CLAR Clarus

Cody Slach Investor Relations
John Walbrecht President
Aaron Kuehne Executive Vice President and Chief Financial Officer
Anna Glaessgen Jefferies
Matt Koranda ROTH Capital
Aubrey Tianello Exane BNP Paribas
Ryan Sundby William Blair
Linda Bolton-Weiser D.A. Davidson
Mark Smith Lake Street Capital Markets
Call transcript
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Good afternoon, everyone. Thank you for participating in today’s conference call to discuss the Clarus Corporation’s final results for the Second Quarter Ended June 30, 2021.

Joining us today are Clarus Corporation President, John Walbrecht; Executive Vice President and CFO, Aaron Kuehne and the company’s External Director of Investor Relations, Cody Slach.

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

Before we go further, I would like to turn the call over to Mr. forward-looking the Private Harbor of Securities provides cautions reads meaning within XXXX he important the of Litigation regarding as company’s statement Safe the that Slach statements. Reform Act Cody, please go ahead.

Cody Slach

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

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

John? John Now, Clarus’ call I would Walbrecht. to the like over to turn President,

John Walbrecht

Thank be you, Cody you everyone. all It and to is afternoon great addressing today. good

year; very well of approximately in outdoor are million, proud growth reported the across driven by super-fan of quarter, overall. any $XX.X We the $XX of sales million to were about compared loss favorable quarter last our versus history. and outstanding an XXXX. record XXX% for our in a of as EBITDA adjusted metrics trends in as a second We up QX continued brands Both another portfolio million $X.X of industry

improvement continued gross partnerships. results the point XXX and a continued strong operational XX.X%. the year-over-year to increases in a saw reporting are testament to supplier excellence basis margin, also We These value of brands,

front, and On to our recognition our the we our key retail brand our have super-fan partners suppliers. leveraged supplier strengthen global with relationships

believe our with of an I and and quarter. nimble poised our long-lasting in prioritize deliberate actions on for that during which that retail that the our long-term isolate consumers. the And our past results this our to product us you few of chain the we It’s supply and This see the these brands industry peers work. Diamond components be partnerships example, to increase give creative, ahead quarters productive our needs us over the and supply our to of broader partners we needle, for us business, of want really allowed hard entire evidence surely To that ultimately sales have best possible. are fit would mold. the thank brands challenges to We suppliers their our them, allowed and are prioritized formation performance. our performance stay availability Without X facing. these allows satisfy and in not our like team Black to chain the moved core products continue

combination a acquire on that products superior and e-commerce in overland Rhino-Rack core segment. a Australia in Rhino-Rack entered an automotive rely long-standing with market a for best-in-class on and space has work, growing partners, well-established to through opportunities third-party solutions to adventure. for OEM that Rhino-Rack retailer subsidiary brand Clarus New a XXXX, reporting vehicles iconic distributors, definitive their its ethos. is transform presence. and that view durable roof to and Customers during designs the brand. founded direct-to-consumer a stand-alone Rhino-Rack adventuring. second roof affinity is and Rhino-Rack super-fan Rhino-Rack, Clarus’ play as make our protecting with its related relationships, addition operate Rhino-Rack and we for truly and rack sites is as built with a will Headquartered brand embodies super-fan our and customer-centric funding founding, focus aligned and constitute for aftermarket leading third an particularly in Australia a known wholly-owned growing Sydney, important U.S., market a we a unique for north/south perfectly Since super-fan strategy. has award-winning brand premier brand rack rhinoceros cause acquisition business results, and to Rhino-Rack share market globally, of In Zealand, positioning, its quarter, a one leading agreement with accessories has and will strong conservation. to into of basis continue to the presence best

off XXXX great continue with ever profitable – Clarus than a we While have prioritize we the start, to believe business first more half certainly that of is to resilient and a we been.

and excited carry momentum about We the year fall and of the brands our seasons. the second half winter the as enter we are

At of year-over-year But more our inventory pandemic to the look QX want outlook cover raising our that compared quarter particularly in QX supported last drivers will shareholder and the consumer to and the year, Aaron results. at are year favorable we retail shortly. in increases to results such, key depth XXX% experienced drive outdoor review I the in drove that trends quarter. second we detail financial and As value. Black normalization continuing Diamond, outstanding market, full to outlook our first, for in forward sales the

the and particular within to Hard inventory national our ski goods gains, gloves. category, accounts T-poles growth and driven was up XXX% By for double-digit up us the climb was climbing XXX%, particularly growth ability MEC. fact, In by accelerate shoes, share across and XX% mountain such triple-digit XXX%. in market REI was of normalization as and created harnesses, product portfolio, lighting, up was

business just discussed, apparel up and in Our footwear are businesses, which categories included XXX% XXX% and the respectively. were

we the prioritize define brand QX. our finish our e-commerce Black re-launching to the ensure a direct-to-consumer business to have season, direct-to-consumer wholesale to community While continue strong we centers. to channel brand allocations accelerated retail from partners spring as their both our website connection story of growing to and Diamond continue we We well as consumers our find well ability efforts inventory our centered can seek our January, summer in top channel and to If as our tell on versus After brand digital social e-commerce, we the activation elevated search simultaneously paid and digital campaigns building pure with focusing around as brick-and-mortar, as within funnel to refine like our elongated. mediums media various across the entrants.

As believe normalize we footprint, as channel refined inventory with the we retail become data-driven more develop tools imbalances brand-accretive for our will and our touch along super-fans. point direct-to-consumer most expanding our

our to Boulder bringing just track retail retail store Boulder, X. X new last to be footprint retail Boulder has opened one Diamond In We week, location Our already this. month, Colorado our Black new is of locations. proven total a location on top our in

in Our us locations. towns brand will many education community-centric awareness of our engagement. retail which and house the mega amplify includes consumer the in This our has product meta-mountain to across allowed communities world, – approach retail our store to

to availability. found increasing categories have this as key have drivers growth chosen our we brand that to awareness, product in sales key where of We and level particularly another engagement strong product maximize

This from generated uncertainties moving our domestically. outdoor both such indoor prior experience drivers million, ammunition growth as continue in Sierra this quarter. unprecedented broad-based hunting ammunition. participation segment, demand of up as both to Barnes and strong to our brands for across reflects of demand performance continued year to we increased drive and civil the as Sierra and XXX% ranges The bullets social and has for sales continuation demand well and shooting both sales Now we as $XX external bullets approximately

and strategy alignment accelerate treating is the by to tailwinds, its mindset. This are retail share innovate each discrete the partners, underlying brand. of addition business rapid that market In ease gains an as own stand-alone go-to-market for on doing success business driving market enables and agile experiencing our focused our we and with allows an with mentality promotes

We our kicked have have also used on mind, our in the this defining resourcing constraints planning take taking product that which employ us particularly cycle core. Black to solidifying for to product mindset, markets focusing also categories. on X-year large a have core With control each a more community-centric approach Diamond, less businesses. in has off supply balance we sheet our availability, strong are allowed innovation in of our over we backdrop we a on optimizing with ensuring categories Within and the addressable brand customer-backed while chain,

opened within in Burlington, are the also and partnership accelerate locations markets unnecessary business deeper outdoor Hole, focused Vermont. focus centers enable we on these to will us similar Bend channel within mentality. Boulder We conflict further this to as distribution, our what our We soon-to-open and existing on going Jackson believe without our recently community location direct-to-consumer entrenching building I creating

overland will intend For specialty accelerate playbook premium America, penetration position activities have on Australia ammunition we owning our R&D geographic innovate innovations demand now the as believe compelled of employing we key markets North this to business paused believe of in and valuable can the and its and Rhino-Rack’s are support to enhancement develop of largest by years ammunition. to in are further strategy capitalize also our as work the for further even be rest during of reinforce scale we and than nearly team. is the Barnes, seek focus look further initiative. provider to product This distributors marketplace by bullets category. accessory just the time, and capacity X and dealers go-forward unified the leading over X At month, our After network vehicle will in presents to Rhino-Rack over our accompanied become that this organically existing in we getting in heightened the which sales in as Zealand commercialize world. New We Sierra approach more on region our to core we one beachhead these opportunities and of expand we Rhino-Rack, environment. grow a

to on to especially chain that believe long-term remain relates remain, Challenges Before operate recommendations, we to our great a Aaron? a super-fan continue but like of to second would have and performance and Aaron, Financial to passing call portfolio details will equipped in. our to within our Officer, quarter additional on to continued Chief outlook. state and it environments supply we we I as cognizant team disciplined now our of in turn we are to that I as increased growth leading on brands we Kuehne, who strategy retail it over sustained provide commentary success. With conditions that, health Aaron the and shareholders the will that well XXXX provide

Aaron Kuehne

Thank John everyone. afternoon good you, and

$XX.X the million. million. Sierra segment XXXX, of to XXX% XXX% Diamond Black $XX.X second improved total By sales sales And to quarter the increased to XXX% For segment, $XX.X sales million. increased in

in which In July our up sales connection Rhino-Rack early quarter I alone a reporting were will that we Rhino-Rack want on with XX% October XXXX, our note acquired organically. Excluding to in X, second concentrate acquisition recent Barnes, third Sierra segment. of

will We on sales the calls. report earnings new segment’s future

demonstrates were compared these sales year-ago would and believe Barnes, businesses. in period categories, were trends great And to and versus of the growth normalized by – XX%. our in continued Sierra the within comparative sales Black second quarter was the QX only performance to but I excluding XX% XXXX. XXXX XXXX. quarter the of like driven share across Sierra The more geographies, COVID-XX Diamond the staying longer-term power within Black and of pandemic, given space. exercise XXXX reflects outdoor rate, growth this does both sales Not how up sales also depth Given up sales, same the were QX Diamond it all the demand provide we a recovery channels QX

mentioned, our experienced in substantial with inventory also QX a these rationalization increase specialty and drove growth. national our year-over-year performance As our business healthy accounts John partners, at

for driven brand our the with maintained of to that that were was price. year-over-year The on and or volatile of is this We continue by of brand current a fact through OEM believe positioned chain driven increase ammunition. in Sierra XX% due robust XX% million has ammo supply we by $X Sierra we continued sales fulfill Originally, box, Roughly domestic the best green to environment set the inventory core $X.X business. growth to being in Sierra’s goal million demand in was increase initiative. this ammunition achieving a

of continues product and to is was improved than a accelerate offset ability our fulfill a and XX% our in box, turn, the to year-ago to the we our sustained Barnes Consolidated quarter XXX sales COVID-XX third and sales a deploying increased example generate output supply forma Barnes for due contributing strategy, chain tracking quarter. revenue more our in with our benefits on This quarter for pandemic. to how quarter. and million growth. earnings. the we that second gross disciplined Improvements channel acquired well super-fan XX.X% impacts approach exchange innovate the great points quarter XX.X% in margin brand improved in also revenues pro $XX.X around second leading took mix logistics levels and are exceed as compared unfavorable the foreign by OEM and of basis black the to as processes. growth in more of also Barnes We orders ammo in driven currently domestic growth as XX%. revenues, We is and expectations, consecutive new of third it’s believe quarter reporting and This

margin foreign we a experienced point exchange. basis tailwind from the quarter, During XXX

being foreign our global contracts. manage currencies, natural through continuous denominated approximately currency we foreign to hedge with a XX% attempt currency and basis reminder, a of in As risk on sales foreign hedges our

vendor we costs margins. we million in impact share able management record we diluted months deliberate a both same management, have increased $X.XX a per loss increased The to to and the diluted within active general that growth. quarter. to or on our manage quarter Adjusted of $X.X quarter administrative of such expense the quarter $X.X net commodity million $XX.X out. X actively in Through in in share the partners the segments. $X.X million the be $X.XX as of income attributed to million and our understand with X in diluted our per Additionally, net risk an to $X.XX our because second sales increased share second a quarter. to year-ago and of second largely net increase business, is to second loss to to loss improvement share million; $X.X specifically or lead the income Net quarter, in expect the same million gross significant adjusted on costs compared Selling, for our period a of company’s a to copper the million contributed the with compared of diluted increase $X.XX of or the per a of second expenses price. in EBITDA the million loss quarter $X.X the Adjusted an profitable compared per $XX.X $X.X in XXXX. loss or remain million compared pleased in $X.X $XX.X in year-ago to the quarter primarily extremely compensation Barnes, stock-based due to increase due sales; share of million and in which mitigate We inclusion were to year-ago

levels XX% at roughly where and XX% shift year-end. last than were asset to up and last ended Now, our I higher million, efficiency from will we $XX.X liquidity. Inventory our quarter

inventory meet work to to our to with partners chain supply seek continue levels to demand. manage dynamically our We

strong John to with the balance in increase demand. order we As using mentioned, are help sheet product availability to our pace elevated keep

at of our context, chain an are offset elongated moving Black For carrying from partners million inventory the effort supply an in process inventory we additional of our $XX to current to warehouses. Diamond

pipeline raw with higher of in size higher the has confident are position resulted strategy increasing levels it additional $X.X capital, production and of our us working to of and $X of cost partially core The levels will our to our opportunistically strategy. corresponding by as of commodities. demand $XX.X of and reported material availability. reflected better in focusing satisfy are Within that Although inventory our while execution of XX, million manner. hedging XXXX, fulfillment enabled results purposely and are were testament increased timelier the XX, a protect June Such us on we baseline an have we XXXX. has reported At a to benefits rising items margins. of cash gross levels cash component this Barnes, the December Sierra today and compared our we equivalents chains million This to million, supply

comparative The an year-ago ranging to strong generated despite net During total to with alternative items an close utilized inventory of activities ourselves free the revolving to flow in capacity $XX.X closed quarter. of cash cash million net increased to lower we and less XXXX. X, term and by on $XXX seek The an the with generating have applicable day rate our flow We on from same of compared million scarcity feature annum the commodity includes provided $XXX $X The million. income a points our key by facility in we July driven the pressures, investments from second or the as to quarter, operating million free of uncommitted on continued approximately shares flexibility concerns borrowing consumer the partially At credit. CapEx as terms cash million $XXX In to defined does loan. acquisition was facility million $XX.X stock approximately of credit upsized basis XX, million purchase $XXX sheet access total acquisition. and connection million. and balance the debt million was our of strong for on satisfy $XXX to not us accordion X, we had for $XX.X margin the total price at June of on XX reflect facility the base we revolving a acquisition for Under facility common roughly of Please our credit And X.X line July million. of increased to points Rhino-Rack million close XXXX, note, to remaining June approximately basis upsized capacity demand. to a bears after agreement, of acquisition, XXX.X plus X. rate, an increased credit $XX also XXX access cost an and May Rhino-Rack adjusted matures interest an per either or LIBOR up insulate provide

Beyond forma potential businesses, leave the to being use brands. immediate this the our brand’s pleased for growth to have deploy us us us that and supported our Xx, maximize which with and direction additional momentum believe we are built organically as has disciplined across the by strength well other the seen capital strategy brand for evaluate, we build purchase our at year of well will we our have M&A. of facility sustained as growth that inherently Rhino-Rack, extremely portfolio to which us the around provides through the further this of a policy. pro leverage both positioned is upon accelerate strategic with And across Overall, opportunities allocation we innovate and

full compliance we our financial pleased year. announce and ratio that are for acquisition our quarter raising recent to covenants remainder fixed our servicing are second outlook. And the leverage we requirements. within debt based With of requirements our we charge and of full current in are our year our results, debt the to Rhino-Rack be projections, current strong coverage expect our We on well with comfortable and

XXXX. shared are XX% sales an grow of consolidated million. This expecting from compared to $XXX million last We quarter now is to guidance to increase we XXXX $XXX the

to forward, provide prior Diamond was our the prior, provide growth includes in we to Black million in guidance is layer While million each Sierra segment-level our $XXX Rhino-Rack and XX% we now context $XX sales important trajectory. By to up from not which expected we XX% segment, it this as XXXX to up to quarter it felt to moving intention from XXXX. $XX million, to near-term outlook; increase $XXX increase Barnes compared expect million, in sales business

contribute We expect XXXX. to to sales approximately XXXX. million to EBITDA compared from a now million approximately in we second basis, of $XX grow XXXX consolidated adjusted On to Rhino-Rack half to XXX% the expect $XX

previously have $XX to guided We million.

to consolidated contribute approximately our adjusted outlook. expect to million EBITDA We Rhino-Rack $X

In addition, approximately we expect $X.X of million. capital expenditures

is our while cash an have free in current flow, a business. more availability around the previously creating we environment Lastly, shared inventory dynamic situation on outlook

and As our previously, I strong positioned to the to the supply flows balance continued will we sheet most in be product manage and better our option noted value sheet chain our be most we how flexible to importantly, manage use consumers. partners of continue proactively have having creation. We cash prudent balance for and, retail believe to our in for and year remainder the is deliver the

expect As our a reminder, each change. not do We profitable of businesses are self-sustaining, this to and cash flow positive.

have remain our will maintain invested to dedication highest we and executing and over and financial built years. covenants. returns we the strong to on proud foundation strategic that our responsibly our compliance We with committed grateful Across focus operational possible and priorities organization, our for remain managing our are team’s We of generating the this on capital.

again prosper our our to are and ready success accelerate brands allows Q&A. have external that and playbook commitment our innovate Operator, no We proven is and market we to environment. now important matter us for super-fan to the


Anna come first Please from And of Jefferies. you, Glaessgen [Operator will Thank sir. question Instructions] our proceed.

Anna Glaessgen

Thanks Hi. my Good for afternoon. question. taking

how we demand should channel expect clearly, replenishment you maybe and past on today where provide to Could this long mean, perspective supply outstripped continue? stand quarters. I over some inventories from few First, tailwind the has

John Walbrecht

Thanks, Yes. Anna.

that the believe still quarter XXXX. think We least play as and will impact two to the other anticipating of or go I parts it into may market the logistics issues longer XXXX, and past. back-to-school world gain as I’m kicks of combined COVID share. the will all continue has issues in will first at holiday with in the XXXX it we

will about the very and just around rates in challenge, our biggest getting port world. our is of be aggressive the things or it’s whether the We closures movements chain supply management. Logistics

ease chains keep only and of to doing supply demand Our logistics the goal XXX% The ultimately is business on-time of ability which up. and fulfillment continues to delivery, complicates surge, with.

to that think of see hoping spring probably ‘XX. I we’re normalization by some

Anna Glaessgen

now accelerate on America, Polaris, announced as the should hasn’t this historically, with this to recently on partnership And been the partnerships had potential Thanks. or like Great. and in the as you which, partnership penetration we touched North for Rhino-Rack, turning how thinking congrats distributed? about brand’s to be

John Walbrecht

market exceeds I this supply that the not and is over fastest-growing to by obviously, – posted, others Yes. brand. next Sierra now. X it which the that The or checked brand, the its which boxes that go-to-market, with then huge seen segment business, consumer brand we’re where the combination And that opportunity about States the and one share the that market launch of business rack the of automotive awareness on we and far have meets players opportunity and Then has And of or you’ve of here. is Toyota lot home that demand multiple aftermarket this a if the X mean BD just all Polaris in in outdoor super-fan few a the the is right Rhino-Rack Barnes, with leading in Jeep similar in love was We years. focus innovation last history specifically what the overlanding. a real the thing products. played is And of micro-adventures over new to distribution, category that, of demand whomever being we see think OEMs the rack is growing really we to their the systems, years business. of even United of great for or able or tiers or to there like develop Rhino-Rack Ford is of partnering

And on think us allow that this retail But our partnerships partnership to still the we’re so alongside we yes, definitely will Polaris accelerate business. chasing that.

Anna Glaessgen

Great, thanks.


Your Koranda ROTH next from Capital. is question Matt of Please proceed.

Matt Koranda

Hi, I also, half you wanted pretty Wanted customers. to Thanks and know guys. year, relative to like is building there strategy even of back a to any is it’s to implications implied looks maybe I taking could the did still BD – the the for your relatively it see you thread start get some the just difficult out guidance you discuss the And pickup so revenue, supply slight prior if have margins availability to and have tight for build But revenue you there? you see seasonally half in questions. certain the then to for with if back interesting could components? given be it’d headwind strong guys going in, and in for that chain of inventory a years.

Aaron Kuehne

to be Yes, first, of conservative you. the terms how Aaron. the guided part we this year, with and considering last of in forecast speak year, consistent we’ve to we question guide or Answering exist. how fairly Matt, different with entire dynamics this Great continue naturally the is that the

terms how place. continue the cautious in taking place based logistical think chains we so feel the about we’re the within do is the be what’s positioned of are off we year various taking And currently. and confident answer of rest We to about elongations yes, the of that where supply

Black the for strong have we a booking the For order in half, particular. Diamond business back

the earlier during and it different take really be well this to off be As continues into little position favorable we’re and positioned able for down the to able advantage that each availability. script, a the put we’re to we a originally that initiatives to of comes like and of us tailwind that very what satisfy something John product had recognizing every to place based mentioned bit demand, continuing But feel outdoor taking do better it than longer is to ourselves we anticipated. be year, day we to

to the margin progress expect we profile to do BD, improve. to relates it it and As of continue

we at logistics into of we and mentioned things, few that to especially XXXX. increase have also in eliminating as leakage gross path of levers place a side mitigating adjusted that head very on at margin, We spring the Naturally leakage. within there, what’s some clear we be do do an appropriately, we looking do focused business able to because taking have both EBITDA scale As levels. before, but being will this and see from a imploring, feel we’re and that we the

an And the inventory that EBITDA with bringing to we’ve could reflects various the provided so warehouses. of also guide the there – perspective the that half some also exist from back that noise associated in

Matt Koranda

up a understanding with highs noticed first pretty imply just at industry. well? and be the really And I seems given it So just and of turning helpful. I channel inventory been guidance, helpful bullets bit and just the But down, half the on all to thoughts the look sort first in Sierra-Barnes, to your sort that’s it like any that record hasn’t demand ammunition a half that if for does step is I obviously then half back revenue much? led implied to Okay, of the wanted light there would at relative color get has why down still step of that as the

Aaron Kuehne


the So some also we’ve we of we side related domestic, – BD, also what previously. challenges consistent because do we similar albeit just one that the continues supply that with of discussed, that wanted to highlighted Sierra-Barnes experience that things is on to but just to that the discussed

been tempered we able consistent being so in two demand coming especially businesses. we bit there. together slowdown seen the not out our for point, a about overall for have a your that’s to and And materialize past in with that also practice, think how we’ve To little marketplace terms the business the of demand

great done partners job and the satisfy, the down but can tempered on And how in extremely we but I as of once view extremely brand chains the different of of ourselves to positioning ammunition back providers out how be. has premier team reflects retail establishing an one in that a also will to the think bullets, reaching specialty proactive that supply guide quickly and the reliable ability. that it comes again

John Walbrecht


would been hunt all and than the is has there in category. rifle into the going know far think demand so specifically obviously, bullets season. more the there enough But a that in biggest industry I ammunition, in one of we constraints blast centerfire is centerfire

be of exceeding and – as scrappy can, aggressive we a will but had as we we’ve we meeting or so expectations. also mentality as always And

Matt Koranda

idea And a take guess, I of quarterize enough. the revenue back the and for $XX I wanted million Rhino-Rack mean segments, I terms given surprised, $XX trifecta just million to in it, like complete $XX second XX-month of the just if million sort million have revenue could rate don’t quickly real if seasonality. that in for kind you on it looks I just rate. get of revenue be given the just to you speak But $XX Fair in run guess, in you on see But the maybe the year to trailing to I should little any just – constraints on Rhino-Rack. if run what a half and to that could be the half guidance sort may seasonality of of front, in here. Rhino-Rack the Was

Aaron Kuehne

Similar Barnes Yes. also things we integrate focused on and handled of that very with long-term that that for position go we that of is side one – integration this fall, the acquisition well we’re last extremely to the we things way we ourselves through the of that the ensuring success.

the up things especially of has in COVID, as marketplace. that is One that of Australian though, recently well, come the

how headroom coming with in of its businesses. give factor U.S. market there little progression into New the through it’s a we to seeing the bring and line back about is we’re want Zealand we bit currently the strong We how work conservatism where Australia. integration what markets again, core these of baked also currently on to ourselves as extremely we once – think exists. topic. But seeing right within guide in to – little But of the core We’re bit within a business

mentioned able it those John discussed the be well we chains that with similar partners need to that accelerate this this and look be credibility out go business, right in different positioned as can are well, have. to here to to well, as the But make especially we sure U.S. accelerate we needs that way so we very we we’ve domestically with and to what we where to As place in confidence the in get supply business get retail the inventory

John Walbrecht

a matter one bit is of in these thing we it’s think COVID no really control can’t was a we right the how Australia, I surprise impacts lockdowns aggressive now on little of which are in the important, there. the plans

Vietnam like in And soon. had do the recently. by at Some obviously, impact guys, an be earlier in of question COVID not the when markets Indonesia asked noise going the honest, channel is Anna logistics clear, of to or think this as impacts then we I’ll Jefferies, in

to points be and have smart. Now win it the board. be mean on find we doesn’t But can’t put you have ways to you to aggressive,

this a some expected of. you’re headwinds space get to port Nobody will You close. aware that in not

XX% that what hit, even to we And headwind. recognize we like them, know QX the have every – plan and could just so achieve view headwind is, every of hell quarter if a overcome then can we’re the like face, three or fantastic, if of single them, always we look, we is we four we And XX% to achieve fight better.

Matt Koranda

and Great. leave Fair enough Nice I job there. guys. it will

John Walbrecht

it. Appreciate


Please Laurent Exane Your from next Vasilescu BNP is proceed. from Paribas. question

Aubrey Tianello

is This actually guys you everyone. for Laurent. on okay? Aubrey hear Hi Do me

John Walbrecht

we Yes, Thank you. can.

Aubrey Tianello

first has adjacencies those trajectory growth extensions? start of business Great. for think can think a there? time? big And you want you our Can been question. there into on in do I lines, how it that are over about taking product to Thanks go revenue of Rhino-Rack. the can along you be long-term, what talk you terms And

John Walbrecht


of understand surge. got a obviously definitely COVID, playbook. to has big sales in two this the for Typically, outdoorism share been in is, $XXX $X you that single, Obviously, leaders. it, high billion let’s Rhino long-term The million call our been of is today Rhino-Rack typically has has in So competition market million space the opportunity. window low ballpark some the with model. growth there type a think growing double-digit We last business. $XXX

– rooftop horizontal is that is obviously on And from more really is on you to accessories not ours that rack this call what number. the align Somewhere rack than and system a vehicle, of with between are this just something the bar ways from And the versus stereo, point, open the what do up, is but vehicle. in boxes goes and your wider vehicle, structure, the what million rack. a our about is simply you different more even have that can competition in Rhino-Rack, But $XXX probably really opens tent trailer, for racks. a the think itself boxes, back do the create to once I adjacencies with put you that $XXX really theme right pioneer what’s you off Like didn’t system it resolve can What potential space about that speakers, start up. the top what in can it, coolers, to you beyond and adventure, you think the today what racks ski of and million a what that light, To about Rhino-Rack’s of more of everything the bike where on of treillage, rack making but legos. based markets really that, system, as of the rack cargo on. the all north/south name – than

legoism, at and And of the are we then the wider to so relative racks. North just A, opportunities. and that’s where we the biggest these see look competition calling market its American to as opportunities ability it,

Aubrey Tianello

it’s integration it. of as of standalone, is COVID lengthy long going we Got about an the that topic just should operate typically, a integration should expensive or or think of back Obviously, going to notwithstanding, Rhino-Rack, process? how the we then given expect? integration you. how involved but Thank to that how And

Aaron Kuehne

system-type it Because and around of topics, but seeing more don’t a process. planning lot the was go-to-market standalone, the it’s anticipate Yes. we

about And is way integration been six-month we a that thinking so the have it working towards cycle.

about it’s then also or to awareness accelerate same as been through and only years, the positioned activities. have cycle, or we really sure basic time, supported over last or make high business not thoughtful hoping that product go-to-market up. and able but we levels are innovate well new the really adjacencies extremely following activities product really expanded be on-time accelerating that by marketing the to deliveries, it an the are But enhanced that formula the playbook, want accelerate easy-to-do accelerate to being various We fulfillment, of through with, several and we to brand at introductions

And we next to are the working it’s we months. something X that with that currently And expect something have the team through so that’s on. within finalized

John Walbrecht

it a the this on the though other helps I the do side standalone side business, other markets, Australia job and New think that it’s Zealand right. in here different is they phenomenal a that that’s –

model. there the so and over and few try to proved And out go that that goal years. model over last is change They well our obviously,

right North Our make I hope before American to what sure assimilate want into is at take it we where the is to we home. this the And and do closer market really Rhino-Rack accelerate that’s range we this. think

Aubrey Tianello

Excellent. business. I call there be And the been then of revenue side shifting third could either rest you Is noise, that seeing if chain the there? called out supply direction? Were of a know anything the out you any some more in XQ shifts would ask have lot I you. there could disruptions. you on one Thank between the in there just general, and BD quarter last given potentially And the maybe that just on quarter, second from XQ. quarter into

Aaron Kuehne


we to least the on shift of side, saw QX QX million. million $X from of Diamond at So, Black revenue a $X to

Aubrey Tianello

Thank Great. you.

John Walbrecht

ability up. right? order so far our and book is you capacity unachievable, you to everything our production, and the almost obviously, didn’t And can but and book maximize shift. strong The order Barnes side, It’s do our max it ammo efficiency, bullet on just at roadies the Sierra to exceeds only keep not but


next from Ryan of William Your Blair. is proceed. Please question Sundby

Ryan Sundby

of my you about lack to Could of does move any that this on question there XX% quarter. think on this higher well then said goal. make specific competition the quarter, maybe Clearly, that you that guys. ahead their quarter, number for and forward? I Was target? Aaron, the Thanks XX% congrats kind given Sierra accelerate you as that helped be and by the taking sales it’s XX% of of just inventory Hi. shelf the that rethink tracking

John Walbrecht

has want inventory best Do to it. end for able the bit, at This at Walbrecht. we market, in and Did no. – And to the us, the a of fulfill it. answer best you we can we wanted, the store as answer competition inventory levels so people We little business question Were our no. try to view, in at in order missed fall shake continue we our have play Do and ‘XX, face challenging will for we yes? all XX rising we that is months I But next we our try continue do to is share costs then Are obviously X ready XXX%. were may to gained rephrase that I can, tides often but that fulfillment, so said into months. market we accelerate yes. rise an with ships. to even will But is we levels short-term. and the QX least headwinds everything that on outperforming logistics it. And are times to and these to we relative And now, market actually probably long-term this, going short-term that impact in the faster. our the meet

our is through. therefore, more that scale gain so flow believe partner be And that? to we answer And market and for goal create share. best we I margins, Did continue long-term, will can and retailers, continue the to scale to growth, and our this

Ryan Sundby

think guess Yes. target and the I I was roughly… ammunition there, specifically initiative John, Sierra just the for

John Walbrecht

am you. I sorry, I missed

Ryan Sundby

No, no. But – yes.

John Walbrecht

XX%. that seeing Do we did about even yes. higher faster make we be started could straight that we It’s XXX%. it We lot it, goal a than Sierra was running a that, at – and with of out, now for if XX% are than think

at that. do or vertically acquiring to with not yet are the was of obviously. partially we integrated strategy Barnes Sierra have what Sierra, We Part

right did However, everything Barnes sell they now. load could

is – these like go with load more I The value And proved out we of especially have leader categories loaded demand best is the what So, the you become bullets. even side and work ammo can. what the as chain And hunt, foremost portion that’s will ammunition that and very with try to possibly into and as much this as continue of will our we we growing the become of starts premium partners of to this first certain we significant. think valuable.

we hunt stretched in it’s even it no. has I or for think our expectations. yes. we pistol us, could strategy, Sierra we we XXX%. Do sell these believe ammo loading within in exceeded made going didn’t ammo chasing, we And there every is now, brands, that, has so ammo Has for right single and changed it more away, bullet think But really to our OEM, frankly, do if opportunity make

will So, there expanding increase opportunity, more production we continue while to is our our loading. and

Ryan Sundby

of bigger great little bit going that consumer year Got online it. or the also least Do either that an terms approach for think engagement hear And consumer you kind are the Yes, direct to is stressed to so. a than you coming of in brand been at mix inflection there that a maybe have what means with open or involvement you or and now for forward? that hitting are feel development stores John, perfect. this I I your more like the you that’s kind quarter. thought. like feel community-centric have of

John Walbrecht

in backcountry saw what climbing, this think we really starting even more sports ‘XX and the outdoorism name was running, trail you I of XXXX massive tailwind skiing, into people hiking, and it.

towns. the a is and leader but where this going community in our meccas only responsibility people more experience to seeing we and people we equipment-driven think that. watch heavily, therefore, grow. that to place, the growth that this have heard during mountain and voice with believe And that that we that snow to activation up are and outdoors the we the become we in access works off. that to of be but are these around place and continue we as take specifically, Alpine came going are train educational in all more are these an responsibility safety. we have And and coach, this we that educate and We from took And to to specifically to towns winter, They They not perspective also an a country safety communities and where the super-fans. make never opens – to lead outdoors. from, are be up an onerous as on these watched of what Towns really think house, sure on builder for really to opportunity, one continue popping a

Ryan Sundby

Thanks. That’s hear. great to


question is Please D.A. Linda proceed. from of next Your Bolton-Weiser Davidson.

Linda Bolton-Weiser

you. Thank Hi.

received us did magnitude So, on they I of increases a the and price some by positive those have of how customers? And are effect you May. that that, on quarter increases kind believe taken in price update results? you had Can being increases second the

Aaron Kuehne

what we around don’t We a that on Typically, were did. taking in price commodity spectrum, industry the publish really on that really were pricing standard with place industry. in that did increases the discussions wide the and we the

maintained have We prices drives those bullets and in for is even-steven markets. our fourth now in was frankly, third quarter in commodities. our quarter I and products, with demand And really literally QX place – the Pricing in an taking what what’s don’t the ammo. overarching results the for just both

Linda Bolton-Weiser

logistics – any the more freight and margin way gross strongly a bigger your things materials to Is components were there gross Okay. the break about logistics there was it up though more the on then and Thanks. and you talked can Like inflation it impact was like quantify was like shipping impact margin? component the and margin, and that. even that down? the impact impact or due And negative you on was and it the

Aaron Kuehne

things, have of that impact side and logistics It was the of on XX did to more chain and a margins. negative basis points about consolidated related supply

John Walbrecht

Sierra type on more of the Barnes. obviously, on and domestic deal Black And the Diamond production

Linda Bolton-Weiser

pretty will strongly that important in to Okay. in U.S. And distribution as you, to confident organically place How would the plans markets. and they you of you the in market I quickly really mean, after can remain New to Australia move New can the then terms I obviously, expand are to continue Australia as grow whole you I ask of near-term and in But expect in just Zealand Zealand? Rhino-Rack, integration have

John Walbrecht


awards. new their which there. pipeline look out in But they dominant the we share, strong this really of is Australia New what like are and at and where have as we there market Two, design super-fans, is to criteria, including very does really brands they have when obviously, innovation, we a proved a look stated, innovations So as history for recent that pick one, many pipeline the the leading and Red times, Dot critical of – Zealand.

accelerating I some New and Australia other obviously that looked is OEM a on opportunity job there have done they like think phenomenal aspects within they at have still and market outdoors go-to-market and believe Next is between there partnering and growing feel there is with not it’s aftermarket. the realizing then at point confident because they this brand. the they helping in ideology of And But growing the them Australia demand we markets, the the ceiling that share and have, there. a certain trend and Zealand, some market the I Zealand, go-to-market dominant New has pipeline and we slowing albeit the think on just that down, is are

don’t other part addressable growth help world. other will or of than and of opportunities, obviously, will – we that other that gain which to to in expect and expect market we are them the are don’t it racks growth markets anticipate expand continue anticipate faster what to find as will is will we then we into. that opportunity, in extensions be the So, the we parts And this, that expansions bring it the can accessories the share, adjacent them same we though

Linda Bolton-Weiser

Thank for it me. Okay, great. That’s you.


Mark of Please Your Street Lake proceed. Capital is from next Markets. question Smith

Mark Smith

guys. Hi

channel is in First you bullet the or backlog, hit that refill you the business just one how that ammo, at Sierra about maybe to in specifically the can large timeframe Barnes and inventory? – talk quantify all the magnitude can to business,

John Walbrecht

that tell is market this today, I you would tell months, this that months, is a going the to at next enough All think don’t if look slowdown I we with will I there my XX for at to is by right. see you are can that hope that, least ‘XX. And to for If reality we longer. get in is we maybe fall that hunt hunt fall not not season And still ammo ceiling or dealing bullets ‘XX.

Mark Smith

throughout you internationally. continue then can have demand, and be as there seen acceleration retail industry, or domestically looking outdoor as And at any is the consumer well Okay. slowing you speak some broadly all to if

John Walbrecht

we all, as season actually level not We anticipate year, and that seen we well see be not the winter slowing the any fall the – at have We shifts, come the chasing multi-door sports. the at this at as #X specialty level surge if accounts. or will winter will we activities

IGD will I out out as accelerate. which – haven’t it continue COVID, now comes momentum we coming positive rationalizes of seen months. And are we seeing actually think XX of for more the Europe, to market,

Mark Smith

how quantify all retail direct-to-consumer me, from you term growing your you And businesses can then then current partners? manage channels? e-commerce managing last your just with profitability growth while the one the Perfect. and just at also retail those and in or longer look the stores, at as relationship you DXC And

John Walbrecht


So and obviously, have first easy-to-do good on-time delivery, fulfillment, we with. foremost, always business this. It’s stated

low you your model. because and – you do You fulfillment business DXC can’t prioritize are to difficulty have with not

So, our before it’s DXC. and wholesale market specialty prioritize that important we really our

long grow DXC. while We to want on business grow through with either product consumer we Now where Diamond product at them that Black go than believe opportunities our and I distribution more you be we our also is community-centric have struggle to awareness just themselves continues to buy to syndrome. more that to this still as is wholesale have they create DXC runway product. or just of for continue of will flagship brands. them itself, rather the the because stores BD, the BD the the of part DXC the through Part to time exposure the educated believe to and that with growing a continuing of versus

on strong both as also BD never come we Diamond, the And the an seen in see the Black our a your meta with awareness we brand but really will fronts. heard distribution. both brand. super-fan, think to be for is has that And stores never You they our on or it’s of consumer favorite those issue have whole this. of retail either who both And because world. time have The flagship proved become I expand

Mark Smith

guys. you, Thank Excellent.


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

John Walbrecht

Thank today. our speaking participating third back results look All again you best. forward conclude when come with the you at we that appreciate time. to everyone. We and We you quarter


Ladies conclude this today’s and does conference. gentlemen,

for now disconnect. participation. may your You Thank you