RICHARDSON, TX – Optex Systems Holdings, Inc. (NASDAQ:OPXS), a manufacturer specializing in precision optical sighting systems, has secured a $3.8 million contract to supply the U.S. Government with components for the Armored Multi-Purpose Vehicle (AMPV). The company, which is the exclusive supplier of laser protected periscopes for this project, will begin deliveries over a period of 14 months starting today.

The AMPV is a pivotal project for the U.S. Army, aimed at enhancing troop transportation capabilities within the Armored Brigade Combat Team (ABCT). The vehicle is designed to operate in conjunction with the M1 Abrams tank and the M2 Bradley, as part of the Army’s strategy to improve protection, mobility, reliability, and interoperability.

Danny Schoening, CEO of Optex Systems, highlighted the significance of the contract, stating that the AMPV is “essential to the future of the ABCT.” This new order brings Optex’s current backlog to over $47 million.

Founded in 1987 and based in Richardson, Texas, Optex Systems has a long-standing relationship with the Department of Defense (DOD). The company’s products are featured on a variety of U.S. military land vehicles and are also supplied to prime contractors. Optex’s portfolio includes a range of periscopes, rifle and surveillance sights, and night vision optical assemblies.

The press release also contains forward-looking statements regarding the company’s future events, which are subject to risks and uncertainties. These include variables such as defense funding, market conditions, technological changes, and economic trends that could impact the actual results of Optex Systems.

Investors and interested parties should note that this article is based on a press release statement and that actual future results may vary materially from the company’s projections.

InvestingPro Insights

Optex Systems Holdings, Inc. (NASDAQ:OPXS) has demonstrated a robust financial performance with several positive indicators that investors might find encouraging. With a market capitalization of $48.47 million, the company has shown a strong revenue growth of 29.45% over the last twelve months as of Q1 2024. This growth is further underscored by an impressive quarterly revenue growth of 72.48%, reflecting the company’s ability to expand its earnings significantly.

The stock has also experienced substantial appreciation with a one-year price total return of 147.2%, which aligns with the InvestingPro Tips indicating a high return over the last year and a large price uptick over the last six months.

These metrics suggest that investors have recognized the company’s value and prospects. Moreover, with a P/E ratio of 16.62, Optex Systems trades at a level that may be considered reasonable in relation to its earnings, which could appeal to value-oriented investors.

InvestingPro Tips further highlight that Optex Systems operates with a moderate level of debt and has liquid assets that exceed its short-term obligations. This financial stability is crucial for the company as it undertakes significant contracts like the one for the AMPV project. Additionally, the company’s cash flows are strong enough to cover interest payments, which is a positive sign for its creditworthiness and financial health.

For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, including insights on the company’s profitability over the last twelve months and its strong return over the last three months. To explore these tips and more, visit https://www.investing.com/pro/OPXS and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 9 additional tips listed in InvestingPro that could provide further valuable insights into Optex Systems’ financial performance and investment potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Renuva™ and Ecolibrium™ technologies enable two new offerings for a wide range of propylene glycol applications including personal care, cosmetics, pharmaceutical, food ingredients, flavorings, fragrances, agricultural and industrial.

MIDLAND, MI / ACCESSWIRE / May 6, 2024 / Dow (NYSE:DOW) is proud to announce the launch of two new sustainable varieties of propylene glycol (PG) solutions in North America featuring bio-circular and circular feedstocks. Suitable for a broad range of applications, customers can now offer their high-performance products with externally verified sustainability benefits thanks to a mass balance approach.

The mass balance approach traces the flow of bio-circular and circular materials used to manufacture PG through complex value chains and attributes it based on verifiable bookkeeping; an approach that recently received ISCC PLUS certification in Freeport, Texas.

This achievement marked the first time that a Dow PG manufacturing plant in North America received an ISCC PLUS certification. “We are proud to set a precedent for more sustainable material production in North America, demonstrating our commitment to advancing sustainable production and products for our customers,” said Thales de Oliviera, business sustainability leader for the Americas for Dow Polyurethanes. “The demand for circular and bio-circular material for polyurethane end-markets is increasing, and by using our advanced recycling technologies, we can now offer our customers the same high-quality products with increased sustainability benefits.”

Supporting more sustainable offerings in the PG portfolio

Applying innovative technologies, two new sustainable PG products will now be available in North America, and certified by ISCC PLUS:

• Propylene Glycol CIR featuring Renuva™ recycled content helps customers close the loop and process hard-to-recycle post-consumer and post-industrial waste into sustainable feedstocks.
• Propylene Glycol REN featuring Ecolibrium™ bio-circular technology enables a reduction in the use of fossil fuel-based feedstocks.

The new PG solutions, CIR and REN, are designed to help customers reach their circular and sustainability goals and are suitable for a broad range of applications across industries including personal care, cosmetics, pharmaceutical, food ingredients, flavorings, fragrances, agricultural and industrial.

As Dow accelerates its sustainability journey, it continues to seek out new and innovative ways to incorporate alternative feedstocks, specifically those with bio-circular origins or derived from post-industrial consumer waste, to create more sustainable solutions. The mass balance approach makes use of verifiable bookkeeping to trace and attribute the flow of sustainable materials through complex value chains without changing the production process.

About Dow

Dow (NYSE: DOW) is one of the world’s leading materials science companies, serving customers in high-growth markets such as packaging, infrastructure, mobility and consumer applications. Our global breadth, asset integration and scale, focused innovation, leading business positions and commitment to sustainability enable us to achieve profitable growth and help deliver a sustainable future. We operate manufacturing sites in 31 countries and employ approximately 35,900 people. Dow delivered sales of approximately $45 billion in 2023. References to Dow or the Company mean Dow Inc (NYSE:). and its subsidiaries. ‹‹‹‹Learn more about us and our ambition to be the most innovative, customer-centric, inclusive and sustainable materials science company in the world by visiting www.dow.com.

###

For further information, please contact:

Justine Bellor
989.636.8480
jbellor@dow.com

Mary Fournier
989.636.7475
mkfournier@dow.com

View additional multimedia and more ESG storytelling from DOW on 3blmedia.com.

Contact Info:
Spokesperson: DOW
Website: https://www.3blmedia.com/profiles/dow
Email: info@3blmedia.com

SOURCE: DOW

Clarus (NASDAQ:) Corporation (NASDAQ: CLAR), a company specializing in outdoor and adventure segments, reported strong financial results for the first quarter of 2024. The company’s Executive Chairman, Warren Kanders, highlighted the strategic plans that have been implemented to streamline business processes and focus on long-term growth opportunities.

With a debt-free balance sheet and over $47 million in cash, Clarus reported Q1 revenue of $69.3 million and adjusted EBITDA of $2 million, surpassing market expectations. The company also reaffirmed its full-year guidance, with a positive outlook based on Q1 performance.

Key Takeaways

• Clarus Corporation reported Q1 revenue of $69.3 million and adjusted EBITDA of $2 million, exceeding expectations.
• The company reaffirmed its full-year guidance with sales projected between $270 million and $280 million.
• Strong sales growth in the Adventure segment was driven by new products and expansion in the OEM channel.
• The Outdoor segment experienced stabilization and growth in the North American wholesale market.
• Clarus achieved a debt-free balance sheet and holds over $47 million in cash.
• A gain of $40.6 million was realized from the sale of Precision Sports, recognized through discontinued operations.

Company Outlook

• Full-year sales are expected to range between $270 million and $280 million.
• Adjusted EBITDA from continuing operations is anticipated to be approximately $16 million to $18 million.
• Capital expenditures are projected to be between $4 million and $5 million for the full year.
• Free cash flow is estimated to range between $18 million and $20 million for 2024.

Bearish Highlights

• Free cash flow for Q1 was an outflow of $18.3 million, mainly due to a reduction in accounts payable.
• Europe and independent global distributor markets faced challenges, impacting the Outdoor segment.

Bullish Highlights

• Clarus is focusing on cash generation, inventory reduction, and organic growth.
• The company is pursuing smaller M&A opportunities to bolster its market position.
• New products and expansion in the OEM channel are driving sales growth.

Misses

• There were no significant misses reported in the earnings call.

Q&A Highlights

• The company plans to improve fill rates by categorizing inventory and adding back A category inventory to meet demand.
• Inventory levels are expected to be healthier, with a decrease overall, but with a slight increase by the end of Q2 in preparation for the fall/winter season.
• Clarus is investing in its digital and direct-to-consumer channels to improve margins.

In summary, Clarus Corporation is capitalizing on its strong Q1 performance to reinforce its strategies for growth and efficiency. The company’s focus on new products, digital platforms, and careful inventory management is setting the stage for a promising fiscal year.

With the trial against HAP Trading LLC and Mr. Harsh A. Padia expected to commence in late 2024 or 2025, Clarus continues to navigate its legal challenges while maintaining a solid financial position. The company looks forward to updating investors at upcoming conferences and in the next earnings report in 90 days.

InvestingPro Insights

Clarus Corporation’s (NASDAQ: CLAR) first-quarter performance paints a picture of a company with a solid financial foundation and promising growth prospects. The InvestingPro data and tips provide additional context to this outlook. With a market capitalization of $279.96 million, Clarus is positioned as a mid-sized player in the outdoor and adventure market.

Despite a negative P/E ratio of -13.54, reflecting the company’s challenges in turning a profit in the last twelve months, the adjusted P/E ratio has improved to -8.81, indicating a better performance in the more recent quarters.

The revenue growth of 4.7% in the last twelve months as of Q1 2024, coupled with a gross profit margin of 33.98%, shows that Clarus is maintaining its ability to generate income from its sales effectively. However, the slight quarterly revenue decline of -1.38% in Q1 2024 suggests there may be some short-term challenges in maintaining sales growth.

InvestingPro Tips highlight that Clarus holds more cash than debt on its balance sheet and that the company’s net income is expected to grow this year. These insights are particularly relevant as they align with the company’s reported debt-free status and cash reserves of over $47 million. Furthermore, the significant return over the last three months, with a price total return of 22.7%, reflects investor confidence in the company’s strategic plans and market performance.

For readers looking to delve deeper into Clarus Corporation’s financial health and future prospects, there are additional InvestingPro Tips available that can provide further guidance. For instance, the company’s liquid assets exceeding short-term obligations and the analysts’ prediction that the company will be profitable this year are critical factors for potential investors to consider.

To explore these insights and more, readers can visit https://www.investing.com/pro/CLAR, and don’t forget to use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With a total of 10 InvestingPro Tips listed for Clarus, investors have a wealth of information at their fingertips to make informed decisions.

Full transcript – Clarus Corp (CLAR) Q1 2024:

Operator: Good afternoon, everyone and thank you for participating in today’s conference call to discuss Clarus Corporation’s financial results for the First Quarter ended March 31, 2024. Joining us today are Clarus Corporation’s Executive Chairman, Warren Kanders; CFO, Mike Yates; President, Black Diamond Equipment, Neil Fiske; Management Director of Clarus’ Adventure segment, Mathew Hayward; and the company’s External Director of Investor Relations, Matt Berkowitz. Following the remarks, we will open the call for your questions. Before we go further, I would like to turn the call over to Mr. Berkowitz as he reads the company’s Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Matt, please go ahead.

Matt Berkowitz: Thank you. Before I begin, I’d like to remind everyone that during today’s call, we will be making several forward-looking statements and we make these statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act. These forward-looking statements reflect our best estimates and assumptions based on our understanding of information known to us today. These forward-looking statements are subject to potential risks and uncertainties that could cause the actual results of operations or financial condition of Clarus Corporation to differ materially from those expressed or implied by the forward-looking statements. More information on potential factors that could affect the company’s operating and financial results is included from time-to-time in the company’s public reports filed with the SEC. I’d like to remind everyone this call will be available for replay starting at 7:00 p.m. Eastern Time tonight. A webcast replay will also be available via the link provided in today’s press release as well as on the company’s website at claruscorp.com. Now, I’d like to turn the call over to Clarus’ Executive Chairman, Warren Kanders.

Warren Kanders: Good afternoon and thank you all for joining Clarus’ earnings call to review our results for the first quarter. I am pleased to be joined today by not only our Chief Financial Officer, Mike Yates, but also Neil Fiske and Matt Hayward who lead our outdoor and adventure segments. At our Investor Day this past March, we discussed wanting to deliver a comprehensive segment level view so that we are excited to have Neil and Matt to deliver on board for earnings calls going forward. Last year, we took crucial steps to realign our overall platform and individual brands. And a key component of this strategy was hiring highly experienced and dedicated executives to guide the outdoor and adventure businesses. Since their appointments last year, both have made considerable progress implementing strategic plans to streamline business processes and capitalize on clear long-term growth opportunities. Today, I am confident that we have the right team in place and we continue to be encouraged by the steps Neil and Matt are taking to advance our rebased businesses and turnaround. At our Investor Day, we outlined a strategic roadmap, highlighting anticipated multiyear growth and margin expansion targets for both segments that we believe Clarus can achieve. The first quarter of 2024 represented the initial phase of these plans. While Neil and Matt will provide more specific comments, we are encouraged by the incremental progress demonstrated in the first quarter. In outdoor, we continue to seek to prioritize simplification and rightsizing, which we believe is evidenced by a reduction in total outdoor inventory of 15% versus last year. At Adventure, we saw significant year-over-year sales growth driven by the launch of compelling new products and expansion in our OEM channel. Based on the results to-date, we are pleased to reaffirm our full year guidance, which Mike will detail later in the presentation. There is so much more work to be done, but we believe we have laid the foundation to drive increased profitability and unlock new growth opportunities in 2024 and beyond. With that, thank you again for being with us today. And I will turn the call over to Mike.

Mike Yates: Thank you, Warren and good afternoon everyone. I want to remind people or let people know who are on the call that we have actually provided slides to accompany our presentation. They are available on the webcast and they are also available on our website. That’s something new. So I wanted to make sure all the participants were aware of the addition that we have made to our call today. On today’s call, I will provide a general Q1 update before turning it over to Matt and Neil to review the segment performance. I will conclude with a more detailed summary of our Q1 financial results, followed by a Q&A session. Beginning on Slide 4, we entered the year focused on initiating our strategic plans with Clarus’ next chapter as a pure-play ESG-friendly outdoor business. As we have discussed previously, we completed the sale of our Precision Sports segment in February 2024, which represented a highly successful outcome for Clarus. Today, we have a more streamlined company focused on two consumer segments with broad appeal and attractive long-term tailwinds, outdoor and adventure. In outdoor, our focus is on simplification and solidifying the core. Although the macroeconomic backdrop remained challenging during the first quarter, the stabilization we mentioned during our Q4 and year end 2023 earnings call was confirmed as our North American wholesale market grew year-over-year. We believe that the work the sales team put in during the second half of 2023 is paying dividends now as we start to listen to our paid account and deliver the right product for them on time. From an operation standpoint, we believe that our inventory reduction in SKU rationalization initiatives, are on track. In Adventure, where our core objective is to invest at scale, we saw a continuation of the strong sales growth momentum we established in the back half of 2023. We may describe both increasing brand awareness through global marketing programs and strengthening our Adventure team to ensure we’re best positioned to capitalize on strong market tailwinds. Complementing this progress and following the sales Precision Sports segment, Clarus has a debt-free balance sheet that we believe provides us with significant optionality to allocate capital for the benefit of shareholders. After retiring all of Clarus outstanding that was the proceeds from the sale, we had over $47 million of cash on hand at the end of the first quarter. Importantly, this provides the flexibility in how we seek to pursue our long-term value creation objectives and growth initiatives. In terms of priorities, we are committed to reinvesting in our existing 2 segments to drive organic growth. We expect to continue to pay our quarterly dividend and also selectively look at smaller bolt-on M&A opportunities that may enhance our venture business in the United States and new geographies. Overall, our focus is on cash generation through the continued rightsizing of inventory and business expansion with the intent of accumulating cash on our balance sheet as we execute our strategic growth plans. Before I turn the call over to Matt, I’ll briefly highlight a couple of key figures on Slide 5. Clarus first quarter revenue of $69.3 million exceeded our guidance of $64 million to $66 million. We also generated adjusted EBITDA of $2 million, which beat our expectations of $1 million to $2 million for the quarter. Overall, we are pleased with our execution in Q1 and with the building blocks in place, and we are ready to continue to meet Clarus long-term financial targets. I’ll now turn the call over to Matt Hayward, Managing Director of Clarus Adventure segment. Matt?

Mathew Hayward: Thanks, Mike, and good morning, everyone, from Australia. I’ll begin my remarks on Slide 6. I’m very excited to be part of these calls now to address our Adventure segment directly. I’ll try to tie back to many of the things we touched on during our Investor Day in order to track our progress financially and strategically. 2023 marked a reset and stabilization year for the Adventure segment, and we are pleased to have kicked off 2024 with significant momentum. The first quarter represented the initial phase of our new 3-year strategic plan, and we took important steps launching compelling new products and continuing to expand beyond the home market in Australia. Q1 sales increased 27% year-over-year supported by two primary drivers. The first in wholesale, we saw strong key account performance across Australia, New Zealand and combined with the onboarding of new key accounts in the U.S. market. This has been supported by strong product portfolio introductions across all of our key categories, inclusive of trades where we have our category leading Pioneer 6 platform, our new crossfire system of RX100 and RX200 introductions and new accessory ranges with rooftop tents and storage boxes. Second, we continue to experience strong demand in our OEM channel, a vital channel for us that we believe will drive volume while enhancing our brands in new markets and vehicle models. Following the first deliveries to new OEM customers in 2023 for a product launch, demand has continued to remain robust, which has helped accelerate sales growth. At the same time, our first quarter margins were affected by less favorable channel mix, particularly given the outperformance of OEM as that continues to grow. Q1 gross margins and adventure was 38.4% as compared to 41% last year. We also saw on boarding of new key account programs and locations, which do bring in some lower margins in order to be good partners in our dealer base. We continue to take immediate and intermediate steps expected to improve overall profitability and are committed to seeking to drive better SKU productivity, inventory management and organizational efficiency. Driving performance outside of [indiscernible] is critical as is the ramp-up of opportunities across both MAXTRAX and TRED as we expand brand and category reach across 2024. In terms of market conditions, more generally, positive fundamentals continue to be supported by strong auto sales. This facts and figures, the standard for vehicle deliveries in Australia showed all-time record first quarter results for the auto sector, with 300,000 sales, a year-over-year increase of 13%. Close to the home in the U.S., new vehicle sales are expected to have risen 5.6% year-over-year to 3.8 million units volume in the first quarter of 2024 as per cost of the automotives. Diving into strategic initiatives, I’d like to highlight some of the key investments we are making in the U.S. market. During the first quarter, we identified several key positions that we believe will enhance our ability to grow. With our focus on delivering best-in-class products globally, we have recently added a new recognition, a national marketing leader that will sink up with our shared services in Australia to deliver best-in-class content tailored specifically for North America. That will soon be joined by local IT leadership to not only help drive greater DDC transformation, but also to support enhanced integration with our key partners locally. Linked to the above are called out as a key impair to the Adventure segment is our strategy to grow our OEM opportunities on a global level outside of ANZ. To this end, we are very excited to be adding a new global head of OEM sales and development in the U.S. based in our Denver office in Q2. In terms of brand investment, we’ve stepped up investment and support across both trade marketing and parallel digital investment. Within trade support, we’ve been very excited to launch our first truly global brand and product catalog for Rhino-Rack, delivered in multiple languages for the very first time for partners across Japan, China and Germany and also added patients with basal specifics for U.S. and Canada. This has been supported with trade-through investments across Japan, France and we will continue across markets in 2024. We will also be introducing a brand-new platform to support the Adventure portfolio as a whole across [indiscernible] later on in 2024. Developments to showcase our ramped up new product development delivered comprehensive campaigns for our world famous and industry leading Pioneer 6 platform, and our new focus on showcasing an adventure lifestyle supported by our amazing array accessories across all brands in our portfolio, including MAXTRAX and TRED in these campaigns. Our focus is clearly aimed at the support of our amazing partners globally, while we’re driving greater visibility with investment into digital platforms and media. Lastly, new game-changing product arrives and is on the horizon. As we mentioned during our last earnings calls, the new Pioneer 6 platform in Australia marked the first major new product launch in the last 15 months, and we’ve begun to bring to market a portfolio of accessories that complement it. We also brought to market the first MAXTRAX port innovation for nearly decades through the introduction of the light board. We are pleased with the progress of launching four new products in the U.S. as well as new accessories globally, including rooftop tents during the first quarter. We believe that our Adventure segment is well positioned to capitalize on strong industry dynamics and a large and growing addressable market across multiple verticals. We have made significant investment in professionalizing the same, process reengineering and product merchandization to ensure we continue to gain market share. Moving forward, we are committed to seeking to establish a best-in-class product ecosystem, while remaining intensely focused on enhanced product margins as we scale. At the end of the day, when we engage with our wider community and empower them with the opportunity to make space for adventure in whatever shape and activity that entails with our key partners globally across all key markets, we will win together. I’d like to now turn the call over to Neil Fiske, President of Black Diamond. Neil, over to you.

Neil Fiske: Thanks, Matt. Turning to Slide 7. Overall, results in the Outdoor segment were in line with our expectations for the first quarter of 2024, and we are pleased with the progress we’re seeing. At our Investor Day in March, I said that 2023 was a reset year for the industry and for Black Diamond, and that 2024 would be about simplifying the business to solidify our core, improve profitability and lay the foundation for long-term sustainable growth. This quarter, we are starting to see the early results from the hard work we put in over the last year. Importantly, our biggest region of North America returned to growth with the wholesale channel growing 10% year-over-year. This is one of the first areas of focus in our turnaround plan as we completely rebuilt our sales leadership team. As Warren indicated earlier, in addition to the sales results, we’re hearing good feedback from our retail partners that our service levels have improved, that we are sharper in our brand positioning and execution and that we are, for the most part, outperforming the market in our core categories as we seek to expand our product leadership. We are also pleased with our progress in strengthening our relationships in the specialty channel, which is a top priority for us strategically. We are continuing to rationalize our product line under the direction of fewer, bigger, better. This quarter, for example, we made the decision to exit our distribution of ski bindings, a category which has low margins, high SKU complexity, low term and high cost to serve. We expect to see further category in SKU reduction over the course of the year as we focus on our core sports and build on positions of strength. As we simplified the business, we’ve streamlined the organization and taken out costs. Operating costs are down 8.3% year-over-year, and we expect that they will continue to fall as a percentage of sales over the course of 2024. We closed five underperforming stores versus the same period last year. We’ve also made major strides in both the quality and levels of our inventory. Overall inventory is down 15% versus last year. But equally important, we’ve moved more of this inventory value into the A styles, which drives 80% of our sales. 59% this year versus 45% last year, and the trend is still improving. Fill rates are up, markdown exposure is down. We’ve done a lot of work to bring apparel inventories in-line with a 38% reduction versus a year ago. Geographically, the reasons are in different stages of recovery. We’re pleased to see the turnaround in our largest region of North America. However, the Europe and independent global distributor markets still face tough market conditions. The EU was down 17% in wholesale, which was better than our expectations. The smaller D2C segment in EU was up 33%. EU represents 34% of our revenues in Q1. IGD is a different story altogether. Here, we have an added layer of distribution that is still overstocked from the pandemic boom and will likely take all of 2024 to get back in-line. For the quarter, IGD was down 44%, and we expect the year to be down 25% to 30% as inventories rebalance across the network. IGD represents 10% of our revenue in Q1. Overall, gross margins per Outdoor were flat year-over-year. While we’re still caring through and rightsizing inventory, we believe we are less promotional than the overall market in North America and Europe. We have, however, begun to build a reserve to deal with any PFAS-related inventory that may be more difficult for us to move as a result of new regulations taking effect at the end of this year. By fall of 2025, all of our apparel and packs will be PFAS free, but there will likely be some residual PFAS inventory to clear in the first half of next year. In summary, we’re pleased with our progress and confident in our strategy, knowing there’s so much more to do and to demonstrate. I’ll now turn the call back over to Mike.

Mike Yates: Thank you, Neil. I’m on Slide 8, and I’ll begin with a summary of our financial performance in the first quarter. As a reminder, and as we’ve noted previously, given the sales of Precision Sports segment for approximately $175 million, which was completed and closed on February 29, 2024, during the first quarter. Our U.S. GAAP results are comprised of our Outdoor and Adventure segment and the results I refer to as continuing operations. First quarter sales were $69.3 million compared to $70.3 million in the prior year first quarter, driven largely by the softness in the European wholesale market in IGD market that Neil just discussed at Outdoor, partially offset by strong Adventure segment sales growth. On a constant currency basis, sales were down 0.5%. FX was not material in the first quarter. Moving to consolidated gross margin. In the first quarter, gross margin was 35.9% compared to 36.3% in the year ago quarter. As you heard, the decrease was primarily attributable to promotional pricing at the Outdoor segment, the increase in cash-related inventory reserves as well as unfavorable channel mix in the Ventures segment. I’d like to highlight that adjusted gross margin of 36.9% in the first quarter improved 50 basis points versus Q1 of last year. Adjusted gross margin is adjusted for the PFAS reserve that Neil just mentioned. We reserved $729,000 in the first quarter for this exposure. Selling, general and administrative expenses in the first quarter were $28.2 million compared to $29.4 million in the same year ago quarter. The decrease was attributable to success reducing cost at Outdoor as well as lower intangible amortization and lower stock compensation expenses. Higher investments in marketing initiatives in the venture segment partially offset the overall decrease. The loss from continuing operations in the first quarter of 2024 was $6.5 million or $0.17 per diluted share compared to a loss from continuing operations of $2 million or $0.05 per diluted share in the year ago quarter. Loss from continuing operations in the first quarter included $3 million of charges relating to the legal costs and regulatory matter expenses and $700,000 of PFAS inventory reserves. Adjusted loss from continuing operations was $0.1 million or $0.00 per diluted share, this compares to adjusted income from continuing operations of $400,000 or $0.01 per diluted share in the year ago quarter. Adjusted EBITDA in the first quarter was $2 million or an adjusted EBITDA margin of 2.9% compared to $1.1 million or adjusted EBITDA margin of 1.6% in the same year ago quarter. Our adjusted EBITDA is adjusted for restructuring charges, transaction costs, stock compensation expense, and this quarter, we began adjusting for the PFAS inventory reserve. Additionally, beginning in the first quarter, we adjusted for the costs associated with the Section 16B litigation and the Consumer Product Safety Commission matter known as the CPC matter. These legal costs were $502,000 in the first quarter. Finally, also included in a separate line on our P&L, legal costs and regulatory matters with a $2.5 million estimate of our liability for the matter outstanding with the CPSC, which we recorded as a liability in the first quarter. We have adjusted our EBITDA for this estimated liability as well. After consideration of these adjustments, the year-over-year improvement in adjusted EBITDA reflects the early results of our efforts to achieve less complexity and focus on the highest margin, highest return opportunities, particularly at the Outdoor segment. First quarter adjusted EBITDA by segment was $2.9 million at Outdoor and $1.9 million of debenture. Adjusted corporate costs was $2.8 million in the first quarter. We’ve provided a reconciliation of these adjusted EBITDA numbers by segment and the corporate cost at the back of the presentation included in today’s material. Next, let me shift to liquidity. At March 31, 2024, cash and cash equivalents were $47.5 million compared to $11.3 million at December 31, 2023. Total debt at March 31, 2024, was $100,000 compared to $119.8 million at the end of 2023. Our reduced debt and substantially improved cash position reflects the closing on the Precision Sports sale in February and the termination and repayment in full of our credit agreement. During the first quarter, we realized a gain on the sale of Precision Sports of $40.6 million, which was recognized through discontinued operations on our statement of income. Consolidated cash tax expense for the full year is expected to be $2 million. which will allow us to maintain most of the net cash realized from the sale of Precision Sports. Free cash flow, defined as net cash provided by operating activities less capital expenditures for the first quarter was an outflow of $18.3 million compared to positive free cash flow of $1.7 million in the prior year quarter. Free cash flow was significantly lower because of the significant reduction in accounts payable during the first 2 months of the quarter. As a reminder, we have net operating loss carry-forward for U.S. federal income tax purposes of approximately $7.7 billion at December 31, 2023. The company expects to utilize all the remaining NOLs in the future years. Before turning to our guidance, I would like to highlight that we continue to proceed in our lawsuit against HAP trading LLC and Mr. Mr. Harsh A. Padia. Both fact discovery and expert discovery has been concluded. The court set the following schedule for that half summary judgment motion and challenged our expert witnesses. Motion papers to be filed by May 9, 2024, opposition papers by July 2024, and we reply papers by August 9, 2024. If this matter goes to trial, we would expect the trial to commence in the fourth quarter of 2024 or sometime in 2025. Moving on to our outlook for 2024. I’m on Slide 9. We have reaffirmed our guidance and continue to expect sales to range between $270 million and $280 million and adjusted EBITDA from continuing operations of approximately $16 million to $18 million or an adjusted EBITDA margin of 6.2% of the midpoint of revenue and adjusted EBITDA. We continue to expect capital expenditures to range between $4 million and $5 million and free cash flow to range between $18 million and $20 million for the full year 2024. Consistent with our historical seasonal pattern, the second quarter decelerated compared to the first quarter, therefore, second quarter sales are expected to be between $58 million and $62 million and adjusted EBITDA is expected to be between zero and $0.5 million. I want to reiterate that our outlook does not include any expense for ongoing litigation specifically relating to the Section 16B matters, the CPSC matter or further increases in PFAS-related inventory reserves. As we look forward to the remainder of 2024, we are pleased with the incremental progress we are making in both Outdoor and Adventure segment, and we believe the foundation is in place for profitable growth ahead. While hurdles remain, we are confident in the exceptional team we now have in place and our new positioning as a pure-play Outdoor company. At this point in the call, operator, we are ready to take questions from the participants.

Operator: Thank you. [Operator Instructions] And our first question comes from Laurent Vasilescu of BNP Paribas (OTC:). Your line is open.

Laurent Vasilescu: Good afternoon, thank you very for taking my question. As well as thank you for a detailed presentation this afternoon as well at the Investor Day a couple of weeks ago.

Mike Yates: Very welcome, Laurent. Good to hear you. How are you?

Laurent Vasilescu: It was good, good. It was very detailed, and I appreciate having the team on the call today. I wanted to ask Mike about the guidance for revenues starting off the midpoint for 2Q with get mid-single-digit growth, which is great, but the guidance on the back half which suggests that 2H revenues are down high single digits by my rough math. Maybe can you just kind of walk through what’s happening there? Is that a level of conservatism or is there something that we should consider separate from that?

Mike Yates: Well, it’s a little bit of both, right? I mean, last year, we did about $59 million in Q2, right? So we’re kind of right from midpoint, we’re up to 60%. In the back half, if we kind of hit that, that would imply the back half would be about $145 million to $150 million of revenue. So call that $75 million a quarter in Q3 and Q4. Last year, I think we did about $83 million in Q3 and $76 million. So it’s slightly down. I think it’s a little bit of, as we right-size the business, we may see a little slower revenue. But I think – I hope there’s some conservatism, right? We’ve set a budget and the plan is back end loaded, consistent with our business, right? Our Black Diamond outdoor business is really a third and fourth quarter winter business, call winter business. And same with our venture business, the big season is in the summer in the Southern Hemisphere. Unfortunately or understandably the summer in the Southern Hemisphere is Q3 and Q4. So, we do expect to see our business turn – return to some profitability and some growth in the back half. But at this point, that’s kind of how it’s put together. I kind of think of it as flat. Hopefully, it will be flat on a year-over-year basis, but that’s where the crop will come from in the back half as well.

Laurent Vasilescu: Very helpful. Thank you very much. And then my second question is around the EBITDA margin of 6.2% for the full year. I remember – correct me, from 90 days ago, that’s largely going to come from gross margin. So, I wanted to ask about gross margins. I think they were up 60 bps on an adjusted basis. How much is promotional pricing a headwind in this quarter? And how do we think about the gross margin evolution, particularly in 2Q and then for the balance of the year.

Mike Yates: Gross margin should be a little better in Q2, but not a whole lot. And I mean maybe 37%. You should be right kind of around where we are at 36.9%, 37%, 37.2%. I mean it’s probably in that range. The promotional pricing, there is still some of that going on for sure. And as Neil highlighted in his comments, the market is still requiring promotional pricing, but we don’t think we are participating at the same level the market is. But that doesn’t mean we are not promotional pricing. To answer your question specifically, I think there is 30 bps or 40 bps of pressure from promotional pricing is our best estimate in our margin.

Laurent Vasilescu: Mike, it’s super helpful. Last question, if I may. Any comments around inventory levels at your key retail partners in the U.S. side within the outdoor category. I know we had – it’s been challenging for a lot of key retailers, but just curious how – what’s your sense about their inventories? Are we finally at the destock level and potentially at the restock inflection here?

Mike Yates: Well, I think the short answer is yes, but there are categories where some of our partners, categories of inventory that they are still overstocked. But as we mentioned, we saw a 10% increase in our North American wholesale, which is a good sign that they are restocking, especially in the categories that we are a market leader in. So, that’s been specifically the decline. Neil’s comments also highlighted, though, that the channel is over in Asia, which was only 10% of revenue. They are still struggling with too much inventory. But fortunately, that’s only 10% of our revenue.

Laurent Vasilescu: Okay. Very helpful. Thank you very much.

Mike Yates: Thanks Laurent.

Operator: Thank you. [Operator Instructions] And our next question comes from Matt Koranda of ROTH MKM. Your line is open.

Matt Koranda: Hi guys. Good afternoon. Just one follow-up of the prior – hey Mike. I just wanted to take off the prior question for sort of the consolidated outlook and just wanted to understand or make sure you put a finer point on for the second half with the implied growth rate dropping off, is that largely because we have tougher comps in adventure, or is that because we just still sort of lack an inflection point in demand in outdoor maybe if you could just take a segment-by-segment and just kind of give us the rationale there.

Mike Yates: Yes. It’s a little bit of both. So, I think as mentioned, it’s provinces observes I think internally, we were up to a little greater than the $150 million that I have kind of highlighted that the back half would be. But I don’t want to commit to that until we see till we get a little further in the year. I would like to say one quarter doesn’t give us – make a year. So, let us execute over the next day, and we get some our next 90 days, and we will get some better visibility in the back half, but we are confident in our pre-season orders for the fall winter at the outdoor space and adventure is continuing to – did have some real nice growth in the fourth quarter that will be challenging to comp again. So, there is a little bit of that as well. But we had some – we posted 43% growth last quarter, 27% growth this quarter. So, we are starting to see the efforts from the work that the team has put in place. But like I have said, we have got to get a little further into the year to get confident about the back half.

Matt Koranda: Okay. Fair enough. And then I have got one question for each of the segment leaders, so maybe just outdoor and Neil first. The positive 10% in North America wholesale is definitely an encouraging data point. Just wondering if you could maybe unpack for us the categories that are working, where you are seeing some growth, the types of retailers that are participating in that growth? And then where is there still room for improvement in North America?

Neil Fiske: Yes. Thanks Matt. So, the good news is, I think the places that we are seeing the growth are in our core categories where we have really put the focus on building on our positions of strength where we are number one, two or three in those categories, things like trekking poles, lighting, a number of our clam categories. And I think that’s a combination of marketing programs that we have put in place, importantly, reallocating our inventory dollars to get behind our core categories and our top styles has really led to a big improvement in fill rate year-over-year and kept down a lot on that friction that we have had in the retail channel with our retail partners over the last couple of years. So, I think it’s good to see the fill rates coming up. It’s good to see the friction going down. I think our retail partners are much happier with our performance in both sell-through and the ability to support that sell-through for service. The other thing I would just say, as sort of an addendum to Mike’s comments around revenue for the outlook for the year. Bear in mind too, that some of the revenue outlook for Black Diamond includes the exit of categories such as ski bindings and other things that we will be getting out of the course of the year. So, bear that in mind as you think about factors that affect year-over-year comparables on the top line, less stores this year than we had last year, etcetera . Does that answer your question?

Matt Koranda: Okay. Yes. That’s helpful. Neil, I appreciate that. Maybe just turning to adventure and that I guess you called out operating margins being a little bit impacted by mix and the OEM business that you are pursuing and winning. Just curious, I guess one, why pursue that business if it isn’t sort of accretive to margins for the segment, just given the margin goals that you have over the next several years? And then I assume that probably means that you see a path to improving those. And maybe just if you could highlight for us what levers you have to kind of improve margins on the OEM side of the business to get them back up to kind of that aftermarket sort of cadence?

Mathew Hayward: Hi Matt. Look, great question. I will start by saying like historically, our OEM business has been very much focused in our backyard of – and again, when I kind of outlined the opportunity that the investment session, it really is about the growth opportunities in the U.S. and outside of home [ph]. So, part of that is establishing a team that’s chasing the growth opportunities that exist in the U.S. and directly with the likes of the [indiscernible] increasing our partnership with Polaris (NYSE:), any offers taking on the U.S. in 2024. So, it’s about finding that opportunity. Now the reason OEM is so important is it does give you access to accelerated aftermarket programs. A good example is we are the global partner from an AMD (NASDAQ:) point of view for the launch of the new land crude, which is returning to the U.S. Now, in Australia, we have back to TRED, and it’s around 4,000 units. The challenge is when you don’t have that on a global level, the size and scale is a lot bigger in the U.S. And so the investment with the new Global Head of OE based in the U.S. is actually partnered directly with the larger market and one of the driving forces in order. That’s where the growth opportunity lies. And that’s the right sizing of the margins as well, just getting that scale. So, it does give us access and first-in-class kind of our positioning to have new products hit the market at the same time of the new vehicles because the development timelines can range from 2 years to 5 years to 7 years depending on delays in auto production, and then it gives us the readiness for aftermarket programs. Outside of that was margin improvement, and it really is also about bringing online the size and scale outside of AMD, but also making sure we are seeing improvements in DBT. So, in the second half of this year, we will be launching new platforms across digital, new websites where we haven’t really focused and it has not done direct to consumer. And this is getting done in line with supporting key wholesale that blend to see margin improvements as well. So, it’s a number of different levers, product mix across the board. Adventure sports range has not been a strong part of it. So, looking at lifetime value and really adding on after the sale of a pit, being able to sell our system and accessories, and that’s where the blended margin will actually improve as well when we can get more products and more basket size per sale. So, it’s a mix of levers. And I guess that’s kind of the good things as we go throughout this year, we are adding a lot more firepower across, I guess multiple growth opportunities versus relying on a single aftermarket product or a single OEM partner. Matt, does that help kind of give you a high level on that?

Matt Koranda: Yes, that’s a great area. I appreciate that, Matt. I will take the rest of mine here offline. I appreciate you guys.

Mathew Hayward: Thanks Matt.

Operator: Thank you. And our next question comes from Mark Smith of Lake Street. Your line is open.

Mark Smith: Hi guys. First, I just want to ask on the PFAS products on kind of where we are, kind of what we got through here in this report in this quarter and kind of how you feel that’s coming along?

Mike Yates: Good question, Mark. No, we are progressing well with that. We are working with all the opportunities to move inventory that we have that has PFAS in it. There is actually some exceptions we are looking in to take advantage of for some extreme weather here that will give us another year to move that inventory as well. And then there is also regions that they are still acceptable to sell that. But with all that being said, like I think I had mentioned in the last call, we said there is $3 million to $5 million of exposure. And I think that number is probably very similar, still $3 million to $4 million of exposure, but that’s why we have gone ahead and booked the small 25% of that number here in the quarter.

Mark Smith: Perfect. And then another question for me, just as we think about inventory in general today and primarily within outdoor, how do you feel about the improvements are positive, but how do we feel about that total inventory number today? Are we in a good place? How much is us to kind of move what’s a good level where you would like to be?

Mike Yates: I am very pleased. I would explain it this way. In ‘23, we wanted to just reduce inventory, right. In ‘24, we are definitely reducing inventory kind of with our purpose. Last year was reduced inventory, generate cash pay down debt. This year, it’s very tactical in this direction is strategic. We are reducing inventory, but we are pivoting as Neil described, we are adding back from inventory as we categorize inventory A, B, C to D. And we are adding – the inventory we are adding back is A category inventory, which will allow us to meet demand, which will allow us to build or improve our fill rate. It’s all A category inventory stuff that we sell the most of that we have the highest margin on that our customers want. So, I think overall, I would expect inventory to continue to decrease. At the end of Q2, it will probably increase a little bit compared to where we are now as we prepare for the fall winter. But by the time we get to the end of the year, I would expect inventory to be down significantly compared to last year, but more importantly, the mix of our inventory at the end of this year compared to the end of last year will be much healthier.

Mark Smith: Excellent. Thank you.

Operator: Thank you. And our next question comes from Jim Duffy of Stifel. Your line is open.

Mike Yates: Hey Jim.

Peter McGoldrick: Hi guys. This is Peter McGoldrick on for Jim. I am sorry for taking the question.

Mike Yates: Good morning Peter. Go ahead.

Peter McGoldrick: Yes. I wanted to discuss your investment plans as you build your strategies for re-platforming outdoor DTC, updating systems and otherwise simplifying the business. So, how should we be thinking of SG&A dollar growth on a year-over-year basis as 2024 progresses?

Mike Yates: Good question. So, I think Neil mentioned, we are being very cautious on SG&A. In fact, our operating cost is down 8% year-over-year. So, again, it’s all about complexity reduction and choosing the best investments with the highest return, whether that’s human capital, which is hiring more people are investing in CapEx, right. It’s new systems that we go ahead and install right, being capitalized on to our book. So, that’s how we are kind of – that’s the filter. We are looking at all investments, again, whether it’s operating cost or capital. And Neil and I and Warren are fully aligned on that. So, when we think about SG&A, I wouldn’t expect it to increase significantly. It’s really about an allocation of those dollars that we have available and putting them to the right in the best opportunities.

Peter McGoldrick: Okay. And then as we think about gross margin drivers for the year, the BD Asia office is a meaningful driver long-term. Can you provide some expectations for timing of the BD Asia sourcing and product development office to influence gross margin?

Mike Yates: Yes. Great question, Jim – Peter , I am sorry. That’s the investment we are making this year, and we won’t see the full benefit of that until next year.

Peter McGoldrick: Okay. Thank you.

Mike Yates: Our supply chain and lead times are extended. So, we will get that benefit in ‘25.

Operator: Thank you. I would like to turn it back to Mike Yates for any closing remarks.

Mike Yates: Great. Well, hey, I wanted to thank everyone very much for participating in our call today and your interest in Clarus and your continued support. We look forward to updating you at investor conferences over the coming months, I will be on the road at three or four conferences and then again in 90 days when we report the second quarter. Again, thank you very much and we will talk soon.

Operator: This concludes today’s conference call. Thank you for participating and you may now disconnect.

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