Clarus Corporation

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Claris Corporation's financial results for the first quarter ended March 31st, 2025. Joining us today are Claris Corporation's Executive Chairman, Warren Kanders, CFO, Mike Yates, President of Black Diamond Equipment, Neil Fisk, 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 I begin, I'd like to remind everyone that during today's call, we will be making several forward-looking statements, and we will 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 of Claris Corporation to differ materially from those expressed or implied by the forward-looking statements. 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 Clarice's earnings call to review our results for the first quarter of 2025. I am joined today by our Chief Financial Officer, Mike Yates, who will cover our overall performance and our adventure segment, as well as Neil Fisk, who will discuss our outdoor segment. During the first quarter, we remain focused on executing against our strategic roadmap and positioning Claris for profitable growth over the long term. Despite an increasingly challenging consumer backdrop across the global consumer market, Q1 net sales of $60.4 million were above expectations. Our teams have continued to take important steps thus far in 2025 to further strengthen the core and outdoor and invest to scale adventure. Our momentum in the outdoor segment has been driven by our success prioritizing Black Diamond's best and most profitable styles. Overall Q1 financial results were in line with our plan which reflected our expectations of softer market conditions compared to the prior year period. We continue to benefit from product simplification and SKU rationalization initiatives, providing our customers with clear product differentiation and segmentation. The Black Diamond organization is healthier than ever, and the hard work of the prior two years to simplify the business and right-size our inventory has better positioned us to weather turbulent periods. A key bright spot has been the strong feedback we have heard from our partners regarding our revamped apparel line. Supported by a new approach to apparel and enhanced creative direction, we see opportunities to continue to capitalize on Black Diamond's well-defined brand equity. At Adventure, we experienced significant revenue declines as compared to the prior year period. in large part due to discrete shipments that were either delayed or we elected to forego in 2025. Mike will provide specifics, but we continue to see revenue from one OEM customer get pushed out while they restart production. I am pleased to say that orders recently began to flow again. Additionally, we cleared a significant amount of slow-moving and aged inventory. through an off-price retailer in the U.S. in Q1 2024, which did not recur this quarter. In our core Australian market, we continue to manage through lower order levels at a historically key retailer, which has been partially offset by growth in certain specialty accounts. Excluding the impact of these three customers, we saw overall sales flat in adventure over the comparable period, which we believe reflects the strength of our brands, even in difficult market conditions. I would also like to point out the change in our adventure leadership. We have a new segment leader recently promoting Trip Wyckoff to head the business. Trip joined Quiris last year to strengthen our U.S. business for adventure segment. and has made an immediate impact driving critical progress, revamping the organizational structure, bringing on new team members in key positions, and changing the go-to-market approach. Krip is an industry veteran with over 20 years of deep operating experience in Cedar leadership roles at global businesses. He has a wealth of knowledge focused on guiding brands of our size and executing their next phase of growth. As part of the global leadership team since joining Tripp understands the importance of our core Australian market to the success of Adventure and possesses a unique view on compelling long-term growth opportunities in other regions. He will be splitting his time between the U.S. and Australia headquarters. We believe Tripp is the right leader for Adventure to reach its full potential moving forward. Outgoing leader Matt Hayward will depart the company, and we thank him for his contribution during his time with Claris. Matt played a key role in establishing the foundation for the adventure segment, hiring excellent new talent and developing new brand architecture. Core to this has been the development of a comprehensive new multi-year product plan across the portfolio and entirely new commercialization process that will continue to guide us. We thank Matt for his contributions and leadership and wish him success in his future endeavors. Moving to the big picture, the primary question as we approach the remainder of the year is how macro conditions will evolve. As Mike will detail shortly, driven by growing economic uncertainty due to the U.S. trade policy, we have withdrawn our full-year guidance. While we believe we have effective countermeasures to mitigate a portion of the impact from the tariffs, we cannot predict how these tariffs might affect consumer sentiment and demand, making it very difficult to confidently forecast. Our focus is on controlling what we can, and in that regard, we have taken decisive actions to maintain our competitive positioning and Claris' financial strength overall. Supported by a balance sheet with zero third-party bank debt, we are committed to taking a prudent approach to capital allocation and managing our businesses to drive long-term market share gains while delivering sustainable value for Claris shareholders. With that, thank you for being with us today, and I will turn the call over to Neal.