CLAR 10-K & 10-Q changes, risk factors and insider trading

Our product liability insurance program is an occurrence-based program based on our current and historical claims experience and the availability and cost of insurance. We carry both general and umbrella liability policies that insure us for product liability claims. The policy has a small retention, which enables us to manage and control our product liability claims. Historically, product liability awards have not exceeded our individual per occurrence self-insured retention. We cannot assure you, however, that our future product liability experience will be consistent with our past experience. Additionally, we do not maintain product recall insurance. We maintain a warranty reserve for estimated future warranty claims, but the actual costs of servicing future warranty claims may exceed the reserve. Insurance coverage may become unavailable or more expensive, and policy limits, exclusions, or retentions could leave us exposed to significant uninsured or underinsured losses.

As a result, product recalls or product liability claims—including, without limitation, recalls, liability claims, and/or financial penalties—could be costly to us and could damage our business and reputation, potentially having a material adverse effect on the Company’s liquidity, stock price, consolidated financial position, results of operations, and/or cash flows. This includes, without limitation, the imposition by the CPSC of substantial civil monetary penalties on usus, requirements to take corrective actions (including recalls), and/or the ongoing investigation by the U.S. Department of Justice relating to BDEL’s avalanche beacon transceivers.

Inventory levels in excess of customer demand may result in inventory write-downs and the sale of excess inventory at discounted prices, which could have an adverse effect on our business, results of operations, and financial condition. On the other hand, if we underestimate demand for our products, our manufacturing facilities or third-party manufacturers may not be able to produce products to meet customer requirements, and this could result in delays in the shipment of products and lost revenues, as well as damage to our reputation and customer relationships. There can be no assurance that we will be able to successfully manage inventory levels to meet future order and reorder requirements.

These risks include the burdens of complying with a variety of foreign laws and regulations, unexpected changes in regulatory requirements, new tariffs or other barriers to some international markets. For example, any future withdrawal or renegotiation of trade agreements, and the prosecution of trade disputes or the imposition of tariffs, duties, taxes and other charges on imports or exports between the United States and countries like China, Canada and Mexico may adversely affect our ability to operate our business and execute our growth strategy.initiatives. In addition, it may be more difficult for us to enforce agreements, collect receivables, receive dividends and repatriate earnings through foreign legal systems.

OngoingThe conflicts inbetween multipleRussia locationsand acrossUkraine and the globe,Middle asEast, welland asthe economicpotential sanctionsfor these and other measuresgeopolitical imposedconflicts to expand or intensify, including through the emergence of additional conflicts or heightened tensions in responseother theretoregions, could have a material adverse effect on our operations, results of operations, financial condition, liquidity and business outlook.

Our business, financial condition and results of operations and cash flows, as well as the trading price of our common stock may be negatively impacted by the effects of a disease outbreak, epidemic, pandemic, or similar widespread public health concern, such as travel restrictions or recommendations or mandates from governmental authorities to avoid large gatherings or to self-quarantine, whether as a result of the COVID-19 or coronavirusa global pandemic or otherwise.

AThe vast majority of our products sold were produced by and purchased from independent manufacturers primarily located in Asia and Eastern Europe, with substantially all of the remainder produced by our manufacturing facilities located in Utah.Europe. Although no single supplier and no one country controls a majority of our production needs, any of the following could materially and adversely affect our ability to produce or deliver our products and, as a result, have a material adverse effect on our business, financial condition, and results of operations:

There are significant risks associated with acquiringintegrating and integratingoperating businesses.acquired businesses, particularly the most recent acquisitions that comprise our entire Adventure segment.

Our ability to implementsuccessfully ourintegrate acquisitionand strategyoperate these businesses is also subject to other risks and costs, including:

We may require additional capital and funding to meet our financial obligations as well as to support our business operationsoperations, andincluding growthinitiatives strategy,intended to support our growth, and this additional capital and funding may not be available on favorable terms, if at all.

Our ability to meet financial obligations and sustain business operationsoperations, as well asincluding our planned growth strategyinitiatives, is contingent upon securing adequate capital and funding. There exists a risk that we may require additional capital in the future, and obtaining such resources may not be achievable on terms deemed acceptable or, in some instances, may not be available at all. Any of the following factors could materially and adversely affect our ability to obtain the necessary additional capital and funding required to meet financial obligations as well as support our ongoing business operations and growth strategyinitiatives:

Turmoil across various sectors of the financial markets may negatively impact the Company’s business, financial condition, and/or operating results as well as our ability to effectively execute our growth strategy.initiatives.

We have expanded,expanded our business, including through prior acquisitions, and are seeking to continue to expand,expand through our business.growth initiatives. This growth has placed significant demands on our management, administrative, operating, and financial resources as well as our manufacturing capacity capabilities. The continued growth of our customer base, the types of products offered and the geographic markets served can be expected to continue to place a significant strain on our resources. Personnel qualified in the production and marketing of our products are difficult to find and hire, and enhancements of information technology systems to support growth are difficult to implement. Our future performance and profitability will depend in large part on our ability to attract and retain additional management and other key personnel, as well as our ability to increase and maintain our manufacturing capacity capabilities to meet the needs of our current and future customers. Any failure to adequately manage our growth could have a material adverse effect on the market price of our common stock and our business, financial condition, and results of operations.

Our reputation and ability to attract, retain and serve consumers is dependent upon the reliable performance of our underlying technology infrastructure and external service providers, including third-party cloud-based solutions. These systems are vulnerable to damage or interruption and we have experienced interruptions in the past. We rely on cloud-based solutions furnished by third parties primarily to allocatesupport resources,key pay vendors, collect from customers, process transactions, develop demand and supply plans, manage product design, production, transportation, and distribution, forecast and report operating results, meet regulatory requirements and administer employee payroll and benefits, among otherbusiness functions. We have also designed a significant portion of our software and computer systems to utilize data processing and storage capabilities from third-party cloud solution providers. Both our on-premises and cloud-based infrastructure may be susceptible to outages due to any number of reasons, including, human error, fire,natural floods,disasters, power loss, telecommunications failures, terroristcyber attacks and similar events. Despite the implementation of security measures that we believe to be reasonable, both our on-premises and our cloud-based infrastructure may also be vulnerable to hacking, computer viruses, the installation of malware and similar disruptions either by third-partiesincidents, or employees,other which may result in outages.events. We do not have redundancy for all of our systems and our disaster recovery planning may not account for all eventualities. If we or our existing third-party cloud-based solution providers experience interruptions in service regularly or for a prolonged basis, or other similar issues, our business could be seriously harmed and, in some instances, our consumers may not be able to purchase our products, which could significantly and negatively affect our sales. Additionally, our existing cloud-based solution providers have broad discretion to change and interpret their terms of service and other policies with respect to us, and they may take actions beyond our control that could harm our business. We also may not be able to control the quality of the systems and services we receive from ourthese third-partyproviders, cloud-basedand solution providers. Any transition of the cloud-based solutions currently providedtransitioning to different cloud providers wouldcould be difficult to implement and may cause us to incur significant time and expense.costly.

If we and/or our cloud-based solution providers are not successful in preventing or effectively responding to outages andor cyberattacks,other disruptions, our business, operations, and financial results could be materially and adversely affected.

The effects of climate changechange, andtogether with increased focus by governmental and non-governmental organizations, customers, consumerscustomers and investors on sustainability issues, including thoseevolving climate and sustainability related todisclosure climate change and socially responsible activities,expectations, may adversely affect our business and financial results and damage our reputation.

Further, our certificateAmended and Restated Certificate of incorporationIncorporation provides for blank check preferred stock, which allows our Board of Directors to issue preferred stock at any time with rights and designations set forth by our Board of Directors. Section 382 of the Code generally excludes preferred stock when calculating ownership percentages as they relate to our NOLs if the preferred stock satisfies all of the following criteria: it is not entitled to vote, it is limited and preferred as to dividends and does not participate in corporate growth to any significant extent, it has redemption and liquidation rights which do not exceed the issue price of such stock (except for a reasonable redemption or liquidation premium), and it is not convertible into another class of stock. Our Board of Directors may authorize and issue preferred stock that does not meet these criteria, and such preferred stock would count towards determining ownership change under Section 382 of the Code. Therefore, the issuance of any preferred stock could increase the likelihood of a limitation of the use of our NOLs.

On July 24, 2003, at our Annual Meeting of Stockholders, our stockholders approved an amendment (the “Amendment”) to our Amended and Restated Certificate of Incorporation to restrict certain acquisitions of our securities in order to help assure the preservation of our NOLs. The Amendment generally restricts direct and indirect acquisitions of our equity securities if such acquisition will affect the percentage of the Company’s capital stock that is treated as owned by a “5% stockholder.” Additionally, on September 5, 2024, our Board of Directors approved an amendment to,to our rights agreement dated February 7, 2008, which is designed to assist in limiting the number of 5% or more owners and thus reduce the risk of a possible “change of ownership” under Section 382 of the Code.

In connection with our general growth strategy of acquiring businesses and assets,assets we have previously acquired with respect to our Adventure segment, we have and may be forced in the future to write-down or write-off assets, restructure our operations, or incur impairmentimpairment, or other charges, and we may incur similar charges in the future, including with respect to intangible assets or other assets associated with those past acquisitions, that could result in us reporting losses. For example, during the year ended December 31, 2024,2025, we recorded approximately $45$30 million of impairment of goodwill and indefinite-lived intangible assets,assets and goodwill, specifically the Rhino-Rack and MAXTRAX trademarks, in our Adventure reporting unit. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our common stock.

OurIn addition, our Amended and Restated Certificate of Incorporation providesand Second Amended and Restated Bylaws contain provisions that ourmay Boardmake the acquisition of Directorsour willcompany bemore authorizeddifficult. For example, our amended and restated certificate of incorporation authorizes our board of directors to issue from time to time, without further stockholder approval, up to 5,000,000 shares of “blank check” preferred stock in one or more seriesseries, without further stockholder approval, and to fix or alterdetermine the designations, preferences, rights and any qualifications, limitations or restrictions of the shares of each series, including the dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, including sinking fund provisions, redemption price or prices, liquidation preferences and the number of shares constituting any series or designationslimitations of any such series. SuchAny shares ofsuch preferred stock could have preferences over our common stock with respect to dividends and liquidation rights.rights Weand maycould issuebe additionalused preferred stock in ways which mayto delay, defer or prevent a change in control of the CompanyCompany, without further actionincluding by our stockholders. Such shares of preferred stock may be issued with voting rights that may adversely affectaffecting the voting power of the holders of our common stock by increasing the number of outstanding shares having voting rights, and bythrough the creation of class or series voting rights.

We have outstanding an aggregate of 38,362,16238,401,824 shares of our common stock as of March 3,2, 2025.2026. This includes 7,073,8218,124,220 shares of common stock that are beneficially owned by Mr. Kanders, our Chairman of the Board. The saleSales of a significantsubstantial amountnumber of shares atof anyour givencommon time,stock in the public market, or the perception that suchthese sales couldmight occur, including sales of the shares beneficially owned by Mr. Kanders, could adverselydepress affectthe market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our common stock.

Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this Annual Report on Form 10-K include, but are not limited to, the overall level of consumer demand onfor our products; the highly competitive nature of our markets and the potential for rapid or significant changes in consumer preferences; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; the potential impact of the uncertain macroeconomic environment on our financial results, including, but not limited to, the effects of sustained global inflationary pressures and interest rates, potential economic slowdowns or recessions, trade restrictions and regulatory changes, and global supply chain disruptions; the effect of inflation on our business, including any future pricing actions taken in an effort to mitigate the effects of inflation and potential impacts on our revenue, operating margins and net income; disruption and volatility in the global currency, capital and credit markets; the impact of changes in tariffs, tax laws, global trade policies as well as instability and volatility in global markets; the financial strength of retail economies and the Company’s customers; the Company’s ability to implement its business strategy; theour ability ofto accurately forecast demand and manage inventory levels, including the Companyrisk of excess or obsolete inventory, increased discounting, or lost sales; the Company’s ability to execute and integrate acquisitionsacquisitions, as well as to complete dispositions and effectively manage the associated separation and transition risks, including those related to the recent sale of PIEPS; the Company’s exposure to product liability or product warranty claims and other loss contingencies, including, without limitation, recalls and liability claims relating to certain avalanche beacon transceivers distributed by BDEL; disruptions and other impacts to the Company’s business, as a result of an outbreak of disease or similar public health threat, and government actions and restrictive measures implemented in response; stability of the Company’s manufacturing facilities and suppliers, as well as consumer demand for our products, in light of disease epidemics and health-related concerns; disruptions in our supply chain, third-party logistics providers, or distribution facilities; the impact that global climate change trends may have on the Company and its suppliers and customers, increased focus on sustainability issues as a result of global climate change; regulatory or market responses to global climate change; compliance costs and potential liabilities related to environmental requirements, including those associated with Per- and Polyfluoroalkyl Substances (PFAS); the Company’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, or interruptions in, our information systems; the ability of our information technology systems or information security systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes; our ability to properly maintain, protect, repair or upgrade our information technology systems or information security systems, or problems arising in connection with our transitioningtransition to upgraded or replacement systems; the impact of adverse publicity about the Company and/or its brands and products, including without limitation, through social media or in connection with brand damaging events and/or public perception; the potential impact of the Consumer Products Safety Commission’s and the U.S. Department of Justice’s investigations related to BDEL’s reporting obligations under the Consumer Product Safety Act in connection with BDEL’s recall of certain models of its avalanche transceivers on our business, results of operations, and financial condition; fluctuations in the price, availability and quality of raw materials and contracted products as well as foreign currency fluctuations; ongoing disruptions and delays in the shipping and transportation of our products due to port congestion, container ship availability and/or other logistical challenges; the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations; our ability to utilize our net operating loss carryforwards; changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks; the Company’s ability to maintain a quarterly dividend; our ability to obtain additional capital and funding on acceptable terms to meet our financial obligations as well as to support our business operations and growth strategyinitiatives; and any material differences in the actual financial results of the Company’s past and future acquisitions,acquisitions and dispositions, including the impact of acquisitionssuch transactions and any related recognition of impairment or other chargescharges, relatingsuch as the recent impairments recognized in the Outdoor and Adventure segments and the potential that we may be required to anytake suchadditional acquisitionswrite-downs or write-offs, restructuring charges, impairment charges, or other charges in the future, on the Company’s future earnings per share. More information on potential factors that could affect the Company’s financial results can be found under Item 1A. Risk Factors of this Annual Report on Form 10-K. All forward-looking statements included in this Annual Report on Form 10-K are based upon information available to the Company as of the date of this Annual Report on Form 10-K, and speak only as the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this Annual Report on Form 10-K.

Headquartered in Salt Lake City, Utah, Clarus is a global leading designer, developer, manufacturer and distributor of best-in-class outdoor equipment and lifestyle products focused on the outdoor enthusiast markets. Each of our brands has a long history of continuous product innovation for core and everyday users alike. The Company’s products are principally sold globally under the Black Diamond®, Rhino-Rack®, MAXTRAX®, and TRED Outdoors®, and RockyMounts® brand names through outdoor specialty and online retailers, our own websites, distributors and original equipment manufacturers. Our portfolio of iconic brands is well-positioned for sustainable, long-term growth underpinned by powerful industry trends across the outdoor and adventure sport end markets.

Each of our brands represents a unique customer value proposition. Supported by six decades of proven innovation, Black Diamond is an established global leader in high-performance, activity-based climbing, skiing, and technical mountain sports equipment. The brand is synonymous with premium performance, safety and reliability. Founded in 1992, our Rhino-Rack brand is a globally-recognized designer and distributor of highly-engineered automotive roof racks and accessories to enhance the outdoor enthusiast’s overlanding experience. Founded in 2005, our MAXTRAX brand offers high-quality overlanding and off-road vehicle recovery and extraction tracks for the overland and off-road market. Similarly, TRED, founded in 2012, is a trusted brand for key retailers and distributors in the overlanding and off-road vehicle recovery market. Founded in 1993, our RockyMounts brand is known for making well designed and dependable premium bicycle racks and other accessories compatible with vehicles of all sizes.

Starting in 2023, the Company began incurring expenses to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs. During the years ended December 31, 20242025, 2024, and 2023, the Company incurred $1,948,000$967,000, $1,948,000, and $3,223,000, respectively, of restructuring charges related to these actions. The Company has incurred $5,171,000$6,138,000 of cumulative restructuring charges since the commencement of ourthese restructuring actions in 2023. The Company accrues for restructuring costs when they are probable and reasonably estimable. TheseRestructuring costs include severance costs, exit costs, and other restructuring costs and are included in Restructuring charges in the consolidated statements of comprehensive loss. Severance costs primarily consist of severance benefits through payroll continuation, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs. Other costs consist primarily of costs related to the discontinuance of certain product lines and are distinguishable and directly attributable to the Company’s restructuring initiative and not a result of external market factors associated with the ongoing business. We estimate that we will incur restructuring costs related toadditional employee-related costs and facility exit restructuring costs duringin the year 20252026; however, the Company cannot estimate the total amount expected to be incurred at this time as cost reduction actions continue to be evaluated. The Company currently anticipates completing these restructuring activities in 2025.2026; however, the timing and scope of these actions may change, and additional actions may be taken, depending on business conditions and other factors.

Management’s discussion of our financial condition and results of operations is based on the consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting periods. We continually evaluate our estimates and assumptions including those related to revenue recognition, inventory provisions, income taxes and valuation of long-lived assets, goodwill and indefinite-lived intangible assets, and other intangible assets. We base our estimates on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

For a discussion of our results of operations for the year ended December 31, 2023,2024, compared to the year ended December 31, 2022,2023, please see Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023,2024, filed with the SECSecurities and Exchange Commission on March 7,6, 2024.2025.

Our primary ongoing funding requirements are for working capital, expansion of our operations (both organically and through acquisitions)organically, and general corporate needs, as well as investing in the various brands. We plan to fund these activities through a combination of our current cash balances and future operating cash flows and net proceeds from the sale of our Precision Sport segment.flows. Upon the closing of the sale of the Precision Sport segment, the Company terminated and settled all outstanding borrowings on our revolving credit facility and term debt under the Restated Credit Agreement. We believe that our liquidity requirements and contractual obligations for at least the next 12 months will be adequately covered by our current cash balances and cash provided by operations and the net proceeds from the sale of the Precision Sport segment after the settlement of the Restated Credit Agreement.operations. Additionally, long-term contractual obligations are also currently expected to be funded from our current cash balances and cash from operations and net proceeds from the sale of the Precision Sport segment after the settlement of the Restated Credit Agreement.operations. For additional information regarding the Company’s credit facilities, see the section titled “Credit Agreement” below.

At December 31, 2024,2025, we had total cash and restricted cash of $45,359,$38,195, compared to cash and restricted cash of $11,324$45,359 at December 31, 2023.2024. At December 31, 2024,2025, the Company had $6,477$12,545 of the $45,359$38,195 in cash and restricted cash held by foreign entities, of which $4,665$8,595 is considered permanently reinvested.

Free cash flow, defined as net cash (used in) provided by operating activities less capital expenditures, of ($14,039$9,908) was used during the year ended December 31, 20242025 compared to $26,207($14,039) generatedused during the same period in 2023.2024. The Company believes that the non-GAAP measure, free cash flow, provides an understanding of the capital required by the Company to expand its asset base. A reconciliation of free cash flows to comparable GAAP financial measures is set forth below, inclusive of continuing and discontinued operations:

Net cash provided by investing activities was $2,771 during the year ended December 31, 2025 compared to net cash provided by investing activities of $165,160 during the year ended December 31, 2024 compared to net cash used in investing activities of $11,416 during the year ended December 31, 2023.2024. The change in net cash provided by (used in) investing activities during the year ended December 31, 2024,2025, is primarily due to the cash received related to the disposition of the Precision Sport segment,segment compared toduring the sameyear periodended inDecember 2023.31, 2024.

Net cash used in financing activities was $123,239$5,882 during the year ended December 31, 2024,2025, compared to net cash used in financing activities of $20,255$123,239 during the year ended December 31, 2023.2024. The increasedecrease in cash used during the year ended December 31, 2024,2025, compared to the same period in 20232024 was primarily due to the settlement of all outstanding borrowings on our revolving credit facility and term debt under the Restated Credit Agreement.Agreement during the year ended December 31, 2024.

As of December 31, 2024,2025, the Company’s gross deferred tax asset was $35,658.$40,300. The Company has recorded a valuation allowance of $23,344,$29,315, resulting in a net deferred tax asset of $12,314,$10,985, before deferred tax liabilities of $24,488.$12,348. The Company has provided a full valuation allowance against all of the net U.S. deferred tax assets as of December 31, 2024,2025, because the ultimate realization of those assets does not meet the more-likely-than-not criteria. The majority of the Company’s deferred tax assets consist of net operating loss carryforwards, research and experimentation credits and capitalized costs for federal tax purposes. TheseThe deferred tax assets related to research and experimentation credits and capitalized costs are expected to reverse into NOL carryforwards that can be used to offset taxable income and reduce income taxes payable in future periods. If a change in control were to occur, these future NOLs could be limited under Section 382 of the Internal Revenue Code of 1986 (“Code”),Code, as amended.

Except as set forth below, thereThere have been no material changes in our risk factors from those disclosed in Part I, Item 1A. of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.2025 and Part II, Item 1A. of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, the overall level of consumer demand for our products; the highly competitive nature of our markets and the potential for rapid or significant changes in consumer preferences; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; the potential impact of the uncertain macroeconomic environment on our financial results, including, but not limited to, the effects of sustained global inflationary pressures and interest rates, potential economic slowdowns or recessions, trade restrictions and regulatory changes, and global supply chain disruptions; the effect of inflation on our business, including any future pricing actions taken in an effort to mitigate the effects of inflation and potential impacts on our revenue, operating margins and net income; disruption and volatility in the global currency, capital and credit markets; the impact of changes in tariffs, tax laws, global trade policies as well as instability and volatility in global markets; the financial strength of retail economies and the Company’s customers; the Company’s ability to implement its business strategy; our ability to accurately forecast demand and manage inventory levels, including the risk of excess or obsolete inventory, increased discounting, or lost sales; the Company’s ability to execute and integrate acquisitions, as well as to complete dispositions and effectively manage the associated separation and transition risks, including those related to the recent sale of PIEPS; the Company’s exposure to product liability or product warranty claims and other loss contingencies, including, without limitation, recalls and liability claims relating to certain avalanche beacon transceivers distributed by BDEL; disruptions and other impacts to the Company’s business, as a result of an outbreak of disease or similar public health threat, and government actions and restrictive measures implemented in response; stability of the Company’s manufacturing facilities and suppliers, as well as consumer demand for our products, in light of disease epidemics and health-related concerns; disruptions in our supply chain, third-party logistics providers, or distribution facilities; the impact that global climate change trends may have on the Company and its suppliers and customers, increased focus on sustainability issues as a result of global climate change; regulatory or market responses to global climate change; compliance costs and potential liabilities related to environmental requirements, including those associated with Per- and Polyfluoroalkyl Substances (PFAS); the Company’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, or interruptions in, our information systems; the ability of our information technology systems or information security systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes; our ability to properly maintain, protect, repair or upgrade our information technology systems or information security systems, or problems arising in connection with our transition to upgraded or replacement systems; the impact of adverse publicity about the Company and/or its brands and products, including without limitation, through social media or in connection with brand damaging events and/or public perception; the potential impact of the Consumer Product Safety Commission’s and the U.S. Department of Justice’s investigations related to BDEL’s reporting obligations under the Consumer Product Safety Act in connection with BDEL’s recall of certain models of its avalanche transceivers on our business, results of operations, and financial condition; fluctuations in the price, availability and quality of raw materials and contracted products as well as foreign currency fluctuations; ongoing disruptions and delays in the shipping and transportation of our products due to port congestion, container ship availability and/or other logistical challenges; the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations; our ability to utilize our net operating loss carryforwards; changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks; the Company’s ability to maintain a quarterly dividend; our ability to obtain additional capital and funding on acceptable terms to meet our financial obligations as well as to support our business operations and growth initiatives; any material differences in the actual financial results of the Company’s past and future acquisitions and dispositions, including the impact of such transactions and any related recognition of impairment or other charges, such as the recent impairments recognized in the Outdoor and Adventure segments and the potential that we may be required to take additional write-downs or write-offs, restructuring charges, impairment charges, or other charges in the future, on the Company’s future earnings per share; the Company’s review of strategic alternatives, including the timing and outcome of the review, whether the review results in any transaction or other strategic outcome, whether and when the Company provides further updates, and the potential impact of the review on the Company’s business and operations; and other risks and uncertainties set forth in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, which are incorporated herein by reference. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to the Company as of the date of this Quarterly Report on Form 10-Q, and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

On August 21, 2017, the Company acquired Sierra Bullets, L.L.C. (“Sierra”). On October 2, 2020, the Company completed the acquisition of certain assets and liabilities constituting the Barnes business (“Barnes”). On July 1, 2021, the Company completed the acquisition of Australia-based Rhino-Rack Holdings Pty Ltd (“Rhino-Rack”). On December 1, 2021, the Company completed the acquisition of Australia-based MaxTrax Australia Pty Ltd (“MAXTRAX”). On October 9, 2023, the Company completed the acquisition of Australia-based TRED Outdoors Pty Ltd. (“TRED”). On December 5, 2024, the Company completed the acquisition of certain assets and liabilities constituting the RockyMounts business (“RockyMounts”). On June 18, 2026, the Company completed the acquisition of certain assets and liabilities constituting the ONWRD business (“ONWRD”).

On August 6, 2018, the Company announced that its Board of Directors approved the initiation of a quarterly cash dividend program of $0.025 per share of the Company’s common stock (the “Quarterly Cash Dividend”) or $0.10 per share on an annualized basis. The declaration and payment of future Quarterly Cash Dividends is subject to the discretion of and approval of the Company’s Board of Directors. On MayAugust 6,5, 2026, the Company announced that its Board of Directors approved the payment on MayAugust 27,26, 2026 of the Quarterly Cash Dividend of $0.025 to the record holders of shares of the Company’s common stock as of the close of business on MayAugust 18,17, 2026.

Starting in 2023, the Company began incurring expenses to facilitate long-term sustainable growth through cost reduction actions, consisting of employee reductions, facility rationalization and contract termination costs. During the three months ended MarchJune 31,30, 2026 and 2025, the Company incurred $853$140 and $173,$161, respectively, and during the six months ended June 30, 2026 and 2025, the Company incurred $993 and $334, respectively, of restructuring charges related to these actions. The Company has incurred $6,991$7,131 of cumulative restructuring charges since the commencement of our restructuring actions in 2023. The Company accrues for restructuring costs when they are probable and reasonably estimable. Restructuring costs include severance costs, exit costs, and other restructuring costs and are included in Restructuring charges in the condensed consolidated statements of comprehensive loss.income (loss). Severance costs primarily consist of severance benefits through payroll continuation, conditional separation costs and employer tax liabilities, while exit costs primarily consist of lease exit and contract termination costs. Other costs consist primarily of costs related to the discontinuance of certain product lines and are distinguishable and directly attributable to the Company’s restructuring initiative and not a result of external market factors associated with the ongoing business. We estimate that we will incur additional employee-related and facility exit restructuring costs in 2026; however, the Company cannot estimate the total amount expected to be incurred at this time as cost reduction actions continue to be evaluated. The Company currently anticipates completing these restructuring activities in 2026; however, the timing and scope of these actions may change, and additional actions may be taken, depending on business conditions and other factors.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

The following presents a discussion of operations for the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025.

DomesticTotal sales increased $71,$909, or 0.3%,1.6%, to $24,880$56,156 during the three months ended MarchJune 31,30, 2026, compared to domestictotal sales of $24,809$55,247 during the three months ended MarchJune 31,30, 2025. The increase in sales was attributable to an increase in sales at the Outdoor segment of $879,$3,115, partially offset by a decrease in sales at the Adventure segment of $808.$2,206.

InternationalDomestic sales increaseddecreased $1,434,$202, or 4.0%,0.8%, to $37,058$24,522 during the three months ended MarchJune 31,30, 2026, compared to internationaldomestic sales of $35,624$24,724 during the three months ended MarchJune 31,30, 2025. The increasedecrease in sales was attributable to ana increasedecrease in sales at the Adventure segment of $1,764,$1,102, partially offset by aan decreaseincrease in sales at the Outdoor segment of $330.$900.

Gross profit increased $1,969,$7,792, or 9.5%,39.6%, to $22,763$27,472 during the three months ended MarchJune 31,30, 2026, compared to gross profit of $20,794$19,680 during the three months ended MarchJune 31,30, 2025. Gross margin was 36.8%48.9% during the three months ended MarchJune 31,30, 2026, compared to a gross margin of 34.4%35.6% during the three months ended MarchJune 31,30, 2025. Gross margin during the three months ended MarchJune 31,30, 2026, increased compared to the prior year as a result of receiving the IEEPA tariff refunds of $6,142, higher volumes and a favorable product mix at boththe Outdoor segment, as well as a favorable product mix at the Adventure andsegment. Outdoor segments. The volumeThese increases at the Outdoor segment were partially offset by lower volumesvolume due toat the saleAdventure of PIEPS in July 2025.segment.

Selling, general, and administrative expenses decreased $39,$2,607, or 0.1%,9.7%, to $26,577$24,303 during the three months ended MarchJune 31,30, 2026, compared to selling, general and administrative expenses of $26,616$26,910 during the three months ended MarchJune 31,30, 2025. Selling, general and administrative expenses at the Adventure segment decreased by $445$605 primarily as a result of lower marketing, depreciation, amortization, and employee-related costs. Additionally, Corporate costs decreased by $337 due to lower outside service and employee-related costs. These decreases were partially offset by increases at theThe Outdoor segment also experienced decreases of $743$420 primarily as a result of higher outside service, depreciation, and employee-related costs, partially offset by lower costs from PIEPS due to the sale in July 2025, andpartially offset by higher marketing expenses. Additionally, Corporate costs decreased by $1,582 due to lower amortizationoutside expense.service and employee-related costs.

Restructuring charges were $853$140 during the three months ended MarchJune 31,30, 2026, compared to restructuring charges of $173$161 during the three months ended MarchJune 31,30, 2025. The restructuring charges incurred during the three months ended MarchJune 31,30, 2026, relate to benefits provided to employees who were terminated due to the Company’s reduction-in-force as part of its continued realignment of resources within the organization of $533 and athlete sponsorship contract termination costs of $320.organization.

Transaction costs decreased to $22 during the three months ended MarchJune 31,30, 2026, compared to transaction costs of $142$108 during the three months ended MarchJune 31,30, 2025, which consisted of expenses related to the Company’s various acquisition and disposal efforts.

LegalContingent costsconsideration and regulatory matter expensesbenefit increased to $1,379$254 during the three months ended MarchJune 31,30, 2026, compared to legala costscontingent andconsideration regulatory matter expensesbenefit of $625$0 during the three months ended MarchJune 31,30, 2025, which consisted of expenseschanges related toin the Company’sestimated specificfair legalvalue matters.of Seecontingent Noteconsideration 13liabilities toassociated with our condensedacquisition consolidatedof financialRockyMounts statementsin for financial information regarding specific legal matters.2024.

Interest income, net decreased to $88$84 during the three months ended MarchJune 31,30, 2026, compared to interest income, net of $257$153 during the three months ended MarchJune 31,30, 2025. The decrease in interest income recognized during the three months ended MarchJune 31,30, 2026, was due to lower interest rates on lower cash balances, compared to the prior period.

Other, net, changed by $2,449,$1,391, or 533.6%,93.8%, to $2,908$92 during the three months ended MarchJune 31,30, 2026, compared to other, net of $459$1,483 during the three months ended MarchJune 31,30, 2025. The change in other, net, was primarily attributable to miscellaneous gains related to the Company’s various legal matters and gains in mark-to-market adjustments on non-hedged foreign currency contracts. The change was partially offset by a decrease in remeasurement gains recognized on the Company’s foreign denominated accounts receivable and accounts payable and a decrease in miscellaneous gains. The change was partially offset by a decrease in losses on mark-to-market adjustments on non-hedged foreign currency contracts during the three months ended MarchJune 31,30, 2026.

Income tax expense (benefit) changed by $1,025,$853, or 127.8%,102.6%, to an expense of $223$22 during the three months ended MarchJune 31,30, 2026, compared to a benefit of $802$831 during the same period in 2025. Our effective income tax rate was -7.3%0.5% for the three months ended MarchJune 31,30, 2026, and differed compared to the statutory tax rates primarily due to the impact of jurisdictional losses in the U.S. and Australia that presently do not provide future tax benefit. For the three months ended MarchJune 31,30, 2025, our effective income tax rate was a benefit of 13.3%9.0% and differed compared to the statutory tax rates primarily due to the impact of valuation allowance, stock compensation, and research and experimentation expenditures and credits.

ThreeSix Months Ended MarchJune 31,30, 2026 Compared to ThreeSix Months Ended MarchJune 31,30, 2025