What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-01 compared with 2024-05-02 · 142 added, 64 removed, 177 unchanged (54% of the section changed)

35 unchanged sentences

obligation to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

Headquartered in Salt Lake City, Utah, Clarus is a global leading designer, developer, manufacturer and distributor of best-in-class outdoor equipment and lifestyle products focused on the outdoor enthusiast markets.

Headquartered in Salt Lake City, Utah, Clarus is a global leader in the design and development of best-in-class equipment and lifestyle products for outdoor enthusiasts.

Driven by our rich history of engineering and innovation, our objective is to provide safe, simple, effective and beautiful products so that our customers can maximize their outdoor pursuits and adventures.

Each of our brands has a long history of continuous product innovation for core and everyday users alike.

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(“SKINourishment”).

During the first quarter of 2024, the Company ceased operations of SKINourishment.

On October 2, 2020, the Company completed the acquisition of certain assets and liabilities constituting the Barnes business (“Barnes”).

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

On February 29, 2024, the Company completed the sale of all of the equity associated with the Company’s Precision Sport segment, which is comprised of the Company’s subsidiaries Sierra and Barnes Bullets – Mona, LLC (“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 approximately $175,674 in cash subject to customary working capital adjustments, for all of the equity associated with the Company’s Precision Sport segment.

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 approximately $175,674 in cash subject to customary working capital adjustments, in exchange 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.

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The declaration and payment of future Quarterly Cash Dividends is subject to the discretion of and approval of the Company’s Board of Directors.

On April 30, 2024, the Company announced that its Board of Directors approved the payment on May 20, 2024 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 10, 2024.

On July 30, 2024, the Company announced that its Board of Directors approved the payment on August 19, 2024 of the Quarterly Cash Dividend of $0.025 to the record holders of shares of the Company’s common stock as of the close of business on August 9, 2024.

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, 2024 and 2023, the Company incurred $370 and $0, respectively, of restructuring charges related to these actions.

During the three months ended June 30, 2024 and 2023, the Company incurred $161 and $736, respectively, and during the six months ended June 30, 2024 and 2023, the Company incurred $531 and $736, respectively, of restructuring charges related to these actions.

The Company has incurred $3,754 of cumulative restructuring charges since the commencement of 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 income.

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

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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, 2023.

Accounting Pronouncements Issued Not Yet Adopted

Recent Accounting Pronouncements

See “Recent Accounting Pronouncements” in Note 1 to our condensed consolidated financial statements.

CLARUS CORPORATION

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Results of Operations

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

The following presents a discussion of operations for the three months ended March 31, 2024, compared with the three months ended March 31, 2023.

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

The following presents a discussion of operations for the three months ended June 30, 2024, compared with the three months ended June 30, 2023.

Three Months Ended

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

Domestic sales

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Operating loss

Other (expense) income

Interest income, net

Total other (expense) income, net

Total other income, net

Loss before income tax

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Discontinued operations, net of tax

Total sales decreased $967, or 1.4%, to $69,311 during the three months ended March 31, 2024, compared to total sales of $70,278 during the three months ended March 31, 2023.

Total sales decreased $1,453, or 2.5%, to $56,484 during the three months ended June 30, 2024, compared to total sales of $57,937 during the three months ended June 30, 2023.

The decrease in sales was primarily attributable to a decrease in sales at the Outdoor segment of $3,880, partially offset by an increase in sales at the Adventure segment of $2,427.

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Sales in the Adventure segment were reduced by $230 due to foreign exchange impact from the strengthening of the U.S.

dollar against the Australian dollar during the three months ended March 31, 2024, compared to the prior period.

Sales in the Outdoor segment increased by $296 due to foreign exchange impact from the weakening of the U.S.

dollar primarily against the euro during the three months ended March 31, 2024, compared to the prior period.

Sales in the Outdoor segment decreased due to weakness in our European and IGD markets.

This weakness was partially offset by growth in the North American wholesale channel.

Sales in the Adventure segment increased due to higher demand from OEM customers and the impact of the TRED Outdoors acquisition.

Domestic sales increased $4,087, or 16.9%, to $28,284 during the three months ended March 31, 2024, compared to domestic sales of $24,197 during the three months ended March 31, 2023.

The increase in sales was attributable to increases at the Outdoor and Adventure segments of $2,064, and $2,023 respectively.

International sales decreased $5,054, or 11.0%, to $41,027 during the three months ended March 31, 2024, compared to international sales of $46,081 during the three months ended March 31, 2023.

The decrease in sales was primarily attributable to a decrease in sales at the Outdoor segment of $7,817, partially offset by an increase in sales at the Adventure segment of $2,763.

dollar against the Australian dollar during the three months ended June 30, 2024, compared to the prior period.

Sales in the Outdoor segment were reduced by $28 due to foreign exchange impact from the strengthening of the U.S.

dollar primarily against the euro during the three months ended June 30, 2024, compared to the prior period.

Sales in the Outdoor segment decreased due to weakness in our North American direct to consumer markets and softness in our European markets.

Sales in the Adventure segment increased due to higher demand from original equipment manufacturer (“OEM”) customers and a $977 increase from the TRED Outdoors acquisition.

Domestic sales decreased $2,991, or 11.5%, to $22,934 during the three months ended June 30, 2024, compared to domestic sales of $25,925 during the three months ended June 30, 2023.

The decrease in sales was attributable to decreases at the Outdoor and Adventure segments of $2,984, and $7 respectively.

International sales increased $1,538, or 4.8%, to $33,550 during the three months ended June 30, 2024, compared to international sales of $32,012 during the three months ended June 30, 2023.

The increase in sales was primarily attributable to an increase in sales at the Adventure segment of $2,434, partially offset by a decrease in sales at the Outdoor segment of $896.

Cost of Goods Sold

Cost of goods sold decreased $310, or 0.7%, to $44,460 during the three months ended March 31, 2024, compared to cost of goods sold of $44,770 during the three months ended March 31, 2023.

Gross profit decreased $657, or 2.6%, to $24,851 during the three months ended March 31, 2024, compared to gross profit of $25,508 during the three months ended March 31, 2023.

Gross margin was 35.9% during the three months ended March 31, 2024, compared to a gross margin of 36.3% during the three months ended March 31, 2023.

Gross margin during the three months ended March 31, 2024, decreased compared to the prior year due to promotional pricing at the Outdoor segment, the increase in PFAS related inventory reserves, as well as unfavorable overall foreign currency exchange movement.

Cost of goods sold increased $718, or 2.0%, to $36,078 during the three months ended June 30, 2024, compared to cost of goods sold of $35,360 during the three months ended June 30, 2023.

Gross profit decreased $2,171, or 9.6%, to $20,406 during the three months ended June 30, 2024, compared to gross profit of $22,577 during the three months ended June 30, 2023.

Gross margin was 36.1% during the three months ended June 30, 2024, compared to a gross margin of 39.0% during the three months ended June 30, 2023.

Gross margin during the three months ended June 30, 2024 decreased compared to the prior year due to an increase in polyfluoroalkyl substances (“PFAS”) related inventory reserve expenses, unfavorable product mix due to increased discontinued merchandise sales at the Outdoor segment, as well as higher inventory and sales return reserve expenses at the Adventure segment.

Selling, General and Administrative

Selling, general, and administrative expenses decreased $1,139, or 3.9%, to $28,215 during the three months ended March 31, 2024, compared to selling, general and administrative expenses of $29,354 during the three months ended March 31, 2023.

The decrease was primarily due to expense reduction initiatives in the Outdoor segment to manage costs, as well as lower intangible amortization, and stock compensation expenses.

The decrease was partially offset by higher investment in marketing initiatives in the Adventure segment.

Selling, general, and administrative expenses increased $1,199, or 4.5%, to $28,081 during the three months ended June 30, 2024, compared to selling, general and administrative expenses of $26,882 during the three months ended June 30, 2023.

The increase was primarily due to an increase in higher investment in marketing initiatives in the Adventure segment, as well as higher employee-related expenses across the Company.

These increases were partially offset by expense reduction initiatives in the Outdoor segment to manage costs as well as lower intangible amortization.

Restructuring Charges

Restructuring charges increased to $370 during the three months ended March 31, 2024, compared to restructuring charges of $0 during the three months ended March 31, 2023.

The restructuring charges incurred during the three months ended March 31, 2024 relate to benefits provided to employees who were or will be terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization of $358 and lease exit and contract termination costs of $12.

Restructuring charges decreased to $161 during the three months ended June 30, 2024, compared to restructuring charges of $736 during the three months ended June 30, 2023.

The restructuring charges incurred during the three months ended June 30, 2024 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 $158 and lease exit and contract termination costs of $3.

CLARUS CORPORATION

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Transaction Costs

Transaction costs increased to $38 during the three months ended March 31, 2024, compared to transaction costs of $37 during the three months ended March 31, 2023, which consisted of expenses related to the Company’s various acquisition efforts.

Transaction costs increased to $27 during the three months ended June 30, 2024, compared to transaction costs of $22 during the three months ended June 30, 2023, which consisted of expenses related to the Company’s various acquisition efforts.

Contingent Consideration Benefit

Contingent consideration benefit decreased to $0 during the three months ended March 31, 2024, compared to a contingent consideration benefit of $1,565 during the three months ended March 31, 2023, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisition of MAXTRAX in 2021.

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

Legal Costs and Regulatory Matter Expenses

Legal costs and regulatory matter expenses increased to $3,002 during the three months ended March 31, 2024, compared to legal costs and regulatory matter expenses of $128 during the three months ended March 31, 2023.

The increase in legal costs and regulatory matter expenses recognized during the three months ended March 31, 2024 reflects the Company’s accrued liability for the outstanding regulatory matter with the United States Consumer Product Safety Commission.

Legal costs and regulatory matter expenses increased to $399 during the three months ended June 30, 2024, compared to legal costs and regulatory matter expenses of $355 during the three months ended June 30, 2023, 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 increased to $370 during the three months ended March 31, 2024, compared to interest income, net of $5 during the three months ended March 31, 2023.

The increase in interest income recognized during the three months ended March 31, 2024, was due to interest income on higher cash balances.

Other, net, changed by $985, or 1,296.1%, to ($909) during the three months ended March 31, 2024, compared to other, net of $76 during the three months ended March 31, 2023.

Interest income, net increased to $455 during the three months ended June 30, 2024, compared to interest income, net of $8 during the three months ended June 30, 2023.

The increase in interest income recognized during the three months ended June 30, 2024, was due to interest income on higher cash balances.

Other, net, changed by $188, or 83.2%, to $414 during the three months ended June 30, 2024, compared to other, net of $226 during the three months ended June 30, 2023.

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

The change was partially offset by a reduction in gains in mark-to-market adjustments on non-hedged foreign currency contracts during the three months ended June 30, 2024.

Income tax benefit changed by $913, or 105.9%, to $1,775 during the three months ended June 30, 2024, compared to $862 during the same period in 2023.

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

For the three months ended June 30, 2023, our effective income tax rate was a benefit of 16.6% and differed compared to the statutory tax rates due to the impact of stock compensation, research and experimentation expenditures and credits, and discrete stock option windfall benefits.

Discontinued Operations

Net income from discontinued operations was $0 during the three months ended June 30, 2024, compared to net income from discontinued operations of $2,231 during the three months ended June 30, 2023.

The change in net income from discontinued operations is due to the sale of the Precision Sport segment occurring during the three months ended March 31, 2024.

There was no activity in discontinued operations during the three months ended June 30, 2024.

CLARUS CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

The following presents a discussion of operations for the six months ended June 30, 2024, compared with the six months ended June 30, 2023.

Six Months Ended

June 30, 2024

June 30, 2023

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 income, net

Loss before income tax

Income tax benefit

Loss from continuing operations

Discontinued operations, net of tax

Net income (loss)

Total sales decreased $2,420, or 1.9%, to $125,795 during the six months ended June 30, 2024, compared to total sales of $128,215 during the six months ended June 30, 2023.

The decrease in sales was primarily attributable to a decrease in sales at the Outdoor segment of $3,880, partially offset by an increase in sales at the Adventure segment of $2,427.

Sales in the Adventure segment were reduced by $891 due to foreign exchange impact from the strengthening of the U.S.

dollar against the Australian dollar during the six months ended June 30, 2024, compared to the prior period.

CLARUS CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

Outdoor segment increased by $268 due to foreign exchange impact from the weakening of the U.S.

dollar primarily against the euro during the six months ended June 30, 2024, compared to the prior period.

Sales in the Outdoor segment decreased due to weakness in our European, independent global distributors (“IGD”), and North American direct to consumer markets.

This weakness was partially offset by growth in the North American wholesale channel at the Outdoor segment.

Sales in the Adventure segment increased due to higher demand from OEM customers and a $2,236 increase from the TRED Outdoors acquisition.

Domestic sales increased $1,096, or 2.2%, to $51,218 during the six months ended June 30, 2024, compared to domestic sales of $50,122 during the six months ended June 30, 2023.

The increase in sales was primarily attributable to an increase in sales at the Adventure segment of $2,016, partially offset by a decrease in sales at the Outdoor segment of $920.

International sales decreased $3,516, or 4.5%, to $74,577 during the six months ended June 30, 2024, compared to international sales of $78,093 during the six months ended June 30, 2023.

The decrease in sales was primarily attributable to a decrease in sales at the Outdoor segment of $8,713, partially offset by an increase in sales at the Adventure segment of $5,197.

Cost of Goods Sold

Cost of goods sold increased $408, or 0.5%, to $80,538 during the six months ended June 30, 2024, compared to cost of goods sold of $80,130 during the six months ended June 30, 2023.

Gross profit decreased $2,828, or 5.9%, to $45,257 during the six months ended June 30, 2024, compared to gross profit of $48,085 during the six months ended June 30, 2023.

Gross margin was 36.0% during the six months ended June 30, 2024, compared to a gross margin of 37.5% during the six months ended June 30, 2023.

Gross margin during the six months ended June 30, 2024, decreased compared to the prior year due to unfavorable product mix, lower volume, and an increase in PFAS related inventory reserve expenses at the Outdoor segment, as well as an increase in sales return reserve expenses at the Adventure segment.

Selling, General and Administrative

Selling, general, and administrative expenses increased $60, or 0.1%, to $56,296 during the six months ended June 30, 2024, compared to selling, general and administrative expenses of $56,236 during the six months ended June 30, 2023.

Restructuring Charges

Restructuring charges decreased to $531 during the six months ended June 30, 2024, compared to restructuring charges of $736 during the six months ended June 30, 2023.

The restructuring charges incurred during the six months ended June 30, 2024 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 $515 and lease exit and contract termination costs of $16.

Transaction Costs

Transaction costs increased to $65 during the six months ended June 30, 2024, compared to transaction costs of $59 during the six months ended June 30, 2023, which consisted of expenses related to the Company’s various acquisition efforts.

CLARUS CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except per share amounts)

Contingent Consideration Benefit

Contingent consideration benefit decreased to $125 during the six months ended June 30, 2024, compared to a contingent consideration benefit of $1,565 during the six months ended June 30, 2023, which consisted of changes in the estimated fair value of contingent consideration liabilities associated with our acquisitions of MAXTRAX in 2021 and TRED in 2023.

Legal Costs and Regulatory Matter Expenses

Legal costs and regulatory matter expenses increased to $3,401 during the six months ended June 30, 2024, compared to legal costs and regulatory matter expenses of $483 during the six months ended June 30, 2023.

The increase in legal costs and regulatory matter expenses recognized during the six months ended June 30, 2024 reflects the Company’s accrued liability for the outstanding regulatory matter with the United States Consumer Product Safety Commission and increased 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 increased to $825 during the six months ended June 30, 2024, compared to interest income, net of $13 during the six months ended June 30, 2023.

The increase in interest income recognized during the six months ended June 30, 2024, was due to interest income on higher cash balances.

Other, net, changed by $797, or 263.9%, to ($495) during the six months ended June 30, 2024, compared to other, net of $302 during the six months ended June 30, 2023.

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 March 31, 2024.

Income tax benefit changed by $517, or 154.8%, to $851 during the three months ended March 31, 2024, compared to a benefit of $334 during the same period in 2023.

Our effective income tax rate was 11.6% for the three months ended March 31, 2024, and differed compared to the statutory tax rates primarily due to the impact of stock compensation, research and experimentation expenditures and credits, and discrete stock option shortfalls.

For the three months ended March 31, 2023, our effective income tax rate was 14.1% and differed compared to the statutory tax rates due to the impact of stock compensation, research and experimentation expenditures and credits, and discrete stock option windfall benefits.

The change was partially offset by gains in mark-to-market adjustments on non-hedged foreign currency contracts during the six months ended June 30, 2024.

Income tax benefit changed by $1,430, or 119.6%, to $2,626 during the six months ended June 30, 2024, compared to a benefit of $1,196 during the same period in 2023.

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

For the six months ended June 30, 2023, our effective income tax rate was a benefit of 15.8% and differed compared to the statutory tax rates due to the impact of stock compensation, research and experimentation expenditures and credits, and discrete stock option windfall benefits.

Discontinued Operations

Net income from discontinued operations increased $24,717, to $28,346 during the three months ended March 31, 2024, compared to net income from discontinued operations of $3,629 during the three months ended March 31, 2023.

The increase in net income from discontinued operations was primarily attributable to the pre-tax gain on the sale of the Precision Sport segment of $40,585.

The increase was partially offset by an increase in income tax expense, a decrease in sales and gross profit at the Precision Sport segment of $6,471 and the recording of transaction costs of $3,440 related to the sale of the Precision Sport segment.

Net income from discontinued operations changed by $22,486, to $28,346 during the six months ended June 30, 2024, compared to net income from discontinued operations of $5,860 during the six months ended June 30, 2023.

The change in net income from discontinued operations was primarily attributable to the pre-tax gain on the sale of the Precision Sport segment of $40,585.

There was no activity in discontinued operations during the three months ended June 30, 2024.

CLARUS CORPORATION

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Liquidity and Capital Resources

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

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

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Additionally, long-term contractual obligations are also currently expected to be funded from cash from operations and cash on hand.

At March 31, 2024, we had total cash of $47,484, compared to total cash of $11,324 at December 31, 2023.

At March 31, 2024, the Company had $6,796 of the $47,484 in cash held by foreign entities, of which $5,546 is considered permanently reinvested.

The following presents a discussion of cash flows for the condensed consolidated three months ended March 31, 2024 compared with the condensed consolidated three months ended March 31, 2023.

Three Months Ended

March 31, 2024

March 31, 2023

At June 30, 2024, we had total cash of $46,221, compared to total cash of $11,324 at December 31, 2023.

At June 30, 2024, the Company had $5,660 of the $46,221 in cash held by foreign entities, of which $4,527 is considered permanently reinvested.

The following presents a discussion of cash flows for the condensed consolidated six months ended June 30, 2024 compared with the condensed consolidated six months ended June 30, 2023.

Six Months Ended

June 30, 2024

June 30, 2023

Net cash (used in) provided by operating activities

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Net Cash From Operating Activities

Net cash used in operating activities was $16,361 during the three months ended March 31, 2024, compared to net cash provided by operating activities of $3,199 during the three months ended March 31, 2023.

Net cash used in operating activities was $15,527 during the six months ended June 30, 2024, compared to net cash provided by operating activities of $17,286 during the six months ended June 30, 2023.

The change in net cash (used in) provided by operating activities during 2024 is primarily due to the gain on sale of $40,585 related to the disposition of the Precision Sport segment and an increase in cash outflows related to working capital of $13,855.

These were partially offset by an increase in net income and a decrease in contingent consideration benefit during the three months ended March 31, 2024, compared to the same period in 2023.

These were partially offset by an increase in net income and a decrease in contingent consideration benefit during the six months ended June 30, 2024, compared to the same period in 2023.

CLARUS CORPORATION

1 unchanged sentence

(in thousands, except per share amounts)

Free cash flow, defined as net cash (used in) provided by operating activities less capital expenditures, of ($18,258) was used during the three months ended March 31, 2024 compared to $1,728 generated during the same period in 2023.

Free cash flow, defined as net cash (used in) provided by operating activities less capital expenditures, of ($19,002) was used during the six months ended June 30, 2024 compared to $14,034 generated during the same period in 2023.

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:

Three Months Ended

March 31, 2024

March 31, 2023

Six Months Ended

June 30, 2024

June 30, 2023

Net cash (used in) provided by operating activities

2 unchanged sentences

Net Cash From Investing Activities

Net cash provided by investing activities was $173,608 during the three months ended March 31, 2024, compared to net cash used in investing activities of $1,383 during the three months ended March 31, 2023.

The increase in cash provided during the three months ended March 31, 2024 is primarily due to the cash received related to the disposition of the Precision Sport segment, compared to the same period in 2023.

Net cash provided by investing activities was $172,162 during the six months ended June 30, 2024, compared to net cash used in investing activities of $3,083 during the six months ended June 30, 2023.

The increase in cash provided during the six months ended June 30, 2024 is primarily due to the cash received related to the disposition of the Precision Sport segment, compared to the same period in 2023.

Net Cash From Financing Activities

Net cash used in financing activities was $120,848 during the three months ended March 31, 2024, compared to net cash used in financing activities of $3,138 during the three months ended March 31, 2023.

The change in net cash used in financing activities during the three months ended March 31, 2024, compared to the same period in 2023 was primarily due to the settlement of all outstanding borrowings on our revolving credit facility and term debt under the Restated Credit Agreement.

Net cash used in financing activities was $121,602 during the six months ended June 30, 2024, compared to net cash used in financing activities of $13,962 during the six months ended June 30, 2023.

The change in net cash used in financing activities during the six months ended June 30, 2024, compared to the same period in 2023 was primarily due to the settlement of all outstanding borrowings on our revolving credit facility and term debt under the Restated Credit Agreement.

Net Operating Loss

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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