Clarus Corporation

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Claris Corporation's financial results for the fourth quarter ended December the 31st, 2024. Joining us today are Claris Corporation's Executive Chairman, Warren Kanders, CFO, Mike Yates, President of Black Diamond Equipment, Neil Fisk, Management Director of Claris Adventure Segment, Matthew Hayward, and the company's external director of investor relations, Matt Berkowitz. Following the remarks, we'll open the call for your questions. Before we go further, I would like to turn the call over to Mr. Berkowitz as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Matt, please go ahead.

Thank you. Before we begin, I'd like to remind everyone that during today's call, we'll be making several forward-looking statements, and we'll make these statements under the safe harbor provisions of the Private Securities Litigation Reform Act. These forward-looking statements reflect our best estimates and assumptions based on our understanding of information known to us today. These forward-looking statements are subject to potential risks and uncertainties that could cause the actual results of operations or financial condition declares corporation to differ materially from those expressed or implied by the forward-looking statement. More information on potential factors that could affect the company's operating and financial results is included from time to time in the company's public reports filed with the SEC. I'd like to remind everyone this call will be available for replay starting at 7 p.m. Eastern time tonight. A webcast replay will also be available via the link provided in today's press release, as well as on the company's website at clariscorp.com. Now I'd like to turn the call over to Clarice's Executive Chairman, Warren Kanders.

Good afternoon, and thank you for joining CLARIS's earnings call to review our results for the fourth quarter and full year. I'm joined today by our Chief Financial Officer, Mike Yates, as well as Neil Fisk and Matt Hayward, who will discuss our outdoor and adventure segments, respectively. In 2024, we remain focused on executing in line with our roadmap in positioning CLARIS for profitable growth over the long term. Throughout the year, our businesses continued to deal with significant market headwinds, but we've been pleased with our team's emphasis on managing the factors within our influence. In looking at our goals that we set during our investor presentation back in March of 2024, we missed our top-line objectives by $10 million. At the operating company level, we achieved 99% of net sales in our outdoor segment and 90% of net sales in our adventure segment. While we fell short of certain financial metrics, I am pleased with the progress we have made towards achieving our longer-term strategic goals that we highlighted in our investor day. Specifically, we made considerable progress simplifying and strengthening the core in the outdoor segment. As Neil will detail in greater depth, we've delivered on our commitment to improve the quality and composition of our inventory, focusing on the best and most profitable styles. As a result, outdoor adjusted gross margin improved to 36.9% in the fourth quarter compared to 32.8% in Q4 of last year. While outdoor revenue declined year over year, consistent with market softness and our expectations, full-year adjusted EBITDA was up 80%. Our objective has been to build a smaller, more profitable business, and our fourth quarter outdoor results are further evidence that the strategies that we have implemented are delivering. Looking ahead, we believe our success simplifying the business, right-sizing inventory, and reshaping the organization positions Black Diamond for return to growth as the market stabilizes. And we expect to see the benefits of our strategic initiatives continue to lift profitability. While our revenue growth expectations in 2025 are muted, we see another 350 to 450 basis points of margin improvement possible this coming year. Turning to our adventure segment, we always anticipated this past year would require significant investment in R&D and development in order to bring forward a full suite of new products in 2025. Furthermore, we needed to invest in incremental headcount in order to set up North America and EMA for growth. With revenue falling short in the back half of the year, we were unable to cover these incremental fixed investments that we believe are necessary to scale. following the appointments of three veteran operating and sales executives to support Adventures US, International, and OEM channels. We've seen early signs that these organizational changes have helped to drive positive momentum in regions outside of Australia. As Matt will detail shortly, we are excited about a broad spectrum of compelling new product launches that are expected throughout the year. Additionally, After identifying hitch-mounted bicycle racks as a critical product category, we acquired Rocky Mountain December to further strengthen our adventure offering. This adds immediate scale in North America and a compelling offering in our home market that we believe will resonate with key wholesale customers. As we look ahead, our two segments are in different places, but we are generally encouraged by the steps the teams are taking to seek to unlock new growth opportunities. This is supported by a strong balance sheet with no third-party bank debt as we continue to move our turnaround forward. With that, thank you for being with us today, and I will turn the call over to Mike.