Investor’s Watch List: Clarus Corporation (NASDAQ: CLAR)

SALT LAKE CITY, November 7, 2019 – Shares of Clarus Corporation (NASDAQ: CLAR) declined -2.12% to $11.31. The stock grabbed the investor’s attention and traded 186.665K shares as compared to its average daily volume of 184.09K shares. The stock’s institutional ownership stands at 86.60%.

In the second quarter, Clarus Corporation (CLAR) reported 2% increase in sales to $47.00M compared to $45.90M in the same year-ago quarter. The increase was driven by 8% growth in Black Diamond, partially offset by a 16% decline in Sierra. The year-over-year decline was expected due to headwinds in the bullet and ammunition industry. On a constant currency basis, total sales were up 3%.

Selling, general and administrative expenses in the second quarter were $17.20M compared to $15.80M in the year-ago quarter. As a percentage of sales, selling, general and administrative expenses were 36.6% compared to 34.4%. The increase was attributable to the Company’s continued investment in the brand related activities of marketing and direct-to-consumer of $0.50M, a shift in timing of summer tradeshows from traditionally the third quarter to the second quarter of $0.50M and costs incurred with the move of the Company’s warehouse in Europe of $0.40M.

Net loss in the second quarter was $0.70M or $(0.02) per basic and diluted share, compared to a net loss of $0.80M or $(0.03) per basic and diluted share in the year-ago quarter. Net loss in the second quarter of 2019 included $2.20M of non-cash charges, compared to $3.20M of non-cash charges and $0.20M in transaction and restructuring costs in the same year-ago quarter.

Adjusted EBITDA in the second quarter was $1.60M compared to $2.80M in the same year-ago quarter. As a percentage of sales, adjusted EBITDA was 3.4% compared to 6.2% in the same year-ago quarter.

Net cash provided by operating activities for the six months ended June 30, 2019 was $9.70M compared to $7.90M in the same year-ago period. Capital expenditures for the six months ended June 30, 2019 were $2.00M compared to $1.50M in the same year-ago period. Free cash flow, defined as net cash provided by operating activities less capital expenditures, for the six months ended June 30, 2019 was $7.70M compared to $6.40M in the same year-ago period.

At June 30, 2019, cash and cash equivalents totaled $2.00M compared to $2.50M at December 31, 2018. The Company’s debt balance at June 30, 2019, was $16.70M compared to $22.10M at December 31, 2018.

2019 Outlook:

Clarus still anticipates fiscal year 2019 sales to grow approximately 8% to $230.0M compared to 2018. By brand, the Company now expects sales for Black Diamond to increase low-double digits and sales for Sierra to decrease high-single digits.

The Company continues to expect adjusted EBITDA to increase approximately 20% to $25.0M compared to 2018. Additionally, in fiscal year 2019 the Company still expects capital expenditures to be approximately $4.50M and free cash flow to be approximately $10.0M.

CLAR has a market value of $357.78M while its EPS was booked as $0.35 in the last 12 months. The stock has 30.95M shares outstanding. In the profitability analysis, the company has gross profit margin of 35.40% while net profit margin was 4.90%. Beta value of the company was 1.36; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.00.