Good afternoon, everyone. Thank you for participating in today's conference call to discuss Clarus Corporation's financial results for the quarter and full year ended December 31st, 2022. Joining us today are Clarus Corporation's President John Walbrecht, CFO Mike Yates, the company's External Director of Investor Relations Cody Slach. Following their remarks, we'll open the call for your questions. 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 the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead. Thanks, Shannon. 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 potential risks and uncertainties that could cause the actual results of operations or financial condition of Clarus Corporation to differ materially from those expressed or implied by the forward-looking statements. More information on potential factors that could affect the company's operating and 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 February 27th, 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. It's good to be with everyone. As I reflect on 2022, there is no doubt it will go down as one of the most challenging years in our company's history. An uncertain macroeconomic environment, a tough consumer backdrop, extremely volatile foreign currency exchange markets, and inefficient supply chains presented rough waters for our brands to navigate. We are proud of our team's tenacity and dedication in these uncertain times, so I first wanna recognize all the people across all of our brands and their great efforts. As the challenges set in, we acted quickly and pivoted towards the areas of our business that weren't facing the most severe headwinds. Areas of focus were precision sports, as well as the markets outside of North American wholesale in our outdoor segment. We also prioritized expense reductions, free cash flow generation, and debt reduction. On the cash side of this equation, we focused on streamlining inventory and cost reductions. This allowed us to generate over $30 million in free cash flow during the fourth quarter, which we used to pay down $28 million in debt. We ended the quarter at approximately 2x leverage, which is at the low end of our leverage range, and we believe it is a comfortable spot as we enter into 2023. Zooming out on the full year, we have much to be proud of as well. We drove record revenue growth, grew our Precision Sports segment by 21%, deepened our specialty retail presence in our Outdoor segment by increasing sales in this channel by 31% in the second half of the year, grew our apparel by 31%, and expanded our direct-to-consumer business by 26%, all while focusing on decreasing our inventory and paying down debt. We weren't totally immune to the challenges I just mentioned. Negative impacts associated with foreign currency, inventory destocking at our larger retail accounts in North America during the second half of 2022, a consumers whose confidence has been tested by rapid inflation, and continued inefficiencies with our supply chains were difficult for our brands to fully offset. On a consolidated basis, our fourth quarter sales were $104 million, down 12% or down 9% on a constant currency basis. Breaking down our Q4 performance at the segment level, as mentioned, Precision Sports continued its to market outperform, growing 10%. Our Outdoor segment declined 15% or 11% on a constant currency basis, and our Adventure declined 28% or 22% in a constant currency. Like last quarter, macroeconomic factors outside of our control continued to hamper our profitability. Specifically, unfavorable movements in foreign currency exchange rates had negatively impacted our Q4 Adjusted EBITDA by an estimated $3.7 million, while higher freight costs associated with supply chain challenges resulted in incremental $9.9 million in additional costs. Removing these costs, our consolidated Adjusted EBITDA margin would have been 14.1%. We believe elevated freight costs are transitory as supply chains continue to stabilize. In fact, we are making progress in the reduction of lead times back to pre-pandemic levels, and container costs are decreasing as well. As such, we currently expect a more normalized operating environment as we move towards the back half of 2023. At this time, I would like to provide additional highlights at the segment level, starting with Outdoor. In our Outdoor segment, our focus on Europe and our international global distributor markets, which aren't experiencing the same magnitude of inventory overhangs that the North American market has, allowed us to drive constant currency growth in the fourth quarter of 15% in Europe and 7% in our international global distributors. To provide some context on the level of FX impact we endured in Europe, the strength of the dollar caused a $2.3 million headwind on a constant currency basis in the fourth quarter and nearly $6.6 million for the full year impact. Despite the market challenges and significant foreign currency headwinds, our outdoor segment experienced a 400 basis point gross margin improvement in the fourth quarter due to activities previously outlined around new product introductions, pricing, channel development, sourcing, and productivity initiatives. Without the impact of the foreign currency headwinds that I just mentioned, our outdoor segment gross margin would have increased 640 basis points to 41.4% margin. Apparel continues to be our fastest-growing category, with sales up 15% for the quarter and 31% for the year. We experienced outsized demand for the outdoor snow shells led by our Dawn Patrol hybrid and our expanded Recon collections. Our innovative four-way stretch fabrics and unique feature sets have been strong drivers for our new consumers in this brand. As we continue to refine and innovate our technical components, our fit, and our features, we believe this will further increase demand awareness and our overarching growth path. Our direct-to-consumer business also remains a bright spot, with fourth-quarter sales up 19% year-over-year and up 38% in apparel alone. We have been very intentional about driving our direct-to-consumer business, doubling down on our engagement with our core community by opening flagship retail stores and executing a long-term investment in e-commerce. Internationally, our outdoor segment continues to perform well and gain market share. With the lack of microprocessor availability, this has hampered our PIEPS brand all year. Foreign currency exchange headwinds lowered European sales by EUR 2.3 million in the fourth quarter. Demand trends are strong for the brand moving forward. We believe this highlights the strength of our relationship with our vast network of European specialty stores and the desire for the consumer to remain active in the outdoors. Our international global distributor market, specifically Korea, Japan, and China, reflected a 90% increase in footwear and a 41% increase in our mountain products in the fourth quarter. Overall, the retail channel in these two international markets is much healthier than we experienced in the North American market. In fact, inventory destocking trends with our larger key accounts in North America dramatically reduced their open-to-buy and was the major offset to the positive initiatives I just discussed. Based on our continued conversations with our larger key accounts, this is not a Black Diamond specific issue, as our products continue to show strong sell-through. We believe the issue stems from other discretionary categories not geared towards the activity-based consumer. Unlike other retailers we work with globally, there continues to be a challenge for large North American key accounts to ensure a balanced portfolio of inventory. The demand pull forward experienced in 2020 and 2021 due to the pandemic led to an extreme over-indexing of inventory. With the overall demand curve slowing, open-to-buys are delayed until this excess inventory is sold through at the retail level. Within our specialty accounts, however, we continue to chase demand with sales in the channel up 31% in the second half of the year. To meet this demand, we often needed to incur higher than anticipated costs associated with air freighting the product. We estimated we end the quarter with $3 million in backorder demand globally. This number has come down every quarter since the second quarter of 2022, given the strong sell-through trends and our team's ability to service our accounts at higher levels while chasing the increased demand in headlamps, trekking poles, gloves, and apparel. We start 2023, we feel confident in our ability to deliver on time 95%+ fulfillment and being easier to do business with than we were in 2022. Looking forward, we are excited about the recent announcement of Neil Fiske as the new President of BD. He will be responsible for accelerating the growth and lifting profitability by capitalizing on the attractive expansion opportunities across various categories, channels, and regions. He joins Black Diamond from Marquee Brands as a leading brand accelerator with a portfolio of 13 brands. As a CEO for almost 20 years, he has an extensive experience in outdoor, active, and apparel categories, having led transformational change at Marquee Brands, including the Kind and Body Glove, Eddie Bauer, Billabong International, The Gap, and L Brands. Fisk brings deep experience in building brands, driving innovation, and improving operational performance. Please welcome Neil on board. Our focus in our outdoor business in 2023 will be continuing our commitment to activating and scaling our go-to-market activities. 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 our retail partners and consumers, we believe that we are well-positioned for continued market share gains as we seek to elevate the brand awareness and demand for our brand within our targeted markets. We anticipate that the supply chain continue to improve and inventory normalizes, and we will accelerate this segment's growth and profitability. Moving to Precision Sports. Our niche brand positioning and ability to be nimble with product deliveries resulted in another record quarter. We drove another record quarter with sales growth of 10%. Our ability to continue executing in this segment stems from the diversification we have by brand, by vertical, and by geography. Not only do we have two super fan brands in Sierra and Barnes. Both of these brands have strong business relationships across the globe supporting ammunition, OEM, and component businesses. Our 10% sales growth was driven by the prioritization of orders for our OEM partners, both domestically and internationally. Demand for our center fire rifle hunt product and broader ammunition remains high, limited only by our availability of the brass cases required to load and deliver this product, which continued to create back order through our wholesale channels. Demand continued to exceed supply for both Sierra and Barnes, we increased capacity in both bullets and loading of ammo, ending the year at our production rate targets of 330 million bullets at Sierra and 110 million at Barnes, and an ammo loading capacity of 50 million rounds. As we look to 2023, we anticipate the use of this capacity will mix between OEMs, reloaders, and ammo, but it will also mix from the various calibers. We do expect to focus on larger centerfire rifle calibers and less on pistol and revolver in 2023. The key driver of any variance in this strategy will be our ability to source product components, mainly, as stated previously, the brass cartridges for rifle loads. All things being equal, we will continue to chase growth opportunities in 2023. This stems from our two super fan brands we own. We believe it is inaccurate to lump our precision brand into the broader ammunition market, given our unique product and our brand positioning and our leading specialty market share, premium prices, enthusiast consumers, and growing demand by our various channels worldwide. It is our demand across various diverse geographies and channels that allows us to shift quickly when one channel slows or when the supply chain limit other opportunities. Having just come out of SHOT Show in mid-January, we are feeling confident about the upcoming product launches. At our Barnes brand, we will be launching the Pioneer line, which is product for lever-action rifles. We expect that Sierra will follow with a similar product in 2023. The response we are receiving from the dealers is positive, and combined with our relationship with key distributor partners, we believe we will continue to steal market share in 2023. We will also continue to see opportunities outside of the domestic market, primarily in Europe, Australia, and South Africa. Now on to Adventure. The challenges we experienced in the third quarter persisted into the fourth quarter. Worldwide new vehicle supply continues to lag demand. Like our Black Diamond business, our larger key distributors of our Adventure products were sitting on too much inventory going into the second half of 2022, impacting the sales velocity. To combat these headwinds, we have improved our organizational structure, enhanced our go-to-market process, professionalized our team via salesforce expansion, in-store support systems, fulfillments, and our fulfillment center. We have reallocated expenses to the areas that matter most around new product introduction, distribution, and systems. We have also taken over the U.S. and Canadian distribution for MAXTRAX and in Canada for Rhino-Rack, allowing us to further control these brands in these important markets. We are also onboarding additional sales agencies to create more touch points with our retailers. Ultimately, we believe the combination of factors negatively impacting our Adventure segment in the past couple of quarters will be short-lived. Our long-term growth premise for these brands remains unchanged, strengthened by our overall industry trends that we witnessed at SEMA in November. We continue to see global vehicle trends shift towards more SUVs, CUVs, trucks, and side-by-side or utility cast vehicles, making outdoorism combined with overlanding the global automotive fashion trend, which fits perfectly with our products at both Rhino-Rack and MAXTRAX. 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 expansions, both into more specialty as well as outdoor accounts. Activating this playbook forms the basis of our strategy to re-accelerate growth in our Adventure segment. The strategy is as follows. First, we will seek to own the overlanding market globally. Retailer expansion into mainstream adventurism is just beginning as key retailers launch flagship adventure stores with an overlanding as the leading category of focus. We are moving rapidly to build our strategic initiatives as we seek to create an ecosystem of overlanding products, sportsmen, and weekend warrior consumers. We expect to be introducing updated bike and ski and kayak racks, luggage boxes, truck bed systems, and awnings as new accessories, including storage cases, rooftop tents, duffel bags, and expanded recovery systems. Second, we expect to improve our speed to market through more focused new product introduction efforts, increasing our sourcing efforts, augmenting our engineering and supply chain teams, and leveraging key vendor relationships within the Clarus portfolio. Third, we expect to unlock the U.S. market through an improved direct-to-consumer presence, augmenting the support of our direct specialty dealer setups, providing more touch points of service and selling through the onboarding of additional sales agencies, improved operation systems, and building out our super fan brand approach to performance marketing and community activation. Finally, as we prove our U.S. expansion strategy, we expect to develop other attractive markets like Japan, Korea, the Middle East, and Europe, which we believe will increase our total addressable markets. We are confident that we are positioning the brands for growing as outdoor adventure through overlanding continues to build momentum globally. As we look ahead to 2023, we believe we have a portfolio of super fan brands that have strong growth profiles with significant market share left to target, even in challenging environments. Climbing, backcountry skiing, trail running, hiking, hunting, competitive shooting, and overlanding adventuring are mega trends we do not anticipate changing for the next decade plus. This is one of the most important attributes that we seek for in our super fan brand strategy. We believe it is the key component to our long-term shareholder value creation strategy. Now I'll turn the call over to Mike. Thanks, Mike. Thank you, John. Good afternoon, everyone. I'm gonna jump right into the performance in the fourth quarter. Sales were $104.2 million, compared to $118.2 million in the prior year quarter. Sales included revenue contribution of $3.8 million from MAXTRAX, an acquisition completed on December 1st, 2021. Reported sales in the fourth quarter were down 12%. Organic sales were down 11% in the fourth quarter. MAXTRAX contributed 2%, and foreign exchange was a 3% headwind in the quarter. On a constant currency basis, total sales were down 9% in the quarter. Fourth quarter sales at the outdoor segment were $55.3 million versus $65.1 million in the fourth quarter of 2021. If you adjust constant currency exchange, Outdoor sales would have been down 11% as opposed to being down 15% at Outdoor. As John mentioned, while we've done a good job closing the gap on outstanding Black Diamond orders, we are still constrained by lower open-to-buys from our N-key North American retail partners, due in part to their inventory destocking activities. Partially offsetting this decline was execution in the key pivot areas of direct-to-consumer, European, and IGD that John mentioned earlier. Another area of strong execution was apparel, which continues to be our fastest-growing category within the Outdoor segment. Sales were up 15% at the apparel category level. This is notable as apparel, along with footwear and our direct-to-consumer business, represent key strategic growth pillars over the next five years for the corporation. Precision Sport sales increased 10% in the quarter to $30.3 million. Strength in the international business continued in the fourth quarter as our Precision Sports team continued to do an excellent job in fulfilling demand, increasing production capacity, and navigating a challenging sourcing environment. One thing to note, during the fourth quarter, we sold $5 million of 9mm ammo at lower margins than normal. We did this in an attempt to reduce inventory and generate cash, as the demand for 9mm is expected to remain low compared to the supply during 2023. You'll see this reflected in the segment EBITDA in the fourth quarter, but we expect this to be a one-time decrement given the strategy John discussed. Our adventure segment contributed sales of $18.5 million, reflecting lower consumer demand given the challenging economic environment, bloated industry-wide inventory to distributor level, and constraints on new vehicle deliveries. Despite these results, our long-term positive view of these brands remains intact. During the fourth quarter, due to the reduction in the consolidated market capitalization of the Clarus Corporation and the enterprise value of the corporation, and the lower sales growth and lower EBITDA expectations in the immediate and near-term forecast for the adventure segment, we determined it necessary to write down the value of the trademark and goodwill associated with the Rhino-Rack acquisition. An impairment charge of $92.3 million was recorded in the quarter. This non-cash charge is included in operating expenses, and we have excluded it from our Adjusted EBITDA in the earnings release published earlier today. Moving on to gross margin. Consolidated gross margin in the fourth quarter declined to 34.6% compared to 36.1% in the year ago period. As John mentioned, we were able to push through significant improvements in gross margin for our outdoor segment. These improvements were offset by inventory optimization at the Precision Sports segment as we cleared out our remaining 9mm inventory ammo. Foreign currency had a negative impact of $3.7 million or 220 basis points. Well, higher freight costs had a negative impact on gross margins of $900,000 or 90 basis points. Excluding both, gross margins in Q4 on a consolidated basis would have been 37.7%. SG&A in the fourth quarter were $33.1 million compared to $32.6 million in the same year ago quarter. In both our outdoor and Precision Sports segments, we were able to push through expense improvements, leading to lower SG&A compared to the prior year. SG&A expenses for the quarter also reflected lower non-cash stock-based compensation for performance awards at corporate. This disciplined expense management was entirely offset by the inclusion of MAXTRAX and higher rent and selling investments at the adventure segment. Net loss in the fourth quarter was $81.6 million, or $2.20 per diluted share, compared to net income of $14 million or $0.36 per diluted share in the prior year quarter. Net loss in the fourth quarter of 2022 included the non-cash impairment charge of $92.3 million that I just referenced. Adjusted EBITDA in the fourth quarter was $10.6 million or an Adjusted EBITDA margin of 10.2% compared to $20 million or an Adjusted EBITDA margin of 16.9% in the same year ago quarter. Lower revenues in the Adventure segment, higher freight expenses, and adverse changes in foreign currency exchange rates all contributed to the reduction in Adjusted EBITDA. The 10.2% Adjusted EBITDA in the fourth quarter would have been 13.3% on a consolidated basis if you remove the impact of FX and would have been $14.1 million or $15.2 million if you remove the FX impact and the higher freight cost at Outdoor and Adventure. EBITDA at Outdoor was 11.7% for the quarter. It was 23% at the Precision Sports segment in the quarter due to the 9mm inventory liquidation I just discussed. EBITDA was a loss of $1 million at Adventure in the quarter as we continue to deal with unfavorable FX and freight. We do expect the challenges associated with freight to be behind us in the first half of 2023 as we monetize the inventory that carries these higher freight costs. Let me shift over to liquidity and asset efficiency. Inventory levels declined by 5% from where we ended the September quarter to $147.1 million, which was near our end of the year goal. At December 31st, 2022, cash and cash equivalents were $12.1 million compared to $19.5 million at December 31, 2021. Free cash flow, defined as net cash provided by operating activities plus capital expenditures for the fourth quarter of 2022, was $30.3 million compared to $5 million in the same year-ago quarter. This is reflective of our conscious efforts to improve working capital during the fourth quarter. Specifically, we were able to reduce receivables by $10 million in the quarter and inventory by $8 million on a sequential basis. We are committed to generating cash in 2023 through our continued focus on optimizing working capital across all three segments. During the fourth quarter, we paid down $28 million in debt and ended the year with total debt of $139 million. This put us in a net debt position of $127 million, with net debt leverage of 2x on a trailing twelve-month Adjusted EBITDA basis, which is at the low end of our 2x-3x target. We expect to stay at that low end of that range in the near future. Under our $300 million revolving credit facility, we have approximately $18 million outstanding and further borrowing capacity of approximately $98 million as of December 31st, 2022, while maintaining compliance with our required covenants under our credit agreement. From a tax perspective, we were able to utilize $41 million in NOLs in 2022 and expect to use the remaining $18 million in 2023. That's right, we only have $18 million left of the NOLs. Over the last 10 years, we have worked to strategically balance the utilization of our NOLs to ensure the optimum path for growth while mitigating tax burdens. During this time period, we've been able to realize $220 million in tax benefits from our NOLs. It's quite a testament to the organization's accomplishments in making accretive acquisitions while driving significant cash tax savings for our shareholders. I'm going to introduce our 2023 outlook. We expect sales of approximately $420 million and Adjusted EBITDA of approximately $60 million or an Adjusted EBITDA margin of 14.3%. We expect full year capital expenditures to range between $7 million-$8 million, and free cash flow is expected to range between $35 million-$40 million for the full year of 2023. Implicit in these expectations is caution and conservatism considering the challenging macro environment, the higher interest rates, and the uncertain impact these challenges might have on the consumer as we work through the rest of 2023. As a countermeasure to these unknowns, we are focused on further optimizing our SG&A and driving gross margin enhancing initiatives in order to accelerate the underlying profitability profiles of each of our segments. We also expect to realize further working capital improvements, generating the outlined free cash flow target I just provided. That was result in our further deleveraging our business with this incremental free cash flow we're expecting to generate in 2023. This strategy will not only ensure further value creation in 2023, but will also reestablish the baseline businesses and position us for growth both organically and via M&A in 2024. Additionally, this outlook assumes foreign currency exchange rates stay where they are, specifically the euro at 1.05 and the Australian dollar at 0.67 to the dollar. Based on these rates, we estimate that FX is a $2 million headwind for 2023 compared to 2022 on a constant currency basis. For the first quarter of 2023, we expect consolidated sales to be approximately $95 million, reflecting continued headwinds surrounding unwinding of inventory at our key North American wholesale partners. Excuse me. I'll pause here and hand the call back to the operator as we're ready for Q&A. Thank you, sir. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question will come from Alex Perry with Bank of America. Please proceed. Hi. Thanks for taking my questions. Just first, any color about on how we should think about the growth rates between segments for 2023. You know, should Precision Sports continue to outgrow? Like, you know, I think in the past you have provided a, you know, a little bit more detail on sort of segment growth. Any help there would be very appreciated. Thanks. You know, Alex, I'll start. John can add any comments. You know, we specifically have not given segment guidance this year. You know, we're really proud of the diversification and strength of the entire portfolio across the three very distinctive segments. Each of these segments is really positioned to grow in 23. We've put the effort in to grow these segments and make the investments necessary to grow them. Each are in their different phases of growth. As you may recall, last year we guided Precision, you know, was probably an underwhelming guide. It outperformed. We're really looking to 23 with the challenging macro environment, the impact to consumer, the higher interest rates. We wanna leave ourselves some optionality of where we, where we pivot to, because like I said, all three businesses are, we've made the efforts to grow these businesses, and like I said, they're positioned to grow. We're gonna wanna keep some optionality available to, as we move through the year and lean into where we're seeing the best opportunities to grow in light of this difficult environment. We're gonna be super cautious about, you know, our capital and where we invest and how we allocate resources and. We're gonna lean into the hot segment and whether that's geographically, the hot channel, et cetera, and we will as we go through 23. That's why we've elected to kinda give a guidance at the core consolidated level versus trying to predict, you know, how each of these businesses are gonna perform here as we go through 2023. Great. That's really helpful. Just one clarifier. It looks like the $95 million total sales guidance is down a bit from the $113 you did last year. Any help in terms of how we should think about, you know, the margin there versus maybe the, you know, 17.4% you did in 1Q 2022? My other question was, you know, the theme last quarter was retailers were being really cautious with their open-to-buy. They continue to work through inventory levels and in competing categories, not necessarily your category. Is this still the case, and is this headwind sort of carrying with you into 2023? Thank you. Sure, Alex. Great question. Yeah, no, the main driver of that $95 million in the first quarter is really as John Walbrecht alluded to the difficulties with our North American retail partners, specifically in our outdoor business, right? As we said in our prepared remarks, you know, that they, their open-to-buy are limited. We're seeing demand for our product, but our big customers here in North America are really taming back and rightsizing their inventory levels. As long as that's going on, despite the tremendous job at specialty or despite the growth in our international distributors or in Europe, or in our new initiatives, right? When North American wholesale is struggling, that's really the headwind we're facing here in Q1. You know, we think that's transitory in nature, right? Once they rightsize their inventories, and, you know, we see that picking up. In, you know, we're sitting here almost two months into the 1st quarter, so we know what's going on here in the first couple months. That's really the background to that. From a earnings perspective, you know, I think gross margins and EBITDA margins are both should be trending favorable compared to what we just posted here in the 4th quarter because a lot of the initiatives we talked about, controlling SG&A, but more importantly, capturing value leakages at the gross margin line, the stabilization of freight, the more favorable FX than we had prior, you know, in the back half of 2022. So you know, we're not giving specifics, but I think, you know, we highlighted the significant improvement in gross margins at Outdoor, and we think a lot of that sticks here as we move forward. Great. Sorry, just to clarify. You said EBITDA margins and gross margins favorable versus fourth quarter. Yes for the first quarter, right? Yes. Okay, perfect. Thank you. I'll pass it along. Best of luck going forward. Thank you. Thank you. Our next question comes from the line of Randy Konik with Jefferies. Your line is now open. Hey, Randy. Hey, guys. Just first quickly, I guess for Mike, just on the EBITDA margin guidance for next year for the year, just how much of that is gross margin expansion versus, you know, SG&A rate change? Can you clarify that for us first? No, we haven't been that specific, but it's over 100 basis points of margin improvement compared to where we finished this year on a reported basis. Like I've just mentioned to Alex, you know, those initiatives that we've been driving under Aaron Kuehne's leadership, you know, they're sticking. You know, I'd say over 100 basis points. Over 100 basis points of gross margin? Yeah. Got it. Okay. I guess, John, for you know, as the, as the leadership bench continues to expand, maybe. You know, I know Neil Fiske from his days at Bath & Body Works. You know, he did a good job of kind of, elevating the perception of the brand there. He wrote a book, Trading Up, that I've read. Maybe give us some perspective of conversations you've had with Neil about, you know, what he's focused on or gonna be focused on in his first year ahead at Black Diamond, any kind of broad strokes, you know, that you think he's gonna be attacking for that particular brand in the next 12 months? Yeah, fantastic question. Thank you, Randy. Good to hear from you again. As we look to 2023, two aspects that Neil will be focusing on, first and foremost is continuing to accelerate, you know, the innovate and accelerate strategy across the brand today, continue to innovate in the apparel footwear segment, as well as the expansion of distribution within headlamps, trekking poles, glove packs, you name it. As we look beyond that, the real goal is how do we continue to think about BD, its place in the market space, brand awareness, new category expansion, new retail, more focus on consumer direct and our community-centric model, and the long-term, you know, competitive growth of Black Diamond beyond what we've achieved, you know, up to 2023. Got it. I guess my last question is, I think on the guidance you guys talked about, I guess a free cash flow generation, expectation of $35 million-$40 million. You know, how do you think about the utilization of that free cash? You know, are you just gonna kind of hoard it in the bank, you know, take a pause on acquisitions for 2023, given the market uncertainty, look at debt paydown or anything like that? Just curious on what you're thinking about, you know, in terms of utilization of free cash flow, going forward. Sure, Randy, let me take that one. You know, you know, we've been very specific about investing in organic growth and doing M&A, strategic M&A, you know, finding the next super fan brand. For the first six months of the year, we're gonna focus on generating cash and paying down debt, though, this year, right? Rightsizing, improving our working capital, et cetera. It's gonna be kind of a in-internal look, right, that's focused on paying down debt with that cash flow generation. Now, we only have $18 million in my prepared remarks outstanding under the revolver. We have about $10 million of required payments under the term loan, you know, that's $28 million. We should be building cash at some point throughout the, you know, through the year, right? That's, you know. In my prepared remarks, I said we'd get back to, you know, looking more aggressively at M&A, you know, in the back half of the year or in 2024. Understood. Thanks, guys. Really appreciate it. Thanks, Randy. Thank you. Our next question comes from the line of Joe Altobello with Raymond James. Your line is now open. Thanks. Hey, guys. Good afternoon. Wanna talk about outdoor and the, you know, retail inventory reductions you guys have alluded to throughout the call. Are there any categories in particular that they're heavy on, or is it pretty much across the board? Good question, Joe. Good to hear from you. I think that, coming out of spring, summer 2022, there was an expectation that some of these new growth categories that had seen explosion during COVID, which can be around family camping, could have been around bike and bike carriers, racks, things like that. It ended up heavy as we went into Q3 and Q4, we saw a shift and a slowdown. I think it just manifests itself in too much inventory in the total system, which just limited open-to-buy and made it difficult to chase those categories that we're continuing to see growth, which for us were things like trekking poles, headlamps, gloves, packs. You know, apparel in the mix. Now, I think apparel as a whole was saturated in the market, specifically in the, you know, casual side of the business. It was pretty broad-based. On Precision Sport, you mentioned the 9mm inventory liquidation. Is that done or is that continuing here into one? Yes. Okay. No, that's done. That's done. That was a, you know. We took advantage of the popularity of 9mm in.223 in 2021 and, you know, thought it would carry over some into 2022. In 2022, the demand was really around the center fire hunt and precision, and that's where we chased through all of 2023 and are still chasing into 2023. Got it. Got it. One last one for me. Vista, as you know, is splitting up into two companies, sporting and outdoor products. Do you anticipate any change in your relationship with the sporting side? No. We believe we have very good relationships with Federal and the team, Jason and all the way down. We are partners on both sides of, you know, we supply bullets both from Sierra and Barnes to Federal, both for commercial loading as well as their OEM contracts. You know, they're generous enough to help us with cases and primers. Okay, great. Thank you. Thank you. Our next question comes from the line of Ryan Sundby with William Blair. Please proceed. Yeah, hey, thanks for the questions. Maybe to follow up on Joe's first question there around inventory by category. John, you've got a pretty unique portfolio in that you've got warm and cold seasonal offerings. Are you seeing any difference in the way retailers are managing or behaving in kind of an in-category, an active season category like ski and something that will be in demand later in the year? Yes. I think what we find is at the specialty level, where they chase on a weekly basis, they're able to chase whatever the latest, greatest weather trend is. When you have larger accounts who have a normal seasonal cadence, right? It's a little more difficult to chase open-to-buy in those categories because they already have prescribed bookings going out, right? And, and we pull off of those with trends, but, you know, they anticipate certain seasonal and activity trends shifting in their business. And, and we've seen, you know, that impacted in this space, right? The winter that comes later but is much bigger, longer, or big in the Rockies but, you know, warm and dry in New England, for example, or whatever, makes that difficult for them to chase. Got it. That's helpful. Then John, you called out a few positives around demand, whether it be constant currency growth 15% in Europe or the DTC outdoor growth of 19%. Is that more reflective of kind of the true underlying demand or POS you're seeing out there? Just help us kinda understand that delta is given some of the dislocation that's happening from the inventory management. Yeah. You know, very, very astute on that. Obviously, when we look at the year as a whole, there are areas we were bummed that we couldn't accelerate the business as we had previously hoped, and some of it not in our control, which we talk about, whether it's airs freight and supply chain or it's FX headwinds or whatever. As you've caught on, the true demand for the brand typically shows up in key growth categories, or it shows up in key growth geographies, which we're seeing in Europe and IGD, or it shows up in key growth channels, which could be direct to consumer, it could be specialty. And when you see the mix gives you a sense of, as you're saying, what is really the demand for the brand today versus the marketplace. That's why, you know, albeit we're guiding conservatively because we're going to have to in 2023 chase certain channels, certain geographies, certain product lines, right? Even certain brands or segments, and we will do so, and that's our, you know, our commitment to it. It won't be an easy layup that every category, every brand, every channel, every geography sees the same upside, right? And that's going to be the challenge for every brand in 2023. All right. Thanks. Thanks for the questions. Thank you. Our next question comes from the line of Matt Koranda with ROTH MKM. Your line is now open. Hey, guys. Good afternoon. just wanted to spin back to the guidance one more time just to make sure I understand. I mean, the simple take for me, you're guiding revenue lower by about $30 million, just a tad less than that. EBITDA only shrinks by about $3 million, and I think that implies that you expect some margin improvement. There's got to be some puts and takes underneath the surface from a segment level, and it feels a little bit like maybe we're relying on a bit more contribution from the Precision Sport segment, just given that's higher margin, that mix shift should be helpful. Am I thinking about that in the right way? Are there other areas... You did talk about 100 basis points of gross margin improvement. Where do we see, I guess, opportunity to cut on the SG&A front? It sounds like the guide also implies a bit of SG&A cut as well. Well, you know, we're not talking about cutting a lot of the SG&A. I mean, there's a few opportunities perhaps maybe in the adventure segment. You know, year-over-year, you know, the SG&A at from 2021 to 2022 was actually down at the outdoor and precision sports business. I mean, SG&A is pretty tight. We spent, you know, the back half of last year focused on expense control and generating cash and rightsizing inventory. You know, we're not gonna get into the details of where we. You know, my comments around, Matt, around where we see the from a segment perspective, where there more opportunity or less opportunity from this segment or that segment. We've made investments, all three of them, like I said, have different headwinds, different tailwinds. We're gonna lean into that segment where we see where we can achieve the growth, right? You know, with the difficult environment today, whether that's the consumer or the macro or interest rates, 'cause interest rates do play a bigger impact, especially in Australia, because of the way their financing works down there. So we're gonna lean in where the opportunity is. You know, we're only, you know, 60 days away from reporting Q1 again. We'll talk, we'll have more to say in 60 days. Well, I will say, Matt, Okay. on the. Positivity. Sorry, go John. increases, obviously you don't expect those to be as much a headwind as it was in 2022. You know, we don't anticipate having to experience as much air freight. You know, all those things being positive to the overall EBITDA. I'm sorry, John. That's a great point. The FX and the air freight, right? You know, the freight's behind us, right? For the second half of 2023. We're seeing those container and shipping costs, you know, normalize and the FX is built in. I said we were expecting about a $2 million headwind compared to last year. You know, compared to last year, FX overall was a $9 million, you know, headwind. Okay. Got it. That's very helpful. Thanks for the call out on that, John. On precision sport, just wanted a little bit more detail. You mentioned the one-time sale, bulk sale of 9mm. Just what was the EBITDA headwind from that in the fourth quarter, Mike? Is there any more, you know, large amount of loaded ammo inventory that you could be sitting on that you can monetize over the next quarter or two that we should be factoring in to how we think about the first half of the year? Well, I'll answer that one. We don't have any pistol and revolver ammo, large amounts of that, right? As John's prepared remarks, we're really leaning into the center fire rifle, which is what Barnes and Sierra really, you know, that's really where they play. We were opportunistic in 2021 when we did sell some of this pistol and revolver 9mm stuff. We have a couple, $3 million of.223 ammo and that's about it. From what I'll say is slower moving stuff. From a margin perspective, you know, we sold it at cost, so it was pretty significant impact. That's why, you know, margin of 23% for the segment was, you know, that's the main driver, right? That, you know, we don't expect that to continue. We expect that, you know, profitability of the business to bounce back to that, you know, 30%- 35% range that we've talked about our precision sports business performing at. Okay. Great. I just want to sneak one more in on the adventure segment, if I could. It seems like the issue in that business, especially in Rhino-Rack, has just been channel inventory over the last couple of quarters. Just any update on sort of where you think channel inventory sits, how long you think it'll take to kind of work through over the next couple of quarters? It sounds like some nice developments on the distribution front in North America. How does that play into your growth expectations and maybe just the progression of the revenue for the year in adventure? I would say, Matt, that there are two headwinds that we faced both in Australia and in North America in 2022 that we didn't account as aggressively for. One was the, you know, inventory hangover, and the second was really about the new vehicles. The two are similar, i.e., we expect typically 10%-15% a year type of growth through new product introductions associated with new vehicle launches. And when the vehicles get delayed, whether it's at the Polaris OEM level or it's at the consumer not being able to buy an F-150 or whatever, that has an impact. Now, you know, I think that the impact of the inventories were really heavy in three and four, Q3 and Q4, and rolled over a little bit into Q1. I think as we come into the spring, summer, we anticipate those inventories to get to minimal levels and the business start to see a pickup. Gotcha. I'll turn it back to you guys. Thank you. Thank you. Thank you. Our next question comes from the line of Mark Smith with Lake Street. Please proceed. Hi, guys. Wanna just dig in a little bit more on precision here for a minute. You know, we've seen the slowdown in 9mm, you know, in.223, 5.56 as well. You know, are you starting to see some of the beginnings of maybe some slowdown or normalization in the remainder of center fire rifle, you know, especially as we start to see channel inventory, fill up a little better? Are you, and the question is you're seeing that or you're asking if we're-? Yeah. Asking are you starting to see any signs of maybe some slowdown in demand? You know, maybe if you speak to, you know, what you've got in backlog orders. No. Yeah. As we came out of SHOT Show, the two trends we saw and continue to hear from both the OEM partners, which is a significant portion of our business, as you're aware, which is loading for either military or law enforcement under contract or even the commercial side, is continued demand for what we call the Big Eight cartridges, which start with a.270 and go all the way to.308s and everything in between. Then for us, the big demand around things like.338s from a global, you know, international conflict perspective. So, as we said in the prepared remarks, you know, we're going to over-index into those products, channels, geographies where the demand is still accelerating. And we don't see a slowdown in centerfire rifle, but again, it's caveated by how many shell cases we can acquire as fast as we need them. Our order book is back up to the demand levels we saw coming out of Q3 and Q4, so we're very positive about that. I think again, the super fan nature of Sierra and Barnes is that we have a unique positioning in the market, and it's super difficult to replace those two brands and what they offer in product. Okay. Then can you talk about any commodity pressures or easing of, you know, within precision? Also, you know, are you starting to see any better availability in brass casings, you know, or primers or any other components for loaded ammo? So that message is the same, right? The sourcing of components, specifically the cases mark is critical. You know, that is the wild card on this. That story is no different than it's been throughout 2022, right? The more cases we can source, the more conversion of bullets that we can convert over to ammo, right? That's the wild card, right? The demand for centerfire rifle is staying strong, as John just alluded to, because of the Big Eight calibers that we're focusing on, and we're not focusing on pistol and revolver. 9mm. With regards to commodities, you know, copper's above $4 on the LME right now, and that's right around our you know, where we'd expect it to be and from a standard standpoint. You know, we don't see a big headwind or a tailwind either way right now from commodity pricing. Okay. The last one, just wanted to dig into just apparel and footwear. And sorry that I think I missed it. Can you give, you know, maybe the growth numbers again that you saw, you know, for the full year in those segments or anything else that you can kind of quantify for sales and the strength that we're seeing there? Yeah. We had 31% growth for apparel for the year, 15% in the quarter. We continue to chase demand and growth in footwear. We don't see either of those categories slowing down in 2023. Obviously, they're not the predominance of our business, you know. I think even more exciting is the level of apparel growth we saw even through our D2C. D2C was up. Apparel was up even more than our D2C growth. We continue to see strong interest and strong demand for these new categories. Excellent. Thank you. Thank you. Our next question comes from the line of Linda Bolton-Weiser with D.A. Davidson. Please proceed. Yes. Hi. I think that when you were talking about your expectations for inventory, your own inventory at the end of the year, I thought you had said something like $143 million or so. You got really close to that, but it was still a little bit higher. I'm just trying to kind of marry that thought with the idea that you had this precision sport inventory reduction that impacted gross margin. Was there some other inventory reduction that you had hoped you would do that didn't quite get done in the fourth quarter? Or like I mean, why wasn't inventory performance Why wasn't it even lower, I guess, at the end of the year? Hi, Linda. Good question. I think it's a good observation. Inventory at Outdoor is a little higher than we'd hoped for. Again, it's directly tied into the fact that North American retail is, you know, our wholesale partners aren't taking as much, right? We have a little more inventory on hand than we'd hoped to there. You know, we're working through that. That's a priority here, as I mentioned in the prepared remarks. True at Adventure as well, Linda, right? I mean, when you look at the overall businesses, we didn't expect to see the headwinds in either Outdoor or Adventure that we experienced. They're a little closer. John's correct, but they're a little closer to the target, right? The miss, you know, it, you know, as you're pointing out, is a little stronger at Outdoor. Mm-hmm. So i mean, I know that this is not the same channel as what you're supplying into, but, I mean, when you look at like Walmart, for example, I think their inventory in the most recent quarter was actually flat year-over-year. Like, they've declared the inventory reductions kind of completed. Is there just something different going on among your retail customers that's so different from, say, a Walmart? Like, talk about is your inventory up still year-over-year, but just up less at retail? Or can you give us more color on that? Smart. I would say that our retailers aren't exactly similar to Walmart, but I think they would all tell you that over the last three to six months, they have successfully moved down their inventory towards their targets and their new open-to-buys. That's why, as we said in the looking into the future, we can't tell you by exactly every channel, every geography, but we expect the businesses to see growth now that the inventories have come down, right? That was, you know, that's what impacted Q4 so much was big retailers using, you know, trying to manage every ounce of inventory at the cost of open-to-buy. You see that growth in second quarter or not until third quarter 2023? I think we are expected to start accelerating in the second quarter, but we do think that the second half of the year will be stronger. That's correct. Okay. All right. Thanks very much. Great. Thanks, Linda. Thank you. Our next question comes from the line of Jim Duffy with Stifel. Please proceed. Thanks. Hey, John. Hello. Hey, Mike. Hello, Jim. I'll. It's been a long call, so I'll keep it brief. Quick one on the cash flow. Mike, what's the gap between the $60 million EBITDA and the $30 million-$40 million cash flow guide? I guess I'm surprised you don't see working capital opportunity in 2023. We do see some working capital. Next year though, we're gonna be a higher tax cash taxpayer, right? We only have $18 million of NOLs left, right? We utilized over $40 million this year. That's the main driver. Okay. Then, next question, I guess for you, John. With Neil coming on board, you spoke to where he's gonna focus his efforts with the Black Diamond brand. Maybe you could talk about with the incremental bandwidth that provides to you and Aaron, what are the areas that are going to attract your attention? Where do you see the opportunity for greatest return, on your incremental bandwidth? Yeah. I think as we look to 2023 and beyond, this being a year that we're not as focused on M&A, which obviously was an area of our bandwidth in the past, is really accelerating the business, new NPI innovate and accelerate side, along with the operational plans and strategic planning of accelerating the other categories which we still believe have strong growth. Okay. Great. Thank you. Thanks, Jim. Thank you. As a reminder, to ask a question at this time, please press star one one on your touchtone telephone. Our next question is a follow-up from Alex Perry with Bank of America. Please proceed. Hi. Sorry about the third question here, but I just wanted to ask, the guidance implies a sort of re-acceleration in revenue from, you know, call it down 16% in 1Q to down 6% for the year. I know you have sort of the open-to-buy impacting BD in the first quarter. Are retailers 2H orders up year-over-year for Black Diamond based on sort of your read on the fall/winter 2023 order book, which is sort of causing the implied acceleration in revenue as you move through the year? Yeah, great question, Alex. Yes, we're able to look forward and see a strong order book for both spring 2023 as well as fall 2023. Obviously, fall is a higher percentage of our business. It's more like a 55, 45 as the mix. As we know, the acceleration of D2C and even our flagship retail does 75% of its business in the back half of the year and 50% in Q4. We see that often in our direct-to-consumer businesses as well. Gotcha. The fall/winter 2023 order book should be up against this year. Correct. sort of right? Yep. Got it. Correct. obviously in line with, you know, this anticipation that the open-to-buy or inventory overhang that we have seen at our key accounts will not be the case in Q3 and Q4 of this year. The 1Q is just, you know, 2022 product, them not chasing sort of winter 2022 product. It's not necessarily indicative of, you know, core momentum or demand for your product. It's more of a factor. Yeah. Which you see that easing as you move through the year. Correct. We believe that, you know, we've had a long winter, as you all know. I mean, as we get more snow again this week. You know, as the season changes over from what was the season in Q3 and Q4 and into, you know, spring, summer, you're probably now really April as opposed to February or March, we will see that shift of activity accelerate key categories. The spring 2023 is up as well. Yes. It's just Okay. All right. Perfect. Thank you. Yep. Thank you. At this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. Walbrecht for closing remarks. Thank you. We thank everyone for listening in to today's calls. Appreciate all your questions. We look forward to speaking with you when we report our first quarter of 2023 results. Thanks again, everyone. Be safe. Ladies and gentlemen, this does conclude today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.