Clarus (CLAR) risk factors, FY2024 10-K

Risks Related to Our Industry

1. 01remove, or if we voluntarily remove, our products from the market, our reputation could be tarnished and we might have large quantities of finished products that we are unable to sell
2. 02Adverse publicity about the Company and/or its brands and products, including with respect to certain models of avalanche transmitters distributed by BDEL through social media or connection with other media or brand damaging events and/or public perception could negatively impact our business and reputation
3. 03We are subject to risks related to our dependence on the strength of retail economies in various parts of the world, and our performance may be affected by general economic conditions
4. 04Additionally, the products sold by our Adventure segment are vulnerable to fluctuations in automotive sales and trends, shifts in consumer preferences, the availability of automobiles and/or disruptions in the automotive industry’s supply chains
5. 05The occurrence of severe weather events, catastrophic health events, natural or man-made disasters, social and political conditions or civil unrest could significantly damage or destroy demand for our products, as well as key supply chain and fulfillment arrangements
6. 06Changes in the retail industry and markets for consumer products affecting our customers or retailing practices could negatively impact existing customer relationships and our results of operations
7. 07We may be negatively affected by changes in the policies of our retailer customers, such as inventory destocking, limitations on access to and time on shelf space, use of private label brands, price demands, payment terms, and other conditions, which could negatively impact our results of operations
8. 08Seasonality and weather conditions may cause our operating results to vary from quarter to quarter
9. 09Our results of operations could be materially harmed if we are unable to accurately forecast demand for our products
10. 10Additionally, we often schedule internal production and place orders for products with independent manufacturers before our customers’ orders are firm. Therefore, if we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of product to deliver to our customers
11. 11Competition in our industries may hinder our ability to execute our business strategy, achieve profitability, or maintain relationships with existing customers
12. 12If we fail to adequately protect our intellectual property rights, competitors may manufacture and market products similar to ours, which could adversely affect our market share and results of operations
13. 13Our success depends on third-party logistics providers and our and third-party distribution facilities
14. 14Our operations in international markets, and earnings in those markets, may be affected by changes in global cultural, political, and financial market conditions as well as potential changes in regulations, legislation and government policies such as tariffs, tax laws and global trade policies
15. 15If we cannot continue to develop new products in a timely manner, and at favorable margins, we may not be able to compete effectively
16. 16Our operating results can be adversely affected by changes in the cost or availability of raw materials
17. 17We may not realize returns on our fixed cost investments in our direct-to-consumer business operations
18. 18Changes in effective tax rates could adversely affect our results
19. 19Ongoing conflicts in multiple locations across the globe, as well as economic sanctions and other measures imposed in response thereto could have a material adverse effect on our operations, results of operations, financial condition, liquidity and business outlook
20. 20We use foreign suppliers and manufacturing facilities for a significant portion of our raw materials and finished products, and disruptions to international trade, such as disease epidemics or potential “trade wars,” pose a risk to our business operations
21. 21Compliance costs related to environmental requirements, including those associated with Per- and Polyfluoroalkyl Substances (PFAS), could negatively impact our financial results
22. 22We may incur significant costs in order to comply with environmental remediation obligations

Risks Related to our Business

1. 23There are significant risks associated with acquiring and integrating businesses
2. 24We may require additional capital and funding to meet our financial obligations as well as to support our business operations and growth strategy, and this additional capital and funding may not be available on favorable terms, if at all
3. 25Our previously announced growth strategy may negatively impact our business, financial condition and results of operations
4. 26Turmoil across various sectors of the financial markets may negatively impact the Company’s business, financial condition, and/or operating results as well as our ability to effectively execute our growth strategy
5. 27Our business is significantly dependent on our ability to meet our labor needs
6. 28We may not be able to adequately manage our growth
7. 29Compliance with changing laws, regulations and standards of corporate governance and public disclosure may result in additional expenses
8. 30We could face particular challenges in maintaining our internal control over financial reporting
9. 31We may be subject to disruptions, failures or cyber-attacks in our information technology systems and network infrastructures that could disrupt our operations, damage our reputation and adversely affect our business, operations, and financial results
10. 32Initiatives to upgrade our business processes and information technology systems to optimize our operational and financial performance involve many risks which could result in, among other things, business interruptions, higher costs and lost profits
11. 33If we and/or our cloud-based solution providers are not successful in preventing or effectively responding to outages and cyberattacks, our business, operations, and financial results could be materially and adversely affected
12. 34Our Board of Directors and executive officers have significant influence over our affairs
13. 35We may be unable to realize the benefits of our net operating losses and tax credit carryforwards
14. 36Certain protective measures implemented by us to preserve our NOLs may not be effective or may have some unintended negative effects
15. 37The loss of any member of our senior management or certain other key executives could significantly harm our business
16. 38Our Board of Directors may change significant corporate policies without stockholder approval
17. 39Compensation awards to our management may not be tied to or correspond with our improved financial results or share price

Risks Related to our Common Stock

1. 40Our Amended and Restated Certificate of Incorporation authorizes the issuance of shares of preferred stock
2. 41Our payment of future quarterly dividends on our common stock is subject to the discretion and approval of our Board of Directors
3. 42The sale of a substantial amount of our common stock in the public market could adversely affect the prevailing market price of our common stock
4. 43We may issue a substantial amount of our common stock in the future, which could cause dilution to current investors and otherwise adversely affect our stock price
5. 44If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our securities adversely, the price and trading volume of our securities could decline
6. 45Shares of our common stock have been, and may continue to be, thinly traded, which may contribute to volatility in our stock price and less liquidity for investors
7. 46Techniques employed by short sellers or other derivative traders may drive down the market price of our common stock and/or spur litigation or regulatory action