimentation credit for U.S. federal income tax purposes of $ 41,209 and $ 5,709 , respectively. All federal NOLs will have an indefinite carryforward period. Federal research and experimentation credits have a limited carryforward period and will begin to expire in tax year 2033. In accordance with Section 382 and Section 383 of the Internal Revenue Code of 1986 (“Code”), utilization of the NOL and tax credit carryforwards may subject to limitations based on prior or future ownership changes. ​ ​ ​ ​ NOTE 15. 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, TRED, and RockyMounts 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. 20 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 March 31, 2026 ​ Outdoor ​ Adventure ​ Total Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 21,573 ​ $ 3,307 ​ $ 24,880 International sales ​ 23,299 ​ ​ 13,759 ​ ​ 37,058 Total sales ​ 44,872 ​ ​ 17,066 ​ ​ 61,938 Cost of goods sold ​ 28,726 ​ ​ 10,449 ​ ​ ​ Selling, general and administrative ​ 14,769 ​ ​ 8,394 ​ ​ ​ Restructuring charges ​ 793 ​ ​ 60 ​ ​ ​ Legal costs and regulatory matter expenses ​ 802 ​ ​ - ​ ​ ​ Segment operating loss $ ( 218 ) ​ $ ( 1,837 ) ​ $ ( 2,055 ) Corporate costs ​ ​ ​ ​ ​ ​ ​ ( 4,013 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ 88 Other, net ​ ​ ​ ​ ​ ​ ​ 2,908 Loss before income tax ​ ​ ​ ​ ​ ​ $ ( 3,072 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2025 ​ Outdoor ​ Adventure ​ Total Sales ​ ​ ​ ​ ​ ​ ​ ​ Domestic sales $ 20,694 ​ $ 4,115 ​ $ 24,809 International sales ​ 23,629 ​ ​ 11,995 ​ ​ 35,624 Total sales ​ 44,323 ​ ​ 16,110 ​ ​ 60,433 Cost of goods sold ​ 29,354 ​ ​ 10,165 ​ ​ ​ Inventory fair value of purchase accounting ​ - ​ ​ 120 ​ ​ ​ Selling, general and administrative ​ 14,026 ​ ​ 8,839 ​ ​ ​ Restructuring charges ​ 173 ​ ​ - ​ ​ ​ Transaction costs ​ 70 ​ ​ 40 ​ ​ ​ Legal costs and regulatory matter expenses ​ 578 ​ ​ - ​ ​ ​ Segment operating income (loss) $ 122 ​ $ ( 3,054 ) ​ $ ( 2,932 ) Corporate costs ​ ​ ​ ​ ​ ​ ​ ( 3,830 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ 257 Other, net ​ ​ ​ ​ ​ ​ ​ 459 Loss before income tax ​ ​ ​ ​ ​ ​ $ ( 6,046 ) ​ There were no intercompany sales between the Outdoor and Adventure segments for the periods presented. 21 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 March 31, 2026 and December 31, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ Outdoor $ 139,142 ​ $ 145,902 Adventure ​ 83,912 ​ ​ 84,086 Corporate ​ 20,210 ​ ​ 19,040 ​ $ 243,264 ​ $ 249,028 ​ Capital expenditures, depreciation and amortization by segment is as follows. ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ March 31, 2026 ​ ​ ​ March 31, 2025 Capital expenditures: ​ ​ ​ ​ ​ Outdoor $ 1,490 ​ $ 1,143 Adventure ​ 68 ​ ​ 38 Total capital expenditures $ 1,558 ​ $ 1,181 Depreciation: ​ ​ ​ ​ ​ Outdoor $ 635 ​ $ 506 Adventure ​ 289 ​ ​ 377 Corporate ​ 63 ​ ​ - Total depreciation $ 987 ​ $ 883 Amortization: ​ ​ ​ ​ ​ Outdoor $ 222 ​ $ 283 Adventure ​ 1,715 ​ ​ 1,941 Total amortization $ 1,937 ​ $ 2,224 ​ ​ ​ 22 Table of Contents CLARUS CORPORATION MANAGEMENT DISCUSSION AND ANALYSIS (in thousands, except per share amounts) ​