Clarus Corp, the holding company previously registered as Black Diamond Equipment, saw a return to profits in the fourth quarter of 2017, along with better sales and margins. This was mainly due to a strong performance in Europe and America, along with the contribution from a newly acquired company, Sierra Bullets. The group paid $79 million in September for this highly profitable U.S. firm, whose proprietary manufacturing process is said to give it the tightest tolerances in the ammunition market.

Clarus posted net income of $6.0 million, as compared to a net loss of $1.4 million for the year-ago quarter, thanks in part to a higher tax benefit of $6.8 million. Adjusted to exclude non-cash items, transaction costs, merger and integration costs and minimal restructuring costs, net income grew to $4.6 million from adjusted net income of $0.4 million for the fourth quarter of 2016.

The quarterly gross margin jumped by 3.5 percentage points to 32.6 percent, with 3.2 percentage points coming from step-up inventory from Sierra's acquisition. Adjusted Ebitda reached $5.1 million, as compared to $0.3 million for the same period a year ago.

Sales jumped by 27 percent to $52.7 million, boosted by growth in North America and Europe, with gains across all of product categories. The sales increase was also driven by $6.8 million in sales generated by Sierra Bullets. Excluding the acquisition, sales still went up organically by 11 percent, with continued growth for the Black Diamond brand. On a currency-neutral basis, sales were up by 25 percent.

The quarter benefited from an increase of 10 percent in pre-season orders, while improved fulfillment rates and healthier inventory levels drove an increase of 28 percent in at-once orders. This was partially offset by a drop of 46 percent in the amount of discontinued merchandise sold, reflecting improvements in supply chain and inventory management.

The ski category improved by 24 percent, driven by an increase of 33 percent from the group's Pieps brand, which the management said benefited from Black Diamond's focus on a broad collection built around snow safety, along with a strong winter in Europe. The climb category rose by 19 percent, fueled by the continued rollout of the Rock Shoes line, as well as the early launch of new spring harnesses. Other products that performed well included trekking poles, gloves and packs.

By region, North America's growth was supported by strength in all product categories and by continued higher levels of sports with specialty retailers. In Europe, very strong At Once or ASAP orders - particularly in snow safety, harnesses, gloves, trekking poles and ski - drove double digit sales growth in the region. In the Independent Global Distributor business, which covers the rest of the world, including large markets in Asia, the group experienced relatively flat results due to lower pre-season orders, particularly in the mountain category.

The gross margin jumped by 3.5 percentage points to 32.6 percent, due to a continued enhancement in the products, channel mix and the stabilization of its sourcing strategy, particular in-house manufacturing, better product fulfillments and lower levels of discontinued merchandise. Excluding the acquisition of Sierra, the gross margin stood at 35.4 percent.

For the full year, sales were up by 15 percent to $170.7 million, driven by the inclusion of Sierra, which contributed $10.4 million, and growth in the Black Diamond climb, ski and mountain product categories.

Annual sales grew by 16 percent in the U.S. to $88.6 million and by 14 percent in the rest of the world to $82.0 million. Excluding Sierra's acquisition, sales increased by 8 percent. On a constant currency basis, they were up by 14 percent.

The gross margin advanced by 2.0 percentage points from the previous year to 31.5 percent, due to a favorable mix of higher margin products and channel distribution, as well as lower manufacturing costs. Excluding the acquisition of Sierra, the gross margin was 32.3 percent.

The company still incurred a net loss of $0.7 million for the year, but it improved from a net loss of $9.0 million booked in 2016. On an adjusted basis, the group posted net income of $4.7 million, compared with an adjusted net loss of $2.6 million in 2016.

The outlook is very positive. Clarus expects sales to grow this year by between 17 and 20 percent to approximately $200-$205 million, with a high single-digit or low double-digit increase for the Black Diamond brand. On a constant-currency basis, the company anticipates sales to go up by between 16 and 19 percent.

Clarus announced that it has promoted John Walbrecht to president of the group, effective March 9, 2018. He has been with Clarus for nearly 18 months, serving as president of the company's Outdoor Group.