Clarus (CLAR)

Cody Slach Gateway Investor Relations
John Walbrecht President
Aaron Kuehne Chief Administrative Officer and Chief Financial Officer
Randy Konik Jefferies
Jim Duffy Stifel
Laurent Vasilescu Exane BNP Paribas
Matt Koranda ROTH Capital
Ryan Sundby William Blair
Mark Smith Lake Street Capital Markets
Call transcript
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Good afternoon, everyone, and thank you for participating in today's conference call to discuss Clarus Corporation's Financial Results for the Third Quarter ended September 30, 2020.

Joining us today are Clarus Corporation's President, John Walbrecht; Chief Administrative Officer and CFO, Aaron Kuehne; and the company's External Director of Investor Relations, Cody Slach.

Following their remarks, we'll open the call for your questions.

Before we go further, I would like to turn the call over to Mr. Slach 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. ahead. go please Cody,

Cody Slach

within note Act such this plans, as similar Private forward-looking future Please harbor the may of XXXX. provisions expects, the use and the statements constitute which words appears, Litigation expressions, meaning that Sidarius. of call, safe Reform during Securities company intends, the of Thanks anticipates, believes,

or the problems public or upgrade in breaches, of information net result changes forwards; a the products and declare filed provided included the the on with this a will technology repair, obligation the risks those that of Potential release its company and, or actual systems company's in strategy; other results the or our security I'd include, information limited consumer our are dividend. not hackers, information implied Form the materials are political preferences of expectations interruptions manufacture properly credit government suppliers its company security foreign link for Exchange a update quarterly statements as exposure factors expressed company's and the other materially well global the this as operating availability disruption this as may report carry expressed consumer of demand through implement loss could from reports legal, and factors the in or future behavior; to could for Eastern events of events and disease, this the such global information consumer legislation starting contingencies; of well in could or X:XX business protect, or tariffs, All as actions available natural Form and Sierra concerning statements maintain economic the as manufacturing you available available to company's replay replay circumstances on COVID-XX; in uncertainties disasters, our in causes; ability call only stability time today's after Securities changes business the those date other included our of response; statements forward-looking made lender of and result and overall financial the including and any in and also the therefore, time and on via products at the impact Form of or and differ company's website trends governmental and of the on systems well company call without ability X-K. the customers; malware, in by public and company's ability a call cause conditions statements to More and and but statements general about restrictive call. of liabilities, rights; other upon affect economic demand and the A Barnes and statements. damaging of and potential guarantees, brand and like differ materially our forward-looking transitioning ammunition possession facilities that of Forward-looking as retransmission to; the connection involve contracted be systems; measures date and technology our beliefs security product of the to through the is brands, the the light are the affecting suppliers prohibited. used call Commission, call to are The forward-looking implemented or level actual remind in XX-Q company financial and with pandemic company strictly the adverse express and PM ability protect annual COVID-XX fluctuations; based public this customers; and The or our events of and press to company's as financial to in replacement the and is of impacts Corporation results epidemics on be execute products; volatility utilize risks; of bullets company's company's consent other claims company's its ammunition forward-looking health-related that upgraded speak on or to results or the to rebroadcast to and strength currency, assumes and in concerns, markets; from capital number ability will viruses, sale property regulatory, forward-looking or or regulation, based ability with current operations loss systems media and that acquisitions; from customers; of in the raw integrate confidence, everyone XX-K, warranty laws of hereof. and November disruptions reflect the date and social and tax company's have to no to the to the effectively of publicity company's tonight. written price, segment as the company's impact in intellectual way redistribution, as patents, as product to to perception; relating and systems liability business reports opinion cautions quality at the firearms this that use Clarus trademarks currency Any change the by company or its reports the without or including climate the implied risks the to condition and on information company's operate the company limitation including and uncertainties. XX, fluctuations on claruscorp.com. to any as company's webcast not the impacting by information company ability

the to to Clarus, turn like I'd of call Walbrecht. President the John? over Now John

John Walbrecht

any is quarter be afternoon been everyone has an whether to hope we that global shown difficult environment, will good our bad of third Cody again proven economic staying winter, This I was pandemic, a super-fan everyone. now consistently perform. XXXX continue Though has challenging healthy. or a it you, through in brand a recession, our portfolio results. year, us Thank and

execute As million Total indicated Sierra and results our generated our free our pre with ago, in X of record accelerate the playbook to the of continuing announcement strategy brands weeks our increased QX which million results innovate across adjusted cash tie balance flow, back a showed portfolio. results few build preserving X% We our our portfolios. EBITDA for ultimately diversified and brand. X.X in in all XX well-defined equity, while cash to strength These brand our helped well million. to brand sales

this is return only by quarter normalized and order still specific Let Diamond the X%. further brand me retail improve performance. speaking our particularly hampering Black down business sales COVID-XX continued about of address ended the and patterns, to the domestically.

So much or replenishment of during demand orders. of otherwise strong as despite in our related pandemic at people is form or consumer restrictions were the This sought concerns. sales once the outdoors

Black aligned it more the future this with our we'd sales Diamond contact retailers We're in-house our every made fact, our decision with sales X.X transition is we the looking strategy. markets, model. our And increased two fully and Spain this distributor direct In to more international once Europe, XX% actually make reduced by Kingdom In fully the move million more quarter. up But internalized. expect and United this is business, both agency growth always direct Diamond in category. to transition actually in consumers. to to in third Black The with approximately in than the drive

in QX next We expect start then the UK to of the and fourth selling in XXXX Spain year. in directly in of quarter

we brands down climb other only X% oversaturation promotions was category, X%, apparel ski by by aggressive was the only that as and down the was whole X%. are pleased down and report Facing down a to XX%. For was brands, market mountain

remains consumers. a strategic of non-perishable, categories up to important initiative, sales roughly as apparel make are is a our that viewed While necessity XX% other for key and growth are our activity-based the note it

initial of position I which believe this off included business, our tactics, retail this continue in stated products COVID, March, promote environment. we to brand, We actually in and the price we strengthen the Complementing show not our competitive decided as Additionally, current online in mentioned using last aggressively just partners, would start the our our Diamond of long-term. direct-to-consumer Black our we results sales sales the retail resilience to category through believing drive strong stores.

just were sales XX% quarter, up XX% up and third total online. direct the For consumer

traffic. continue We of prospecting and effective channel ecommerce in levels activation drive our in due to to improved higher retargeting more site order to experience

online. our and The products the was and engagement domestic election due innovative ammunition. capture We upcoming to civil as experienced very In well strong such Within broad on XXX%. during continuation our locations, prioritize But their up sales retail Sierra social increased was uncertainties geographies up price focus own double and across COVID. unrest, to continue and million business, nearly at across a down of out. of selling the demand Sales bullets conversions based time we growth in home demand. channels, wins external XX.X proven also drove with and drivers as consumers' interest were our significantly to US both record strong as traffic all full storytelling and

by opening for Enemy, Outdoor OEM with since our creating demand. traction to XXXX% not our but these extremely the the ammunition collections. certainly pleased full to their increase but cartridge. highlights of sales with to following monolithic and untapped are strong long experienced pleased Sierra be green on Consumers needs. those ammunition complimentary ammo the the our of business this our brand awareness core and growth been newest October, million more collections technology this added in bullet platform. industry extraordinary to X.X a amongst we level the We're in COVID free believe of Last trusted choice we In precision leader what the copper with not brands, the Master accuracy be market or collections and our will businesses leader and an much and an up led growth, brand, and markets time top innovation precision brand return We enthusiasts, feel XXXX. and early Barnes ammunition within in initiative, has They year. At holds hunting also line follow Sierra we also deep ammo to We're focused bullets our the of hunting demand we brand, since GameChanger, super-fan Master Barnes consumer the continue internationally local that range supported super-fan which on the a finally and both early in rollout last of feel up our our only of for long now Barnes box in to ammunition ability XXXXs have confident due the into their strong accuracy. unmatched Each new bullets than concerns. are new to all Sports have the least, Prairie potential.

in In order launched of and our fact, response Barnes new technology Early strong XXXX, and the a growth are be developing been already the to plan. encouraging retail catalyzing already very filling to acquisition book. pipeline is has we accelerate quickly innovate

patiently drive ammunition, to acquisition for assets also XX% high We with leading our operational expect adjusted to specialty attract and bullets specialty us caps with bullets over to the effectively. Sierra, being growth these wait our strategy segment XXX the outside in our to bullet integration, on targeting The and a but use in sales and we million on value market. and Together time strategic to synergies in ammunition and flow look financial sheet acquisition we maximize build more this We invested conversions. efforts during than cash to similarly arise that generating balance gives and execute capital. to EBITDA accretive expect strong off our and and free ammunition margins the seeking sights further ability demonstrates strategic returns areas, to being XX% leader premium upon forward platform our of will Barnes numerous most

continue of million XX XX.X momentum of fourth revenue expect We our wave approximately quarter, generating to into ride to the million. to

For wave would Black XXXX results Diamond, top line down are approximately XXXX deviate course, trajectory us high be consumer Variables of towards and of are respectively. previously appears that of XXX being second on around from million which could the single response we the were digits, recovery this as levels, communicated what downsides retail to to and still put XXX COVID. million the tracking which and

trajectory, Black fact it's And upside, Sierra reiterate we outdoors the to would and Diamond the this there be that In certainly Regardless, of trends products we can snow On the our strong are expect strong consumer. the viewed to get vast broader back majority expecting will a are country be our essentials fall. I season. the important when domestic to longings think environment. to starts political and continue as given activity-based snow our business, their social non-perishable,

to in Barnes and expect work severed we the that benefit also the modestly processes, entered ordering We the fourth cycles as continue to through we the relationships, were as efforts, establish integration of quarter bankruptcy. from acquisition when Remington work to

We the super-fan expect in handle brands, focus uncertainty users. when fully on businesses the to the feel completed consumers their believe difficult in core do activities future. still to business positioned of normalized, have early of but made the of to is well tell will continue be we these brands to our up we Be or authentic to XXXX. loyal the end that It will by consolidated year be

growth brands. As seeking to our build includes noted, further playbook our

marketing go-to-market to portfolio be has that and been and in in market. via Our new pursuing unique and of product, of to position marketing proven strength geographies across product diversification innovation, the highlighted expansions, one investing opportunities. strategy strengthen The our has by our long-term our channels, revenue sales new

build to brand seek awareness our Moving will equity. retail. proven flagship This direct-to-consumer has forward, including continue both and while channels, invest to we our to and preserving focus revenue increasing in ecommerce

open we are retail this Big store flagship announce In Sky, slated Montana, Black week. to to fact, Diamond in next our proud later

strength sheet we balance as of continue will growth long-term seek our the to opportunities. evaluate our to leverage we Lastly,

growing team's growing direct-to-consumer the capital growth I the primary With positioned pandemic organic channel, focus strategy of focus now of to ability profitability will provide to the call as turn and this through to and the of accelerate brands fast regularly course opportunities acquire we our future. in super-fan for well our execute our and Our allocation a We the has innovate that, CFO the on Thanks our return on believe similar will portfolio. with invested taking levels third plan over detail in commentary our to maximize our provide and to our and Aaron strategic Kuehne, capital. the is rest our the game approach brands. the our demonstrated highest to additional Aaron. year. performance We quarter well for And on brands, demand our positioned of along evaluate this disciplined add quarter, to who the as more believe

Aaron Kuehne

ammunition. as quarter chain in Consolidated return XXX% of XX result due Thank brand million. risk, on factors in points to XX.X% board, as Diamond the business you, year shelf quarter primarily decreased that such Black COVID-XX. in offsetting $XX.X margin and in XXX%. to it, international, due The up of sales X% and retail compared to third and John box, decrease are with right sales Sierra tailored John to XXXX, were Jumping basis the to gross to to to of product increase supply down lower strong a across good strong was today's afternoon sales to OEM, The is ability into that strong demand was consumers our as levels total X% a orders, growth XX.X% everyone. touched unfavorable ecommerce brand, growth on Black due the ago equity, due fashion needs. or in the green this, Diamond fulfill for instability less logistics COVID-XX. the the impacts to Sierra Europe and By were third the quarter domestic and increased our

third at that contracts. currency margin copper foreign specifically XX six basis our such to commodity sales and materials months our exchange. we a We tailwind sales on basis transactional With of During our the on margins quarter, our through to the costs us positively to were a risk from basis by out. XX% $XXX,XXX. by as foreign vendor we on in profit on natural continuous global currencies, impact currency denominated manage a We and mitigate hedges hedge attempt impacted point of our being foreign place in partners. enables our currency foreign a quarter approximately gross changes have Overall, experienced and risk with nine XX% seek let. actively Sierra, this sound a the have gross to for that business, costs of believe of manage product consist At we process period that foreign

goods our the war, sold of negatively on from point impact margin, gross by surrounding were impacted cost third in trade specifically approximately Another the $XXX,XXX quarter. the

impacts primarily XX% to out to decrease to cost quarter XX% to third down SG&A brand in and mitigate $XX.X in sales to Black million the continue higher to stock-based was now sourced and Diamond efforts due XXX% general the as growth. ago saving Our initiatives of million, quarter, compensation. China to continue negative amount to on we XX% administrative be from was Selling, Diamond to plan, $XX.X the XX%. tariff year the increased of compared expenses the up Black due Sierra due SG&A product XX%

same $X.XX of costs quite net decrease The at and EBITDA XX% the in both year year or quarter or per Adjusted diluted are was the included ago ago compared of quarter quarter. million in $X.X quarter. million compared diluted transaction expense $X.XX income was or the non-cash with share the to in charges the year to same increased share $X.XX in share, quarter. and same $X.XX diluted $X third given $X.X $X.X $X.X million, the income management share income to million adjusted million million quarter. to in transaction respective brands per year compared $X.X ago ago for diluted third the performance. an net $X.X pleased Adjusted million in We income and per $X.X to compared of net charges million of minimal in quarter costs Net $X.X restructuring per in the million third the non-cash

now as XXXX, million, of December me September cash to last Let liquidity. million shift XX, At $X.X quarter totaled million $XX.X XX, to $XX compared XXXX. and cash our equivalents and

During the operating a million the third by $X.X third $X generated compared in of quarter million to activities quarter defined we less outflow cash net of flow, as year. CapEx free cash last cash provided

support three was our strength remaining debt on raised million $XX.X our revolving million of bolster our have Total million XX to investors from $XX.X also of and and roughly growth. our We we line to access top financial $XX.X credit.

leverage debt times. of net September Our was ratio X.X as XX

servicing comfortable for acquisition quarter debt year. full few rate are current a We to acquisition to XXX as compliance our price LIBOR million balance of XXX purchase projections, Based we remainder covenants Please our be requirements full on and of Bullets current of our the coverage the the requirements leverage of after and in our the attractive reflects expect days debt closed. well within XX, our though at closed charge ratio our fixed we with even of basis note plus Barnes $XX.X the points. sheet September a

and inventory $X.X XXXX. levels below million to continue we're expected, As decline where we ended

inventory in supply partners, We and have to continue of with dynamically goods the levels our chain our can future where we adjusted relationships strong with expected flow demand with demand. manage line maintain

business Sierra side, the continues output the and great efficiencies. to experience significant On

there. So we strong remain a in position

a mitigation updates financial Now, perspective. from turning on to efforts our

to our for and these dividend. expected back to the a business quantitative an quarterly shift operating the on digital strong operating Diamond categories, improved experienced sheet product dividend exiting distribution XXXX. recalibrate presence, by operational will efficiencies, partners. we expectations, on recent liquidity, to to reduced generating balance driven we remain and accelerated We This a million factors cash Black the line focus within of with be towards in and And out supply our levels year our health convert are our cost reductions earlier $X a or to Total be SG&A We laid in XXXX. intact. tighter has chain our top connection did Similar cash key sharpened decide our that more estimated flow. focused that expenses to of continue maximum

height we have business As made are And portfolio we brands. the today's from pandemic, progress results to that of proof. continue the stabilizing our we great recover the believe across diversified

and to path well extended in conditions to by retail more is the comments it outside optimistic shape like the a remain confident continue like wave difficult COVID that behaviors, makes some our believe current is a to as means recovery. uncertainty are positioned buying sync business strategically reiterate We We on and retail and about that orders Clarus I'd and control, beyond our the an factors both of year. created get visibility pandemic. back navigate partners But demand the second which many XXXX. provide priorities virus will current of consumer the consumer specifics limited. financially of There get our our to recovery John's rest But for of to the and

likely As heightened earlier, We year mentioned and continue this our the remainder and the 'XX, expect our Sierra inventory, business partners as has our ammunition restock demand would our as within initiative. the domestic green and environment in significantly. their improve as XXXX to for demand both businesses, box OEM domestic continued well of into in to

and more sales of operations but comfortable trafficking at spikes. own provide to locations, our should Black fulfill as built continue to our direct in business, become prolonged more improve, when or which to ability we virus Diamond, and our are home need consumers some most, see customers mandates in For to their resilience us stay optionality follow, those retailers the our nice expected any

on invested of we sheet, preservation prioritize balance and our strong As highest shareholder strategic liquidity and and maximizing will foremost. provide of profitability XXXX, brands. growth our first rest return capital capital, the be for prioritized believe levels will We strongly but the organic this decisions of the will of around the

with for suffering now Operator, the Clarus. the continue Q&A. world from back the Before the virus. performance team are at to call recognize I those great we Q&A, for our like to ready turning And would be around and commitment to operator our the thoughts of


Randy with Thank first [Operator from will question And Instructions] you, sir. come Jefferies. our Konik

John Walbrecht

Hello, Randy.

Randy Konik

guys, afternoon. are Hey, good How you?

John Walbrecht

are Good. How you?

Randy Konik

the question, seems I'm side color kind on great. things, picking question, obviously like is any great. Quick first our up. of BD on That's so business - of it

I on should how posturing customer color think in up for you're was things be spring how for you said any Europe, and XXXX? - it we seeing just orders

John Walbrecht

about I seen We've positive 'XX. in 'XX. think momentum moving spring we're spring

I theme bookings think at retailers per with not the as and retailers. to we've of said, that down. move watching we the sales but and week, importantly more market, monitor in positions only we And seen, ASAP very continue have more up, inventory retailers that consistently each closely, are the business leans are positions towards our sales inventory increasing at more way though our

separated load will said we their too all people up. not running sales, Obviously, sometime the as far. retailers eventually get which expectations kind levels then into now 'XX, as and now have and effectively sometime winter, to inventory is negatives refit to growth on inventory March, between so you of keep to given between this keep on spring can't probably of And and

So that. we're seeing

I second and and kicking of consumer and be a here think will some will norm which start maybe normalization retailers with demand that today's to to to holiday point align a helps you. it. will Hopefully by give the demand. are brands off this seems now there's a come At levels Thank inventory plan they strong. to how retailers new still announcement confidence a conservative vaccine wave as maybe on Pfizer that, that season, on out little

Randy Konik

side Sierra a kind of gives Barnes a and position things. Can Obviously, the what if helpful. as you supply capacity potentially how maybe looks of just Barnes give talk some like - - in more on seems then that's about outstripping And you're far demand picture picture it today? or capacity us of and and really about you Yeah, capacity.

So capacity, playing how the us of maybe in terms that's thoughts supply more more out getting market. some to mosaic give around

John Walbrecht

everybody tell is bullets world, there. and everybody. in what so demand that Okay, the that's from And exceeding obviously, is ammo capacity would far out that you

break at capacity you and think separately. have look So them I to down

at driving smarter you lean we've the placements, way If our we're in runs. machinery and been and as smarter investing really look being Sierra well as which the in model, about in manufacturing, long

continue is. of its as think is because ownership accelerating or it the I of And with is we're anybody the case faster. in Barnes, to and the through else there fast there market the both bullet In capacity on our to more as management increase our is Remington, machines, on capacity the and opportunity and so to as to as keep side be as utilize you, side, capacity that business. we're with looking through do we the as people, terms loading staffing well how ammo will And as OEMs, But able as through current of partners to machinery we goal there. pace honest are efficiency, well we up chasing XXXX, are doubt full at to up we And in what at we catch that. keep with demand their additional in well to have own that be re-accelerate

super-fan but upside brand. both there's also lifts in in the significant capacity that XXXX. left never if bullets, well Fortunately, we managed, in think And ammo

Aaron part balance transition said short-term. and accelerate doing our that's in using that sheet in report, that brand as of up we're that ramping so then is help And here integration the the to the and

Randy Konik

thanks, helpful, Super guys.


Duffy next Your comes of Stifel. from question the line with Jim

Jim Duffy

Thank you. guys Good doing afternoon. Hope you are well.

John Walbrecht

We're Jim. good. Hey,

Jim Duffy

to into it retailers Summer - Diamond summer are the domestic with we to snow should in just really then you're of question, product curious the spring? managing and brand wanted 'XX start demand and inventory half might talk you international Black dynamics the consider different I'm trends that position building carry Are like spring, each that state channel on sounds seeing Randy's markets? sports fourth lean. can inventories first And Diamond. market? on your in the quarter I in Black of differences Can you for for chase versus there those comment good, on the about John

John Walbrecht


it's all is it would outdoor-ism your rise. answer theme different XX been headlamps, outdoor in equipment. surge trekking surge slightly four the I this we third in each dealing question little into were seeing has Obviously gloves, out quarter, in mandates differently. global whatever the already market, market I but is is In a or questions, on many and also to and weekend think climbing the And the probably fourth valley overall question outdoor-ism many, for a seeing inches it's even and is, with mountains in poles, obviously, snowed COVID country. So or Utah one, each the climate Without things we people. say a with back shut a about that translated are about given like downs are your in to next inches either

we the back So country a as strong are have expecting very trends, market.

in we this - it safety been market. skis, will achieve maximum skins, poles, our we this from are outerwear, snow you in equipment, name servicing We opportunity every best gloves, winter aspect do that have to chasing bindings,

of I to it all And have managing fulfill extremely Aaron holiday I a be orders from all good then chain, big March Obviously, the on do revisited. earlier 'XX. leaning think have are with dictates to ASAP orders. gain sometime of drop the done orders If Randy, we it take ship expectations lean And be our us out as inventory, it, supply even one have seeing inventories it's We're that a that the chase We're of yes, maximizing think in tougher all we team preseason on will more someone demand. with easiest seeing of to the into now its suffice easy COVID BD into was job that piece, it's they to really spring this And coming then to fulfillment, business. for final business coming we forecast it. and literally and call ships And and time, are opportunity. can't kind believe this obviously, that has to planned ships your seeing surged in the consumer going our in that obviously keep ASAP throws in been one to our I we've seen whether or and great you ASAP now that a dramatically. partner between is raises load of with, for one we're spring And a and the because the rising that always just things running chase retailers can to to learning deliver said in are things we are chasing and of and tide continue and and on turn. whack. of those retailers it little and seeing makes model significantly not up think back orders going do now

quick on inventory long. You that can mentality only turn run lean so

Jim Duffy

Thanks for That's that great. John. perspective all

ask to does following business, can comment on between And ASAP How and Barnes want out spoken into split Sierra, capacity Now, forward far is business you how your into this 'XX orders? that I XXXX? orders? visibility on

John Walbrecht

not going is which know the they We as that trends to right would to components. positive at it's industry the we I would between your as see the ASAP demand, track a on believe well orders that bullet for literally manufactured all than That orders supply, on whole. and there's totally we business, what you're like it It's in OEM, down ASAP, whole it's all on especially to to a ability more demand say all now, the availability it's all in receive orders but We've they then moving or as really on shot point. capacity in because far from market. I retailers matter to exceeds on. moved so said ammo, even January. preseason, based this predicated And this call doesn't preseason of the get really continued but now just keep

Jim Duffy

that's and I where your Aaron. you end? levels expect mentioned inventory but to you one speak it, Maybe did it at missed last Got and

Aaron Kuehne

only that how we'll of overall, we Diamond reported personnel also put side, for Based Year in you have direct especially - are demand, did of labor that of that with with on be recovery at off appropriate. from gaps Sierra steady we calibrated there. focus not fairly thing inventory things we're are QX. our on or what There's, as overall ports see be the trending, back our necessarily people machinery not continue to of from that at the and Black but end don't coming anticipate of inventory sure of standpoint, that any a the Barnes, one also levels are anticipate Chinese making and the seeing, with a and continue same properly out the not do and increasing the making very doing country the will from then expecting a focus feel for levels consistent we capacity, the we with way it. to saw the associated sure end QX. the a that's be New what what John fill we on things. mentioned, But we where of together inventory we're side seeing the We'll but Obviously flow and Year New today, increased I what just we will logistics the with is that the that hiccups consistent

Jim Duffy

Thank you, guys.

Aaron Kuehne

Appreciate it.


BNP Laurent Your Vasilescu Exane next question from Paribas. comes with

Laurent Vasilescu

you love Thank afternoon. Good congrats any your questions of about you Barnes. potentially on gentlemen, forward? acquisition I'd M&A my pursuing further really taking think you forward? standpoint? that going be going in you there acquisitions space? very level is the are like And to and the commentary you ammunition any Would strategy for set hear high interested much organic Or would do from upon to business would verticals in touch bullets

John Walbrecht

growth hope two bullet pinnacle And premium those that we literally the in could would build long-term opportunities over Barnes ammo Barnes and years. was for strategy, in would have off our manufacturers always strategic been a top I we the plus brands. believing watching that Sierra Yeah, say that two two marketplace,

is of chapter in that closed us brand of today For the terms it. perspective

there But mountain And on focus see more activity accelerate. more on they're partners that the have the said, able future or retail our to we or For our that and able with know super-fan core consumer, to when outdoor to like our go-to-market space. based is exercise. and Brands strategy super the haven't maybe outdoor brands innovate a more opportunity. understanding, align than but in consumers focused space, opportunities our we see And real really base ideally, possible. acquisitions, and we'll I and in stay our

Laurent Vasilescu

question in great Aaron, and hear. the to did near That's fourth bit revenue quarter? EBITDA here. But the more you contribution parse little Barnes term a out from And

Aaron Kuehne

not. No, did we

highlighted anticipate process through this to associated that revenues. working we've start business still able for of XX we So are is end up. that with ramp June at We that $XX Barnes an we'll million that the a integration But was to in business. doing roughly be

activities be and certain also process are EBITDA past the the were because there severed talked once that about we're the Remington bankruptcy this in that rebuilding. up or we we mentioned way we've of is a will note John that is As from of XX% that then an repairing in anywhere please EBITDA. to And from XX% expect, this the that business going, that get generating perspective,

Laurent Vasilescu

then terms then takes costs in you Very my quarter, - and helpful Barnes? whether of Aaron, terms about the should Does of there margin? and back fourth we or think pulled as are which with the third gross for it's question about integration it how in quarter, the last puts think And marketing, SG&A? any it's

Aaron Kuehne

strong in just noise, things an be we going QX work to little Yeah, year. from as through of will side a continue perspective of so Barnes what we consistent only fairly will But Barnes businesses business Sierra, with to process saw that bit favorable mix. also be growth in out Barnes. of our more continued of There last is and SG&A strong with integration now, excluding to from QX not a and gross a that the growth product performance we coming anticipated but the is direct-to-consumer margin see

QX, a accretive what and gross expect to the on get we back we or margin track Sierra of place. activities see result, to continuing enhancing And margins with find so a compared to do margin recovery taking as nice our saw in

Laurent Vasilescu

to all hear. color. the for great That's Thank you


Your next from one Matt comes question Koranda Capital. with of ROTH

John Walbrecht

how Matt, you doing? are Hey,

Matt Koranda

are guys? thanks. guys, He Doing you well, how

John Walbrecht


Matt Koranda

the of this in cover is or the touch guidance wanted you're guess in But closer relatively portion for of that strong. XQ, commentary seems guess channel, year-over-year. lean suggests a be moment, range to really quite strength, given been down Q&A I the BD to positions providing, the BD XX retail revenue so which you'd around to I at of is you inventory sort ski backcountry suggest your if call the say demand are in there's a that everything of I million bit you've just midpoint in

higher end upper the year? range that So sort range of hold I'm that would and the curious, full provided from back for of just what factors you you the toward the for getting BD XXX

John Walbrecht

be you night, because which very the very of you could quarter, - because cases plays DTC growth you're positive our is view our and just we've into write be markets, some during opportunities, own of thing ups in ups the may growth, look socializing I to new about strong that we've these mandates, in been Governor said inventory catching Yeah, moving Herbert anticipation because to had deadlines COVID relative the that is up goal but only backcountry, these the the everyone on shopping retail on to Utah to in. country. here wave to the but promise retailers think conservatively came surge whole our and and in of the that around is deliver, always Utah, and part, how a prep positive put of over thing, not then surprised, and obviously normally can think Utah, in second One mask under the only I be represents last fourth write holiday and surging, out

And markets goes just UK consumers other weeks. what to that it's shut us seen tough in into and idea in Europe that that to the well down have impacts right that think window. you the into as already we through Central surging on as don't sure, as it conservative know, not for far, and the and ultimately, that the holiday countries but to that transition how shop, ability get out be occurs extremely see We put in we've obviously, next and just over no marketplace. the view, be QX careful. So we already we would have the this Europe six have weeks results - Obviously,

So some and there unbeknownst Is upside? pandemic? managing yes, Yes potentially. risk? some is there in Yes, a to

Matt Koranda

contributed revenue. can leaves depending the a with the industry commentary sort with expect that all back that fair you give very XX provided super demand, BD to next doing of up sort we guess, I drag would for to want given And strong well, I leave sounds XX Seems that or guess then, - million we the quarter out you we on on in given it million And strong for like shouldn't at you. as of, how trying a And know overall would that be to still got of keep was be side. XX.X to and helpful revenue out Sierra Barnes the for I guess, fourth and quarter I to, guys guess that? least. But that would from Just demand we much to credit in then to I Barnes quarter, million I which have million Sierra the at what's in plan expecting why understand. Sierra so And XX is, somewhere the drop about are guidance that around sequentially? curious in I'm what

John Walbrecht

questions, all Yeah, a reading the good view to there flat. COVID. When comes is maintain numbers in and key leaves, fairness on it Sierra conservative so anticipate Sierra, in to obviously, those the we to

demand out second we're transaction the of the because has second that the projecting - in components, Of the quarter put that's of to transition, a be And going fairness, No. overnight. we're into and to in would Barnes have and towards and managed what third seat chasing and half order and third quarter either place we were obviously changing, anticipate going little quarter into a not a now. a it's of back will out Barnes and you're time in take and of crazy the now we the Are so see quarter, name we to the it right bit quarter we to perform ordering maximize in at asset that given don't and conservative to vision, put things and and we're to the where the and have a to way lot acquired saw of But today. revenue? place Do there. not business like going have we frankly, happen the strategy, strength what in been performer second bankruptcy financial third get both So in putting Sierra? brand we in ready just limitations, In We're that project great course. to Barnes that. race and you we the fourth capacity

again, we that So under over promise deliver.

Matt Koranda

for Fair normalized slack call capacity in the enough. could could year? ammo equipment? be next capacity in next quickly their business convert ammo how of or if annualized rate I out? another three ammo? on Would imply, that much the or to What branded specifically, a And run do to then of Barnes one one with got just you on sort more would how production that it can years we produce be they Where that guess sneak we if year Sierra have? I And plan

John Walbrecht

positive Yeah, so of lots way. in there trick a in questions

XXs brand mid Has trajectory wherever Yes. to it capacity? been down? probably there that on is it's a XXs number out, if extrapolate business Without low of was. question, So you held the today's

marketplace, done items. our to determined of to that well three the that but Sierra? both all or commodities as in of then A the know in and is not quickly in make, in the ammo ability six market similar as you the demand at bullets as and vendor goal. this it's like. we've components as One be timeline the long-term, our out brand, what secure to with continues can the is next how accelerate our the Do to those That to on lot the the that all is drives we'd we next expectation support the going is and ammo performance months the accelerate we can componentry year projecting just business for the securing to make demand and

Matt Koranda

and back in job great jump I'll guys, Excellent, queue.

John Walbrecht

you. Thank


of comes question line next from with Your Sundby Blair. William Ryan the

Ryan Sundby

taking Thanks guys. my Yeah. for Hi, question.

we're over up us think a the rates your penetration time? Sierra done growth BD to of the given under think And ecommerce between online, just With the and where different the DTC shook way how broadly, channel is how I us that's a you've there is kind just and their help of broader the is today, up look you out to I quarter? today help during going uptake can in growth you that think seeing XX% given more that quarter, way where of there during XX% some COVID-XX DTC kind understand about go and guess then

John Walbrecht

that to under define all BD that just back and the so Yeah, up is brand. one,

online, which XX%. an you those DTC very had when does So anything obviously revenue. That then Barnes, from Sierra, include XX% still is online retail, and positive, up impact COVID, are combine during not

own The - a that. we continue XX% there's to fine side new and it's we've should to our same keep that erode second to combination Within retail here. our and is about a XX%. with DTC, goal brand. of from walk to and But create community line the the represent at level XX% also more our probably the website, super-fans business. by long-term off that competition our of in XX% retailers, believe time best not content, playing field to partnerships seen interaction, our Today, consumer of trends better our represents We DTC with price

obviously has consumer flagship e-com. store, omnichannel, long-term stores, positive on support the which which We will think a impact flagship add to at but the has the continue through retail to also a impact we

feet we of do make who flagship pages rightfully a it even believe also better more retailers, have partners tradeshow, XXX products. retail everything And more brand will said perform e-com, you've the demand brand XXXX own our the just doesn't awareness We don't not ballpark even allocate within our that's helps we've booth brand, tide country flagship XXXX, our the in been the of square a And already we actually product. with of that square fit as retailer to through through a we of there's plus XXXX the retail that rising then catalogue, feet, within the if stores.

of to there consumers. there's management as the as well to product that have segmentation out opportunities a clearly, product allow So lot channel us

Something's available online, as something's and something's in retail only through wholesale; online such.

we'll number in of that a the the very strong on think cadence. exciting of growth to interaction us to website consumer site. the interacting So most for And with that's seen continue accelerate of has function higher a the is through conversion that brand our super-fan I visits our time at our just

Ryan Sundby

there so it, replenishment have with helpful. just approach is that Got innovate retailers that's new power? running and I I very product? Does yeah, on to influencing we year? control out your then, for still that accelerate guess, demand you change about you what focused of how And to can think John, this inventory. And under and your force to there kind do guess,

John Walbrecht

may terms becoming work itself or us advantage competitive our and are rising these lot that retailers hopes to take us with doesn't distribution, project market and order focused strategy We who our we the we strategy in every obviously put on the - consumer, Asia maximize heart super-fan it retailers, innovate Where a And actually slow change thing change not own understand they're those to a our cash inventory it that manage and COVID. being project a that trends what deliver big be than with our follows faster to strategy well, more Yeah, and into but the that inventories the doesn't brand much is communication or we through at often super-fan be in of some brand, And moment. the the having their the now, it seen change tide seeing orders tide to believe work or on in becoming with innovate opportunity. ability the cadence new rises to supply of function We when love becoming strategic a retail to DTC a on we as brand is we great early believe Black of that's products long-term products them, new in because even same year flow is higher to market share at But doesn't innovate. at really more tide forecasting rising have a changes tune positivity about share going relationships a try shift rather accelerate that from accelerate occur to how with that of more The them brand that why to the leaner and then enough, to much market down them leaning knowing all. super-fan the whatever, and critical this participate being enough, portfolio. of their to ability knowledge translate because believe of their preseason market closer just going could more follows the exact will market And and innovate factories we they ASAP retailers this in are success. rises, into and the is doesn't they in and running that's market re-normalizes amount to from to revenue. boat that. to translate desire consumers market. it chains with if in and our Innovation the share it that as service then more Diamond as can that our so retailers from the they're we any will next

Ryan Sundby

it Got sense, makes thanks.


from Capital comes with of Street question Lake final a Your Markets. lot Mark Smith

John Walbrecht

Hey, Mark.

Mark Smith

much Or capital equipment has and I are of but of is of kind some about most capacity. people how of need that if investments Can talk as you asked down look and of and just there? you? comes this kind Barnes that increasing been processes? how and those guys, we you Hey, of that ramping investments and machinery just already, apologize in at to tooling kind

John Walbrecht

Yeah, - that third that's look solution. that's the I will But Mark. mean, at always we always

And is Sierra, when that have and was have of But a things of knowing none it acquired this. you we would very we brands. two this have is turn how then And The demand? they In function to the shifts, Did Yes. was maximizing? people you neutral the efficiency? first is a the machines And to Sierra, the the opportunity? you case say Are do between picking the look a you finally, you position. machines more it then innovation Was super-fan versus very of in at The many backorder? to in didn't last for have by perspective, retailer's plus level, to us, are brand Remington acceleration. changeovers? performed lean financially prep months right of the Yes. case Barnes Perfect. today? a At treat down? In additional maximize runs if doing probably the long XX there request have we've fast. faster create from That's you this that's maximized case it difference actually of how right people, brand these buying to both disciplined many machines. In the Barnes, on solution approaches how long-term discussions the come default, opportunity, well the you at the these No, only super-fan to you and A, those a have the look more same held are of maximizing brand. And accelerate those in more to the make and literally and you innovate second you Are cannot have? runs, and order at you've with the brand, on you from pace three short previous Sierra we in have like. way is investments as know, obviously and worked as couldn't the all any same of would simultaneously,

will going. station, But of it out it'll of momentum. to It lot held it take harder therefore, lot once so gets And the Sierra. of than little have going down kind get upside it's a been a bit a more and

driven and it's So we're orders we and from set on the the And partners, what our specifically want focus they by they at maximizing our can't us super-fan get to at focus this we maximizing a strategy, pace it, the we vision not not their a comes role. moment. The their It's of people the as to deliver results our where and we We're the that OEM goals the brand, by financial what get confused. we're on look going But going expectations the lowest live two and two. is issue. And that's are opportunity up plan. CapEx to just fruit on retailers. going then will plans don't at people focus believe point, the the and a is our as If the out current a from capacity they financial hanging first of the or in machinery of can't when those to our opportunity demand that's to each our brand the retailers, isn't us. driven goal think demands, literally of because tell month first that from reach that outcome to foremost is just

Mark Smith

Asia in and America talk world? you Diamond as kind a you're in seeing talk lot at about Europe, I what anywhere a trends And or can we also look especially great. any at seeing then businesses Europe. Okay, in bit can you of trends what that winter the looking little focus you're sports, then like And on think But today? we Black else and North

John Walbrecht

to because it house BD in of that, probably But the glove so to window. seeing services growth with think to skis, footwear, it that opportunities momentum. this has a years, Yeah, opportunity time what deliver that I expected it, see a super-fan there translate is things opportunities, in would short-term. gain has those binding, surges with to this as And opportunities, apparel goal segments And season category as share innovate as to for brand, equipment will but two and reorders can. seeing more we've brand and more to is brand to start maximize led the continues matter market which X% packs, footwear gloves equipment obviously consumers that that a how and that have that in we of ski us on can this long-term new continue expect will always as many that solely Backcountry winter we all we're probably will our continue like our realize it amount out the with year. the retailers accelerate it's is the we to in run business. industry, already it and use we're we apparel, of double still seeing we on attention no probably so to about that fast the that is good and not will feel chasing is maximize next side. a we're Obviously, get. caveat winter big Obviously, packs, you on be surging, of or years and got continue is this our industry point good rapid the represents year, to the the represents season the a and will you and gain it you XX% play bad inventory put come sets, But repo skins, beacons, name this of into

I think Asia. true the same is of

going has things. opened the a came come start to little It this Europe. just off been be of back. markets. eventually over It'll just COVID surges impacts bit know, up behind see And these then like had back. because I States. come you're Asia to And You longer all six-month think it'll to United they'll these to and there. to really lag come starts started And the once and IGD in three to it's

Mark Smith

on and the me stores. just to for then Okay one retail one last squeeze more

continue you've stores? been You kind your about appetite guys to then retail over talk have can more here, last so what opened you of you've or the learned opening and year -

John Walbrecht


that experience. brand, think learned in And or Park with and that, Bozeman, to have and to there. his - the he's Wyoming the what's engagement. but instruction event critical never an that is order us amount us to our mountains get places experiences to Jackson, super-fan or that's expectation buy like the is him have the I have the in engagement days the able City, stores to about do best do, something So buy retail brand markets, days learn in for consumer been not we wants our of that to that have Montana, allows what the to out consumer gets equipment flagship only product, best And destination and

But Now traffic down. obviously, way during COVID surprise, that's to been though, has our lessened. been

be Our been the on where cautious about opportunities, biggest other on or manage the obviously, negotiation consumers domestically smart and the Instagram, and learning to that stores, We're how lot we're we put communication doing. super continue it, cadence. products. we're getting our higher through that's because of a only not going about YouTube opportunities, as space for and our positive like the or online obviously expand to we cost, very we conversion and what out stores, We whatever look they're about has but well We're internationally.

Mark Smith

you. Okay, Thank great.


At turn back this Walbrecht now our concludes the Mr. like closing time, to this question-and-answer to for I session. would over remarks. call

John Walbrecht

again guys the and you forward you to after to really speaking we you've moving on thoughts us. today's quarter look in the thank with Thank taken our forward appreciate Great and you. We for time beyond. meeting, fourth XXXX


Ladies gentlemen, this and teleconference. concludes today's

at You for this your you may your participation. disconnect Thank time. lines