Clarus Corp under investigation by U.S. Attorney’s Office

Clarus Corporation (NASDAQ:CLAR), a company known for its outdoor equipment and apparel, has come under the scrutiny of the U.S. Attorney’s Office for the District of Utah. The investigation, which stems from an ongoing inquiry by the U.S. Consumer Products Safety Commission, involves grand jury subpoenas issued to Clarus and its subsidiary, Black Diamond Equipment, Ltd. (BDEL). These subpoenas, received in January 2025, request documents related to certain avalanche transmitters distributed by BDEL.

The company has indicated its intention to fully cooperate with the investigation. In a statement, Clarus Corporation emphasized its commitment to addressing the concerns raised by the U.S. Attorney’s Office and to fulfilling its legal obligations.

While the specifics of the investigation remain confidential, Clarus Corporation has acknowledged that it pertains to the safety of consumer products, a critical aspect of the company’s operations. The outcome of this investigation could potentially impact the company’s business and financial results.

According to InvestingPro data, the company maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 5.32, indicating robust liquidity to manage potential challenges.

This news is based on a press release statement and serves as a factual report on the current situation faced by Clarus Corporation. The company’s stock is publicly traded on the NASDAQ Global Select Market under the ticker symbol CLAR, currently trading at $4.86. While the company wasn’t profitable over the last twelve months, InvestingPro analysis reveals that analysts expect profitability this year.

As the investigation progresses, further details may emerge that could provide additional insight into the implications for Clarus Corporation and its stakeholders. For deeper insights into CLAR’s financial health and future prospects, investors can access comprehensive Pro Research Reports available exclusively on InvestingPro, covering over 1,400 US stocks including Clarus Corporation.

In other recent news, Clarus Corporation has announced significant developments. The company expanded its Board of Directors with the appointment of Mark M. Besca, a seasoned professional with over 40 years of accounting and financial expertise. This move coincides with the amendment of indemnity agreements for certain officers and directors, aimed at strengthening indemnification protections in accordance with Delaware law.

In its Q3 results, Clarus Corporation reported a revenue of $67.1 million, which fell short of expectations. However, the company saw significant improvement in gross margins and maintained a strong cash position of over $36 million without any debt. Despite a slowdown in the Adventure segment, the MAXTRAX brand, part of this segment, experienced a 16% sales growth.

Analysts tracked by InvestingPro predict a return to profitability this year for Clarus Corporation, with an EPS forecast of $0.09 for 2024. The company has adjusted its full-year sales guidance to $260 million to $266 million, with an anticipated adjusted EBITDA between $7 million and $9 million. Looking ahead, Clarus Corporation aims for net sales of $330 million and a 10% EBITDA margin by 2025.

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