Clarus Corporation · NASDAQ:CLAR
Clarus — Investor Day (March 2024)
58 slides from Clarus's investor day presentation, Mar 12, 2024
Slide 1: Clarus Investor Day, March 11, 2024
CLARUS INVESTORDAY MARCH 11, 2024 ~ on ~ - »
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements Please note that in this presentation we may use words such as “ ea ‘g ” “plans,” “ “it .” “future,” and similar expressions which constitute forwar within the \ing of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-lo
Slide 3: Presenters
PRESENTERS CLARUS a Warren Kanders Mike Yates Neil Fiske Mat Hayward EXECUTIVE CHAIRMAN cro PRESIDENT MANAGING DIRECTOR Clarus Clarus Black Diamond Equipment Adventure BADRE eacaStano IEEX kbhigG' pwe Bath&BodyWorks EDDIEBAUERS< = Carterton @@&_ DECKERS Sorrento = © armor Howpincs hatha GAP VA arcut
Slide 4: The New Clarus
THE NEW CLARUS ¢ Black QRHINO-RACK TR=D Diamond Mmax<TRAX< OUTDOOR: DESIGNS, MARKETS AND SELLS EQUIPMENT AND SOFT GOODS FOR CLIMBERS, MOUNTAINEERS, HIKERS AND SKIERS ADVENTURE: DESIGNS, MARKETS AND SELLS AUTOMOTIVE AFTERMARKET EQUIPMENT & ACCESSORIES FOR OUTDOOR ADVENTURES DOOR & ADVENTURE BUSINESS
Slide 5: Value Creation Case Study: PS Divestiture
VALUE CREATION CASE STUDY: PS DIVESTITURE CLARUS | FOLLOWING A ROBUST SALE PROCESS, CLARUS DIVESTED PRECISION SPORT FOR $175MM SS Se CLARUS VALUE ADD = Rebuilt management team around recognized leaders = Acquired Barnes Bullets out of the Remington bankruptcy process g = Tripled bullet output throug
Slide 6: Near-Term Capital Allocation Priorities
NEAR-TERM CAPITAL ALLOCATION PRIORITIES DEBT FREE BALANCE SHEET CREATES STRONG FOUNDATION FOR VALUE CREATION Reinvest in existing businesses > Highest margin, highest return opportunities Seek bolt-on acquisitions > Only synergistic with existing operating infrastructure Prudent cash management > In
Slide 7: Adventure
0 ‘i ADVENTURE
Slide 8: Adventure
AEAY ADVENTURE THE ADVENTURE SEGMENT OF CLARUSIS A GLOBAL GROWTH PLATFORM FOR OUR PORTFOLIO OF ADVENTURE BRANDS: RHINO-RACK, MAXTRAX AND TRED.
Slide 9: We help people make space for adventure with world ready outdoor gear
6 February 2023 We help people make space for adventure with world ready outdoor gear born and proven in Australia. ..
Slide 10: This is our lab
THIS IS OUR LAB
Slide 11: This is our quality control
THIS IS OUR QUALITY CONTROL
Slide 12: And this is our field test
AND THIS IS OUR FIELD TEST
Slide 13: Global Roof-Rack & Hitch, Caravan & Camping Market
GLOBAL ROOF -RACK & HITCH CARAVAN & CAMPING MARKET GLOBAL ROOF -RACK & HITCH CARAVAN & CAMPING MARKET
Slide 14: Adventure Key Metrics
FY24F Revenue FY24F EBITDA # Retail Doors Worldwide # Countries Distributed to # Employee’s Worldwide
Slide 15: Adventure Sales Mix
6 February 2023 ANZ, 65% Americas, 25% ROW, 10% Wholesale, 75% DTC, 15% OEM, 10% Trays, 20% Bars, 30% Accessories, 50%
Slide 16: Adventure Use Categories
6 February 2023 OVERLANDING CAMPING CYCLING TOURING WATER SPORTS WEEKEND ADVENTURE SNOW TRADE
Slide 17: Future State Adventure Ecosystem in Action
FUTURE STATE ADVENTURE ECOSYSTEM IN ACTION
Slide 18: Adventure Ecosystem Categories
6 February 2023 SNOW OVERLANDING CAMPING CYCLING TOURING WATER SPORTS WEEKEND ADVENTURE TRADE
Slide 19: NPD Delivering Brand Growth
NPD DELIVERING BRAND GROWTH PAGE19
Slide 20: Ecosystem Delivering LTV Growth
ECOSYSTEM DELIVERING LTV GROWTH GUUS soventure System Accessories Adventure Lifestyle ESTABLISHING A PATH TO LIFE TIME VALUE PAGE20
Slide 21: Product Fitment Multipliers
6 February 2023 x663 x180 x4 X530* x10 x2
Slide 22: Customer Segments
6 February 2023 [ PRIMARY SEGMENT] [ Overlanding & 4WD ] [ SECONDARY SEGMENT ] [ Work & Play, Tools & Toys ] [ SECONDARY SEGMENT ] [ Bike, Kayak, Snow] [ SECONDARY SEGMENT ] [ Families, Mall Crawlers] [ AU SECONDARY SEGMENT ] [ Sports, Camping, Van Life] [ US SECONDARY SEGMENT ] [ Hunter, Fisher, Ca
Slide 23: Regions. Brands. Global Platform
3 REGIONS. 3 BRANDS. 1 GLOBAL PLATFORM NORTH AMERICA GM, Sales, Product, DC Accelerate Growth ROW - ASIA & EUROPE GM, Sales, QC Unlock opportunity ANZ Global HQ, Global Shared Services Fuel market leading strength in home market PAGE 23
Slide 24: Adventure Leadership Team
6 February 2023 PRESIDENT 1 .3Year at Clarus 35 years industry experience Chief Finance Officer 6 Years at Rhino Rack 35 years industry experience Head of Operations 0.1 Years at Rhino Rack 20 years industry experience Head of Product 6 Years at Rhino Rack 10 years industry experience Head of Market
Slide 25: Organizational Change Driving Growth
ORGANIZATIONAL CHANGE DRIVING GROWTH CLARUS SINCE JULY 2023, ADVENTURE HAS UNDERGONE DRAMATIC CHANGE, QUICKLY IDENTIFYING CHALLENGES AND SOLUTIONS, WHILE DELIVERING MONTH-OVER-MONTH IMPROVEMENT Leadership team lacking integration, vision & direct experience to oversee global growth - 2 regions opera
Slide 26: February 2023 ••••• ••• ••• ••••
6 February 2023 ••••• ••• ••• ••••
Slide 27: Adventure: Building Blocks for Growth
ADVENTURE: BUILDING BLOCKS FOR GROWTH GUUS soventure RESET & STABILIZE | wvestroscaue | | restroscae | ACCELERATE GROWTH 2023 2024 NET SALES $82M $90M REBUILD LEADERSHIP INTEGRATION OF TEAM ADVENTURE OPS ESTABLISH GLOBAL HQ &3 REGIONS INVESTMENT INTO ROW INVESTMENT INTO USA KEY ACQUISITION OF TRED:
Slide 28: Brand Investment Highlights
BRAND INVESTMENT HIGHLIGHTS EU KY ADVENTURE BRAND STRENGTH GROWTH OPPORTUNITY Cleaned up, integrated organizational structure divided between global shared services and Regional P&L ownership Well-established brand recognition in “home” ANZ market Category leading brand portfolio with established fr
Slide 29: No matter what, we've got you
_NOMATTER Y , WE'VE GOT
Slide 30: Outdoor
OUTDOOR
Slide 31: Black Diamond
& Black Diamond BLACK DIAMOND IS A GLOBALLY RECOGNIZED, ICONIC BRAND THAT TRACES ITS ROOTS BACK TO THE ORIGINS OF ROCK CLIMBING AND MOUNTAINEERING
Slide 32: Iconic founder driven brand
6 February 2023 Iconic founder driven brand W e h e l p p e o p l e m a k e s p a c e f o r a d v e n t u r e w i t h w o r l d r e a d y o u t d o o r g e a r b o r n a n d p r o v e n i n A u s t r a l i a .
Slide 33: Core Climbing, Outdoor Gear and Gym Climbing Markets
CORE CLIMBING MARKET OUTDOOR GEAR & EQUIPMENT MARKET GYM CLIMBING MARKET CORE CLIMBING MARKET OUTDOOR GEAR & EQUIPMENT MARKET GYM CLIMBING MARKET
Slide 34: Participation by Activity
Climb 10M, Backcountry 4M, Trail Run 12 M, Hike/Trak Represent US Participation data from OIA and SIA. BD FOCUS: TOURING, FREERIDE, MOUNTAINEERING, SIDE-COUNRY, OFF-PISTE INDOOR, BOULDER, SPORT, TRAD, ICE, MIXED, BIG WALL, ALPINE, MOUNTAINEERING, VIA-FERRATA MOUNTAIN RUN, TRAIL RUN, FKT, ULTRA OBJEC
Slide 35: Black Diamond Key Metrics
FY24F Revenue FY24F EBITDA # Retail Doors Worldwide # Countries Distributed to # Employee’s Worldwide
Slide 36: Black Diamond Sales Mix
6 February 2023 North America, 65% EU, 25% ROW, 10% Wholesale, 75% DTC, 15% IGD, 10% Mountain, 40% Climb, 25% Apparel, 20% Ski, 10% Footwear, 5%
Slide 37: Global Brand. Global Reach
GLOBAL BRAND. GLOBAL REACH ROW NORTH AMERICA International Global HQ, Sales, EUROPE distribution groups (21 Marketing, Product, DC partners, ex. Japan, S. Regional HQ, Sales, DC Korea, Australia, South America, etc.) PAGE 37
Slide 38: Black Diamond Leadership Team
6 February 2023 Managing Director 1 Year at Clarus 28 years industry experience Chief Finance Officer Recent return to BLACK DIAMOND (6.5 years prior experience) 17 years industry experience Head of Operations Recent return to BLACK DIAMOND (20 years prior experience) 45 years industry experience He
Slide 39: Respect the Past. Shape the Future
RESPECT THE PAST. SHAPE THE FUTU Climber, Ski Mountaineer, Public Lands Advocate GM of Chouinard Equipment at age 27 Started Black Diamond in 1989 Patagonia “One with the sports we serve and ss : absolutely indistinguishable from them.” “Make a difference on issues of great importance to our fellow
Slide 40: One with the Sports We Serve
ONE WITH THE SPORTS WE SERVE Tesstichie' fina CLIMBING IS THE CORE OF THE BRAND TRAIL RUNNING * Origins = Bloodlines = Leadership An expansive opportunity Build on positions of strength “Own climbing wherever it exists” mandates we broaden and constantly evolve our view of what constitutes climbing
Slide 41: Win from the Top Down
WIN FROM THE TOP DOWN & OPPORTUNITY FOR BLACK DIAMOND TO BUILD MORE COMPLETE CONSUMER, PRODUCT, AND CHANNEL PYRAMIDS, LEVERAGING OUR AUTHORITY AS AN EXPERT, ATHLETE DRIVEN BRAND A NATIONAL OUTDOOR = MOUNTAIN CORE PASSION PLAYER OPENING PRICE OUTDOOR REC CATEGORY FOCUS PAGE41
Slide 42: Consumer Pricing Tier Example: Hike / Trek
CONSUMER PRICING TIER EXAMPLE: HIKE / TREK & / Distance DISTANCE /| I/ Carbon FLZ CORE PLAYER oS we 4p + + PURSUIT M / | —— FLZ PAGE42
Slide 43: Product Leadership
PRODUCT LEADERSHIP & BEAUTIFUL DESIGN + SUPERIOR ENGINEERING = ICONIC, MARKET DEFINING PRODUCT. MARKET LEADER ACROSS OUR CORE CATEGORIES \ r PAGE43
Slide 44: Organizational Change Driving Growth
ORGANIZATIONAL CHANGE DRIVING GROWTH SINCE FEBRUARY 2023, BLACK DIAMOND HAS BEEN SUBSTANTIALLY TRANSFORMED INTO A MORE FOCUSED, SIMPLIFIED, LEANER COMPANY, BETTER POSITIONED FOR PROFITABILITY AND GROWTH BRAND AND ORGANIZATION OVEREXTENDED, HIGHLY DEVELOPED 7 PART STRATEGY DEFINED BY COMPLEX SIMPLIFI
Slide 45: February 2023 ▪▪▪▪ ▪▪▪ ▪▪ ▪▪▪▪
6 February 2023 ▪▪▪▪ ▪▪▪ ▪▪ ▪▪▪▪
Slide 46: Building Blocks for Growth and Profitability
BUILDING BLOCKS FOR GROWTH AND PROFITABILITY NET SALES 2023 GUUS soventure 2024 2025 2026 $204M $185M $205M $225M KEY STRATEGIC & INVESTMENT PHASING REVAMP LEADERSHIP TEAM APPAREL TO $80M 3 YEAR PRODUCT PLAN 18-20% CAGR APPAREL BREAKOUT RIGHT SIZE AND CLEAN UP INVENTORY SIMPLIFICATION EXECUTION REST
Slide 47: Value Drivers
VALUE DRIVERS AFTER RESETING THE FOUNDATION, BLACK DIAMOND FOCUSED ON VALUE DRIVERS CONSUMERS: segmentation initiatives CATEGORIES: grow apparel to $100M+, focus on kits not items CHANNELS: DTC, non-traditional, account share gain GEOGRAPHY: focus on APAG SIMPLIFICATION: edit low margin & productivi
Slide 48: Brand Investment Highlights
BRAND INVESTMENT HIGHLIGHTS BRAND STRENGTH RE-ESTABLISHED APPROPRIATE ORGANIZATIONAL SHAPE HIGHLIGHTED BY NEW LEADERSHIP TEAM AND ENHANCED OVERALL TALENT POOL THE BLACK DIAMOND BRAND IS BIGGER THAN BUSINESS ITSELF CATEGORY LEADING AND DEFINING PRODUCT IN THE CORE SPORTS WE SERVICE FOUNDATIONS FOR NE
Slide 49: Summary Close
CLARUS SUMMARY CLOSE MARCH 11, 2024
Slide 50: Long Range Targets: Clarus Consolidated
LONG RANGE TARGETS: CLARUS CONSOLIDATED CLARUS 2023 2024 2025 2026 NET SALES $286M $275M $330M $375M EBITDA % 0% 6.2% 10% 13.1% OpCo ADJ. EBITDA $12.1M $28.3M $43.0M $59.0M CORP. COSTS (EXCL. NON- ($10.9) (S11M) ($10M) ($10M) CASH) ADJ. EBITDA $1.2M ~$17M $33.0M $49.0M CASH FLOWS $26.2M* $18M -$20M
Slide 51: Why Invest in Clarus
WHY INVEST IN CLARUS CLARUS | OUTDOOR & ADVENTURE CLEAR PLANS FOR GROWTH INVESTMENTS IN 2023 DEBT-FREE GROWTH MARKETS AND PROFITABILITY MOVING THE NEEDLE Pure play Outdoor . Sa sae Debt-free balance & Adventure Established three- Strategic initiatives sheet; Capital business with in- year plan aimed
Slide 52: Appendix
CLARUS APPENDIX
Slide 53: Sale of Precision Sport segment
On December 29, 2023, the Company announced the sale of its Precision Sport segment for $175 million. As the disposition was completed on February 29, 2024, we expect to recognize a gain on the disposition during the three months ending March 31, 2024. The activities of the Precision Sport segment h
Slide 54: 2023 Quarterly Continuing Operations Statements
6 February 2023 Sales Domestic sales $ 24,197 $ 25,925 $ 30,423 $ 31,840 International sales 46,081 32,012 50,879 44,663 Total sales 70,278 57,937 81,302 76,503 Cost of goods sold 44,770 35,360 54,018 54,361 Gross profit 25,508 22,577 27,284 22,142 Operating expenses Selling, general and administrat
Slide 55: Reconciliation to Adjusted Income from Continuing Operations
6 February 2023 As reported $ 70,278 $ 25,508 $ 27,954 $ (334) (14.1) % $ (2,031) $ (0.05) Amortization of intangibles - - (2,768) 278 2,490 Stock-based compensation - - (1,285) 277 1,008 Transaction costs - - (37) 6 31 Contingent consideration (benefit) expense - - 1,565 (335) (1,230) As adjusted $
Slide 56: Reconciliation to Adjusted Income from Continuing Operations
6 February 2023 As reported $ 81,302 $ 27,284 $ 30,459 $ (1,395) (38.7) % $ (2,206) $ (0.06) Amortization of intangibles - - (2,553) 866 1,687 Stock-based compensation - - (1,152) 284 868 Restructuring charges - - (1,076) 334 742 Transaction costs - - (400) 92 308 As adjusted $ 81,302 $ 27,284 $ 25,
Slide 57: Reconciliation to EBITDA and Adjusted EBITDA
6 February 2023 Loss from continuing operations $ (2,031) $ (4,322) $ (2,206) $ (7,229) Income tax (benefit) expense (334) (862) (1,395) (1,700) Other, net (76) (226) 445 (1,104) Interest expense, net (5) (8) (19) (35) Operating loss (2,446) (5,418) (3,175) (10,068) Depreciation 939 1,080 1,045 1,08
Slide 58: Q&A
CLARUS Q&A