Clarus Corp reported third-quarter sales for Black Diamond (BD), the group’s biggest brand, that bounced back from the second quarter, when revenues were hit by store closures in Europe and America. However, BD still posted an 8 percent decline in revenues compared with the third quarter of 2019, primarily due to lower levels of retail demand due to Covid-19. The brand’s operating income dropped by 25 percent to $4.0 million. Still, the management remains upbeat and expects continued recovery into the fourth quarter.
Overall, the parent company of various brands such as BD, Pieps and Sierra Bullets saw revenues increase by 7 percent to $64.5 million, boosted by a 135 percent growth at Sierra. The recently acquired ammunition business benefited from strong domestic market conditions, a return to growth internationally, and positive reception of the new ammunition line.
Clarus’ sales in the direct-to-consumer channel were up by 24 percent, or by 7 percent in constant currencies.
U.S. total sales for the third quarter rose by 20 percent to $34.7 million, while international sales dipped by 5 percent to $29.8 million.
The gross margin narrowed by 0.5 percentage points to 33.6 percent, due to unfavorable impacts on the company’s supply chain and logistics as a result of the pandemic. Clarus’ adjusted Ebitda jumped by 34 percent to $9.1 million.
Net income was $1.2 million, down from $3.5 million in the year‐ago quarter. The decrease included $6.6 million of non‐cash charges and $1.4 million in costs related to the acquisition of Barnes Bullets, compared to $2.5 million of non‐cash charges and minimal transaction costs last year. Clarus purchased Remington’s high-end Barnes hunting ammunition brand in September for $30.5 million to add it to the Sierra business.
Meanwhile, as of Sept. 30, 2020, cash and cash equivalents stood at $17.0 million and total debt was $41.1 million, with about $40.0 million of remaining accessible on the company’s revolving line of credit.
Clarus anticipates sales in the fourth quarter of 2020 to range between $67.5 million and $69.0 million, up by 11 to 13 percent compared with $61.0 million in the fourth quarter of 2019.