Good afternoon, everyone, and thank you for participating in today's conference call to discuss Clarus Corporation's financial results for the first quarter ended March 31, 2026. Joining us today are Clarus Corporation's Executive Chairman, Warren Kanders, CFO Mike Yates, President of Black Diamond Equipment, Neil Fisk, and the company's External Director of Investor Relations, Matt Berkowitz. Following the remarks, we'll open the call for your questions. Before we go further, I would like to turn the call over to Mr. Berkowitz as you read 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. Matt, please go ahead.

Thank you. Before we begin, I'd like to remind everyone that during today's call, we will be making several forward-looking statements, and we will 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 can cause the actual result of operations or financial condition of Claire's corporation to differ materially from those expressed or implied by the forward-looking statement. 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 followed with the SEC. During this call, we will discuss certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in today's press release and the accompanying presentation. I'd like to remind everyone this call will be available for replay starting at 7 p.m. Eastern Time 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 clariscorp.com. Now I'd like to turn the call over to Clarice's Executive Chairman, Warren Kanders.

Good afternoon, and thank you for joining Clarice's earnings call to review our results for the first quarter. I am joined today by our Chief Financial Officer, Mike Yates, who will provide a financial update, including InVenture's segment performance, as well as Neil Fisk, who will discuss our outdoor segment. Overall, our first quarter results reflect disciplined execution of our simplification strategy. Despite continued geopolitical and macro uncertainty across the global outdoor market, we grew revenue and adjusted EBITDA year-over-year and expanded gross margin 240 basis points. Mike and Neil will walk through the details, which reflect the structural actions taken across both segments over the past several quarters. At Outdoor, the team's work prioritizing Black Diamond's best and most profitable styles continues to pay off. Sales, margins, and adjusted EBITDA were all up against a difficult backdrop. We continue to improve the quality of our inventory and revenue, shifting toward a sustainable, full-price model. Growth in our core big three categories, mountain, climb, and apparel, reflects deliberate actions to concentrate inventory on our highest volume, highest margin products. Apparel, a key pillar of our long-term strategy, grew 10% year over year on a full price basis in Q1. Turning to adventure, we delivered solid first quarter results with growth in both revenue and gross profit. Sales growth was driven by a favorable wholesale market in Australia for Rhino-Rack and MaxTracks. We saw new international customer wins in China, Japan, Scandinavia, and the UK, and we strengthened relationships with rack specialty retailers in North America. We are filling product and price gaps not addressed by competitors. Counterbalancing these positive developments, we see macro, trade, and consumer headwinds weighing heavily on adventure segment results in the back half of the year. In response, we have implemented targeted pricing actions and additional cost controls to protect margins. Building global penetration for our venture brands will take time, but we have a clear framework in place and a pipeline of new products on the horizon. Before I turn the call over to Mike, I would like to briefly discuss the review of strategic alternatives we announced today. As we have previously stated, we do not believe our current stock price reflects the sum of the part value of our two segments or the long-term potential of our businesses. The board is confident in Clarice's future and the undervalue of our iconic brands, which is why we have initiated this review to enhance shareholder value. Potential alternatives include the sale of all or part of the business or other strategic or financial transactions involving the company. We are committed to exploring a range of potential strategic alternatives designed to unlock value more effectively than the market is recognizing today. We have retained Jeffrey's LLC as our financial advisor to assist in this process. This review will run in parallel with our continued execution of the simplification strategy. Please note that we will not be answering any questions or commenting further on our strategic review process until further disclosure is appropriate or required. With that, thank you for being with us today, and I will turn the call over to Neil.

Thanks, Warren. Turning to slide six, I will review the outdoor segment's Q1 performance and our expectations heading into the remainder of 2026. Overall, we delivered solid results in Q1 with revenue, margin, and EBITDA all well ahead of the prior year period as our strategy of simplification, focus, and business reshaping continues to pay off. Note, my remarks exclude our divested peeps business from the prior year to provide more comparable results. Total revenues for the quarter were up 5.4%. That top-line growth number is a blend of our go-forward categories and those that we are exiting, such as bindings, lifestyle footwear, and avalanche airbags. Importantly, our core go-forward styles and categories grew 7% versus Q1 of last year. Similarly, our big three business units, Mountain, Climb, and Apparel, were up 6.7% versus the prior period and now account for over 90% of total revenue. For the quarter, Mountain was ahead by a healthy 7.7% versus prior year. The climb segment rebounded nicely with a 6.6% gain. Apparel was up 4.3% as we were lapping the high level of clearance on PFAS inventories from the prior year. Bolt price apparel sales were ahead 10.1%. Gross margins lifted 190 basis points year over year, even though Q1 of last year had not yet been impacted by tariffs. The improvement reflects the progress we've made in the quality of our inventory, our focus on our most profitable categories, less discounting, and a more full-price premium business model. Operating expenses, excluding restructuring, were up 11.6% for the quarter. OPEX for the quarter included $802,000 for CPSC legal costs and $425,000 for consulting work to improve the logistics fulfillment costs and profitability of our European operation. Stripping out these two items, SG&A was up 7.3% versus prior period. Restructuring costs of $793,000 for Q1 reflect the actions taken at the end of 2025 and early 2026 to further streamline our cost structure, including headcount reductions, store closure, and slimming down our athlete roster. These restructuring costs have been added back to adjusted EBITDA, but the costs of the Europe Consulting Project have not. We do not anticipate any further restructuring or consulting costs in 2026. Adjusted EBITDA for the quarter came in at $1.4 million, a 15.2% improvement versus prior period. This includes $802,000 for CPSC legal costs and $425,000 for our Europe consulting project. Inventory ended the quarter at $61.9 million, up 10% versus prior period. This increase reflects the higher cost of tariffs in our base, as well as strategic investments we've made in our franchise styles to protect upside growth from strong demand. Regarding tariffs, we could see some benefit from the new tariff schedule that has been put in place post the Supreme Court ruling. We're mindful that those tariffs are subject to ongoing review and potential changes. At the same time, we are seeing substantial cost pressure from the Iran war in everything from aluminum and other metals to polyester and nylon to printed circuit boards to freight and logistics costs. At this still uncertain stage, we see these two effects, lower tariffs and higher factor costs, roughly canceling each other out for the balance of the year. That said, a prolonged conflict would lead to factor price increases that outweigh any gains from lower tariffs. In that case, we would look at price increases beginning in July of 2026 to mitigate any potential margin compression. Regarding tariff refunds, we have followed the applicable process to claim our tariff IEEPA credit, which we estimate to be $6.2 million coming back to Black Diamond, subject to approval. Now, turning to results by region and channel, North America Wholesale grew 4.8%. North America Digital D2C, which represents 18.2% of the region's revenue, was down 9.7% due to less promotional volume and clearance activity. EU Wholesale was up 16.2% in dollars and 4.9% in constant currency. EU digital D2C, which represents 5.3% of the region's revenue, was down 43.6% in constant currency as we pulled back on both promotional activity and less profitable transactions. Our international distributor channel was up 7.9% for the quarter. Looking ahead, we have a strong order book for the second half of the year, which should support growth for the full year of 2026 compared to 2025. The wild card, of course, is the substantial risk posed by a prolonged Iran war to consumer discretionary spend as well as factor costs, supply chain, and deliveries. In the event of an extended conflict, we will be forced to raise prices to offset escalating factor cost inflation, potentially as soon as the false season shipments, which begin in July. External factors aside, we are pleased with our continued progress on the fundamentals for Black Diamond. This quarter's results show it. I'd again like to thank our teams around the world for their dedication, creativity, focus, and skill. With that, I'll turn it over to our CFO, Mike Yates.

Thank you, Neil, and good afternoon, everyone. On today's call, I'll provide some brief comments on the adventure segment, and we'll then conclude with a summary of our first quarter financial results, followed by the Q&A session. Let's take a closer look at adventure. Following multiple quarters of corrective steps, including pricing, resets, and further cost controls, our first quarter results reflect incremental progress. Q1's revenues increased 5.9%, driven by strong growth in Australia and new partner relationships in Japan, Scandinavia, China, and the UK. This growth was partially offset by a slow start to the year in the Americas, where market softness adversely affected results. However, we remain excited by the growth opportunity in this region, supported by strong long-term fundamentals and a large and growing addressable market of adventure-oriented customers across multiple verticals. Notably, adjusted EBITDA at adventure improved year over year, shifting from a loss of $200,000 in the first quarter of 2025 to a profit of $200,000 in the first quarter of 2026. Gross margin increased by 260 basis points, driven by price capture, customer mix, and improved terms. We are positioned going forward to benefit from steps we have taken to streamline our footprint to reduce costs and overhead and improve scalability. Q2-2026 will be our first full quarter with consolidated operations for our Maxtrax and RhinoRack businesses under one roof in Australia. Other Q1 wins include a $600,000 Maxtrax order by a large Australian automotive parts and accessories retailer, which will be invoiced in the second quarter. Overall, recent Maxtrack product launches have been well-received with sales of the Core MK2 board up 22% year-over-year. Rocky mounts continues to be a bright spot in the adventure segment. In addition to 111 new bike shop placements in the U.S., representing a half a million dollars of revenue in the first quarter, we have seen positive signs that the brand is steadily gaining traction in the Australian market. With a comprehensive portfolio of roof and hitch-mounted bike rack solutions, we are encouraged by our progress reaching new customers in North America, Australia, and New Zealand with the Rocky Mounts brand. I'd also like to highlight the success of the price increases we executed across all the brands that became effective in Q1 2026. We saw minimal retailer resistance, underscoring the strength of our brands. While the first quarter represented a period of improved profitability year over year, the Outlook for Adventure segment during the remainder of 2026 is challenging due to geopolitical and macro factors, including a difficult consumer environment in Australia. Beginning in April of 2026, we received feedback from several retail accounts, large and small, that they have significantly reduced their demand expectations for the remainder of the year. The war in Iran driving higher energy prices is a major factor behind this decline. Some of our retail partners are indicating a decline of 30% in the Australian market compared to last year. Consumer sentiment in Australia is negative. Retailer inventory is growing due to the sudden decline in the market. Higher fuel prices and higher interest rates are affecting the Australian consumer, and low vehicle sales are driving the expectation of an overall contraction in our core market of Australia and New Zealand. Against this backdrop, our focus remains squarely on what we can control, driving margin expansion, maintaining cost discipline, and improving operational efficiency. While we navigate softer demand, we are taking decisive actions with a clear emphasis on incremental revenue and EBITDA growth. Key initiatives include U.S. expansion via the new Rocky Mountain storefronts, increased Rhino-Rack and Maxtrax brand penetration across Asia, Europe, and the U.K. We see a path to maintain the margin improvement realized in Q1 moving forward despite the challenging top line expected for the remainder of the year at Adventure. Continued price capture, reduced promotional activity, and continued optimization of our customer and product mix and a significant focus on cost controls and certain cost out activities will all be necessary for the remains of the year in this challenging market environment to achieve our goals. So with that, let me turn to the consolidated segment financial review. I'm on slide eight. Consolidated Claris first quarter sales were 61.9 million compared to 60.4 million in the first quarter of the prior year. The 2.5% increase in total sales was due to favorable wholesale market in Australia for RhinoRack and Maxtrax in the adventure segment and increases in the global wholesale and independent global distributor revenue for the outdoor segment. The increase in outdoor segment was partially offset by lower peeps revenue due to its sale last July and lower global direct-to-consumer revenue. The consolidated gross margin rate in the first quarter was 36.8% compared to 34.4% in the prior year quarter. Gross margin benefited by higher volumes and favorable product mix at both adventure and outdoor. As I noted during our last call, gross margin expansion is critical and we were pleased with the first quarter's performance at both outdoor and adventure. specifically outdoors actual gross margin for q1 2026 was 36.0 percent compared to 33.8 percent in q1 of 2025 a 220 basis point improvement adventures actual gross margin for q1 2026 was 38.8 compared to 36.2 in q1 of 2025 a 260 basis point improvement first quarter sgna expense were $26.6 million compared to $26.6 million in the same year-ago quarter. So SG&A was flat. First quarter expense reflects lower marketing costs and other expense reduction initiatives across both segments to manage costs and the removal of PEEPS due to the sale in 2025, offset by higher outside service expenses. Adjusted EBITDA for the first quarter was a $1.1 million loss or an adjusted EBITDA margin of a negative 1.8%. Our adjusted EBITDA is adjusted for restructuring charges, transaction costs, stock-based compensation, disposable internally developed software, and inventory fair value purchase accounting. Additionally, beginning in the first quarter of 2026, we will no longer be adjusting and adding back the costs associated with the Section 16B litigation and the Consumer Product Safety Commission DOJ matter known as the CPSC and DOJ matters. These legal costs were $1.4 million in the first quarter of 2026. With this change, the $1.1 million loss for adjusted EBITDA would have been a positive $300,000 of adjusted EBITDA if we did not make this change, and the $0.3 million would have been above our prior guidance. The first quarter adjusted EBITDA by segment was $200,000 in adventure and $1.4 million at outdoor. Adjusted corporate costs were $2.8 million in the first quarter, and that includes $600,000 of legal and regulatory matter expenses. Let me shift to liquidity in the balance sheet. Free cash flow, defined as net cash provided by operating activities with capital expenditures for the first quarter of 2026 was $5.7 million outflow compared to a $3.3 million outflow for the same three months ended March 31st, 2025. Total debt on March 31, 2026 was zero. At March 31, 2026, cash and cash equivalents were $29.8 million compared to $36.7 million at December 31, 2025. Moving to our 2026 outlook, I'm on slide nine. We have revised our full year 2026 sales range to be between $245 million and $255 million and adjusted EBITDA to be in the range of $3 to $5 million or an adjusted EBITDA margin of $1.6 at the midpoint of revenue and adjusted EBITDA. The revision to our full year guidance relates to the challenging environment realized in April and the fact that we expect these challenging conditions to continue for the remainder of the year at Adventure. Specifically, the $10 million drop in our revenue guide at the midpoint from $260 to $250 is entirely at the adventure segment. We now expect full-year revenue to venture to be approximately $70 million, and full-year outdoor revenue to remain as previously guided to be $180 million. From an adjusted EVA dot perspective, we have decreased our previous guide of $9 to $11 million to $3 to $5 million. At the midpoint, the decrease in adjusted EBITDA is $6 million. That $6 million change is comprised of two components. Specifically, we expect ventures businesses decline in the top line from $80 to $70 million to have a $3 million net impact on profitability. The additional $3 million decline in our adjusted EBITDA guidance stems from the fact that we will no longer be treating the legal cost and regulatory matter expenses as an add-back to adjusted EBITDA. Therefore, based on our historical run rates, we have now included approximately $1 million of legal costs related to these matters for each of the three remaining quarters in 2026, or a $3 million impact for the remainder of the year. Second quarter sales are expected to range between $51 and $53 million, and adjusted EBITDA is expected to approximately be a $3 million loss in the second quarter of 2026. I want to reiterate that our outlook now does include estimated costs for the ongoing litigation, specifically relating to the Section 16 matter with HAP and the CPSC matter along with the DOJ investigation. I have assumed we incur approximately $1 million a quarter for each of the three remaining quarters in 2026. With that, I'll turn to an update on legal. I'd like to provide this update on the outstanding Section 16B securities litigation matter that the company is pursuing, as well as an update on the open matter with the CPFC and DOJ. We continue to proceed in our lawsuit against HAP Trading LLC and Mr. Harsh A. Padilla for disgorgement of short-swing profits under the securities laws. In early 2025, the district court granted summary judgment in favor of the defendants. We filed a timely appeal, and the oral argument was held on February 12, 2026, before the Second Circuit Court of Appeals. The court invited the SEC to file an amicus brief, but the SEC declined to do so. We are now awaiting a decision on the appeal. We also filed a lawsuit against Caption Management and its related entities and controlling persons. On February 24, 2026, we entered into a settlement agreement with Caption to resolve the company's claim, and on March 2, 2026, Caption paid the company an undisclosed sum in exchange for, and among other things, mutual releases and dismissal of the claims with prejudice. A shareholder's lawyer brought an identical action against Caption, which we successfully moved to dismiss as duplicative. That lawyer has now sued for legal fees. With respect to the open matter with the CPSC and DOJ, in late 2024, the company was notified by the CPSC that the unresolved matter involving fines against Black Diamond had been referred to the Department of Justice. To date, the DOJ has not pursued a civil lawsuit regarding this matter. However, in early 2025, the DOJ served the company and Black Diamond with grand jury subpoenas in connection with a criminal investigation requesting various categories of documents related to Black Diamond's avalanche beacons. We have cooperated with the DOJ in responding to its discovery requests and have produced substantially all of the documents requested. The DOJ has sent letters to John Walbrecht, Black Diamond's former president, and Rick Vance, Black Diamond's former director of quality, advising them that they are targets in its investigation. And the DOJ has also served subpoenas for grand jury testimony on a current and a former employee. The DOJ recently interviewed the former director of quality assurance and requested an interview with his successor. In closing, we continue to execute our strategic roadmap to support long-term profitable growth supported by a more focused business, a simplified operating structure, and a debt-free balancing. As we move through 2026, we remain committed to executing on the next phase of our transformation and delivering value for our shareholders. At this point, operator, we're ready to take questions.

We will now begin the question and answer session. For this session, we will allow as many questions as you'd like while your line is open. If you would like to ask a question, please press star key, the number one on your telephone keypad. To withdraw your question, press star key, the number one again. Your first question comes from the line of Mark Smith of Lake Street Capital Markets. Please go ahead.

Hi, guys. I wanted to start with kind of a big question first off, just as we look at, you know, really all of the profitability and EBITDA and the guidance is coming second half here. What gives you, as far as ordered books, or what gives you the confidence in second half EBITDA producing to be able to hit that number?

I can start. Obviously, we have, as you're aware, we have real decent visibility at the outdoor space with the, you know, preseason orders. You know, in our back half, order book that Neil can comment on is extremely strong, right? along with the strength in our apparel. Apparel's been gaining traction, both spring-summer lines as well as the fall-winter lines. So we do have some visibility both on our order book and with some of the feedback from our top retailers that we've been growing our business with over the last couple of years.

You guys talked a bit about some of the pressures. On the adventure segment, just due to consumers being squeezed primarily in Australia, interest rates, gas prices, et cetera, what are you seeing domestically as well as internationally as we think about the outdoor segment? At retail, are we starting to see some pullback in consumer spend, or especially domestically, is the consumer holding up?

Neil, you want to address Black Diamond, and then I can add some comments around Adventure.

Yeah. Hi, Mark. Thanks for the question. I think the good news is so far consumers hanging in there in the outdoor in North America. We're pretty happy with what we're seeing in sell-through and turn right now. So I would add, in addition to Mike's comments about a strong fall order book, we're seeing very good results in our big accounts and our most important specialty accounts year-to-date. So it's certainly a volatile, uncertain environment. But so far, at least through April, I think we were pretty pleased with the sales results and the resilience of the consumer thus far. Obviously, if this conflict drags on and gas prices keep going up, it's a whole different story. But year-to-date, consumers hanging in there.

Yeah, Mark, over on the adventure side, we are seeing directly shortly after the Iran conflict and the impact that that's had on oil getting from Iran to Southeast Asian refineries and then ultimately on to Australia, that's had a big, I don't want to say a bigger impact, but almost a bigger impact in Australia than maybe what we're seeing here. We are seeing higher gas prices in the U.S., but the environment in Australia has – the economy is really slowing with the higher fuel cost. Interest rates are being – are raised, and I think we've talked about this. Mortgages in Australia aren't fixed. They do adjust with the interest rate movement. There's even been communications from the government to work from home two days a week to save on gasoline. And we also saw a headline and a story where the government suggested removing your roof rack from your vehicle to improve your miles per gallon as well. So the environment in Australia is much more challenging and the consumer is really feeling it. And our big partners there, even though we had a great first quarter, right, we saw the strength of the brand carry through, we really saw a slowdown in April. And now, as I said in the prepared remarks, we're expecting that business to slow, you know, $10 million for the remainder of the year on the top line.

and the last one for me is just as can you walk us through the the price increases that you took uh here in q1 and and how much of the you know two and a half percent revenue growth came purely from the price increases versus you know mix and you know increased orders

other things that maybe drove that growth well an adventure i'll start with adventure adventure you know i think we we took price up around two million dollars is what we forecasted back at the beginning of the year um the the amount that that you know realized i think in the again in the prepared remarks i mentioned that we really didn't uh get a lot of pushback on any of our pricing uh actions that we took across the adventure segment so um you know i'd say is it is it evenly you know going to be realized i think it's that's probably a safe assumption so probably about a half a million dollars in the first quarter. Neil, do you want to comment on, I know Neil's pricing actions were more targeted. We would take price where we were definitely the market leader and where we were allowed to, you know, had the ability in certain other spots. We didn't take price, but, you know, the realization of that, I'm not sure we have that

number. I don't think we do, to be honest with you. Maybe just a feel for it, Neil, as we think, you know, primarily in apparel, you know, was a bigger factor in growth in apparel just the lack of discounting and kind of clearance of some of that PFAS apparel a year ago, or, you know, or did the price increase that maybe help drive that segment?

Well, a couple things just as a sort of macro comment on the way we planned our price increases and forecasted that into revenue. We assumed a one-for-one elasticity rule that every percent increase in price, we'd lose a corresponding percent in units and that the two would offset. So we didn't plan on getting any net revenue growth from price increases. I think that that has largely played out. Maybe it's been a little bit better, but the real driver of growth for us has just been growth in market share. and I think in particular in apparel, expanded distribution. Retailers have seen very good sell-through rates and velocity on Black Diamond apparel, so the reorders have been really strong. And I think it's much more driven by the performance of the line itself than any price increase.

Great. Thank you. And, Mark, just to clarify some of the prepared remarks, we mentioned that apparel is up a little over 4% in the quarter. That's, you know, year over year. But when you take out the change in the discontinued merchandise, that's where we got it on full line apparel. It was up over 10%. So, yes, we're selling less DM this year in apparel compared to last year.

okay great thank you your next question comes from the line of peter mcgoldrick of tifal

please go ahead hey thanks for taking my question i wanted to follow up on apparel here you mentioned distribution expansion and favorable sell-through could you give us a little bit more on the products that are driving the increased full price growth in apparel and then how that contributes to the outdoor segment's margin profile through 2026.

Sure, I can take that. So generally we think about two segments in apparel, sportswear and technical outerwear and technical apparel. and the good news is we're seeing growth in both our sportswear and our technical outerwear. I think maybe the thing that has really helped propel our success in the apparel category besides just having a much stronger assortment year over year and continued improvement there is the marketing we put behind it. In particular, last year we launched our first sort of reboot of the catalog with a theme called Born from the Climbing Life that really featured apparel as the hero in that story, and it led to a rapid acceleration of sportswear apparel and some technical apparel. We then followed that up in the winter season with another catalog, again, where I think apparel played a key role. It's called Design for the Deep. It's very much focused on ski category or the sport of ski and winter sport. And we saw phenomenal results to that catalog really lifting our outerwear and technical apparel in the winter season. So we have a really nice mix of sportswear that tends to perform very well. in the spring and summer, and is growing double digits. And then our technical outerwear, which kicks in in the colder weather. And it's been a nice balance and helped us sustain the growth. And we expect, again, what we're seeing in the fall order books, apparel to be up, again, double digits in the back half of the year.

Very helpful. And then, Mike, one for you on the cost pressure, as you mentioned, for aluminum and some other inputs. Are these having an influence on guidance, or can you help us think about what is fixed for the year or perhaps the timing on the run rate if we turn the page into 2027 as those products flow through the income statement? Any guardrails on that side?

No, sure. Sure. So, again, as a direct result of some of the Iran war and the higher energy prices, Neil referred to higher costs, actor costs, right? Input costs are escalating, right? Whether that's a printed circuit board, aluminum, any tungsten, all types of inflation, material inflation is being presented to us. Now, with the change from the Supreme Court, we are also seeing some relief from tariffs. Right now, we see those kind of offsetting. So the impact on guidance is a net zero, but it's very different than what we even spoke to 60 days ago with the Supreme Court ruling and now with the war. So right now, I'd say they offset, but Neil also referred to the fact that if inflation and material inflation continues to escalate, we're going to have to look at taking price as early as for the, you know, in the third quarter related to our fall-winter line. So right now, our best estimate is that they're offsetting the benefits from tariff relief, and it's being offset by higher material inflation. So no one backed

on guidance. Go ahead. No, I just clarified that tariff relief excludes the tariff refund when Mike said they balance each other out. So the tariff refund would be over and above that, which obviously would be sort of a one-off if we get it. But we're really, when we talk about the two factors, balancing each other out, it excludes the 6.2 tariff freebate that might be coming our way. Important distinction. Thank you for that.

That will conclude our question and answer session. I will now turn the call back over to Mike Yates for closing remarks. Okay. I want to thank everybody for

your continued interest in CLARIS and attending the call this afternoon. We look forward to updating you on our results again next quarter. Again, thank you, everyone.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.