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Clarus (CLAR)

Participants
Cody Slach Director of Investor Relations
John Walbrecht President
Michael Yates Chief Financial Officer
Aaron Kuehne Executive Vice President and Chief Operating Officer
James Duffy Stifel, Nicolaus & Company, Inc.
Alexander Perry Bank of America Merrill Lynch
Randal Konik Jefferies LLC
Matt Koranda ROTH Capital Partners
Laurent Vasilescu Exane BNP Paribas
Linda Bolton-Weiser D.A. Davidson & Co.
Mark Smith Lake Street Capital Markets, LLC
Ryan Sundby William Blair & Company LLC
Call transcript
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Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Clarus Corporation's Financial Results for the Fourth Quarter and Full-Year Ended December 31, 2021.

Joining us today are Clarus Corporation's President, John Walbrecht; Executive Vice President and COO, Aaron Kuehne; CFO, Mike Yates; 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 now 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

Crystal. Thanks,

harbor industries begin, during our operate. and Exchange I Corp More forward-looking remind These we well the available the provided like on And Litigation be A factors Private I'd tonight. Reform Act. reflect via replay are everyone will would forward-looking starting remind call, XX, Commission. we that replay in with today's Company's our on subject These included website March safe is and under in today’s p.m. statements the several make everyone press that on could the filed of will the for at which uncertainties known information Clarus information like we in to be Eastern financial X:XX Securities to Before these to provisions assumptions as at claruscorp.com. estimates be results will statements. statements of the to risks that as available statements link Company's time and face call forward-looking based the the potential best understanding time also this we public us and to making company's webcast Securities through from release reports affect today. the

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

John Walbrecht

afternoon, and good Cody, everyone. Thank you,

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welcome to earnings Mike So his call. with to I'd like Mike. first that, Congratulations,

Michael Yates

It's Clarus to for Great. thrilled Corporation. first my results as be here call John. CFO be such Thank the you, to strong I'm on great sharing today.

to Before share I with have into get the want more for our strategic numbers, that our company. we align to I objectives segments renamed the

as brands to refer our brand outdoor forward, Black well segment. climbOn the PIEPS Going and Diamond we will as our as

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free For fiscal provided decline defined flow prior cash utilized activities $XX as year. is to cash of This year negative to full operating million An had the compared in CapEx we due $XX.X following net the the $XX Barnes less or transaction XXXX, I approximately Bullet million a and related of million million a also items: the discussed. the $X.X It is inventory result incremental headquarters just purchased the to million increase cash in to in of specifically capital related working the expenses $XX investments acquisition. XXXX by for

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Aaron Kuehne

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to committed highest priorities yield execute on are continue will We on invested that capital. strategic the possible return our to

ready the operator, and and being questions ability answers. our fastest of consistently growing industries. for one confident to in are We With drive strategy and now that shareholder are value said, we

Operator

Jim Stifel. Instructions] [Operator from sir. Duffy comes from first you, our Thank And question

open. is line Your

James Duffy

you. congratulations Good and great year. welcome. a Thank guys, Mike, on afternoon,

Michael Yates

you. Thank

James Duffy

up more materials the in about with through asking you've K. I inventories wanted demand aggressive of by supply a keep like help looking to materials. and raw looks posture start taken to It the challenges materials points the about speak to with of you? you respect different for have segments, Can how stands mix three raw and choke kind present supply across you that any could of

Aaron Kuehne

Yes.

bet. You

Jim, So Aaron, you. this afternoon and is good to

to key position, pretty As our primarily components highlight, and aggressive we supply of related about inventory positioning in you the also units. chains of for we the were different terms our as solidification business think the

the City of Asia Diamond, Southeast experienced from from inventory, see a timelines days. logistic good Salt are standpoint, on being building considering a XX to we Lake and for days focused Black the First that finished we’re more up times would elongated and going XX transit foremost, it, Europe, traditionally that call where

We are to seeing those of respectively, geographical regions. now different days days, XXX transit for times XXX about

As the out that on a that's is overcome to of we've result miss you able that take. to the to water. And the that either the of that, way you pipeline been inventory position that frankly or increase have the sell on floating

product our the and important here note we is through it's from our to to cycle, consumers provide and to it's our retail ourselves product that of focus end that don't or level highest But our vine the we're obsolescence planning fulfillment standpoint. instead, plans a line that lasting rot demand durable, Now overexposing need to the believe committed our possible. mind on product our really merchandise it's that promote and doesn't to that our discontinued keep you, partners

what Now, our with material of of side Sports see segment. on associated you'll raw the is Precision things that really

availability, material lead, of cases, the raw before, whether would here primers, of that constraints key be et it highlighted is shell propellant, have one cetera. we copper, As

in only but copper how market relates important also to output, copper we XXXX terms to to our strategy as of that enough approach point component where so the first in securitize of to a we're And of lead also in inventory balance and our that we we've This of is to line enable it the of to nine aggressive and us have or XXXX. demand. commodities. lapses sheet manage taken months pretty to committed through in the through where of hand securitize exposure satisfy not our opportunistic substantial would our levels particular, utilization In extremely with

As also these about have a had the we’re bit volatile on pressures which that benefit below product the but have been taken moment, that purchases appropriately continue we right the enable pricing, to us is course of right inventory focused ensuring had commitments on and the and prices these place right know, raise Rhino-Rack was they throughout place of we rates also about increasing side demand the inventory things, then that and of and to the because at but different also well marketplace seeing, at are the that current the only to the accommodate in us commodity it the And the were time. of year. levels we not sufficient ensuring more current really

highlighted, an that growth came the pillar businesses. that, we And of away panel to to and more four to in we strategic accelerate centric when and the needed of ours. we've can for result regions we to of within what of growth we head of as terms America. is really three was That a last of XXXX it the from In center of area North XXXX, particular, to Rhino-Rack that start ourselves started North accelerated an in product believe MAXTRAX in key across months a to shift gravity and the holding different to a availability really better that As of set as into particular, America Australian focus ours start position globe. the and up rebalance

James Duffy

the comments, Sports And with your scale probably acquisition are for to then hoping capacity business I respect Aaron. you've questions the speak that, it like the could that to business I the for Barnes where American North the Thanks and ask want marketplace? follow-up the headquarters. you place, was been infrastructure Great. of utilization the Rhino-Rack you your way last capacity manufacturing coming up working the to closer – in on to capacity to Precision with opportunity as is sounds on just following stand in supply well.

Aaron Kuehne

Yes.

Sports Precision segment. So with let's the start

XXXX a bullets. XX so reminder, to also when to and long-term As XX increased combined we million capacity million. that when eaches XX our to of years. or or We was bought we winding prepared coming rounds for over to of it million of that ammo finished XXX or XX business We ammunition. units close Part of producing out to about and our remarks facility. believe $XXX bullets this is bullets, million, XXXX, of to or was to units or close Sierra, finished through eaches December to bought doing the Also, eaches XX close close which year it producing Barnes accomplish million XXX million doing in we can the target XX million close loading eaches million million

a was that within As of both key focused we capacity And gives now and on the your employees, to locations. a of those us that the result, commit acquisition to very our overarching XX acquire ability the we it facility but the to also that increasing but location now are point, that to for we only that not we footprint. that, because Barnes to we have building acquired did also on itself, the the own. expand land gives flexibility facility of us acres Not plus lot a room and only continue growth and to now of flexibility sits component

of of at the chains of time purchase. On Rhino-Rack coming your lot the supply existed that piece, chain the to supply is a the existing out still point,

an Australian so Asia still focused and And from very Southeast that's perspective.

key really as top we to can items being in focused vehicles our has and the really how growth Our been really drivers with the levels that XX U.S. accounts XX we top the focus inventory the are to service to XX the on here transition on ensuring XX see we that that U.S.

As once that, place just a in focused at result of right time. the been again, getting very right the right we've the on inventory

idea XXXX, also we retail EDI best-in-class embrace increasing and to and such As easy-to-do them customers, to will tools processes other about being enjoy enable that and can think business tools folks our systems and sales really well with. be will this to focus of really service, as our our we whole about as as that provide so

hitting As local capabilities today. North also can source but type more start the chains, increase course step-two of compared through operations we at related to also but we'll or go here things in our the that's where process supply to our are XXXX, also look capacity of to America, a where we and more we

John Walbrecht

inventory on these the as question Jim, blessing of at the overlanding saying, kind summer America, months the right other this, just Aaron's as a for time was and months never follow that reaccelerate It are product chance end in those becomes right then The we new summer the is opportunities. rebalance having in as the the counter seasonal, in market. for really North comes Australia, which and it us intention. right to And what

James Duffy

guys. all the I see. Appreciate color. Thank you,

Aaron Kuehne

bet. You

Operator

you. Thank

Bank question Perry from Our comes next from America. Alex of

is Your line open.

Alexander Perry

Hi. Yes.

John Walbrecht

Hello.

Alexander Perry

sort here. yes, covering this capacity of and maybe sort the above Precision there here, remind of to on Is can But, on give of of excited growth for to there? maybe story there? strong just the guess then on And and guide Mike. taking just levels within here, my Sports, restocking inventory us a channel first I the Hey. sort Thanks. biggest welcome, the low more back us embedded efforts sort range that for look be thanks you single-digit what's quarter I'm question how limiting going factor going congrats color still? and

John Walbrecht

Yes.

literally ourselves also supply both XXXX, retailers. included, we saw As demand but we out the entered industry participants the

the like with first]. the well And be that industry what obviously ammo that the for to copper, other say. to So in led then ones a we probably first The Sierra to going drive. things water yet started expansion other that issues or the see lined chased Barnes. factor Within XX be is for capacity churn elections months. XXXX district Barnes and industry has it's Europe, our we rounds. XXXX. specifically of the order and don't across said, it. this we're on issues Sierra Eastern driver going with And we a for a to won't it then obviously honest and ammo up it types lead goal in even and of to us are and in biggest be became accelerated at as the shelves and as hunt place honest than that nine-millimeter XXXX demand And improving particularly but of as XXXX, Aaron constantly continues then to deliver going in business been chasing fulfillment the waves we will but to in see was constraint to targeted the the to retailer [XXX XX the not limiting levels, and this has demand a XX XX%, changer to raw in far on lots became players, board, have to that the to that ammunition last all a with probably in of the less and chasing XX XX really everybody to to Sierra XX% following the is people time, is year, is and constraint and in until capacity of rounds to has own by expected. in the be And the in the able brass like right. meet been and game consumer the still It shell to inventory whole as included process. Today, focused why format, against demands on we're XX capacity the election a for could chase inventory still see with running on ways check a cases, side geopolitical industry that excess control real And And materials as start, in Again, million Barnes able the Sierra. million Barnes, XXX% you, different

going clearly of seasonally this So demand that where see think continue XX gives little you be way plus the strong market. we We it's at least bit next to a months. it though see for shifts we the to and

Alexander Perry

partially And a driven in helpful. retail then out little really Can growth Outdoor in think maybe called there? That's the going being wholesale partnerships. adding bit, strong you you of give Are a distribution? retailers? more that of Or expansion shifting you is I gears additional deeper us existing the color with by sort segment

John Walbrecht

Yes.

consumer hiking it think very and we this trail find whole, trail based a as blessings to the and the mountains. in really this obviously, been anybody a America into go roads just other we black with activity decided year what additional in for skiing, has was of who's backcountry people of few outdoors head brown new tailwinds going last I you're than the to explosion to outdoors and explosion on what tops COVID climbing, that running, say call don't had escape that. this North and associated created And seen and

first that Fjallraven to become But the outdoor outdoor right find and in seen the as of key is North foremost, like model, where can in continue now impact outdoors then and So all that. you retail expanding in The direct-to-consumer what expansion specialty as and U.S., both well expansion years talk we've be aggressive, when I Nordstrom, the wasn't stores. to seen that accounts. will to fashion. point Patagonia, pseudo and seen a loosely your driver it's five market the you We've use we've explosion about of outdoors brands done And ago, where Face,

Bass Academy name like see retailers Cabela's, expanding you XX see a like well accounts year, new to are doors doors as Goods, expansion Warehouse, REI you growing Sporting And their distribution. you who XX Dick's Sports, Pro, it, so Sportsman's as Seal,

And really has consumer lands more only lot retail but base of the new of invites and [indiscernible] every drove the all the Dick's trend. those each that participants during that's not more the He COVID. it. It's wider the much where what a outdoors. market to to more format. always involved It's importantly, In really finally inclusion doors rolling new to really into number the of climbing more exploded. announced the out just that fact, retailers public And climber doing that then following one this, was is these and core not mix, adds and and new successfully started sports a climbed expands the in or retailer that

Alexander Perry

best luck That's and incredibly helpful, going of forward.

John Walbrecht

Thanks.

Operator

Thank you.

next Jefferies. Konik comes Our from question Randy from

open. is line Your

Randal Konik

a Thanks Good just bit. Good taking evening. for little unpack my I wanted guys. to questions. afternoon. segment the Hey, Adventure

just year-over-year XXXX? that gave XXXX you revenue rate looks assuming us for the that us of guide give on how You for perspective of curious? And full-year what the in businesses XXXX. Can some like were the that a growth on full-year, owned looks a

Aaron Kuehne

Yes.

So to speak Randy, pleasure great a always to you. have and you, with

look experienced. the double-digit remarks, segment, our growth we though, in about high-single Mike We wanted mind, is the guide, year-over-year were guide pro different looking to terms the at headwinds responsible providing approach. when of you highlighted to on So standpoint, with forma considering just make you're we how Adventure in the in in a are low prepared sure from think this that rates. keep what When a being at the we're that consistent basis

than there's the biblical the floods to our we and now, and in of a through higher be and those in into targets to scrappy and of continue coming we Australia in a few want should path that a elongated accomplish to that. to for category clear naturally something look chains punch be to But XXXX. guide, growth right be and factor And Now that headwinds will supply through with U.S., aware this our is that much long-term we're reflect we exceed. able have dealing is, even actually limiting types believe approach

bullish extremely this we're segment. So on

the not through because the what we a of are our lot of headwinds pretty There's believe these some bit for of less also M&A, guide opportunity opportunity for a just experienced, just than external growth, market organically just that is is now and terms but I massive. tempered both As because that being addressable of stated. in we're highlighted, being that segment right

John Walbrecht

us guide in believe case that and with this few nature, we consistency category, everything it, or The we arise the channel as name our said, luck that be overachieve expectations you and we that based scenario. upfront then I confident over at and of transparent whether minimum, as on to realizing confidence our continue, last the think anticipate we do or scrappiness by Randy, very headwinds you some very we scrappy lot be all can it. Then will by years. political and temper very the about if that. watched that headwinds will But but now work for also about been goal about is our guide, our the worst hard go over feel geography a clear quarters, exceed these to the last hell and that's we and multiple out,

Randal Konik

rate synergy much be distribution would it businesses. able for all And you assuming get that appear also the would that were helpful. to super higher the It's growth Yes.

kind because you I So of… – want Aaron can to maybe

Aaron Kuehne

market we Australia as not lockdowns can we're in little we're COVID seeing at we least floods, biblical having still that not yet where a faster this having in nor U.S. the And are where be market. in

opportunities fortunately to we market And than so we're in home those market though, in see Australia markets still New upside that able and growth the for see little in share quicker are Zealand. in significant to we acceleration

Randal Konik

Yes.

across something that end helpful. ask pipes. Aaron, you I sold comment have all distribution that to And hope the would comment – made – by that's kind of portfolio I you the a hope to So super being of would you your wanted to under about of believe this said you XXXX, effect brands the

distribution products and that talk around across and through kind executing how your think kind So and that kind account of more how us your base kind walk that about bigger much and scale accounts kind their will, with about Thanks. you and more this guys synergy of of maybe your needs, meet customers about of think you of brand you of and using and effort because walk services, time and how and through are through ordering think if those strategy opportunity you impact to you providing kind just have kind of or products there? of you

Aaron Kuehne

Yes.

I and this. will John So tag team

a to is strategy. just again, Once opportunity the Super first, brands. what brand Fan nature was our a So clarify, this each and highlighting of of there's of that not is I because defined real

these the about, of exists our innovate pillars with. foundational we've that them just DNA extremely of Super also instead through we we've and lens synergization, of market characteristics embracing being share unique open that Fan outline. brands, about understanding lens business pretty of within to but one through all don't been through been taking but the As accelerate and view it's able the the easy-to-do And and strategy

these of for key we of offer, span all segments because with asked strong able product us are to and nature from being Now, request the said, have that to that accounts that our seeing product that we provide demand them. that and some of brands be this the to there is

the that end of extremely with level or first identify Rhino-Rack, months Rhino-Rack brand the this on just it one frankly well couple the able specifically, of aftermarket have foremost has and resonates business and over been learn with is going be. Now is that not easy-to-do being within focus of where needs the to to we service whole the because concept consumer we're to last our of things been automotive that

implore. And line and of strategy that overarching we areas with it so right the focus the in plays

with, they continue want real relationships though asking in that we've run MAXTRAX participate the we piece not what of the as develop approached would support because of been providing the overlanding looking – And to efforts only is as activity these foundational overlanding are they these to we well The with by marketplace, that but with is as them able also at, some and Rhino-Rack, this product. that outdoor on of accounts key it. because reputation developed us elements going business pillars the have other into the to of look in what's in or the we've which we and their

the an Fan of key product because certain the the that different run And business, from will but all gravitational so our way Super where accounts the you'll within the opportunity we of the that there pull do see end categories because with that brands. be segments believe of year also exists by we

John Walbrecht

one really are – I synergies brands. the my are just this, consumer's important, behavior on is corners, in whether comments really the The of on the around Fan you we're think Randy, which the favorite that the new think to driving that it's we're is playing when this, look ability lucky outdoor Super and world.

a your of experiences SUVs? in are parking Texas favorite you saying of don't one GMM a the vehicles to so do retailer, trucks, are lot I in right, the that parking XX%. big standing percentages what for was, said, And with pickup great. And or my lot holiday think I with him, and XX%, Toyotas in we the laughing know, retailer the

aftermarket, but driving their the has them choice. vehicles, right. here. to already either for And wow, you be go year those $XXX I the on fits already went, doing million picked a the a sell their million, rate exact if the or and that you a $XXX of activity made choice It's to you're fitment base same and you'd had he's already those They've which activities which vehicle can X% automotive them can consumer. then an they're eyes is. service So I consumer

two. to Now, I just need the combine

Randal Konik

Yes. Super helpful. guys. Thanks

Aaron Kuehne

Appreciate Randy. it. Thanks

Operator

you. Thank

from from Our Matt Koranda question next ROTH comes Capital.

Your open. line is

Matt Koranda

to Good afternoon. and both well. as Aaron guys. Congrats Hey Mike

Precision cover low million the of a bit any bullet outlook for the that's single-digit about wondered ammo wanted Just outlook you to is and that just just for price Sport growth And $XXX or to revenue if could the speak mix pure outlook then year? volume? sort more and in embedded that versus

Aaron Kuehne

Yes, you bet.

is Aaron. this So

of at we Sport, as within least expect XX% to ammo So Precision our will that highlighted, represent business. our continue

to we tends towards more maybe we as within growth also bit opportunities little bit. little but highlighted ammo Sierra, a that piece, quite Barnes things. of just the bullet unpacking component bit see side worth – a it XX% the is lot Now of And of and continuing are plus trend to a a

that months, the on been every it's Barnes XX the ammo all, to and to market indexing important of really XX First realize piece. focus last also over over domestic the

of of the that Sierra also when that the our differentiation of comes we to and when within to be really comes key choice precision end whether we terminal points We've that also draws consumer and accuracy that cartridge. Now it and of or an talked about in before of unique it Barnes. characteristics ammo believe would characteristics These performance. have both terms after are ammo requires these it and

we that The opportunity look is to stopped. though, to other to customers, an for or prior has that's had as within. another we strong that from providing increase exploit also prior to international we of XXXX, continue And piece taking not to take bullets that – presence demand and market also share OEM look will XXXX, capacity a side also

OEM to increase will of but will expect in so it, to the that to business, continue not XX% be XX% And overall, our our things, of, of that black on overall, but also focused also only ammo continue to to business. continue out round to also box call look range our capacity and green side support to the customers but are entire ammo offering, the box

Matt Koranda

ahead. probably it. there, go maybe Got like sounds it just more that you And deliver just the volume just given made I capacity to growth. Aaron, just question, the but commentary price would assume

Aaron Kuehne

we were also And on pass Yes. able to pricing.

believe the for of level, of at As where highlighted XXXX. call in to we share. true brands is prepared market X% were across but increase increase that Fan able Super price, pricing, to able or that a business all the And gain it, different the overall we manifestation this in so you're remarks, units Clarus also to

just to as benefit is for the also way increasing But be us, there. units taking well. a have along it's there about that's so And share and market

John Walbrecht

that Matt. I think others question, ask will me

the important to new every market innovation here look with new every cost Diamond, the and constant through and now price the the function we season it's then the realize we and products through the and in cycle Rhino innovation year think I or with of pieces. product, relatives price as Barnes, just introduction at Black and through products a both of season of revisit share MAXTRAX course,

that. stealing how best in it's the very really, that goal, And activity our the Aaron their mindful we to always so we're make us we But market one of in days ensure consumers products have out as share. their best show about tool said so it's do that can an that – and just ultimately

Matt Koranda

the have Great. Outdoor called you that, segment – Thanks so for John. was And the other then the embedded I that's my guys in out question outlook. on conservatism, guess, and that

something have your is And misheard you million but prepared in but the thought, $XXX so may I XXX. you, about book I order remarks, range, in the Aaron, outlook said the

on sort more into to the the a get if of – see just conservative you Europe some maybe little we could outlook? how approach in color developments bit BD So of approach more and wanted recent in factored the

Aaron Kuehne

Yes.

the order $XXX we've global is the Black accelerate a spot brand million. once on way are really Diamond the within that you basis. to marketplace with a being around book position This testament on entire the commentary team, the the again continued and to So

that one just that chain comes the we're headwinds the is we at things it when to and supply looking Now, things. of side of logistics seeing are

– some it's a full just that's experienced third-party issues of by our we that's and example, anywhere something freight to of why And with with mentioned, one half month impacted as a our candidly, sorry, an our from a business we As how overcome also month terms in guide that reflected well. as in receipts. that's QX we're our that of through for working forwarders,

as other The electronics, other thing is also it microprocessors that business. seeing delays relates we of but some trekking pole or component are as shortages our some even to such aluminum for

a entire is of us for and not that they seeing are to team the – highlight noise the us opportunity team it is a be it's that the work so the and once continue exceed to substantial to the we the that chain to shape. be there's on again way lot execute. into supply chain terms out, how our they the side depending continue of things take in side guide, tempered causes of to supply And demand an there, kudos this to way put recognizing business some us amount bit that that is But to able in more give logistics a huge the that of little to logistics in for but things of just

Matt Koranda

the queue. guys. I helpful. back will in Very jump Thanks

Aaron Kuehne

bet. You

John Walbrecht

Thanks.

Operator

Thank you.

from Our from Vasilescu Paribas comes BNP next Exane. question Laurent

line is open. Your

Laurent Vasilescu

Good your strong, finish the and as afternoon. I roles Mike, can word congrats say to year. Aaron, on the if new scrappy

Michael Yates

Thank you so much.

Aaron Kuehne

you Thank the for word.

Laurent Vasilescu

that like You word?

Aaron Kuehne

I do.

Laurent Vasilescu

I it. John, forgot

here. the around comments market business, Ukraine your because business, appreciate your business Eastern because, XX% I play Ukraine at think the I and business situation, obviously, I Russia don't European I obviously overall of Russia market's quantify going, abroad. just maybe the and – comes maybe from your and you know could if dynamics where big you your know how

Michael Yates

Sure. Mike. Hey. it’s Laurent, Hey,

that and into directly significant, about exposure Our $XXX,XXX a it's Russia year. isn’t

that the number. when to in a smaller about decision thing And a value-driven do. Aaron suspend and led on operations with it's But to John and part our it's talked Russia. that So and decision just I so customers to our right this,

John Walbrecht

our a talking session, is IGD in obviously book, by you North portion Slovakia, all just prioritization allocation, primary Eastern Slovenia, play around more that without obviously in first and Aaron not that supply and America our to in think And Europe. about question And focus on your it obviously a as of has specifically Europe, But European we Eastern I Europe followed been biggest demand. and have able our Poland, demand as focus said, we question-and-answer to XXXX heard of we're the business.

smart that all so part where inventory. because this you're you making about to going inventory get of of And that just allocation of is put not

Laurent Vasilescu

XXX I freight. adjusted margin basis a up your Very bps a mentioned, includes Mike, of air I about XXX were then Okay. you think basis gross incremental points And which that I helpful. think think

all it's up So XXX. said,

acquisitions know being how overall headwind Just that about margin, gross we a context much was and first freight full-year do driven think air quarter how curious such just just by the for everybody? of to the and

Michael Yates

Well, Aaron first the fluid alluded for guided the gross year. supply still standpoint. about just chain we haven't We for is quarter to from as right? talked The margins, a pretty market

are So still those we incurring types costs? Yes. of

important that's the We to months I So that understand. be for probably – think could actually. a don’t next headwind six

So we improved basis, net way price, Net growth price right? price basis X% a we the this cost are We've a we're the looking at margins, targeting on put on increase. through Aaron mentioned that lot a over last expect as out basis to about margins long XXX challenges way a there a But go XXXX in by alluded there points. to benefit is and hour. to of we've the

it standpoint. of forward So that's at we're looking a from is XXXX going – how we're margin kind how

Laurent Vasilescu

Very you the mentioned I helpful, bit targets acquisition. my with think go leverage that last And right potentially Aaron, you question. could little higher Mike. a

your may you would higher you it which segment question you credit acquisition? higher you go? And would the assume just logical part mentioned you be the but in it two be how much would Adventure in much would segment one, agreement, think how I made if Like would potentially then what's to it go? revising – max? be So here; another

Michael Yates

again. Mike, Laurent. Hey,

remarks, to and to Yes. bring said targeted think range. place – right. into in looking in we that months to we'd our that space remarks, in to look disciplined mitigate get whole next we'd that and pretty All the two we into X.XX? over M&A back plan a take bring we're prepared lot three past range I to we'd in have fashion specific prepared XX be outdoor targeted that or a the it in we back leverage do our wouldn't space. the Could up go to adventure as a But that, the

Laurent Vasilescu

Okay. Very you. Thank helpful.

Aaron Kuehne

structured. I the about relationships to way also that shown it's manage agreements highlight to capital allocation note think help credit how in our the demonstrate how willingness through we have is just, stretch have or their highlighted important our we the leverage. there discipline think also to our policy And banking that thing are we continue and us to

basis, over that's the would a business is on and the actual circumstantial be within you also a that we path from We'll very the range healthy because we that EBITDA, how skis we free is type disciplined. means. also is our or we'll of believe it acquisition also What considering will. do bit everyone very and on always both long-term be tips if becomes we perspective And way that commit of thoughtful, again, that range. continue not it the all to but that progressing clear cash remain to something as an once flow what a the depending maintain Now, that have anticipate to a we'll on getting

John Walbrecht

sooner It sooner back is. we following out opportunity. additional range and the opportunity the deleverage that each business obviously and prove discipline next reloads and get The the acquisition the in

Laurent Vasilescu

you Thank all. Great.

Michael Yates

you. Thank

Operator

Thank you.

next from Linda Bolton-Weiser question comes Our D.A. from Davidson.

is open. line Your

Linda Bolton-Weiser

that wholesale, a kind to efforts did of if of Or to Hi. I able talking having you as customers. you to could you – something versus each your much is supply few bit kind as supply talk issue? retail quarters ago about balance previously? Is about were was you DTC being wondering little still your constraint are channel able an that without a

Aaron Kuehne

So that through. is something that we're currently working

weren't and according best we trying efforts prior the flow to despite terms increasing because concern times for lead goods our deliveries quarters, or as seeing highlighted noted, we a of the the to you the topic accommodate that out, that this As that. of lined just in was of in pipelines

consumers level our As believe product, our will also we to of our high do retail we XXXX not for look own also a each better end fulfillment rest partners, of and level through be in but year, the for channels. fulfillment that to only high we provide spring a position a the DXC

away that, to term what service taking Our direct-to-consumer not want business We business and to a accounts. where have primary also realize means is the wholesale relates area that to targets while as longer it we focus. from it of importance of be we our

to that the brand representation consumer supply the we on that is in operational product can the on of onerous of customer time, And we to have sure and regardless really base place channel. best so right entire make at right the the provide the the the team base chain team and right the so

do that end we a head fulfill tail though, the of in able believe the channels. as that half, across different first the half should we we back the to position be particular, the so into in demand And be to and better exists

Linda Bolton-Weiser

like you curious Asia shipments several Okay. kind of the in just your terms freight. market? on And contract for open like on do or then of buy was year, months time I the ocean Do or of you a ahead for from that,

Aaron Kuehne

both and the on Once of more immune market, advance It's and what in is in increased broader days so again, up not of the or called terms so it. cost those vessels in they're open open booking lead bookings oceanic but seen associated XX rates. they’re with times, typically end also to booking, called freight terms the we're market

we we very inventory proactive measures nodes. goes, it, way think that and where how build different up how the alternative taking product sourced, pipelines how and into that also we where of in price about of we're is think getting we terms then product about So the that those ways

John Walbrecht

One get front to at know at the it, right? hitting ones because you've team gotten exactly front on you curve, chances to the going it done the the way great is be that curve in of ball where moment, of up. right of Linda exactly If the have has is that gone well of in

of and positive if getting of focus in it's move demand we up our But allowed this and curve. that, And earlier front fulfillment buy to top our downside then really can that the [X-K’s] more so plan seen in it And with and retailers. is accurate earlier, get be and is the can accelerate and the – the keep the us increase try this that's operational hence for out, you've as outdoors inventory. and planning, we in front on role it and because

Linda Bolton-Weiser

very you Thank Okay. much.

John Walbrecht

Linda. Thank you,

Operator

Thank you.

Our Capital. from comes Mark from Smith question Street Lake next

is open. line Your

Mark Smith

guys. one keep Hi, just it I'll at here.

the at domestic on you in just talk expect we how can the revenue with you sales? As guidance, business about much – adventure look

Aaron Kuehne

Yes, that's about XX or so percent.

when of that than side XX% international and bought business, the it, So of do grow was, domestic we the of that market things. U.S. we it the things or faster side call expect the will

anticipate seeing do mix we so from XX% to And shift XX%. that

Mark Smith

Excellent. Thank you.

John Walbrecht

and Australia American we it We as heard that New market us before. similar and accelerate you to that be from obviously, then equal market and And of to North time. in that, believe Zealand ought the

obviously Australia demand the and American the requirements North and meet exceed in market, New so market. without slowing Zealand down continue And the to

Mark Smith

Perfect.

John Walbrecht

whether get South Europe, America, And third it or that's others. be chance markets, a we look at before to

Operator

you. Thank

next question William Our from comes from Ryan Sundby Blair.

open. is line Your

Ryan Sundby

I walk that Congrats, the stay to Hey. MAXTRAX just expansion; touched Adventure buy brand? a the with with and can geographic obvious introductions something process Rhino-Rack, Aaron guys. when guess like you beyond on product the new decision us there detailed drivers under category Yes. Mike, expansion, versus maybe and growth the information maybe like today, you category maybe enter for starting the I'll segment, bought you Rhino here. opportunity and through thanks its trying to category all

John Walbrecht

Yes.

we in, on accessories always leading you opportunity at in the it's we whole all to obviously that do share the with about go of One because logical technology expand market first go that, a and the at have the And fall business two The to brand. effectively the adjacency again, products Super an walking is put bought and is overlanding through the ways the what Fan Aaron already I that function biggest hey, the best opportunity call have we we the the can we share is and gain the looking you rack one look into have the brand. So brand catalog. we obviously then market the you things this, continue and rack when once addition rack. and produced catalogs market strength marketplace? XXXX Rhino-Rack the believe to looking have to then saying, opportunity our at And of next that's and and the given

Like I the before of MAXTRAX on said, As rack walked I see orange through are there before went got I show, Then even dude, called I the and we booth. brand one SEMA hadn't Fan is after would the hour this every we Aaron MAXTRAX and clearly the on consistently. page in orange literally been rack the to to space. looked this show the page, Super

been that but And be just we'd Now believe. and reassured we already we careful, you is and knew, Brad discussions the with what in at group got to what that point. this

You is careful trying got Super brand, dominant share the supersede to market who to in Fan leader the be space. the

not that's path. at an go Fan shorter this important and this. that. acquire In the got XX% leading was of the to space clearly market is of opportunity, brand other either kind a look because of It share, be XX%, it's are If supersede but you And with where think trying to we'll saw have that where huge to a dominant that, to fortunately, players, we Super did part we basketball and areas, expand and MAXTRAX is me Nike there the it. make we go opportunity and to

and of stuck. it But itself. are It's You going the win, a we of brand its question not get saw leader. if, it also in was to as a

the create overlanding to so the brand. we Rhino-Rack And will within final, accessories

is the and you is the get end may We the though innovations see rack expanding other MAXTRAX adjacencies seem use on One right. doesn't extending brand, the the also product they and And help them see within And the about recovery. similar moment about racks to the two. as we and time and overlanding unstuck. separate

Ryan Sundby

from Okay. Perfect. how quickly I And you are you're can kind some guess America. placements North build to there already it need sales the those standpoint, as you sounds That's can? little throughout winds? great. But a able a I'm any like are production you meet Very distribution, windows you starting And geographic just or that you then guess scale year to to to uncertainty I true. unclear, as of hit see add in

John Walbrecht

Yes.

out and in the it, two, call and in have business became was be the better not sell either then sell You market it you it, but phenomenal When and and is go specifically world MBA have supply from huge then What to the Rhino-Rack chain but that maximized great that Clarus and it then didn't Fan thought product time first, side, or line can see see at went understanding go have product. in ship school, pipeline you I it, obviously, really innovative Number the out market easy-to-do yet We them deliver business. a it. we alone but model the make heck product, we operating the fulfill first critical on outdoor our really up side. hasn't of make we it. learned, a of bring with Super We the out brands, point. of and existing the out product, go current automotive the that produce for OEM strong let distribution, only that been opportunities the it that

day, it second, of promotion of the window, the to and salesman, Aaron's get you right side and at literally of at of again, falls and deliver it the logistically the don't cannot the end the bigger a the need And we it The if rest for right reason right. produce and became because role the big warehouse the all part that focus. time, it is operation of out

And so months. been first in the literally six has that the focus

the innovation. Now, you come as am and ammo, business back in or in let about somebody are innovations when to with went XX deeper the our just all haven't saw last innovations we that delivery months it. get the open that you've and said, Precision Don't next, me adjacencies brand or Sports the credibility say categories product about we you fulfillment do on the retailers, to then about new them they'd When I last time XX tell going gain time book then that in as through to worry you in key had But that they're talk opportunities to that to during we have, and have with bullets expand I the innovation, that and seen? order I about months, for worry shipping, out. we'll hey, if either

by outdoor significantly there ranges months – XX expansion so let over can supporting, XX this automotive true next grow the is fulfilling. operational the side. the to We here. model side just a to the with business believe The cadence And we the delivering, alone current

all gives the and launch literally innovations the disruptive also time those that range. are ensure to the us that While we're industry that go at Rhino we in probably MAXTRAX doing when to XX-plus

Ryan Sundby

Aaron. split. now just know been sequencing a that you've go? Got as and XX-XX from we the it. Mike standpoint for And we've or a be has might historically challenges But shapes more I this the thoughts kind business platforms helpful. Any That's think got of out But highlighted. the year I on super then how of some year, logistical new kind

Aaron Kuehne

the with consistent or still so. XX-XX Yes, split

Ryan Sundby

Thank you. Got it.

Operator

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

John Walbrecht

XXXX Thank for and questions for speaking Thank we to thoughts forward listening you, Crystal. with present and again, We'd our everyone, the when results. you look like to quarter on we the everyone call, first of report Ukraine. thank are our today with people your and the again, you

Operator

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

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