Again beating analysts' forecasts, Clarus Corp. reported a 9 percent increase in revenues to $57.3 million for the fourth quarter of 2018, with no currency effects, accompanied by a 27 percent jump in adjusted net earnings to $5.9 million. The gross margin improved by three percentage points to 35.6 percent, and the adjusted Ebitda margin went up by 1.9 percentage points to 11.6 percent, thanks to cost efficiencies.

Black Diamond, the biggest brand of the group, contributed a sales increase of 8 percent, while the recently added Sierra Bullets operation contributed a higher sales increase of 14 percent. The management credited the launch of innovative products, an accelerated go-to-market strategy and the execution of the company's previously laid out growth strategy.

Strong margins for Black Diamond apparel, whose sales were up by 60 percent, helped to raise the overall gross margin. Sales of skis were flat, due to a product delay. The mountain sports segment gained 10 percent (more in the Outdoor Industry Compass).

The numbers were even better in many ways for the full financial year, at least in terms of progress. Sales went up by 24 percent to $212.1 million, with growth of 23 percent in local currencies. The gross margin rose by 3.4 percentage points to 34.9 percent, and the adjusted Ebitda margin jumped by 6.3 percentage points to 9.8. After many years of losses, the company booked net earnings of $7.3 million for 2018, compared with a loss of $700,000 the year before. On an adjusted basis, the net income basically tripled to $19.3 million from $4.7 million.

Black Diamond recorded growth in apparel, climb and mountain products. Excluding the acquisition of Sierra, which resulted in extra revenues of $35.4 million for the year, Clarus' revenues were up by 10 percent for the year.

The good results have prompted the management to initiate a quarterly dividend and a share repurchase program, while flowing more resources into an accelerated R&D and product development strategy. Black Diamond alone plans to introduce about 300 new products across all its primary categories this year.

Clarus remains on the hunt for “super-fan brands” to add to its portfolio, taking advantage of net operating loss carryforwards of around $141 million at year-end. Meanwhile, the management predicts that sales will go up by about 8 percent to $230 million this year, while adjusted Ebitda should increase by around 20 percent to $25 million.