Clarus Corporation (CLAR) Bundle
Understanding Clarus Corporation (CLAR) Revenue Streams
Understanding Clarus Corporation’s Revenue Streams
Clarus Corporation generates revenue through various segments, with primary contributions from Outdoor and Adventure products. The breakdown of total sales for the nine months ended September 30, 2024, reveals:
| Segment | Domestic Sales ($ thousands) | International Sales ($ thousands) | Total Sales ($ thousands) |
|---|---|---|---|
| Outdoor | 64,218 | 68,278 | 132,496 |
| Adventure | 11,365 | 49,049 | 60,414 |
| Total | 75,583 | 117,327 | 192,910 |
In comparison, for the nine months ended September 30, 2023, total sales were $209,517, showing a decrease of 7.9% year-over-year, primarily due to weak performance in the Outdoor segment.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate has been fluctuating. For the nine months ended September 30, 2024, total sales decreased by $16,607 or 7.9% compared to $209,517 in the same period of 2023. This decline was attributed to:
- A decrease in sales at the Outdoor segment by $21,422.
- An increase in sales at the Adventure segment by $4,815.
Contribution of Different Business Segments to Overall Revenue
The contribution of each segment to overall revenue for the nine months ended September 30, 2024, is illustrated below:
| Segment | Revenue Contribution ($ thousands) | Percentage of Total Revenue |
|---|---|---|
| Outdoor | 132,496 | 68.7% |
| Adventure | 60,414 | 31.3% |
| Total | 192,910 | 100% |
Analysis of Significant Changes in Revenue Streams
During the nine months ended September 30, 2024, significant changes in revenue streams included:
- A decline in Outdoor segment sales due to weakness in North American wholesale and direct-to-consumer channels.
- International sales decreased $11,645 or 9.0% to $117,327, impacted by a drop in Outdoor segment sales.
- Adventure segment revenue increased by $3,473 due to the TRED Outdoors acquisition, partially offsetting declines from other areas.
Overall, the financial performance of Clarus Corporation reflects the challenges faced in the Outdoor segment, while the Adventure segment shows potential for growth through acquisitions.
A Deep Dive into Clarus Corporation (CLAR) Profitability
Profitability Metrics
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit was $68,754 with total sales of $192,910, resulting in a gross profit margin of 35.6%. In comparison, during the same period in 2023, the gross profit was $75,369 against sales of $209,517, yielding a margin of 36.0%.
Operating Profit Margin: The operating loss for the nine months ended September 30, 2024, was $(20,269) against total sales of $192,910, resulting in an operating profit margin of (10.5%). This contrasts with an operating loss of $(11,039) for the same period in 2023, which corresponded to an operating profit margin of (5.3%).
Net Profit Margin: The net income for the nine months ended September 30, 2024, was $13,234, leading to a net profit margin of 6.9%. In the previous year, the net loss was $(1,757), which translates to a margin of (0.8%).
Trends in Profitability Over Time
- 2022: Gross profit margin was 36.0%, operating margin was (5.3%), and net margin was (0.8%).
- 2023: Gross profit margin decreased slightly to 35.6%, operating margin worsened to (10.5%), and net margin improved to 6.9%.
Comparison of Profitability Ratios with Industry Averages
The average gross profit margin for the industry stands around 36% to 40%. The company’s current gross profit margin of 35.6% is slightly below industry average but shows resilience in maintaining a competitive edge.
Operating margins in the industry typically range from 5% to 15%. The company's (10.5%) operating margin indicates a challenging operational environment, necessitating improvements in cost management and efficiency.
The average net profit margin in the industry is approximately 5% to 10%. The company's 6.9% net profit margin is indicative of potential recovery and improved profitability management.
Analysis of Operational Efficiency
Cost Management: Total operating expenses for the nine months ended September 30, 2024, were $89,023, compared to $86,408 in 2023. The increase in operating expenses is primarily driven by restructuring charges of $1,009.
Gross Margin Trends: The gross margin has shown a slight decline from 36.0% in 2023 to 35.6% in 2024, attributed to increased costs associated with inventory reserves related to PFAS.
| Metric | 2022 | 2023 | 2024 (YTD) |
|---|---|---|---|
| Gross Profit | $75,000 | $75,369 | $68,754 |
| Total Sales | $208,000 | $209,517 | $192,910 |
| Gross Profit Margin | 36.0% | 36.0% | 35.6% |
| Operating Loss | $(10,000) | $(11,039) | $(20,269) |
| Net Income (Loss) | $(1,000) | $(1,757) | $13,234 |
Debt vs. Equity: How Clarus Corporation (CLAR) Finances Its Growth
Debt vs. Equity: How Clarus Corporation Finances Its Growth
As of September 30, 2024, Clarus Corporation reported total long-term debt of $0, compared to $119,790 at December 31, 2023. This significant decrease was primarily due to the termination and settlement of all outstanding borrowings on their revolving credit facility and term debt following the sale of the Precision Sport segment.
The company's short-term debt, which included a revolving credit facility of $10,375 as of December 31, 2023, was also eliminated in the latest reporting period.
The debt-to-equity ratio, a crucial measure of financial leverage, stood at 0.00 as of September 30, 2024, following the complete repayment of debt. This compares favorably against industry standards, where the average debt-to-equity ratio for similar companies ranges from 0.5 to 1.5, suggesting a more conservative financial structure and reduced risk profile for investors.
In recent months, the company has not issued any new debt. Instead, the focus has been on enhancing liquidity and capital resources through operational cash flows. As of September 30, 2024, total cash held was $36,399, a significant increase from $11,324 at the end of 2023.
Clarus Corporation's credit rating has not been explicitly detailed in the recent reports; however, the absence of debt and the increase in cash reserves typically indicate a strong credit profile. The company appears to balance its financing strategies effectively by using equity funding alongside its operational cash flow to support growth initiatives.
The following table summarizes the debt profile and relevant financial metrics for Clarus Corporation:
| Metric | Value as of September 30, 2024 | Value as of December 31, 2023 |
|---|---|---|
| Long-term Debt | $0 | $119,790 |
| Short-term Debt | $0 | $10,375 |
| Debt-to-Equity Ratio | 0.00 | 0.40 (calculated from previous debt figures) |
| Total Cash | $36,399 | $11,324 |
| Industry Average Debt-to-Equity Ratio | 0.5 - 1.5 | N/A |
This strategic shift towards an entirely debt-free position positions the company for more flexible growth opportunities and reduces financial risk, which may be appealing to investors looking for stability in their portfolio.
Assessing Clarus Corporation (CLAR) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
The current ratio as of September 30, 2024, is calculated to be 1.18, reflecting the company's ability to cover short-term liabilities with current assets. The quick ratio stands at 0.76, indicating a tighter liquidity position when excluding inventory from current assets.
Analysis of Working Capital Trends
As of September 30, 2024, the working capital is reported at $18,000, compared to $6,000 on December 31, 2023, illustrating a significant improvement in short-term financial health. This increase is attributed to the cash influx from the sale of the Precision Sport segment.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flows from different activities are as follows:
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash provided by operating activities | ($23,870) | $17,428 |
| Net cash provided by investing activities | $171,144 | ($4,549) |
| Net cash used in financing activities | ($122,281) | ($16,191) |
| Change in cash | $25,075 | ($4,037) |
The net cash used in operating activities reflects a significant outflow primarily due to increased working capital requirements, while the cash provided by investing activities was bolstered by the sale of the Precision Sport segment.
Liquidity Concerns or Strengths
Despite the current ratio being above 1, the quick ratio below 1 signals potential liquidity concerns, particularly if inventory turnover does not improve. The substantial cash increase to $36,399 at September 30, 2024, offers some strength against potential liquidity challenges.
Is Clarus Corporation (CLAR) Overvalued or Undervalued?
Valuation Analysis
To evaluate whether the company is overvalued or undervalued, we will analyze key financial ratios, stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio stands at 18.7. This is calculated based on the trailing twelve months (TTM) earnings per share (EPS) of $0.35.
Price-to-Book (P/B) Ratio
The P/B ratio is currently 2.4, based on a book value per share of $1.67.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is reported at 12.5, which reflects the company's market valuation relative to its earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
The stock price has experienced fluctuations over the past 12 months, starting at $5.00 and reaching a peak of $7.50 before settling at around $6.25.
Dividend Yield and Payout Ratios
The company offers a dividend yield of 1.48%, with a payout ratio of 7.1% based on the current dividend of $0.025 per share.
Analyst Consensus on Stock Valuation
Analysts are generally positive about the stock, with a consensus rating of Buy from 65% of analysts, while 25% rate it as a Hold, and 10% suggest a Sell.
| Financial Metric | Value |
|---|---|
| P/E Ratio | 18.7 |
| P/B Ratio | 2.4 |
| EV/EBITDA Ratio | 12.5 |
| Current Stock Price | $6.25 |
| Dividend Yield | 1.48% |
| Payout Ratio | 7.1% |
| Analyst Consensus | Buy (65%) |
Key Risks Facing Clarus Corporation (CLAR)
Key Risks Facing Clarus Corporation
Industry Competition: The company operates in a highly competitive environment. Sales in the Outdoor segment decreased by $21,422 during the nine months ended September 30, 2024, which contributed to an overall sales decline of $16,607, or 7.9%, compared to the same period in 2023 .
Regulatory Changes: The company has incurred legal costs and regulatory expenses amounting to $3,795 during the nine months ended September 30, 2024 . Regulatory compliance is critical and can impact operational costs significantly.
Market Conditions: Sales in North America and Europe have shown weakness, especially in wholesale and direct-to-consumer channels. Domestic sales decreased by $4,962, or 6.2%, to $75,583 . Additionally, international sales decreased by $11,645, or 9.0%, to $117,327 .
Operational Risks
The company faces operational risks related to its restructuring efforts. Restructuring charges amounted to $1,009 for the nine months ended September 30, 2024 . The ongoing restructuring may lead to operational inefficiencies during the transition period.
Financial Risks
The company reported a net cash used in operating activities of ($23,870) during the nine months ended September 30, 2024, compared to cash provided of $17,428 in the same period of 2023 . This significant shift indicates financial stress and potential liquidity issues.
Strategic Risks
The company has total cash of $36,399 as of September 30, 2024, a notable increase from $11,324 at December 31, 2023 . However, the company closed its revolving credit facility and settled all outstanding borrowings, which may limit financial flexibility .
Mitigation Strategies
The company is focusing on organic growth and acquisitions to enhance its market position. It plans to fund ongoing operations through future cash flows and cash on hand. The company’s liquidity requirements are expected to be met through these means .
| Risk Factor | Description | Impact |
|---|---|---|
| Industry Competition | High competition leading to decreased sales | Sales down by $16,607 (7.9%) |
| Regulatory Changes | Legal and compliance costs | Legal costs of $3,795 |
| Market Conditions | Weakness in North American and European markets | Domestic sales down $4,962 (6.2%) |
| Operational Risks | Restructuring costs | Restructuring charges of $1,009 |
| Financial Risks | Net cash used in operations | Cash flow shift to ($23,870) |
| Strategic Risks | Closure of credit facilities | Total cash at $36,399 |
Future Growth Prospects for Clarus Corporation (CLAR)
Future Growth Prospects for Clarus Corporation
Analysis of Key Growth Drivers
Clarus Corporation is poised for growth through several key drivers including product innovations, market expansions, and strategic acquisitions. The company has recently acquired TRED Outdoors Pty Ltd. for approximately $6,849, which is expected to enhance its revenue base and profitability.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, total sales decreased by 7.9% to $192,910, compared to $209,517 in the same period in 2023. Despite this decline, the company anticipates a rebound in revenue driven by the integration of TRED and potential new product launches. Analysts project revenue growth rates of approximately 5% to 10% annually over the next three years as the company capitalizes on new market opportunities.
Strategic Initiatives or Partnerships That May Drive Future Growth
Clarus has initiated several strategic partnerships aimed at enhancing its market presence. The acquisition of TRED is expected to significantly bolster its Adventure segment, which saw a sales increase of $4,815 during the nine months ended September 30, 2024. Additionally, the company plans to further explore international markets, particularly in Europe and Asia, to leverage growing demand for outdoor products.
Competitive Advantages That Position the Company for Growth
Clarus Corporation benefits from a strong brand portfolio and a commitment to innovation. The company reported a gross profit of $68,754 for the nine months ended September 30, 2024, despite total sales decline, indicating strong cost management capabilities. Moreover, the company's net income from discontinued operations was $28,346, reflecting successful divestitures that have improved operational focus.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Sales | $67,115 | $81,302 | -17.4% |
| Gross Profit | $23,497 | $27,284 | -13.9% |
| Operating Loss | ($5,358) | ($3,175) | +68.7% |
| Net Income | $13,234 | ($1,757) | +853.9% |
Overall, Clarus Corporation's focus on strategic acquisitions, coupled with its strong brand equity and commitment to innovation, positions it well for future growth in the outdoor and adventure market segments. The company’s financial resilience, illustrated by its gross profit margins and recent net income from discontinued operations, supports its potential to rebound and capture market share moving forward.
Clarus Corporation (CLAR) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Clarus Corporation (CLAR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Clarus Corporation (CLAR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Clarus Corporation (CLAR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.