Good afternoon, everyone. Thank you for participating in today's conference call to discuss Clarus Corporation's financial results for the third quarter ending September 30th, 2022. Joining us today are Clarus Corporation's President, John Walbrecht, EVP and COO, Aaron Kuehne, Mike Yates, and the company's External Director of Investor Relations, Cody Slach. Following their remarks, we'll open the call for your questions. To be put into the queue for questions, please dial star one one on your telephone, and we will announce your name in the order it's received. Before we go further, I would like to turn the call over to Mr. Slach as he reads the company's safe harbor statement within the meaning of Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead. Thanks. Before we begin, I'd like to remind everyone that during today's call, we will be making several forward-looking statements, and we make these statements under the safe harbor provisions of the Private Securities Litigation Reform Act. These forward-looking statements reflect our best estimates and assumptions based on our understanding of information known to us today. These forward-looking statements are subject to the risks and uncertainties that face Clarus Corporation in the industries in which we operate. More information on potential factors that could affect the company's financial results is included from time to time in the company's public reports filed with the SEC. I'd like to remind everyone this call will be available for replay through November 7t h, 2023, starting at 7:00 P.M. Eastern tonight. A webcast replay will also be available via the link provided in today's press release, as well as on the company's website at claruscorp.com. Now I'd like to turn the call over to Clarus's President, John Walbrecht. John? Thanks, Cody. Welcome, everyone. First, I want to thank all the teams across all our different brands. We are incredibly proud of everyone's tenacity and dedication in the face of uncertain macroeconomic environment and tough consumer backdrop. Our results this quarter demonstrate how resilient super fan brands are and how they continue to take market share even in the midst of down markets. We delivered market outperformance in our outdoor and precision sports segments. In our adventure segment, while we are experiencing short-term challenges due to vehicle delivery shortfalls and strained supply chains, we are confident that we are positioning the brands for growth as outdoor adventure through overlanding continues to build momentum globally. On a consolidated basis, our sales were favorable to last year, finishing the quarter up 6% and year- to- date 34% ahead of prior year. On a constant currency basis, total sales were up 9% in the quarter. Breaking down our Q3 performance at the segment level, outdoor grew 7%, precision sports grew 13%, and adventure declined 5%. Removing the impact of FX, we would have finished the quarter with 11% growth in outdoor. Our adventure business would have been flat, and our precision sports business would still have been up 13%, given it isn't impacted by foreign currency. However, macroeconomic factors outside of our control hampered our profitability. Specifically, unfavorable movements in foreign exchange rates and supply chain challenges negatively impacted our Q3 Adjusted EBITDA by an estimated $5.6 million. In the third quarter, we estimate that foreign currency headwinds reduced both our sales and Adjusted EBITDA by approximately $3.3 million, while higher freight costs associated with expediting our products to the different regions resulted in an incremental $2.3 million of additional costs. We believe elevated freight costs are transitory as supply chains continue to stabilize, and we are encouraged by the reduction in lead times back to pre-pandemic levels while container costs are decreasing dramatically. While we believe that we will continue to experience downward FX pressure in the short term, we expect the rates will normalize over time. Therefore, we will continue to execute our proven innovate and accelerate super fan playbook. Removing FX, our consolidated Adjusted EBITDA margin would have been 15.4%. We have used this market movement to strengthen our relationships with our community of outdoor enthusiasts, retail partners, and our vendor partners. We remain committed to activating and scaling the go-to-market activities within each of our brands. Through a disciplined approach to new product introductions, identifying continuous improvement activities within our supply chain and operations, and increasing the number of touch points with retail partners and consumers, we believe we are well positioned for continued market share gains as we seek to elevate the awareness and demand for our brands within our targeted markets. At this time, I would like to provide additional highlights at the segment level in order to contextualize how we have mitigated the challenges without compromising the long-term opportunities within our brands, our positioning and related price points, and our consumer experience. Starting with Outdoor. Deliveries remained strong in the third quarter, driven by 35% growth in apparel and 7% growth in hard goods. Specifically gloves, packs, ski poles, and core climbing equipment. In order to meet customer demand, we often needed to incur higher than anticipated costs associated with air freight of the product. We estimated we end the quarter with $8.5 million+ in back order demand globally, and expect to work through this in the coming months. By sales channel, we continue to see our specialty accounts outpacing big box and national accounts, with specialty account sales up 69% in the quarter. Again, proof of market share gains. Our larger national accounts pulled back on orders industry-wide while they contended with bloated inventory levels, warehouse congestion, and slowing retail traffic. This resulted in dramatically reduced open to buys mandated at the corporate levels. This wasn't a Black Diamond issue as our products continued to show strong sell-through while other discretionary categories not geared towards the activity-based consumer were meaningfully impacted. As a result, we expect the shift to a much more at-once driven business with our larger accounts through Q4 and into 2023. Our direct-to-consumer business was up 23% year-over-year, driven by robust demand within our core community of users. I'm proud of our efforts in Europe with sales down only $1 million year-over-year inclusive of more than $2.4 million impact from FX alone. We believe this highlights the strength of our relationships with the vast network of European specialty stores and the desire for the consumer to remain active. Moving to Precision Sports, our niche brand positioning and approach to maintaining predictable, balanced end market results in another record quarter. Our 13% sales growth during the quarter was driven by prioritization of bullet orders for the military and law enforcement and accelerated demand in our international business. Demand for our centerfire rifle hunt product remains high, limited only by availability of brass cases required to load and deliver this product, which slightly impacted our sales through our domestic wholesale channels. As we look towards the remainder of the year and into 2023, we expect our bullet business to remain stable and our international business could have more aggressive near-term growth curve if the war in Europe persists. We see opportunities in our ammo initiative and centerfire rifle business partially offset by ongoing challenges in our ability to source materials. Lastly, the adventure segment results were consistent with what we were seeing from our larger competitors in the space. New vehicle supply, particularly in Australia, continued to lag demand with consumers waiting months for their vehicles, and we began to experience similarly difficult conditions in North America as well. In addition to limited new vehicle deliveries, global economic headwinds, including inflationary pressures and FX, impacted our ability to drive growth and profitability in the segment. Given the relatively young age of these brands within our portfolio, we are still in the process of activating our innovate and accelerate playbook, including meaningful new product introductions and sales channel development. As a point of reference, we estimate product launches associated with new vehicle introductions can account for 10-15 points of annual growth for these brands. We believe the combination of factors impacting the quarter will be short-lived. Our growth premise for adventure segment has remained unchanged. We continue to see global vehicle trends shift towards more SUVs, CUVs, trucks, and side-by-sides or utility task vehicles. Outdoorism combined with overlanding is setting the global automobile fashion trends. North America, Europe, and the Middle East are years behind the overland market development in Australia. Market growth opportunities outside of Australia are expected to be multiple times larger than the Australian home market. Finally, retailer expansion into mainstream adventurism is just beginning as key retailers launch flagship adventure stores within overlanding as a category of focus. We are moving rapidly to build out our strategic initiatives as we seek to create an ecosystem of overlanding products. We expect to be introducing updated bike, ski, and kayak racks, luggage boxes, truck bed systems and awnings, as well as new accessories including storage cases, rooftop tents, duffel bags, and recovery systems. In addition, the current product portfolio is positioned largely towards a do it for me installation model. All future products are expected to include a do it yourself approach, making products accessible to a larger addressable market. Last week, our team was at the SEMA show in Las Vegas for the 2023 product launch, and it was invigorating to see the growth in the space and the new consumer engagement. For example, outdoor adventure was the primary focus for the Toyota brand as it launched its new overlanding trucks and SUVs, including the new Trailhunter concept version of the Tundra. The Trailhunter will be the new flagship offering even slotted above the TRD Pro models. Targeted at the Ford Raptor and positioned to be the lead in the overlanding space. This investment by Toyota in their booth, currently the largest booth at SEMA, included the number of vehicles across both Toyota and Lexus brands, dominating the choice of trucks and SUVs with many accessories for outdoors. This statement reinforced the view of the market potential in the U.S. for adventure brands. Several other manufacturers highlighted the growth of CUVs participating in blacktop to brown road activities that we are targeting and actively innovating. We believe the U.S. market will see significant growth over the coming years as market participants invest millions of dollars into broadening the awareness of overlanding and the accessories that come along with it. Our brands are the originals when it comes to the overlanding market, the reference brand for the influencers and the overlanding communities. As we look to the remainder of the year and into 2023, we believe we have a portfolio of brands that continue to grow, gain market share, even in challenging environments. Whether climbing, backcountry skiing, trail running, hiking, hunting, competitive shooting, or combining them all with their vehicle to go adventuring, we do not anticipate seeing this trend changing for the next decade. This is the most important attribute that we seek for in our super fan brand strategy, and thus believe it to be a key component to our long-term shareholder value creation. Now, I'll turn the call over to Mike to discuss our Q3 financial results in more details. Thanks, Mike. Thank you, John, and good afternoon, everyone. Jumping right into our performance in the third quarter. Sales increased 6% to $115.7 million compared to $109 million in the prior year quarter. This was driven by our outdoor and precision sports segment. The increase includes revenue contributions of $3.7 million from MAXTRAX, an acquisition completed on December 1st, 2021. Organic sales were up 6% in the third quarter. MAXTRAX contributed 3% and foreign exchange was a 3% headwind. On a constant currency basis, total sales for the Clarus Corporation in the third quarter were up 9%. Third quarter sales in the outdoor segment increased 7% to $62.9 million versus $59 million in the third quarter of 2021. If you adjust for foreign exchange, outdoor sales would have been up 11%. As John mentioned, while we've done a good job closing the gap on outstanding Black Diamond orders, we are still constrained by supply chain challenges and logistical challenges that are resulting in inventory showing up late in our U.S. and European markets. To address this, we spent an incremental $1.1 million within the outdoor segment to what we would normally spend on air freight during the third quarter. We will need to continue to do this in the fourth quarter given the persistent demand imbalance. Our apparel business continued to be the fastest-growing category within the outdoor segment, with sales up 35% in the quarter. This is notable as apparel, along with footwear and our direct-to-consumer business, represents key strategic growth pillars over the next five years. While quite a strong quarter for our apparel business, we've experienced a slow start to the winter in North America, which we believe has pushed out some purchasing of cold weather apparel from a traditional preseason model into more of a replenishment model. Despite this, we expect sustained growth in the apparel category going forward. Precision sports sales increased 13% to $34.2 million in the third quarter. Strength in the international business was offset by lower domestic ammo sales due to supply chain constraints around shell cases for the full range of our products. Our precision sports team continued to do an excellent job working to fulfill strong demand, increased production capacity, and navigate a challenging sourcing environment. In the seasonally slowest third quarter, our adventure segment contributed sales of $18.6 million, reflecting lower consumer demand given the challenging economic environment and constraints on new vehicle deliveries, which impacted new product sales both in Australia and the North American market. Despite these results, our long-term positive view of these brands remains intact. Moving on to gross margins. Consolidated gross margins in the third quarter declined to 34.1% compared to 36% in the year ago period. Improvements in channel and product mix were more than offset by higher freight costs as well as unfavorable foreign exchange. Higher freight costs had a negative impact on gross margins of 200 basis points, while foreign currency had a negative impact on gross margins of 180 basis points. Excluding both, gross margins in Q3 would have been up year-over-year to 37.9%. Selling, general, and administrative expenses in the third quarter were $32.3 million compared to $31.3 million in the same year-ago quarter. The inclusion of MAXTRAX and higher go-to-market investments in the outdoor segment were partially offset by lower non-cash stock-based compensation for performance awards at corporate. Net income in the third quarter was $2.8 million, or $0.07 per diluted share, compared to net income of $4.5 million or $0.13 per diluted share in the prior-year quarter. Adjusted EBITDA in the third quarter was $15.1 million, or an Adjusted EBITDA margin of 13% compared $19.2 million, or an Adjusted EBITDA margin of 17.7% in the same year ago quarter. The decline in Adjusted EBITDA was driven by lower sales in the adventure segment, as well as the heightened freight costs and unfavorable movements in foreign exchange rates. The 13% Adjusted EBITDA for the third quarter would have been 15.4% on a consolidated basis if you considered the impact from FX, and would have been 17.4% if you considered the FX impact and the higher freight cost at outdoor and adventure. Let me shift over to liquidity and asset efficiency. Inventory levels were $155.2 million, compared to $153 million at the end of the second quarter. We are carrying higher inventory than we otherwise would in an effort to ensure on-time deliveries and fulfillment, as well as to mitigate supply chain and logistical challenges. As a reminder, our inventory does not go bad, but we are still focused on seeking to reduce our inventory as we close out the year. Our goal is to end 2022 in an inventory position that is approximately $145 million. This is inclusive of carrying approximately $10 million of extra inventory in the first quarter of 2023 to facilitate growth across all three platforms. At September 30th, 2022, cash and cash equivalents were $10.4 million compared to $19.5 million at December 31, 2021. Free cash flow, defined as net cash provided by operating activities less capital expenditures for the third quarter of 2022 was - $13.6 million compared to - $19.8 million in the same quarter a year ago. Free cash flow in Q3 of - $13.6 million reflects our continued investments in working capital, including higher inventory and higher accounts receivable. We are committed to seek to generate cash in the fourth quarter as we collect these receivables and through our continued focus on reducing inventory levels across all three segments. At September 30th, 2022, total debt was $167.2 million, putting us in a net debt position of $156.8 million. Net debt leverage was 2.2 x on a trailing 12-month Adjusted EBITDA basis, which is in line with the low end of the 2x-3x targeted leverage goals that were shared last quarter. Currently, we expect to maintain leverage at the lower end of this target range. Under our $300 million revolving credit facility, we have approximately $45 million outstanding and further borrowing capacity of nearly $110 million at September 30th, 2022, while maintaining compliance with the required covenants under our credit agreement. My objective in the fourth quarter is to generate free cash flow as we manage working capital and use it to pay down some debt outstanding on the revolver. Now let me move on to our 2022 outlook. Given the lower sales in the adventure segment as well as the volatile forex exchange market and higher freight costs, we are revising our full year 2022 outlook. Please note these revised assumptions now consider a $6 million foreign exchange headwind to sales in the final quarter of the year, given the sharp movement in the U.S. dollar versus the euro and Australian dollar. By segment, we now expect outdoor sales in 2022 to increase 1% to approximately $223 million. Given the continued outperformance in our precision sports segment, we are raising our full year expectations in this business to now grow 18% to approximately $130 million from $127.5 million previously. We also now expect sales from our adventure segment to contribute approximately $92 million in 2022 from $105 million previously. This revision reflects lower consumer demand given the challenging economic environment and constraints on new vehicle deliveries, which impacted the new product sales in both Australia and the North American markets. Specifically for the fourth quarter of 2022, we expect consolidated sales of approximately $101 million. On a consolidated basis, we now expect Adjusted EBITDA in 2022 to grow approximately 4% to $64 million. In addition, we now expect full year capital expenditures of approximately $8 million, and free cash flow is now expected to range between $0 and -$5 million for the full year 2022. This is primarily due to delays in being able to adjust inventory levels back to historical. This implies expected positive cash flow of $19 million-$24 million in the fourth quarter, driven by an expected improvement in working capital of approximately $18 million in the fourth quarter. From a tax perspective, we expect to realize $37.2 million in tax benefits associated with our NOL carryforwards in the fourth quarter prior to their expiration at the end of 2022. We look to the remainder of the year and into 2023, we believe we have a portfolio of brands that we can continue to grow and gain market share even in weaker consumer environments. While it's premature to discuss our plans for 2023, we do expect a rebound in certain categories from a revenue standpoint and margins beginning to normalize. We are being very prudent with our P&L, and I'd like to update you on the progress with regards to price cost considerations. Far in 2022, we have increased pricing by approximately 6% across the Clarus portfolio. Pricing is sticking and outpacing our material and wage cost inflation, but standard costing variances associated with freight are expected to be a challenge for the remainder of 2022. We continue to strive towards a series of continuous improvement initiatives around gross margin and further scaling of our SG&A. Within gross margin, we are focused on capacity and increased efficiencies. The elimination of value leakages primarily around the cost of freight and extra costs incurred with the supply chain delays, the redesign and resourcing of our products, as well as pricing. Within SG&A, we continue to reallocate and reduce complexities that enable us to scale more quickly, eliminating investments in anything we view as non-strategic to our brand and taking targeted actions to reduce certain fixed costs. Finally, from a capital allocation strategy, we expect to continue to re-prioritize organic growth, accretive M&A, our quarterly dividend, and the repurchasing of shares in that order. However, given the extreme volatility in our share price during the third quarter, we took the opportunity to repurchase 527,277 shares for approximately $7.2 million or at an average price of about $13.60 per share. That leaves approximately $42.8 million remaining on our $50 million stock repurchase program. Specifically related to accretive M&A, we continue to be active in evaluating opportunities. Given the current economic backdrop, we are seeing more opportunities to consider as well as lower expectations when it comes to price. This is a key underpinning to our core value creation strategy and one that we are well positioned to activate. Let me pause here and hand the call back to the operator as we are now ready for Q&A. Thank you. At this time, we will conduct our Q&A answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. Our first question comes from Alex Perry of Bank of America. Alex, your line is now open. Hi. Thanks for taking my questions. I guess just first, you talked a bit about sort of what led to the guide down in the adventure segment, but maybe just help us sort of understand what, you know, is leading to the decrease in the sales forecast in the outdoor segment specifically. You know, within that, would you expect, you know, some of the cautious ordering posture that you're seeing from your national accounts to sort of persist into 2023? You know, help us frame how we should think about these issues being, you know, maybe transitory versus, you know, longer lasting. Thanks. Okay. I think as we look to the next quarter, seeing the macroeconomic challenges that we are facing and more specifically what we've seen at the national and key account levels, and that's where we've seen this over-elevated level of inventories going into the holidays, carryovers from the summers. That's unfortunately not allowing us to accelerate the business as rapidly as we had hoped and planned going into Q4. We continue to see strong momentum with specialty, although you know, I don't think we're as aggressive to think that 69% growth in specialty will continue into Q4. When we look to 2023, the great thing about BD and Outdoor is the preseason booking programs. We continue to see very strong books both for 2023, which are already in the books and finished that campaign, you know, at the end of the fall. We have already kicked off our fall 2023 campaign and first you know appointments would give us strong momentum into 2023. Key accounts, national accounts, as well as specialties believe that the inventory situations across the industry as a whole will lessen as they go into 2023. ASAP orders and demand will continue and therefore, you know, we continue to see a strong order book where our concern has just been in the short term of the fourth quarter and the macro challenges that we're facing. Perfect. That's really helpful. I just wanted to ask a bit about Precision Sport. You know, that's been an area about performance. You took the guidance up for the fourth quarter. Maybe some sort of, you know, color on, you know, what led you to take the guidance up. As we think about that business heading into next year, obviously incredibly difficult comps, but is that a business that can sort of continue to grow versus these comps? Or do you think that, you know, we'll see a bit of a, you know, deceleration there? Thank you. Yeah. So obviously, you know, coming out of the third quarter, we were very scrappy in terms of over-indexing on the military and law enforcement side of the business. We were very scrappy on the specialty business relative to bullets, specifically around 30 cals and everything in that size and larger. What we saw in Q3 was a slowdown in premium brand PNR, pistol and revolver, just because of the glut of pistol and revolver inventory and the promotional prices taking place in the market. As we stated in the script, had we been able to get the brass cases to load both at Sierra, where we don't load, but get more loaded ammo, or at Barnes, where we do load specifically, the demand for premium centerfire hunt rifle was still there. We weren't able to capture it all as much as we wanted. We continue to be scrappy. We continue to have lots of demand in the OEM world as well as the reloader world, and hence that's the raise in the guide that you saw. As we look to 2023, wow, you know, I think as far as we look out to that market this year being a showcase of the amount of changes that can take place in a window, you know, I think at this point, we're gonna be as scrappy as we can be. We still have a order book for 2023 that's very solid. We have more demand for the specialty bullets that over the last 12 months we've been able to not produce in order to overindex on those where the demand far exceeded our supply. We're hoping that at some point in 2023, brass cases will become more available. Can we grow that business in 2023? I think the landscape will tell us a lot coming out of the election here later this week. You know, more as the both the macroeconomic challenges take place, but I think also the political unrest around the world. Obviously, we're gonna do our best to take as much market share in bullets, in OEMs, in law enforcement, in military, with reloaders and in ammo as we can. Perfect. I think the other thing I would say is remember that we're still very small, you know, you know, 1%-2% of the whole market is what we represent as a brand. Perfect. That's incredibly helpful. Best of luck going forward. Thank you. Thank you. Please stand by while we queue up the next question. Our next question comes from Joe Altobello at Raymond James. Your line is now open. Thanks. Hey, guys, good afternoon. I guess first question on the Adventure segment. You know, sales in North America were down significantly. I know you mentioned the lack of inventory for new trucks, but that's been sort of an issue. It's been ongoing here for a couple of years now. I hope to understand why that business, particularly North America, was down so significantly. Yeah. As we, you know, as we chase new products, obviously two sides come out of this. First and foremost, 80% of our business is based in Australia. We overindexed in Q1 and Q2, moving inventory to the U.S. as we saw COVID lockdowns, floods, all the challenges that took place in Australia. From a new product perspective, we shifted all of our new product launches, believing that in time these vehicles would come. As we said in the report, new product launches represent 10%-15% of the growth opportunity for us in the United States as well as in Australia, and just the availability of pickup trucks, Jeeps, Toyotas, SUVs in that market. Subsequently, around the end of July, beginning of August, we saw a dramatic slowdown, I think based on the macroeconomics across the whole industry, both in Australia and in the U.S., as inventories locked up in the automotive aftermarket space and the consumer demand, you know, saw a blip for what appeared to be a few months. We're starting to see the positive demand come back. I think it was the end of the summer there, and yet wasn't summer yet in Australia, and they had a wet season. We stay close to the market. Like I said, we still feel very optimistic and promising about what's coming as we see the market improving now in Australia going into summer and believing that it, you know, both into the holidays and into 2023, we'll start to see that demand in North America pick up. I think to be honest, we had a perfect storm in Q3, and we saw that. Okay, got it. Maybe on the apparel business, I think it was Mike mentioned that the apparel business was experiencing a slow start to the winter season. A little more color there would be helpful. Is that a Clarus issue or is that an industry issue? No, I think what we have seen, I actually think the 35% growth for Black Diamond in apparel is phenomenal. I think what we're seeing is we have seen a prolonged promotional window taking place in the market early coming out of the summer. I think a lot of people still had delivery issues in regards to supply chain challenges. Then, it wasn't until literally the last week, obviously Q4, not Q3, that we started to see weather across the U.S. change and start to impact this. You know, as you think about outerwear for BD in Q3 and Q4, it is highly driven around insulated rain shells and then obviously snow sports. We anticipate we'll continue to have strong growth with apparel. You know, I think, as I said, we're outperforming the market, but always, you know, wanna continue to accelerate this business and are very hopeful, as we've said, that apparel becomes, you know, a real driver for our long-term growth as we gain market share. We're seeing very strong growth, not only at specialty, which was up dramatically, but more importantly in our retail growth, which was up north of 45% and our direct to consumer overall up 23%. Okay. Thank you, guys. Thank you very much. As a reminder, if you'd like to ask a question, please dial star one one on your telephone and you'll get into the queue. Our next question is coming from Anna Glaessgen at Jefferies. Anna, your line is open. Hi, Anna. Hi, Anna. Anna, your line is open. Oops, sorry, I was on mute. Hey, guys. Thank you for taking my question. Helpful color on the specialty versus mass dynamic that you're seeing. Could you update us on what the breakdown is for your distribution between the specialty channel and mass? Yes. If you look at the North American business specifically, we do about 40% of our business is in specialty retail, what you would know as individual ski, climb or outdoor shops. We do approximately another 30%+ is in national accounts, which includes retailers like REI and MEC. We do approximately 25%-30% of our business remaining in what we would call big outdoor shops. This includes Dick's, Academy, Bass Pro, Cabela's, Sportsman's Warehouse, example. It's in the latter two stages where whether it's warehouse congestion or open-to-buy cuts due to categories that had massive inventories that, you know, were highly COVID affected, didn't carry over into the summer of 2022, ate up open-to-buy and massive inventory gluts didn't allow the retailers to chase into the fast turning categories as much as they would like, given the shift in the consumer. And mainly around, you know, what we saw was demand around consumer outdoor activities versus, you know, some of the more COVID bumped bigger spaces. Got it. I guess, could you unpack that, you know, COVID bump sales a little bit more? Are you seeing a difference throughout your product portfolio where there's a little bit less demand for certain categories, or is it more just they just have too much and are broadly cutting their orders? I think what I'm referring to, Anna, is some of the outdoor categories that we don't participate in, but have big open-to-buy allocations, which could include family camping tents. It could include, you know, outdoor furniture. It could include grills or stoves or like those on hammocks, things that had massive growth coming out of 2021 and into 2022. Retailers were chasing that, you know, what seemed at the time endless demand for these categories. Whether it was the euro going back or whatever, international travel opened up, retail traffic slowed, and certainly these categories built up very rapidly at retail. Great. Thanks, John. Then just one follow-up. You commented earlier in the prepared remarks that, you know, it wasn't a BD problem and that there was still strong sell-through. Could you provide some perspective on what that looked like in the quarter? Yes. You know, in the big box/outdoor/national accounts, where we see demand growing rapidly and the chasing is in headlamps, trekking poles, packs, gloves, and, you know, a combination of our ability to keep up with demand that exceeded our supply, hence the backorder situation that we talked about. It's continued, you know, though it's improved, it's continued into Q3. And then just the inability for these big retailers to be able to chase and allocate open-to-buy to these because of their open-to-buy already being locked up in products that weren't moving, and it left pegs at retail empty, chasing certain of these categories. You know, some cases we ship direct to store, but not every case can you do that. Great. Thanks. Super helpful. Thank you. Please stand by for our next question. Our next question comes from Matthew Koranda of Roth. Matthew, your line's open. Hey, guys, thanks. Just wanted to get a better sense for how much of the EBITDA cut is coming from Rhino-Rack versus the outdoor segment. Pretty clear in terms of revenue what to do with these into Q4. The $14 million cut to EBITDA at the midpoint just seems like a pretty outsized cut. Just trying to get a sense for what's weighing on EBITDA in an outsized way. Is it really Rhino-Rack that's suffering from sort of lower margin sales or just limited restocking? Any help there would be appreciated. Hey, Matt, it's Mike. Let me take that one. Yeah, we did bring down EBITDA $14 million. It's about equal across both outdoor and adventure, right? We see volume and FX both impacting that here in the fourth quarter. There's about $9 million of FX out there in the second half of the year. We think that was about $3 million in the third quarter, and we expect to see another $6 million of headwind from an FX standpoint. That's gonna impact outdoor a little more than adventure. We're also seeing some lower volume, right? Compared to what we had initially forecasted for the second half of the year for outdoor. That's overall, I think the volume is gonna be about a $4 million pressure, and FX is probably gonna be, you know, $3 million as well. In adventure, it's about the same thing. There's about $3 million of volume and another $3 million of FX. You know, the Aussie dollar kind of came down pretty significantly. Those are all, you know, gonna flow through. I'd say it's about equal between the two segments. Okay, helpful. Just in outdoor, can you guys just put a finer point on it? I guess the guidance is just kind of confusing because it implies like a very abrupt deceleration in outdoor in 4Q versus 3Q. Yet you're saying POS and BD is positive and sort of, you know, seasonally that things look good. Just could you put a finer point? Are you seeing positive POS and BD? If you are, and there's just this temporary overhang, I guess, in the fourth quarter, do we have the ability to positive sort of sell-in in the first quarter of 2023? Maybe just help us understand that. Yeah. Great questions and very astute to the mix. What we are seeing is continued good strong throughput, you know, pulling sell-through at retail in our key categories, right? If you break down Q3 and how we estimate Q4, and obviously, you know, the consumer doesn't know the difference between Q3 and Q4, so we just extrapolated those trends. What we saw was strong demand for specialty. What we saw was the inability of, you know, bigger accounts to chase as much ASAP as they would like due to either warehouse congestion or open to buy challenges. Now, are we hopeful that will improve? Yes. Did we, you know, include that in our process? Yes. Though we're having good sell-through at retail, it's the ability to move product as fast as we can into some of these categories and chase that given that there's, you know, a couple of months left in the year. Do we think it will improve? Yes. When you look to 2023 and the plans across both national accounts and the key accounts, our bookings are strong into 2023, and the assumption that they will have is that they will start to eliminate some of the inventory backlog that they've had for Q3 going into Q4. You will see that promotion heavily during the fourth quarter as the holiday sales go on, and their hope is that that will eliminate some of these overhangs, right? At the same time, the belief that as that lessens open to buy for them, no different than us moving inventory and providing cash on this side, will create acceleration opportunities for them to chase in these other areas. It's really just a shift of open to buy from certain categories to new categories. Does that help? That's helpful. I'll jump back in queue here. Thanks, John. Yeah. Thank you very much. Stand by as we pull up the next question. Our next question comes from Ryan Sundby of William Blair. Ryan, your line's open. Yeah. Hey, guys, thanks for the questions. Thanks, Ryan. John, I think you mentioned evolving the Rhino-Rack offering from a more of a do it for me to more of a DIY setup. Can you talk a little bit more about what changes are needed for that to happen, when we could see that, and how big of a barrier has that been for unlocking kind of new retail distribution here in the U.S.? Great question. The industry for the last decade plus has been much more automotive aftermarket, specifically in the overlanding adventure segment, right? I.e., anything other than just two bar racks on top of your car with the skis. That has typically been both based on the vehicles at the time and the process is very much an installed process, right? I buy the racks, I take it to an installer in a bay, they will install that on it for me. Moving forward where we see the biggest addressable market because coming out of SEMA, it was very enlightening to see what we have always believed is the process, is that more and more people driven by the brands themselves, like Toyota, switching from what used to be racing Toyota to overlanding Toyota, will pour a lot of awareness and marketing dollars into this to change the market. The consumer will need it to be much more simplistic, much more, I will do it myself or the installer will do it very quickly at the retail level. To your question, as you expand distribution beyond just automotive aftermarket retailers or specialists and to more mainstream outdoor, this consumer needs it to be easy and quick and something they can follow on YouTube and do it in a very short period of time and be Legos on the rooftop. You'll see that from us in our 2022, 2023 collections, items we actually showcased at SEMA. In all sizes, we introduced new STOW iT that were easy, just turn-in lock systems to new racks for back of hitch as well as rooftop to a lot of accessories that include boxes, tents, bags, everything else to make this a very simple fun adventure of the weekend, whether it's outdoor activities, camping, tailgating, you name it. Great. Sounds like a pretty big change that's coming there. Like we said, that's been part of our shift working on. We just, you know, had hoped we had a little bit more time in the integration of this. As you knew, COVID, lockdowns, floods, we weren't able to as rapidly impact this innovate and accelerate strategy in 2020, end of 2021 and early 2022 as we had hoped. Got it. Okay. Just can you help me understand the full year guidance reduction for Adventure? Is there a way to quantify how much of that is due to the delays we've seen in the new vehicle introductions and, you know, how much is coming from something else, whether that be softer demand or anything else? The best I could say for you is that typically we see, you know, easily 10%-15% of new sales growth associated with new product introductions. I think because the market is shifting rapidly and we're seeing dramatic demand for things like Jeeps and Jeep Gladiators as well as the new Toyota range, which has been extremely well received and I think will be game changer for Toyota. You know, obviously their vehicles stay around 10+ years, à la the Tundra did. Those new vehicles being postponed, it impacted us. That impacted us with, you know, even the demand for Polaris on just not being able to get side by sides, and that's a major partnership for us. Obviously, unless you can get the new vehicle, you don't need the new rack for the new vehicle, and we think that's at least 15+ of it. The rest is inventory and macroeconomic slowdowns in the marketplace, which is probably, you know, somewhere in that, you know, 0%-10% just in the marketplace. Got it. Okay. Last one from me. Just with supply chain lead times coming down and container costs coming down, if we see that normalization continue, when do we start to see that translate into more of a tailwind for you? Because it doesn't sound like Q4 that would happen. I am guessing that you're gonna start to see that in Q1 and Q2. Yeah. Q1 is the right answer. We have some carryover freight costs, you know, due to the difference in our standard costing that I mentioned, the variances from our standard costing that we'll still be absorbing in the fourth quarter. That should clear in 2023. Got it. Okay. Thanks, guys. Thank you. Please stand by for our next question. Our next question comes from Linda Bolton Weiser of D.A. Davidson. Linda, your line's open. Yes, thank you. I just wanted to kind of square my understanding of your high inventory with the idea that you are still talking about not being able to supply demand in outdoor in certain areas like poles and things like that you mentioned. Yet you have really high inventory. I guess I'm not understanding this idea that you're sort of chasing demand. Where is your inventory too high? Because I know it doesn't seem like it would be in bullets and ammunition. Again, where is that high inventory? And then what gives you confidence that you can work the inventory down as you are putting in your projections for the fourth quarter? Thanks. Okay. Great question, Linda. Thank you. There is inventory at each level based on, you know, what we assumed was the plan by category, by segment going into 2022. I'll start with the easy ones. If you look at bullets and ammo or precision sports, you know, clearly we had an over-indexing of PNR or pistol and revolver ammo sales in 2021. We have inventory of PNR in 2022. We continue to move through that. If this would've been 2021, it would've gone out in a month. Here, it's taken longer because the market has flooded on that. Would we continue to sell that? Yes, just not at the rate that we did, while at the same time we did not have, coming into 2022, nor were ever able to make enough loaded centerfire rifle to meet the demand, and there's that shift in the market. Neither one bad, just lost opportunity. When you go to overlanding, given what took place in the lockdowns in Australia, we moved that inventory from Australia to the U.S. You saw the positivity of that in Q1 and Q2, but couldn't do that for the whole year because the Australian market was picking up for what is now summer, just now starting. Obviously in order to start those deliveries in Q4 and Q1, which is the Australian summer, that inventory is needed. We have inventory in the U.S. We continue to chase that. We saw a slowdown in Q3, starting around July, August, September into the market. In BD, we continue. Our biggest challenge there is 35 categories. We continue to see very strong demand for categories like apparel, where we have the inventory and continue to over-index on there, and there is the perfect scenario of having the right inventory and the market wanting it, and that's the overindexing. Clearly, the apparel industry is not trending right now at 35% growth. We're also able to do it across the specialty market where we don't have to load in tens of thousands of units of lights, for example, in one style, in one color, which is what we have to do in big box or multi-door retailers, specifically retailers who have 350, 750, 1,000 doors. It's our transition from a specialty retailer to servicing bigger retailers, while at the same time, although we have that inventory, their glut of inventory and short-term demand slowed down as they focused on carryover inventory, not new inventory. A lot thrown at you there. Hopefully, that answered it. Yeah. Let me get through there, Linda. The, you know, outdoor probably has $4 million or $5 million too much inventory. You know, that it's just a wrong inventory for the season at where we are in the season. Precision sports probably has $5 million or $6 million of too much inventory right now around some of the PNR ammo that John referred to. Then, the Rhino-Rack here in the U.S. probably has a couple million dollars of too much inventory compared to the, you know, our optimal carrying values of what we'd like to be most efficient with. You know, you add that up, you get that $10 million-$12 million off of, you know, the $155 million, and that gets you down to the $143 million, which is probably about the right layer. You know, low 140s is where we think inventory ought to be. And that's what we're trying to, you know, work towards. In my prepared remarks, I said, getting towards that $145 million of inventory. You know, that's kind of our objective here in the fourth quarter. There'll be some puts and takes as we go through it, I'm sure. Okay. Thank you. Thank you. Please stand by as we pull up the next question. Our next question comes from Mark Smith of Lake Street. Mark, your line is open. Perfect. Hey, thanks, guys. First question from me, just following up on the inventory. Can you just talk about maybe even within outdoor and kind of the 35 categories within BD, how much of that is winter kind of season specific and your comfort level with inventory that might be winter specific? I would say today that our inventory around winter specific product probably represents about 25%-35% of our inventory. More around what we said in the prepared remarks, it's really just around the shift of the season. I don't anticipate. You know, often people think winter is Q4, when in reality, winter is Q4 and Q1 of 2023. As we look at another 30 in of snow this year, this week in the Rockies, I'm very excited about what the winter season will be. I'm not worried about that. I actually think that it's going to be an apparel year, overindex versus just an equipment year, which we've seen equipment year is hard in the last few year during, you know, during the last two seasons. Okay. Going back over to Precision, you know, as we look at this mix of international sales versus domestic, can you just talk about, you know, was that purely allocation or an opportunistic shift more towards international? You know, or have you seen any slowdown domestically? I know you've talked a little bit about the PNR. Outside of that, have you seen any kind of slowdown in demand for Precision products domestically? Yeah. Good call, Mark. In 2021, 2020 and 2021, we did not allocate to international because the demand was so far in excess of our domestic by our domestic market. In 2022, we were able to finally allocate some international, mainly, because we were seeing the slowdown in PNR ammo and there we could move the bullets. Now, at the same time, starting back in January, due to the unrest politically around the world and the war in Ukraine, we saw increased demand internationally, and we've not been able to capture all of that, specifically in 30 cal and even larger, whether it's 300, 308, 338, that demand. We will start to index towards that, in 2023 to chase that market because at this moment, we don't see the international demand slowing down. I think it's been a good time for us to shift. The only weakness that I would say we've seen in our business so far has been around the PNR ammo that we over-indexed, which is partially within our guide this year. We knew we over-indexed it in 2021, and therefore, you know, included that in our guide and how we originally started with, you know, numbers at $120, then $127, as we continued to find demand and be able to over-index ammo knowing that that had been over-indexed in 2021. That make sense? That makes sense. Safe to assume within that PNR that the majority of that is 9 mm? Correct. Pistol, but most of it is 9 mm. Yes. Yep. The last piece on that, you called out brass and kind of continued headwind and fighting to get some additional brass. I assume that is heavily within centerfire rifle that you've had a hard time sourcing brass. 100%. The demand, you know, we were able to sell what we had in centerfire rifle, both in Sierra with the GameChanger, we could have sold significantly more had we had brass. We've seen, you know, as we always hope, the super fan brand of Barnes accelerate going into hunt season, and we just were not able to have the full range of VOR-TX in centerfire hunt ammo across the season. What we've had, we've been able to sell and over-index. We just can't get enough brass, and obviously that brass is more complicated, and therefore there's just not much availability. Maybe I'll squeeze in one more just as we look at precision. You know, as we see a slowdown within a lot of handgun, primarily 9 mm, as well as.223, 5.56, you know, what opportunities do you have to switch maybe some lines or production over to other calibers and rounds and away from those that are now heavier inventory throughout the channel? Yeah. What you will see in 2023 and even towards the end of Q4, though we said as always we'll do maintenance the last two weeks of the year because we pushed them, this team and the machines hard. We'll start changing over and focus more on the specialty side, which leans more towards the OEMs and leans more towards the reloaders in the Sierra side, what we call green box, where we have not over-indexed and, you know, we've been pushing 30+ calibers when we have a line as big as 220. In Barnes, really focusing towards the OEM side and the caliber opportunities in specialty where Barnes is by far the clear winner, whether that's in blackouts, whether that's in 338, whether that's in, you know, more specialty calibers. Okay. Perfect. Thank you. Thank you for your questions. I would now like to turn the call back to Mr. Walbrecht for closing remarks. Thank you, Cody. We'd like to thank everyone for listening today. We look forward to the fourth quarter. We appreciate your support and wish you all the best. Thank you. Thank you for joining us. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.