Clarus Completes Sale of Precision Sport Segment to JDH Capital

Rhea-AI Summary

Clarus Corporation (CLAR) completes the sale of its Precision Sport segment for $175 million, strengthening its balance sheet by retiring all outstanding debt. The company will discuss its financial results for Q4 and full year 2023 on March 7, 2024, and hold an investor day on March 11, 2024. The transaction was facilitated by legal and financial advisors.

Financial Analyst

The divestiture of Clarus Corporation's Precision Sport segment for approximately $175 million and the subsequent retirement of the company's outstanding debt is a strategic move that could potentially enhance shareholder value. By offloading a non-core segment, Clarus can now focus on its primary outdoor and consumer enthusiast markets, which might lead to improved operational efficiencies and increased investment in growth areas. The transaction also strengthens the balance sheet by eliminating debt, thus reducing financial risk and potentially improving the company's creditworthiness.

Furthermore, the immediate repayment of outstanding debt signifies a robust liquidity position and disciplined capital management. Investors should note that the absence of interest payments going forward could lead to improved net income margins. However, the sale's impact on the company's revenue streams and profit generation capabilities must be monitored, as divestitures can sometimes lead to a short-term decrease in financial performance.

Market Research Analyst

Clarus Corporation's sharpened focus on the outdoor business could capitalize on the growing consumer interest in outdoor activities, a trend that has seen a significant uptick post-pandemic. By becoming a pure-play outdoor business, Clarus may be better positioned to innovate and tailor its product offerings to meet specific market demands. The sale of the Precision Sport segment could be seen as a realignment of the company's core competencies and resources towards areas with higher growth potential.

It will be crucial to observe how the market reacts to this strategic shift and whether Clarus can leverage its streamlined operations to capture a larger market share. The investor day presentations could provide valuable insights into the company's long-term strategic initiatives and growth opportunities, which could further influence investor sentiment and stock performance.

Legal Expert

The involvement of legal advisors such as Kane Kessler, P.C. and Richards, Layton & Finger, P.A., as well as a financial advisor like Houlihan Lokey, indicates that Clarus Corporation has sought to ensure due diligence and compliance with regulatory requirements during the transaction. The termination of the Amended and Restated Credit Agreement with JPMorgan Chase Bank following the debt repayment is a significant legal step, as it officially releases the company from its previous credit obligations.

Investors should appreciate that the engagement of a special committee of independent directors and their advisors in the sale process reflects a commitment to transparency and governance, potentially mitigating any concerns about conflicts of interest and ensuring that the transaction is in the best interest of shareholders.

Successful Outcome that Strengthens Balance Sheet and Positions the Company as a Pure-Play Outdoor Business

SALT LAKE CITY, Feb. 29, 2024 (GLOBE NEWSWIRE) -- Clarus Corporation (NASDAQ: CLAR) (“Clarus” and/or the “Company”), a global company focused on the outdoor and consumer enthusiast markets, today announced that it has completed the sale of its Precision Sport segment, which is comprised of Sierra Bullets, L.L.C. and Barnes Bullets – Mona, LLC, to Bullseye Acquisitions, LLC, an affiliate of JDH Capital Company.

The Company sold its Precision Sport segment for approximately $175 million and used a portion of the proceeds to retire in full all of the Company’s outstanding debt as of February 29, 2024. In connection with the repayment of the outstanding debt in full, the Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, was terminated.

As previously announced, the Company will hold a conference call on Thursday, March 7, 2024, at 5:00 pm ET to discuss its financial results for the fourth quarter and full year ended December 31, 2023, and host an investor day on Monday, March 11 in New York City.

Kane Kessler, P.C. acted as legal advisor to the Company in the transaction, Richards, Layton & Finger, P.A. acted as legal advisor to a special committee of independent directors of the Company (the “Special Committee”) and Houlihan Lokey acted as financial advisor to the Special Committee.

2024 Investor Day

The upcoming investor day will feature additional commentary on Clarus’ strategic initiatives and growth opportunities with presentations from management, including Warren Kanders, Executive Chairman; Mike Yates, Chief Financial Officer; Neil Fiske, President, Black Diamond Equipment; and Mathew Hayward, Managing Director of Clarus' Adventure segment; followed by Q&A sessions.

• Date: Monday, March 11, 2024
• Time: 12:00 pm to 2:00 pm ET

Institutional investors and analysts interested in attending the event should contact The IGB Group at Clarus@igbir.com. Virtual attendance registration and webcast details will be available on the Company’s website. For those unable to attend the Investor Day, a replay will be made available after the event.

About Clarus Corporation

Headquartered in Salt Lake City, Utah, Clarus Corporation is a global leading designer, developer, manufacturer and distributor of best-in-class outdoor equipment and lifestyle products focused on the outdoor and consumer enthusiast markets. Our mission is to identify, acquire and grow outdoor “super fan” brands through our unique “innovate and accelerate” strategy. We define a “super fan” brand as a brand that creates the world’s pre-eminent, performance-defining product that the best-in-class user cannot live without. 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® 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. For additional information, please visit www.claruscorp.com or the brand websites at www.blackdiamondequipment.com, www.rhinorack.com, www.maxtrax.com.au, www.tredoutdoors.com, or www.pieps.com.

Forward-Looking Statements

Please note that in this press release we may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. 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. Any number of factors could cause actual results to differ materially from projections or forward-looking statements in this press release, including, but not limited to, those risks and uncertainties more fully described from time to time in the Company's public reports filed with the Securities and Exchange Commission, including under the section titled “Risk Factors” in the Company's Annual Report on Form 10-K, and/or Quarterly Reports on Form 10-Q, as well as in the Company’s Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release.

Company Contacts:

Michael J. Yates
Chief Financial Officer
Tel 1‐801-993‐1304
mike.yates@claruscorp.com

Investor Relations Contact:

The IGB Group
Leon Berman / Matt Berkowitz
Tel 1-212-477-8438 / 1-212-227-7098
lberman@igbir.com / mberkowitz@igbir.com

What segment did Clarus Corporation sell?

Clarus Corporation sold its Precision Sport segment, which includes Sierra Bullets, L.L.C. and Barnes Bullets – Mona, LLC.

How much did Clarus Corporation sell the Precision Sport segment for?

Clarus Corporation sold the Precision Sport segment for approximately $175 million.

What did Clarus Corporation do with the proceeds from the sale?

Clarus Corporation used a portion of the proceeds from the sale to retire all of its outstanding debt.

When will Clarus Corporation discuss its financial results for Q4 and full year 2023?

Clarus Corporation will discuss its financial results for Q4 and full year 2023 on March 7, 2024.

When is Clarus Corporation's investor day scheduled?

Clarus Corporation's investor day is scheduled for March 11, 2024.