Good afternoon, everyone and thank you for participating in today's conference call to discuss Clarus Corporation's Financial Results for the Third Quarter ending September 30, 2022. Joining us today are Clarus Corporation 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. [Operator Instructions] Before we go further, I would now 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. Before we begin, I would 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 Corp and 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 7 of 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' 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 superfan 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 segment and 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…

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 & Precision Sports segment. The increase includes revenue contributions of $3.7 million from MAXTRAX, an acquisition completed on December 1, 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 airfreight 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,…

[Operator Instructions] 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 is leading to the decrease in the sales forecast in the outdoor segment specifically? And then within that, would you expect some of the cautious ordering posture that you're seeing from your national accounts to sort of persist into 2023? Maybe just help us frame how we should think about these issues being maybe transitory versus 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 summer. And that's unfortunately not been 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, though 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 outdoors, the preseason booking programs, we continue to see very strong books both for 2023, which are already in the books and finished that campaign at the end of the fall. And we have already kicked off our fall 2023 campaign. And first 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, 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. And then I just wanted to ask a bit about Precision Sports. That's been an area about performance. You took the guidance up for the fourth quarter. Maybe some sort of color on what led you to take the guidance up. And then 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 will see a bit of deceleration there? Thank you.

Yes, so obviously, 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 for premium brand P&R piston and revolver just because of the 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 down 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 scrapping. 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 Q2, Q3, wow, 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 I think at this point, we're going to be as scrappy as we can be. We still have an 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. And 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 and more is both the macroeconomic challenges take place, but I think also the political unrest around the world. Obviously, we're going to do our best to take as much market share in bullets and OEMs in law enforcement and military with reloaders and in ammo as we can. I think the other thing I would say is, remember that we're still very small 1% to 2% of the whole market is what we represent as a brand.

Perfect, that's incredibly helpful. Best 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. 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 that's been ongoing here for a couple of years now. So help us understand why that business, particularly in North America, was down so significantly?

Yes as we chase new products, obviously, two sides come out of this. First and foremost, 80% of our business is based in Australia. We over-indexed 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 will come. And as we said in the report, new product launches represent 10% to 15% of the growth opportunity for us in the United States as well as in Australia. And just the availability of pickup trucks, jeeps, Toyota, 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 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 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 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. And 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 and apparel is phenomenal. I think what we're seeing is we have seen allowed 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. And then it wasn't until literally the last week, obviously, Q4, not Q3, then we started to see weather across the U.S. change and start to impact this. And as you think about outerwear for BD in Q3 and Q4, it is highly driven around insulated rain shells and then, obviously, snow sports. So we anticipate we'll continue to have strong growth with apparel. I think, as I said, we're outperforming the market, but always want to continue to accelerate this business and are very hopeful, as we've said, that apparel becomes a real driver for our long-term growth as we gain market share. And we're seeing very strong growth, not only at specialty, which was up dramatically, but more importantly, in our retail growth, which is up north of 45% and our direct-to-consumer overall, up 23%.

Okay, thank you guys.

Thank you very much. [Operator Instructions] 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 thanks 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, so 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 individuals, ski, climb or outdoor shops. We do approximately another 30-plus percent is in national accounts, which includes retailers like REI and MEC. And then we do approximately 25% to 30% of our business remaining in what we would call big outdoor shops which includes Dick's, Academy, Bass Pro, Cabela's, Sportsman's Warehouse example. And 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 were highly COVID affected, didn't carry over into the summer of 2022, eat up open to buy and massive inventory gluts and 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 what we saw was demand around consumer outdoor activities versus some of the more COVID bumped bigger spaces.

Got it. I guess could you unpack that COVID bumped spaces 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 the - 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 outdoor furniture, it could include grills or stoves or list of goes on [Hammick], things that had massive growth coming out of 2021 and into 2022. But - and retailers were chasing that what seemed at the time in less demand for these categories. And then whether it's the euro going back or whatever international travel opened up, retail traffic slowed and certain of these categories built up very rapidly at retail.

Great, thanks John. And then just one follow-up you commented earlier in the prepared remarks that 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 - in the Box/outdoor/national accounts where we see demand growing rapidly and still chasing is in headlamps, tracking poles, packs, gloves and the combination of us, our ability to keep up with demand that exceeded our supply into the backorder situation that we talked about and it continued in - no 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 disease because of their open-to-buy already being locked up in products that weren't moving. And it left pegs it retail, empty, chasing certain of these categories. And in some cases, we ship direct to store, but not every case can you do that?

Great, thanks super helpful.

Thank you. Please standby for our next question. Our next question comes from Matthew Koranda of ROTH. Matthew, your line is 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 in the Q4, but the $14 million cut to EBITDA at the midpoint just seems like a pretty outsized cut. I'm 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. So yes, we did bring down EBITDA $14 million, and it's about equal across both outdoor and adventure, right? We see volume in FX, both impacting that here in the fourth quarter. So there's about - $9 million of FX out there that in the second half of the year. So we think there's about - that was about $3 million over in the third quarter, and we expect to see another $6 million of headwind up from an FX standpoint. That's going to impact outdoor a little more than Adventure. But we'll also see some lower volume, right, compared to what we had initially forecasted for the second half of the year for outdoor. So that's - overall, I think the volume is going to be about a $4 million pressure and FX is probably going to be $3 million as well. So in Adventure, it's about the same thing. There's about [technical difficulty] of volume and another $3 million and another $3 million of FX. The Aussie dollar kind of came down pretty significantly. So those are all going to flow through. So I'd say it's about equal between the two segments.

Okay, helpful. And then just in outdoor, can you guys just put a finer point on it, I guess, the guy is just kind of confusing because it implies like a very abrupt deceleration in outdoor in 4Q versus 3Q. And yet, you're saying POS in BD is positive and sort of seasonally, things look good. So just - could you put a finer point, are you seeing positive POS in BD? And if you are, and there's just this temporary overhang, I guess, in the fourth quarter, do we have visibility to positive sort of sell-in in the first quarter of '23? Maybe just help us understand that?

Yes it’s a great questions and very sweet to the mix. What we are seeing is continued good, strong through or pulling sell-through at retail in our key categories, right, so if you break down Q3 and how we estimate Q4 and obviously the consumer doesn't know the difference in Q3 and Q4, so we just extrapolated those trends. What we saw was strong demand for specialty. What we saw was the inability of bigger accounts to chase as much ASAP as they would like to do either warehouse congestion or open-to-buy challenges. Now are we hopeful that will improve? Yes. So did we 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 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 highly during the fourth quarter as the holiday sales go on and their hope is that, that will eliminate some of these over drags right. And then at the same time, the belief that as that lessons 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. And it's really just a shift of open to buy from certain categories to new categories. Is that helpful?

I'll jump back in queue guys. Yes, that's helpful. I'll jump back in queue here. Thanks John.

Yes.

Thank you very much. Standby as we pull up our next question. Our next question comes from Ryan Sundby of William Blair. Ryan, your line is open.

Yes, hey guys thanks for the question.

Thanks, Ryan.

John, I think you mentioned evolving the Rhino-Rack offering from more of a do-it-for-me to more of a DIY set up. 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 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. And 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 [ph]. They will install that on it for me. Moving forward and where we see the biggest addressable market because we -- coming down to SEMA and 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. And to your question as you expand distribution beyond just automotive aftermarket retailers or specialists and 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 Lagos on the rooftop. And so you'll see that from us in our 2023 collections, items we actually showcased at SEMA and in all sides as we introduced new [indiscernible] that were easy just turn in lock systems to new racks for back of hitch as well as rooftop to a lot of accessories. These include boxes, tents, bags, everything else to make this a very simple from adventure of the weekend, whether it's outdoor activities, camping, tailgating, you name it.

Great, it sounds like - I had a pretty big change coming there.

That's been part of our shift working on. We just hope we had a little bit more time in the integration of this. But as you know, COVID lockdowns, floods, we didn't get as - we weren't able to rapidly impact this, innovate and accelerate strategy in 2020 - end of 2021 and early 2022 as we had hoped.

Got it, okay. And then 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 how much is coming from something else, whether that be software demand or anything else?

The best I could say for you is that typically, we see easily 10% to 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 a game changer for Toyota. And obviously, their vehicles stay around 10-plus years, how low the Tundra did. Those new vehicles being postponed impacted us. That impacted us with even the demand for Polaris on just not being able to get side-by-side, and that's a major partnership for us. But 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-plus of it. The rest is inventory and macroeconomic slowdowns in the marketplace, which is probably somewhere in that 0% to 10% just in the marketplace.

Got it, okay. And then last one from me. Just with supply chain lead times coming down and container costs coming down, we see that normalization continue, when do we start to see that translate into more of a tailwind for you, because it didn't sound like Q4 that was happening?

I am guessing that you're going to start to see that in Q1 and Q2.

Q1 is the right answer. We have some carryover freight costs due to the difference in our standard cost themes that I mentioned the variances from our standard costing that we'll still be absorbing in the fourth quarter, but that should clear in 2023.

Got it, okay thanks guys.

Thank you. Please standby for our next question. Our next question comes from Linda Bolton-Weiser of D.A. Davidson. Linda, your line is open.

Yes, thank you. So 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, that you mentioned. So - but yet you have really high inventory? So 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 bulletin ammunition. So 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. It's - there is inventory at each level based on what we assumed was the plan by category, by segment going into 2022. So I'll start with the easy ones. If you look at bottom ammo or Precision Sports, clearly, we had an over-indexing of P&R or piston revolver ammo sales in 2021. We have inventory of P&R in 2022. We continue to move through that. If this would have been 2021, it would have gone out in a month here it's taken longer because the market is flooded on that. We continue to sell that? Yes, just not at the over 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 pretty cursing up for what is now summer just now starting. And obviously, in order to start those, delivers and 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. So 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 over-indexing. 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 and one color, which is what we have to do in bigger box or multidoor retailers, specifically retailers who have 350,000, 750,000 doors. And so 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.

Yes, let me...

Yes Linda - the outdoor probably have $4 million or $5 million too much inventory that is just a wrong inventory for the season at where we are in the season. Precision Sports probably has $5 million of too much inventory right now around some of the P&R ammo that John referred to. And then Rhino-Rack here in the U.S. probably has a couple of million dollars of too much inventory compared to the - our optimal carrying values of what we'd like to be most efficient with. So you add that up, you get that $10 million to $12 million off of the $155 million, and that gets you down to the $143 million, which is probably about the right layer, low 140s is where we think inventory out to be. And that's what we're trying to work towards - in my prepared remarks, I said getting towards that $145 million of inventory. So that's kind of our objective here in the fourth quarter, but there'll be some puts and takes as we go through it, I'm sure.

Okay, thank you.

Thank you. Please standby as we pull up the next question. Our next question comes from Mark Smith of Lake Street. Mark, your line is open.

Hi, thanks guys. First question for 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 seasoned specific in 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% to 35% of our inventory and more around what we said in the prepared remarks is really just around the shift of the season. I don't anticipate - often, people think winter is Q4 when the reality winter is Q4 and Q1 of 2023. So as we look at another 30 inches of snow this - week and the Rocky I'm very excited about what the winter season will be. So I'm not worried about that. I actually think that it's going to be an apparel year over index versus just an equipment year, which we've seen equipment years hard in the last few years during the last two seasons.

Okay. And then going back over to Precision as we look at this mix of international sales versus domestic, can you just talk about - was that purely allocation or an opportunistic shift more towards international or have you seen any slowdown domestically. And I know you talked a little bit about the P&R, but outside of that, have you seen any kind of slowdown in demand for Precision products domestically?

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 P&R Ammo and there 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 the 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 to 308, 338 that demand. We will over - start to index towards that in 2023 to chase that market because at this moment, we don't see the international demand slowing down. And so, 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 P&R Ammo that we overindexed, which is partially within our guide this year. We knew we overindexed it in 2021 and therefore, included that in our guidance and how we originally started with numbers at 120 than 127 as we continue 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. And safe to assume within that P&R, the majority of that is $9 mill?

Correct, pistol, but most of it is 9 mill yes.

And then the last piece on that, you called out brass and kind of continued headwind and fighting to get some additional brass. I assume that, that is heavily within centerfire rifle is that a hard time sourcing brass?

100%, the demand, we were able to sell what we had in centerfire rifle, both in tier with the game changer we could have sold significantly more had we had brass. And then we've seen - 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 Vortex in centerfire hunt ammo across the season. What we've had and we've been able to sell and overindex. We just can't get enough for brass - and obviously, that brass is more complicated. And therefore, there's just not much availability

Okay. And maybe I'll squeeze in one more just as we look at Precision. As we see a slowdown within a lot of handgun primarily 9-millimeter as well as 223556. How - what opportunities do you have to switch maybe some lines or production over to other calibers and rounds in away from those that are now heavier inventory throughout the channel?

Yes, so what you will see in 2023 and even towards the end of Q4 that we've said, as always, we'll do maintenance in the last two weeks of the year, because we pushed them this team and the machine is hard. But we'll start changing over and focus more on the specialty side, which leans more towards the OEMs and leads more towards the reloaders in the Sierra side, what we call green box where we have not over-indexed them. We've been pushing 30-plus calibers when we have our line is big as 220. And 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 33H, whether that's in 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 your listening today. We look towards 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.