Clarus Corporation Announces Third Quarter Financial Results
Consolidated gross profit and gross profit margins for the third quarter of 2010 were $9.5 million and 28.1%, respectively. Consolidated gross profit includes a $3.2 million increase in cost of goods sold due to the increase in inventory value as a result of the allocation of fair value in purchase accounting. Excluding the $3.2 million fair value adjustment, consolidated adjusted gross margin for the three month period ending September 30, 2010, would have been 37.4%.
Consolidated adjusted gross profit and adjusted gross margin for the third quarter of 2010, excluding the $3.2 million increase in cost of goods sold due to the increase in inventory value would have been $12.7 million and 37.4% compared to pro forma adjusted gross profit and adjusted gross margins, which include the results of Gregory, of $11.8 million and 38.3% in the same period in 2009. The decline in gross margin is primarily due to the negative impact of foreign currency during the three month period ending September 30, 2010. Through the Company’s hedging activities and natural hedge in operating expenses, the Company was able to mitigate a portion of the financial downside experienced from weaker foreign currencies; however, the benefits of such activities were not realized in gross margin. Beginning in the fourth quarter of 2010, the Company expects to recognize the gains/losses from hedging activities in sales and gross margin. Included in this press release is a reconciliation of consolidated gross profit and adjusted gross profit as reported for the three and nine months ended September 30, 2010 compared to combined gross profit and adjusted gross profit, which do not include the results of Gregory, and pro forma adjusted gross profit for the three months ended September 30, 2009.
Consolidated net loss, as reported in the third quarter of 2010 was a loss of $(3.3) million, or $(0.15) per share. Excluding non-cash items of $4.3 million, consolidated net income before non-cash items was income of $1.0 million, or $0.05 per diluted share. Excluding transaction, restructuring, and merger and integration costs relating to the Acquisitions of $1.1 million, net of related taxes, consolidated adjusted net income before non-cash items was income of $2.1 million, or $0.10 per diluted share. Included in this press release is a reconciliation of net income to net income before non-cash items, adjusted net income before non-cash items and related earnings per share for the consolidated three month period ended September 30, 2010 and for the combined three month period ended September 30, 2009.
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