that the event is being recorded and broadly distributed via live webcast, which along with today's slides, is accessible at www.claruscorp.com. An audio replay of the event will be available on the website later today. Let me please remind everyone that our discussion today contains forward-looking statements. Actual results may differ materially from those projected in 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. With that, I will turn it over to Warren Kanders.
Thank you very much, and welcome. Okay, starting on slide three, it is a pleasure to be here to talk about the emergence of Clarus as a pure-play, ESG-friendly outdoor business with compelling long-term prospects. Over the past two years, we have put together an experienced and dedicated leadership team, and I am pleased to have the team here with us today. First of all, you know our Chief Financial Officer, Mike Yates. Mike has over 35 years of financial management, executive leadership, accounting, and M&A experience, and joined us in 2021 from IDEX Corporation, where he held multiple leadership positions, including Chief Accounting Officer, Interim CFO, and Corporate Controller. I am also excited to formally introduce the two leaders of our outdoor and adventure segments. Neil Fiske joined us as president of Black Diamond in the first quarter of 2023.
With over 20 years of experience as a Chief Executive Officer, Neil brings deep experience in building brands, driving innovation, and improving operational performance in outdoor, active, and apparel categories. Notably, Neil has led transformational change in the active outdoor space, including turnarounds at Eddie Bauer and Billabong International, as well as Body Glove and Dakine. Early in his career, he led the turnaround and transformation of Bath & Body Works. Also with us today is Matt Hayward, who has served as Managing Director of Clarus's Adventure since March of 2023. Matt has over 28 years of experience in building brands globally, focused on growth.
This has included accelerated growth at DC Shoes under Quiksilver, taking the business from $100 million to over $400 million in five years, with Deckers Asia Pacific, that saw similar growth from under $100 million to over $300 million. Previously, Matt was part of L Catterton's Asia Pacific operations team, placed in two of their assets, taking one for sale. This was as Chief Marketing and New Business Development Officer at R.M. Williams, an iconic Australian footwear brand. Matt also has held senior executive roles at Deckers, Quiksilver, and DC Shoes. I am confident that we have the right team in place and encouraged by the steps Neil and Matt have taken to advance our turnaround.
We are excited for Neil and Matt to share the significant progress that they have each made to date, rebuilding top-level leadership teams, reengage with the customer base, and restart the product development pipeline with a focus on delivering superior product margins. Moving to slide four, I will detail the new Clarus, which is anchored by our Black Diamond brand in the outdoor space, that has a 35+ year history, providing equipment and soft goods to climbers, hikers, and skiers, as well as our adventure segment, a global growth platform that includes the iconic Rhino-Rack brand, MAXTRAX, and TRED, each of which is geared towards building and empowering an adventure community. Clarus is now simplified around two traditional outdoor and adventure businesses, with brands that are leaders in their respective core categories.
While we are in the early stages of implementing our action plan and the segment resets are at different points, we are seeing positive signs in both outdoor and adventure as we focus on achieving less complexity, better margins, and streamlined operations. As I highlighted on our earnings call last week, Adventure is coming off its best quarter of 2023, with net sales increase, increasing 43% and gross margins at a 38.1% rate. At the same time, Outdoor has made progress simplifying its organizational structure, product categories, and channel strategy, as well as better aligning inventory with the expected market demand. Complementing this progress and following the sale of Precision Sports, we have a debt-free balance sheet that provides us significant optionality to allocate capital for the benefit of our shareholders, which Mike will discuss in a moment.
Looking forward, we are positioning Clarus for enhanced growth and profitability, but recognize that our strategic initiatives will take time. With that said, reiterating the guidance we provided last week on our earnings call, we expect 2024 sales to range between $270 million-$280 million, with adjusted EBITDA from continuing operations of approximately $16 million-$18 million. We also expect capital expenditures to range between $4 million and $5 million, and free cash flow to range between $18 million-$20 million for the full year of 2024. With that introduction, thank you for being with us today, and I will turn the call over to Mike.
Thank you, Warren. It's great to be here today. Really thank everyone. Tremendous turnout here in person. It's great to see many of you who I spent some time with. I'm gonna start with my prepared comments here on slide five, right? And just a brief discussion around the monetization of Precision Sports, which we completed on February 29th for $175 million. By the way, of background, Clarus identified Sierra Bullets in 2017, a strong acquisition target, given its proven business composition and track record of profitability and free cash flow. Our value-added initiatives, while owning the business, including targeting Barnes Bullets, a highly accretive and complementary add bolt-on acquisition to our Precision Sports business. We acted decisively to acquire the brand out of the Remington bankruptcy process in 2020.
With a management team built around industry leaders, we ultimately tripled total bullet output and improved targeted capital investment and efficiency initiatives. We are pleased to have unlocked significant value during our ownership period, achieving a highly successful outcome here this past February for our shareholders. Specifically, we believe we monetized Precision Sport at a highly attractive price of $175 million on a relative multiple basis. During that ownership period, Precision Sport achieved best-in-class EBITDA performance, averaging EBITDA margins of 34% and return cash of nearly $94 million to Clarus, prior to the $175 million that we also received upon sale. I'd like to highlight also that during our ownership period of Precision Sport, we utilized $103 million of the NOLs.
We've finished this year with $7 million of NOLs, which we expect to fully utilize in 2024. Finally, the sale of Precision Sport is extremely tax efficient. As I mentioned during our earnings call last week, I only expect the cash taxes on the sale, the approximate $50 million gain, to be between $2 million and $3 million. Importantly, as we transition our focus to Clarus' higher upside, higher multiple business segments that Warren just described, Adventure and Outdoors, we have a significantly enhanced balance sheet. After retiring all of Clarus' outstanding debt with proceeds from the sale, our balance sheet is debt-free, with approximately $43 million of cash on hand. Turning to slide six, I'll discuss our near-term capital allocation priorities. A primary component will be reinvested in existing businesses to drive profitable growth in 2025 and 2026.
We are committed to the highest margin, highest return investment opportunities. We also will pursue a disciplined bolt-on acquisition strategy, small acquisition strategy in the adventure space. A good example of what I'm referring to is the purchase of TRED in the fourth quarter. We made a small purchase of TRED Outdoors in October 2023 for about $6 million. It's a bolt-on deal that's included in the adventure segment that significantly strengthens our offerings to existing retail customers in the recovery board business. Additionally, in the coming months, we will continue our focus on cash generation through continued rightsizing of inventory and growth of our businesses, with the intent of letting cash grow on our balance sheet. Given our cash position after the sale of Precision Sport, we plan to manage it prudently.
I'd like to point out that we're getting about 5% interest income on our cash balance presently. At the same time, we will continue to return capital to shareholders in the form of our quarterly dividend. But just to be clear and to reiterate, our plan in the short term is to manage the balance sheet conservatively, conservatively as we seek to prove out our operating model at each segment. We're also working with our incumbent lender to put a new credit facility in place to further enhance our liquidity and capital resources. More to come on that here in the coming months. With that, I'm super excited, which many of you are waiting for, is to introduce Matt Hayward, our Managing Director of our Adventure business, who will be followed by Neil Fiske, our President of our Black Diamond business.
Today is really about their opportunity to explain what they've been up to. They've both been with the business for about a year, and that this is a great opportunity for everyone in the room to meet them and hear what they've been up to, and share their vision and strategies and initiatives for both their businesses. So without any further ado, let me hand it over to Matt Hayward, our Adventure leader.
Thanks, Mike. Pleasure to be here, everyone. This afternoon, I'm still getting used to the time. Landed here, I think, Friday morning. I'm originally from New Zealand, but I've lived about 20 years, outside of, Australia. I've got a mixed up accent. I speak pretty quickly. I'm on a lot of caffeine, so if you've got questions, please follow up with me later on. Before we get into it, a lot of people say, you know, what made me join, you know, Clarus, and the brands that we've got in our portfolio? I've been really lucky in my career to work with some pretty epic Australian brands. Deckers, UGG, and seeing the growth of that, a great Aussie brand taken to the world. With Quiksilver and DC Shoes, and last, R.M.
R.M. Williams, footwear and apparel, premium brand. When I started talking to Clarus about the opportunity, there are a few things that ran true. Most importantly, incredible product, some of the best product in the world in this category. Incredibly strong brands. So if you look at MAXTRAX and Rhino-Rack, the power of the brand in the home market is phenomenal. So with those two things, and what I've really enjoyed doing in my career is accelerating amazing products and amazing brands and taking them to the world, and that was really how I saw this opportunity. So today, what I really want to help you guys understand is how we see the roadmap moving forward, and how we're using this platform for the growth of these three brands in our business.
From a segment point of view, the adventure segment of Clarus, it's our growable global growth platform for our portfolio. And you'll see through this presentation a slightly different mindset change in how we're actually integrating and working across our three brands for the betterment of growth globally. They're not individual, so there are shared services, and you'll see that in our organization, and how we're using this team to actually grow and define each opportunity by market, by region, by group. You know, before, previously, we haven't really looked at it. They've been very much autonomous brands, run autonomously, and there's a lot of opportunity from a shared service point of view to empower these, depending on the markets. And I'll go into that in greater depth later on. So what's this all about?
We believe across the three brands and in the adventure segment, that there is an adventurer in all of us. These can be large or small adventures. Everyone defines it by their own lifestyle, and our mission is to really help people make space for adventure, be it mentally, physically, or both. And this is really important, especially in this day and age, especially after the last couple of years. And we want to empower and really help people around the world take on adventures. And this is with world-ready outdoor gear, born and proven in Australia. And you'll see a few images about, you know, what we mean by that. So a lot of people talk about our competitors, and there's a couple of big ones, and we like to kind of make a bit of fun about them.
They're very big, and they have incredible product, and it's created in a lab with guys in beautiful lab coats and highly dust-free environments. What makes us different with all three of our products? This is our lab, okay? You know, I don't know how many of you have been to Australia, but it's known as pretty much one of the harshest environments in the world. If the snakes and spiders don't kill you, maybe the 40-degree temperatures in the outback will. This is where we build our product. Our engineers are best in class, but they're actually on site, and it's built for this environment. This is our quality control. We swear by our quality. So our engineers, you know, tried and tested and making sure with all of our partners.
You know, MAXTRAX, you don't want to be caught anywhere in the outback, or any environment globally, with a product that you can't trust. This is our quality control. Before anything goes out in the market, it's actually tried and tested and taken to market by proven guidance. And this is our field test, and this is what makes us different. The ability to have unique product and take that story to market. And this, you know, we always like to say if it can, you know, take you, from your house to the adventure and back home in Australia, it can pretty much well do that anywhere in the world. Outside of that, from a strength of brand point of view, you know, there's a huge opportunity.
There's a couple of large players in our primary market with Rhino-Rack for roof racks. But as we purchased TRED, when you're looking at the caravan and camping market, there's very large addressable markets. There's one large player in the roof rack market, and outside of that, there's a lot of minnows. And so the opportunity to really consolidate it and take a very targeted point of view globally is there. TRED gives us a massive opportunity of going to a secondary market of caravan and camping, and you'll see this transition in some of the products that we're gonna be bringing to market in the next two years. The addressable market there, the growth is there.
And again, like I said, this is just about taking some of the world's best, you know, brands and products from Australia to the rest of the world. At a high level, just a quick snapshot. You know, we're targeting $90 million in revenue for this year, delivering $13.5 million EBITDA. We have over 1,500 accounts, so that's not retail doors, that's accounts. So for example, with our partners in Australia, some of our accounts have over 500 doors. It's omnipresent in Australia, and our challenge is to make it omnipresent in the U.S. and other parts of the world. We have our products across the three brands, TRED, MAXTRAX, and Rhino-Rack, distributed in over 60 countries currently.
When you put the three groups together, we have over 200 employees as a group. That's across the three regions and three brands. One of the exciting things is also with this group and how we're looking at the restructure of the business and the organization, giving a bit of flexibility to our organization and actually taking some of the reliance off the Australian market from a performance point of view. So at a high level and, you know, again, throughout today, what I'm gonna walk you through is the evolution across the next three years and how we see this playing out. But currently, sales by region, ANZ is the lion's share. Again, it's incredible foundation, home market across all three brands. The Americas kicking in, 25% of that, and the big opportunity is the rest of the world.
But to make it really, really clear, our focus is really investing into the U.S. market, for 2024, and then through 2025 and 2026, you'll start to see investment into the rest of the world. And we've got great partnerships in Japan and China, fledgling investments, and those are paying dividends already. Our product are turning up in Saudi Arabia and other parts of Asia Pacific. So there is a huge opportunity in the rest of the world that currently is only standing for 10%. By channel, wholesale very much will the dominant part of our business, and this, again, is our opportunity. When I say DTC, MAXTRAX has, has led the way here and also Rhino-Rack, in the U.S. We have not been online, in our key market of Australia, and this is gonna change.
I'll talk about that a little bit further. This is not in competition to wholesale, but more about empowering them and just actually owning a lot of the communication with our consumer. Lastly, OEM, a vital channel for us. We work with some of the, you know, the world's greatest car manufacturers, and adventure brands in the world. We've been very lucky to work with a new incumbent, so INEOS, with their launch of their new vehicle globally, and this has been a, you know, a global partnership that's really paid dividends in 2023, and it's growing across 2024 as well. That's not just on our base systems. It's actually with our MAXTRAX partners as well. So off the back of our success with Rhino-Rack, we're now gonna be kicking off work with MAXTRAX and INEOS globally.
We've had great success with Polaris in the U.S., and we see this as being a growing opportunity. And lastly, by category, to help you understand this with the three brands. The accessories, that's where MAXTRAX and TRED sit. So the way it's consolidated, trays, so Pioneer and all of our tray systems, certain trays, bars, the classic crossbar systems, they sit in that category. And like I mentioned, accessories, everything from our tents that are within our Rhino-Rack business, but also MAXTRAX and TRED now get consolidated under the accessories umbrella, and that's why you see the representation of 50% there. So this is our portfolio. Again, I think one of the most amazing things, we've got some of the most incredible brands. Our product is best in class.
We just need to help the world understand that, and that's the task for the next three years. So Rhino-Rack, like I said, you know, world-tested, best in class, and we're really evolving the quality and portfolio. MAXTRAX, what you see here, I don't know if anyone is aware, but one of our partners was actually they launched, or they relaunched the Dakar edition of their 911. And this little upstart brand called MAXTRAX was actually a partner, and we made a special edition board for their Dakar. I think they limit this to around 1,400 units globally, and our MAXTRAX board is on top of that. So again, the opportunities, because of our product quality and knowing it's been best in class in these territories, is evident. And lastly, TRED, our recent acquisition.
What this does is open up an opportunity within the accessories market and really from a caravan and camping point of view, really taking that on. It also opens up an avenue of, being a, a white label, partner for a lot of brands globally. They're currently a white label for a couple of the big, partners down in Australia, and we see this as being a big driver over the next couple of years. The other change is we've been very product-focused, so again, working through wholesalers and how they take our product to market. What we're trying to do is make sure that this is about empowering adventures, and different people's lifestyles.
So here you can see some of the, you know, different kind of activities that people engage in, overlanding, which is at the heart of our brands, all three brands, camping, weekend adventures, touring, snow. You name the season, the activity, we are typically, you know, relevant and evident in all of those activities. So it really is about empowering all adventures across all lifestyles as much as we can on a global level. In the past, there's been a lot of discussion around creating an ecosystem with our three brands and our three businesses. And only at the end of 2023, and really in 2024, do you start to see this come to life, empowering how the products are working together, how the brands are working together.
In this picture here, you can see our new tent, which we just launched actually this month. It's going to market in ANZ and in the U.S., and it's the first time that we're launching a tent. So some might say we're the last to market here. Yes, we're quite late, but also it's an empowerment of our ecosystem, and we've had feedback already from a lot of our partners and big partners on why this is gonna be a better product. Well, it's made from a point of view of using our core rack system. So this can get installed pretty quickly. I'm talking, you know, 10-30 minutes versus others take an hour. And why? Well, we're talking about how it actually gets used on our rack systems and others.
So the accessibility in making products that actually interrelate and work with each other is vital to actually empowering growth in every, in every market. And you'll see this more and more, how TRED products and MAXTRAX products and Rhino-Rack products can all work together across platforms. From a base product point of view, especially Rhino-Rack, in the last few years and historically, a lot of our systems weren't interoperable. So if you bought a tray system, the accessories weren't transferable if you bought a crossbar system. So it was, you know, a lot of the accessories, you could invest a huge amount into. It's like buying an Apple iPhone. Every season, you have to update all of your accessories.
Now, on one hand, it's great financially, but it also is a pain in the ass for the consumer, and it doesn't give a good experience. As mentioned, we're really about trying to empower the ecosystem of people's lifestyles. You know, we really embrace, I guess, the diversity that adventure offers on a global basis. The adventures that they partake in Beijing versus Sydney versus California, they're very diverse. And this is about turning up and making sure we can be part of those everywhere.
We are known as having some of the best roof rack systems in the world, but historically, we haven't been strong in either bike or luggage racks, and that's changing in the next couple of months and also in the next couple of years, really stepping in and building out our product portfolio to make sure we empower our base systems. You can see here on the bottom left, TRED. This is important to call out because TRED has kind of, I guess, a split personality. There are tradespeople, which is a huge market on its own. So if you think of fleet vehicles and empowering huge companies worldwide to actually, you know, get their fleet vehicles set up to be able to actually undertake all different tasks, that's a huge business.
In Australia alone, it accounted for between $8-$10 million historically. But with the change, you know, over the last couple of years in strategy, we actually kind of parked that to the side and focused on overlanding, and you see a course correction as well that we'll talk about. This is a big opportunity from both an audience, you know, the tradespeople themselves, but also for fleet vehicles. This is a growing opportunity that we're gonna focus on. The other thing I really want to bring to life here is we've got historical products that have really done a great job, best in class and really delivered great results, you know, from an ANZ point of view. What we're accelerating is our new product development.
So at the top here, just some examples of some of the areas that we're gonna be going into in 2024 and beyond. So top left, you see, MAXTRAX boards for the first time going from four wheels to two. So one of the fastest-growing categories in the world for motorcycles are adventure bikes. And a lot of you may think, "Well, why do you need a a traction board for a motorcycle? Can't you just whiskey throttle it and get it out of the mud?" Well, these bikes are quite considerably heavier than dirt bikes and farm bikes. So we've been asked by consumers to look at this opportunity and help them with it. And again, it opens up a brand-new opportunity from a customer and a retail point of view.
Next to it, just being able to look at accessories, so going into all the periphery accessories that go with a recovery trip. We recently launched first aid kits, also for Australia, snake bite kits, quite relevant to the local market. But again, just expanding on the success and the ownership of our customer. There you can see... So this is called the Moto, aptly named the Mega. So a huge opportunity, from an industrial point of view, farms, mining. We're getting asked to actually help a lot of the different industries. We work with military around the world, we work with a lot of industrial partners, and we're getting asked to actually help them empower their vehicles with our same system. The board you're seeing here, it's mocked up.
It's probably about my height, which isn't hard, but it's a different take on the recovery system. And then going to accessories. So you can see some opportunities for storage and then campsite chairs. Again, this brand has got incredible engagement with consumers around the world, and it's just taking it beyond the board, so to say. In the middle, Rhino-Rack and kind of the foundation, a lot of this growth. On the left here, you see a brand-new platform. This is our Pioneer 6. So you probably know from a roof rack point of view, our tray is our Pioneer. It is a flagship franchise, and it's been incredibly powerful from an ANZ point of view, and now we need to make sure that we take that platform to the world.
And to do so, we've introduced a new platform, specifically developed for American vehicles in partnership with our American team. This will be launching in the middle of this year. And again, one of the opportunities here that we have with OEM is working closely with key partners, and this will be on launches the new Land Cruiser. I don't know if you've seen, it's making a return to U.S. shores after many years being kind of out of the market. And this is almost like an Australian champion coming back, you know, into the market, and it will be with new products. On top of that, we're very proud to introduce, and I'll take you through the evolution of our crossbar system.
This has been, you know, probably one of the foundations of Rhino-Rack, but it comes with a degree of complexity, trying to fit all the different roof types around the world. It's a mathematical equation, and sometimes it has inventory impact. So I'll show you how we're gonna handle that, but also cater to the multiple fits. And lastly, just, you know, luggage boxes and tents and other accessories. Our recent kind of brethren in the family, so TRED. We're actually going again, so the opportunity of owning more of the activity at the campsite. Chris Roberts, who is the current GM of the business, he called this the last table you'll ever need. And the idea of this is it's fully plastic.
It's circular, so the ability to actually, if it breaks, use it, you can recycle it, and and turn it back into its source, and it's modular. So when you turn up, height adjustable, you can click in the storage box that we've already launched, and there's gonna be other accessories that allow it to have modular use. This is a tire deflater, a very simple one, and then we're making additional storage boxes. So the storage box launched this year, and again, it'll be pushing hard into many of the markets. So again, NPD is gonna fuel quite a bit of the growth in just going from our core product and actually helping empower all the different lifestyles that we have. And this is the best way of looking at it.
In the past, we've been known as having the best fit in the world, so it's been a focus area of ours. You know, if there was a vehicle out there, the chances are that Rhino-Rack could fit it. But typically, you know, what we'd do is we'd find the fit, and then we'd sell you our crossbar or our tray system, and that's where the relationship stopped. The average vehicle ownership, it's pretty consistent between key markets, ANZ and U.S. It's around 10 years. I'm not talking about those who are lucky enough to turn their car every year or every three years, but the average car life cycle for ownership is about 10 years. We like to think that our product has a five-year run cycle, so we like to evolve our key systems every five years.
So if you start looking at the math of this, you can start to look at what is the lifetime value of our consumer proposition, and no one's ever really kind of looked at it that way. So if we can focus on the fit and how often new vehicles are coming out, if we can empower the sale of the system, be it trays or crossbars, and then actually link that to an accessories world, that really drives seasonality. So if your family is into skiing, if it's into camping—does it go from the winter of skiing into surfing and SUP and other water sports? We've never really focused on being able to go with you on that journey and power an adventure life cycle and adventure, you know, I guess, lifestyle.
This is really an opportunity to look at what are the opportunities to actually own more of that customer relationship through their different adventures. And that's what we're really kind of focusing on the next couple of years. Just to talk about the complexity I raised earlier. We call it raising the bar. And again, this is just giving you a little snapshot about some of the operational muscle that we're bringing to the business. On the left, so this is our classic crossbar systems. And for those who know crossbars and roof racks, you typically have your legs and bars and the fit. There are five different roof types that operate, so it's quite complex, from raised rail, flush rail, gutters, and bare.
So you can imagine what you need to do in terms of empowering that from a product and inventory point of view. And on the left here, you've got our current state. So we offer four different bars, currently, and four different types, and that's for weight, you know, and trade and so forth. Mounting systems, we currently have over 180, and that's how we actually link those bars from a leg and fit point of view to the vehicle, and fit kits over 600. That creates over 11,000 fits, but it also creates, you know, a large amount of supply and demand planning, and inventory management, and that hasn't necessarily been one of our, I guess, our great strengths as a business, and that's where we're really leaning in.
So from a future state point of view, we're evolving to two bars. These are two new bars. They've got greater strength, rigidity, and functionality. There's more adaptability by accessories. We're going from over 180 different mounting systems to 10. And this is, again, where our engineers are really stepping in and creating an opportunity of having more mounting points, more accessibility, more use, but reducing the complexity. And then this empowers over 530, you know, fits. And what we're doing, basically 80/20 rule. We wanna be relevant for the top 80% of our consumer vehicles, but at the same time, reduce some of the complexity that's existed in the business. Really try and simplify it.
And this is really important when you think that over 90% of our business is with wholesalers. So we release this to them, and then it's up to them to take the story to the consumer. So you're handing over in good faith that this complex story can make it to consumer, and they understand what they need for their vehicle and that year. And what we want to do is help empower this, simplify the story, but also from an online point of view, make it easier for everyone to understand what's needed for them and what other systems they can use. From an operations point of view, this is really important as well.
I'll touch on it a little bit, but at the moment, one of our roof rack crossbars, when I first joined, I was asking how, you know, how operations and supply chain works. So two of the main markets that we're delivering production from is Australia and China. The complexity is that there are a lot of components currently getting made in Australia. We then ship them to China. They then get added to components there, and we then ship them back. So again, really looking at the efficiency of the supply chain, where they're made, and with which partner, and how to simplify this whole global supply chain is a big focus in 2024. Just removing the complexity and the double handling and the cost involved in some of this product.
From a customer point of view, you know, when I talk customer, I'm talking more of our B2B partners than consumer, our end users. So this is how we look at our consumer, and we've got four main groups. The Overlander, and you would have heard that quite a bit in the last couple of years. Just to be really, really clear, this is still our bullseye, and the best way of thinking of it, it's a heartbeat. You know, it's that classic, guy or girl who heads out and really takes on, you know, the most extreme adventures in their four-wheel drive vehicle. This is still at the heart of the business. The only difference is it's not our business. It's not everything. It's a great part of it. It drives a lot of the aspiration.
You know, people see these incredible adventures that people take on, and then we drive to our local, you know, trade store to buy timber for the weekend. So they are still our priority bullseye. But added to that, we've got our trades person, our weekend warriors that heavily involved in different seasonal activities, biking, kayaking, snow. The family traveler. You know, when we focused on overlanding in the last couple of years, we ignored our Subaru drivers, so we stopped looking after them from a fit point of view. There's a lot of those in a lot of markets. It's actually one of the best-selling vehicles in both New Zealand and Australia. So again, making sure we're really empowering the family traveler. And then on a local level, we've got the sports person, very focused in the U.S.
We don't have a lot of hunters, typically, in Australia and New Zealand. Firearm laws are a little different down under. But again, the sports person and really being able to empower them. Our partnership with Polaris is really looking at that. And then we've got a huge market in Australia called the Young Explorer, and this customer is basically, they've inherited their four-wheel drive from their mum and dad, and they're using that, so it's probably a 10 or 15-year-old vehicle. So these are the consumer groups that we're going after with all three brands. And again, just being really focused on how we empower these consumers through our wholesale partners, but also product getting built for these groups. You know, it hasn't really been a focus in the past.
We have three regions, we have three brands, and we've got one global platform. What I mean by this is, historically, you had two different entities. So you had the U.S. team, and you had the ANZ team, and they operated pretty much well in silos and independent of each other. I joined, and when I joined in March, I was the MD for ANZ and International, and it's where the engine is. It's our product development, our engineers, our IT infrastructure, our operational infrastructure, but it's very separate to the U.S. One of the key things we did is integrate the business. So in July, I took over our global operations, and again, that's looking at creating our first shared services team.
So now we have one shared services HQ, empowering operations, finance, IT, all of the back of house, and then empowering three new GMs. So we have three GMs running our three regions, focused on ANZ, rest of world, where the predominant focus on Asia and Europe, and then North America. And you can see here, just to call out, you know, this is all about how do we accelerate growth in North America? How do we really empower this market with a huge opportunity, especially from a vehicle and activity point of view, and taking the great knowledge from down under? Like I said, rest of world, it's unlocking opportunity. It's a distributor-driven business at the moment, and we have great partners in a huge amount of markets....
The other thing to call out is when I first joined the business in March, so it's one year anniversary, I was one of four people sitting around the leadership table, okay? Just to give it perspective. So obviously, there's a lot of change from a family-owned business. You know, and again, just the times of life and what we're looking for to take on the world. When I joined, so what's called out here is our new leadership team in the background. In this team, we have diversity. We've got three individuals who have worked internationally. When I sat around the table, there are only two of us who had worked outside of Australia.
And again, just bringing that experience to the table to take on growth in China, Japan, Saudi, Philippines, the U.S., opportunities in Latin America, there just wasn't that muscle and the experience. And now we have a team that can really take on these opportunities and actually build global supply chains. Our head of operations has backgrounds in Venezuela, working with the likes of Estée Lauder. You know, very complex organizations with large SKU counts. And again, this is all about building the right team, so the right people with the right process, and really overhauling our business in totality. Here you can also see a focus on shared services, so all of our key back-of-house and empowering three regional leaders. And this is a big change for the business.
Before you had the ANZ team and the U.S. team kind of working autonomously, and it really wasn't looking at empowering the front office. So a lot of work done to really focus on making sure we've got the right people sitting around the table. I want to spend a little bit of time just talking about some of the challenges, you know, and again, owning them as a team and how we're overcoming them. So the last 12 months, there's been a huge amount of change, and I think you can see it in the results. Again, I think 2023 is a tale of two halves, as I like to say, and the second half of the year really kicked in from a performance point of view from ANZ. You know, our leadership team was lacking integration.
They worked autonomously, you know, between the two regions. We didn't have a really clear vision. Who do we wanna be? How are we using these three brands? How are we gonna take on the world and the opportunities? There wasn't a lot of direct experience, as I mentioned. And what we've done is make sure we've got a very diverse best-in-class management team and really looking at overhauling that. And again, without the right people, you won't have the right product, you won't have the right process, and you really won't be going anywhere fast. We had a very rigid focus on overlanding. So when I joined, overlanding was literally our key market. That's what we're going for. And we quickly rightsized that. Now, like I said, overlanding is still very important to us.
It's the core of our brand, and it's the aspirational kind of, I guess, North Star, but it's not everything. You know, it's a bit silly to say we're only gonna focus on four-wheel drive vehicles, and we're not gonna look after the other, the other 90% of vehicles that people need, you know, help and empowerment with. So we quickly rightsize that. And a good example, historically, we've done over 250 fits per year. And what I mean by fits is that's how you're connecting our product to all the different vehicles and all the different makes and roof types around the world. During this period of time where we focus on overlanding, we reduced that to under 90.
And just to help you understand why this is important, if you don't get the fit for the vehicle and you're not having that, I guess, offering, you're automatically reducing your revenue opportunity. Less fits, less systems that you can connect with vehicles, less accessory sales, less platform sales. It's really simple math. So we quickly rightsize that, and we're ramping fits up, across 2024 and 2025 and getting back on track. Multi-brand decentralized. So when I joined, we wanted every business, every brand, to operate individually. And I think there was a fear that, you know, you would dilute the brand facing customer and consumer. And what we've done is make sure that we've created an integrated shared services team.
And what this means is we're not having to hire duplicate roles and experience in every single brand and every single region. So we've got a shared services group, and that empowers all three regions. And also, we're looking at the cost savings of this integration. So things like warehousing. You know, we're shipping to pretty much all the same customers across MAXTRAX, Rhino-Rack, and TRED, all the big key accounts. You imagine if you're a key account owner of ours and you're getting a shipment from MAXTRAX, you know, from one warehouse, and at the same time, another container will turn up from Rhino-Rack. So again, we're trying to think of how to make their life easier by our back-of-house operations. And also, you know, multiple sourcing points.
You know, a huge amount of 2024 will be focused on our global supply chain, reducing the complexity, finding better partners, ramping up quality. Going across the three years, we'll be looking at how to actually get manufacturing closer to source so as we focus on, U.S., are there opportunities in Mexico? Are there opportunities in Europe? Reducing this unique mix of Australian and Chinese supply chain, where we're shipping products all around the world. There was an interesting data point. My team said that for the RX200, which is a brand-new crossbar system, the parts traveled 190,000 miles, before we actually got them to the consumer. While that's a great number, it's also not something to be proud of.
So again, how do we reduce that complexity, and how do we make sure that we're looking at the best product in the world with the best performance and margin upside? So giving you a view into our roadmap. Like I said, 2023 was really all about stabilizing and resetting the business. Strong leadership team, and looking at how we make sure we deliver our numbers. You know, not really, if you heard my background and what I've done from a, I guess, past career point of view, you know, don't have the luxury of a J curve. Give me two years, and I'll get us back on track.
No, this is make sure we're hitting our numbers every month, every quarter, and at the same time, overhaul the business and get it to where it needs to, to accelerate the next three years. That's what this is all about, and 2023 was a great kind of kickoff for that. So rebuilding the organization, literally overhauled the entire leadership team, focusing on three regional GMs that can empower decisions from a customer and consumer point of view. As we head into 2024, you know, we're looking to ramp up, both revenue and EBITDA, and again, this is looking at, finding sustainable growth and heading towards our 2026 targets of 20% EBITDA. And again, how are we doing that?
I'll go into the next slide, but here, it's making sure that our structure, our product development, and our operational muscle really helps deliver this. An anecdote here, when I joined, there was no product plan. So we created the company's first three-year product plan for Rhino-Rack. And you can imagine without that, some of these products take between two to five years to develop from an engineering point of view. So if you don't have a three-year product plan, it's very, very hard to get your supply chain to actually plan that out. And so for the first time, from an adventure segment point of view, every single brand that we operate has a three-year product plan that's giving us a vision to allow us to actually create the right supply chain for each region and each market, and this is vital.
That's where you see the underlying performance go, take us from just over 13% EBITDA to over 20%. And again, looking to deliver almost a doubling of the business in the next few years. Now, some people might say that's ambitious, but I'd also like to remind everyone, you know, at some point, you know, the U.S., just a few years ago, accounted for over $25 million in revenue, and it didn't do that last year. So we're not being overly ambitious, we're not being overly aggressive. It's just about taking our place back at the table and being more efficient. A lot of the pain that we suffered from a revenue point of view, we did to ourselves. You know, we removed fits, which is the natural enabler of revenue and growth.
It empowers additional sales and also a bit more opportunity with customers. Once you have your rack, you can sell additional accessories, you can empower MAXTRAX sales. So when you reduce the fits, once again, you're just removing that. How we gonna - How we see this building up? So here are some of the key building blocks, and again, I'd love to say everything's happening at once. I do have challenges of impatience personally, but again, these are all sequential building blocks that we need to deliver. So 2023, really around the leadership team, creating our global HQ for the first time ever, and what that means from a supply chain point of view, operations, IT, and systems.
The acquisition of TRED, and like I said, the reason this is so exciting is it actually gives us the ability to go into a new category for us, RV and camping. It's a huge market globally, and they've gone in there with their storage box and some of their leveling ramps. Leveling ramps are what—if you turn up at a campsite, it's how you right-size your vehicle to make sure that if you've got a rooftop tent, you're not sliding out of the door overnight. And again, this is allowing us to go into white label. In ANZ, we do white label manufacturing for two of the largest retailers down there with their own private label boards and boxes. So we see this as an opportunity of doing this globally.
If we can find our partners and work with these great, wholesale partners we've got globally, white label can be a really great empowerment. What it also allows us to do is have good, better, best pricing. So Rhino-Rack and MAXTRAX are typically known as being the best, from a product standard point of view. We've got premium pricing, and what MAXTRAX and TRED allow us to do is have a good, better, best structure. So we can now offer more products at different price points for different consumers and different wholesalers. And like I said, the first three-year product plan. Going into 2024, the integration of adventure operations, and this is where we bring all three brands together, the different teams, and look at manufacturing globally. You imagine when I joined, you've got a different product team running all three brands.
So you've got engineers in each one of the businesses, working with a whole different group of developers, working with a whole different group of suppliers. But at the end of the day, a lot of the material is the same. You're talking about plastics and aluminum extrusion. So how do we really empower and find a solution to that? Investment into the U.S. kicks off in 2024, and this is across every facet of the business. Brand investment, people, we're ramping up and really making sure we've got a really strong team. We've got a great group of people there, and we need to wrap them with arms and give them a bit more support. Products specifically developed for the U.S. Marketing investment. You know, our brand awareness in ANZ is upwards of over 60%.
I think a lot of people who make it to Australia, they're surprised that literally every second car has a Rhino-Rack on its roof. The target is to do that in the U.S. Now, that's what we need to do. Digital transformation. Now, I wanna be clear, this doesn't mean we're taking on the world from a website point of view and e-com. This is every part of the business, digital empowerment, and our use of data. So you've got three different businesses with different systems, working on different ERPs, and also non-integration of our financial data. So it's just cleaning everything up from a digital point of view and making sure we're really driving the opportunity of how we use data in real time to drive better decision making. And saying this, yes, we are, you know, pushing into e-com. Why?
Well, we need to help build the brand for consumers, for all of our wholesale partners. If we don't do our job, you know, we're relying on them to do our sell-through. So this is another part that we have to kind of really, really push. Our global supply chain, that's kicking off in 2024. We're overhauling our entire operations, looking at finding partners closer to the source, as I mentioned. And lastly, MAXTRAX and TRED, you know, some of the products you saw in the NPD pipeline. It's their first ever three-year product plan. The Mark II for MAXTRAX, it's an incredible product, but it's now 13 years old. It's still delivering a huge amount of revenue and enjoyment for customers around the world, but it needs some help, you know, and where's Mark III? Is Mark III coming down the pipeline?
So this is, you know, what we're really trying to address. As you head into 2025, we transition into further investment in the rest of world, and this will be done looking at very, very tactical, kind of, I guess, opportunities with our distributors. So at the moment, like I said, we signed up a new partner for Rhino-Rack in Japan last year. In its first year, it did over $1 million. This year, it's jumping to $3 million. So that's an area that we'll look at investing. You know, we just invested with our partner there in a trade show in January to make sure, like, how are you turning up? And do we need better product? And are our fits relevant for your vehicles? So everyone might know there's a different size of vehicle class in Japan. Their trade vans are slightly different from the U.S. ones.
Are we making fits and systems for them? So this is an opportunity as we invest into the rest of the world. The investment into the U.S.. ramps up continually through 2025, and also brand investment. It's, you know, no one wants to be the world's best product that no one ever hears about, and that's the challenge outside of ANZ, really making sure we're investing in the U.S., with our wholesale partners and our consumer. Global supply chain transformation continues. And again, investment into DTC continues into 2026, and there—we're really evaluating what does that mean? You know, how are we really supporting our wholesale partners with installation? That's one of the challenges, you know.
Like, we've got this incredible mix of product, and one of the confusions that can happen when a consumer turns up, "What product do I need for my vehicle across all the opportunities?" So we're looking at ways of making that better, both digitally and also within a retail space. So very quickly, from a highlight point of view, investment. Cleaned up and integrated org structure, and that's already paid dividends at the second half of 2023. This allows us to actually scale and look for efficiency across the team, but also focus on the regions. So not every region's worrying about their IT system and their supply chain, and their brand calendar and marketing investment. It's all taken care of, and they focus on how they treat and look after customer and consumer. How are we actually empowering the growth of that?
Brand recognition in ANZ, like I said, I wish we had that everywhere. It would be a different story, and that's our focus. How do we make sure that we take that brand strength from ANZ and translate that across international markets? Category-leading brand portfolio. We have some of the world's best product. You know, our Pioneer is one of the best trays in the market. We've even had people try and copy us and get us out of their retail trades, and then in the end, they have to take us back because we drive traffic, we drive customer engagement. We need to build on those franchises, and you see that now. For MAXTRAX going beyond the board, for example, people love the brand. There's so much opportunity beyond our core board.
And then again, from a U.S. point of view and an ANZ point of view, we've got some of the world's best retailers in our portfolio. We've got some of the world's best brands from an OEM point of view. We have not done a great job focusing on those and how we look at working, you know, with which OEM in which market. And OEM is a complex environment, you know, like products, you know, that could take two years, end up taking five. Managing that and really making sure that it's paying dividends. And again, one of the most important things I want you to take away is, you know, 2023 was a great second half. We really set ourselves up to start acceleration into 2024 and 2025.
The goal is to double the business over the next three years, but it's not doing it in any other way than leaning on our franchise products, turning up in markets in a better way, making sure there is brand awareness, and again, having the right people to do it. And we like to think that again, if we can do half of that, and we can actually help inspire people to take on an adventure with our product, we'll be able to deliver that and more. And the goal is, like I said, quarter-on-quarter, month-on-month, deliver the results as we're ramping up all of this new product, and a change in the business. So on that note, I'd like to introduce my running mate from an outdoor point of view. I'll hand over to Neil.
Do a quick sound check here. Everybody hear me okay? Great job, Matt. That was awesome.
Thanks, Neil.
So, it's been about a year since I've been in this seat. I thought I might give you a little bit of background on my journey here. I've been a CEO or president for almost 20 years now. The through line of that time has really been about finding great brands, where the underlying business is either broken or not optimized, and then fixing those business potential brand. And Black Diamond, I think, fits squarely in that thesis. I did a turnaround at... The first turnaround was at Bath & Body Works, early in my career, then Eddie Bauer, then Billabong, stayed in the outdoor space, working on brands like Dakine and Body Glove.
And then when this opportunity came up for Black Diamond, I went all the way back to a very formative experience for me, back when I was running Eddie Bauer in 2007. On my first climb of Mount Rainier, the most glaciated peak in the lower 48, on a late September day, where the weather pattern was such that it was very warm during the day, very cold at night, and so this nice, soft snow that is normally on Mount Rainier, it turned to pure ice. Frankly, I was in a little bit over my head on this climb, but I got up, and I got down. I got up, and I got down, and I looked at my gear, and I had Black Diamond crampons, Black Diamond harness, Black Diamond helmet, Black Diamond headlamp, Black Diamond ice axe.
And I said to myself at that time, "That is a great brand. If you ever, in your career, have a chance to go work for that brand, jump at it." So thankfully, that opportunity came along, and I'm thrilled to be here. And this is a brand with incredible history, heritage, and potential. And I think that, like me, one of the things that makes this brand so unique and special is that we deliver product to people doing activities of great consequence. Their life literally is placed in our hands. And when you have a brand like that, the bond between the consumer and the brand is next level. And it's that consumer bond at the end of the day, and the equity that comes from it, that we're gonna grow upon.
So Black Diamond, most of you know this, worldwide leader, an iconic brand, incredible history, going all the way back to really the origins of American rock climbing in the U.S. and around the world, and a great mountaineering heritage as well. In fact, you can't really tell the story of the growth of American climbing without telling the story of Black Diamond. We were founded in 1989 by Peter Metcalf, who was at the time working under Yvon Chouinard. And Peter had a great quote.
He actually had three or four brand-defining quotes that still guide us today, and one of them was: "The best days of climbing are in the windshield, not the rearview mirror." And the story behind this quote is quite interesting because he and Yvon Chouinard had been working together for a long time in Chouinard Equipment. And they got to the point where Yvon Chouinard said, "Geez, the golden age of climbing has come and gone." And Peter took the opposite view. He said, "No, actually, the best days of climbing are ahead of us. They're in the windshield, not the rearview mirror." And that statement has always been a call to action for those of us at BD to be progressive, to push the boundaries of sport, and to redefine it, to keep it modern and relevant. And we play in an incredible market.
The outdoor market, in general, is a great market, notwithstanding the ups and downs of the pandemic surge and the post-pandemic contraction. This is an industry powered by long-term tailwinds, with a tremendous amount of white space. And so how big is the market? So couple different estimates of the size of the global outdoor industry in the categories we play in, ranging from $40 billion-$60 billion. So if you take $40 billion of that, there's a portion, about $500 million, that's really in that technical rock climbing space. Then a bigger portion when you start to broaden climbing to things like gym.
But then, if you look at the growth of climbing overall and all the categories of climbing, while the overall outdoor market is projected to grow at 5.5%, climbing as a discipline is more than double that at 11.5%. When we look at the market, we see opportunities, white space in categories, in geographies, in channels. When you break that $40 billion-$60 billion global market down in terms of regions and categories, you start to see some pretty striking opportunities for Black Diamond. The regional split, APAC, North America, and Europe, comprise about 85% of the whole market, and they're roughly split equally. So about a third, a third, a third of that 85%. When we look at our business, we're heavily skewed towards North America, a good Europe business, and tremendous opportunity in APAC.
If you slice that global market by major category, 55% of the market is apparel, about 25% of the market is footwear, and about 20% is equipment. So we have tremendous opportunity in apparel, we dominate in equipment, and we'll be a very niche-focused player in footwear. But when you add all that up, tremendous growth opportunities for Black Diamond by region, by category, by channel. From a consumer standpoint, we think about participation and the growth of participation in our core sports. And this is U.S. data. There are about 10 million climbers of all disciplines, from rock to big mountaineering. The snow category, ski and snowboard, about 26 million participants. Our core of that is about four million backcountry skiers, people who go off-piste, like the soft snow.
But then there's a halo into the bigger snow sports market because people want to look like they're a backcountry skier, even if they're skiing in the resort. Trail run's a huge market, 12 million, one of our core sports participants. You can see this giant circle, the most demographic part of the market, most democratic part of the market for us, which is hike and trek, 50 million participants annually in the U.S. So where are we today? A snapshot of BD. We are about $185 million projected in 2024. That's actually down a little bit from 2023, and one of the terms I don't like is this idea that we're shrinking to grow. In fact, our strategy's just the opposite. It's focus to grow.
We think we have tremendous opportunity to grow this business, but we have to narrow our focus, do fewer things bigger and better. We'll generate about $15 million of EBITDA this year through 9,000 retail doors and 60 countries by about 390 employees worldwide. If you break the business down further, you can look at it three ways: by region, North America is 65%, EU 25%, rest of the world 10%. So again, if you think about the global market, a third in North America, a third in Europe, and a third in APAC, you can see that we have opportunity to grow in Europe, and we have enormous opportunity to grow in APAC. Sales by channel, 75% wholesale, D2C is 15% and growing quite quickly for us and quite profitably, by the way.
Our distributor markets, we call IGD, is 10% of our mix. Then when you break the business down by category, our segment we call Mountain, is our biggest, 40%. Things like trekking poles, lighting, packs. Climb is climb equipment, harnesses, helmets, carabiners. Apparel is about 20% of our business today, ski equipment, 10%, and footwear, about five. Across that portfolio, we have the number one or number two position in a lot of our core categories. And naturally, you think of climb: helmets, carabiners, harnesses, protection like cams, and for sure, we have 40%-50% market share in those core categories. But what you might not think about immediately is where we're number one in the United States in headlamps, in trekking poles, and all those things that expand into that big bubble of hike and trek.
We are, in the U.S., 40% of the trekking pole market. We're 2.5x the size of our nearest competitor in the U.S. In headlamps, we're 55% of the U.S. market, according to NPD. Again, about 2.5x the size of the nearest competitor. Really important point: within this very diverse portfolio that Black Diamond has today, we have incredible positions of strength, franchises, and our strategy is to focus on those positions of strength, double down on them, and use them to propel the growth of the company forward. Great thing about Black Diamond as an equipment company is it travels very well globally. This is truly a global brand with global reach, whether it's our athletes, our expeditions all around the world. The culture of climbing is really a tribal, global culture.
So the brand moves very well, and really needs no translation country to country. In terms of how we approach that, we have a market set up in North America, market set up in Europe, and through the rest of the world, we reach our consumers through 21 distributor partners. Team. So a lot of work has gone into rebuilding the Black Diamond team. I call it the Black Diamond Great Renaissance of Talent. And it's been pretty remarkable over the last year, the number of people that have wanted to come back to Black Diamond, who've been associated with the brand over the years. Really a testament to the optimism and conviction that people have behind the future of this brand.
Our creative director is a BD rehire who was at Black Diamond for about five and a half years, went off to be the creative director of Under Armour, and when he saw what was going on at Black Diamond, he said, "I want back in." Kasey Jarvis, an enormous, brilliant, creative talent. We're thrilled to have him back at Black Diamond. Likewise, our head of product, Doug Heinrich, was with Black Diamond all the way back to the Chouinard Equipment days, and was with Black Diamond for many years, left to go be the product director at a fast growing mountain brand called Kühl in a good place, and we said, "Hey, come on back. There's something big happening at Black Diamond." Doug came back.
Between Doug and Casey, if you go back to the origins of the great innovations of Black Diamond over the years, one or both of those individuals will have had their hands on those industry-defining breakthroughs. So it's incredible get for Black Diamond to have those guys back. VP of Operations, been here 20 years, VP of Marketing and Digital, we hired from Arc'teryx. He's been here about two years, superstar, really young, up-and-coming guy. Our VP of HR has been with us more than 20 years, and our VP of Sales is part of the great Black Diamond rehire talent renaissance, named Heath Christensen. Heath was with Black Diamond, running North America sales, for 15 years. Got recruited away to run sales for Cotopaxi. Very happy in his job, and we got him back.
He said: "I like what's going on at BD. I wanna be a part of it." And as soon as we brought Heath back, you could see our accounts turned on a dime, like: There's something happening in BD. They're getting their very best talent back in their seats. And then our GM of Europe, Stephan, has been with us for 10 years, and he does a great. He's a great operator, does a great job in growing Europe, and I think certainly the person that can capitalize on the opportunity in the European market. Put all that together, not everybody on the management team has changed. We've kept some important points of continuity, but there's been a great talent influx. The team has changed dramatically, and we've come together very quickly.
One of the things that brings us together as a team is the specialness of this brand. And I've worked on a lot of brands over the course of my career, and frankly, there's something different about Black Diamond, something intangible, something about its soul, where we came from, that puts it in a class by itself. And all of us on the leadership team are attracted to that history, that heritage, and that future. And we all feel a tremendous sense of stewardship to take the brand to its full potential. How do we do that? We do a little bit of look back to respect the past and our history and heritage, but then think about how do we modernize that and take it forward? How do we look through the windshield, and not just the rearview mirror?
To look back real quickly, a lot of you know this story, but Black Diamond actually was an outgrowth, like Patagonia, of a prior company called Chouinard Equipment, founded by Yvon Chouinard. In about 1989, Patagonia split. Black Diamond took the hard goods business, Patagonia took the apparel business. But, Peter Metcalf, our founder, worked under Yvon Chouinard for many, many years. He is, through and through, still our muse, our inspiration, our, our North Star. One of the things when you have a founder story like we have in Peter Metcalf, it keeps people grounded on the values of the brand, the things that have defined us, and the things that need to keep us pointed in the right direction. Peter has a couple, I would say, foundational sayings, expressions that he used from the beginning.
One of them is our mission statement, which is to be one with the sports we serve, and he would say, "and absolutely indistinguishable from them." We shortened that down to one with the sports we serve. And then he was also quite an advocate of protecting the environment, promoting access to public lands, sustainability, inclusion, diversity, long before they became popular topics. And his quote was: "This is more than a business. We're here to make a matter, to make a difference on matters of great importance to our community." So if you say we're one with the sports we serve, and that's a guiding statement, then the next question is: What sports do we serve?
And this is where I think maybe we've drifted a little bit over the last five years, not being clear on who we're going after, what sports are in, what sports are out. We've really narrowed that down to four core sports. Climbing is at the center of everything we do because it's the history of the brand, our origins, our bloodline, and it also very nicely links to the concentric circles out to ski mountaineering, backcountry snow, training in the mountains, for climbing through trail run, and even approach is really a form of hiking and trekking. And so climbing, so the core of this brand, connects all the way through the concentric circles, of the sports that we serve. And I'd say one thing on climbing, too, because climbing can mean a lot of things to a lot of people.
We believe that by focusing and doubling down back on climbing, we have an expansive opportunity ahead of us. Because climbing can mean climbing in the gym, bouldering outside, trad climbing, sport climbing, ice climbing, climbing 8,000-meter peaks, mountaineering, like climbing Mount Rainier. When you put all the types of climbing together, it's a huge market. And when you look at those brands that have grown over the years to be big brands, in our space, whether it's Patagonia or Arc'teryx or North Face, it's because of their reach to the top of the mountain that has created product franchises that become consumer staples. So climbing is an enormously powerful growth opportunity for us, and it legitimizes everything else that we do. It halos everything else that we do.
Once we've decided we're one with the sports we serve, here are our four core sports, then it's like, okay, within those sports, how do you think about consumer segmentation? And as you all know, segmentation is a way to unlock growth. So we think about segmentation of consumers, segmentation of product, segmentation of channels, and very disciplined about how we approach those different segments. So on the consumer side, we go from outdoor recreationalists, more of a casual user, all the way up to the pro athlete, Alex Honnold in Free Solo, and everything in between. That then translates to a product opportunity for those entering the sport, those who want to get better at the sport, and those who are close to mastering it or accomplishing things for the first time.
So really, not good, better, best in a traditional sense, but an opening price point, entry into the brand, a trade-up to a better skill level and better product, and then mastery of the discipline. Then lastly, that translates into a distribution pyramid. Specialty accounts at the very top, along with our D2C, then national outdoor, and then some very exciting opportunities we have to take certain categories, like lighting, into lateral channels of distribution because the consumer will want them to want to buy them from Black Diamond versus somebody else. And I think this is really important to pause on, because maybe in the past, there's been a time in Black Diamond's history where we've just focused on the top of the pyramid, being sort of a badass brand for elite athletes.
and we still are a badass brand for elite athletes, but now what we're doing is systematically filling out the pyramids of growth underneath those positions. So an example of that, if we take our 40% market share in the U.S. in trekking poles and say: How do we continue to build on that business? We think about this consumer pyramid, and then we think about product franchises that speak to each of those segments. And those franchises are Distance franchise, our Pursuit franchise, and our Trail franchise. So the Trail, as you might expect, more the casual person looking to get out, and enjoy the outdoors, but do it safely. Pursuit is a step up from that, more objective-based. I want to climb this mountain or cover this much territory in a certain amount of time.
Distance is really the elite athlete that wants to climb a mountain up and down in record amount of time and move very fast and light. Our corresponding product line then does translate to a sort of good, better, best, but really driven from a consumer need perspective. Our Trail Back pole at $89, our Pursuit FLZ Z-P ole, which we created and invented, $159, and then a super light Distance Carbon pole that weighs like a feather, if you're moving fast and light at $209. And by the way, this season, we brought in, even below the Trail Back line, an Explorer line of poles, starting at $59.
So we've really taken a category that we own, we've segmented the market, we've kept the halo, and our permission to play, but we've broadened that demographic, dramatically through this approach to segmentation. So that's the journey from one with the sports we serve, what sports do we serve, what consumers do we target within those sports, to, okay, let's get down to creating amazing product for those consumer segments. And the one thing that I would say has defined Black Diamond above any other company is this marriage of beautiful design and superior engineering. Analogs, you could think of Herman Miller, for example, in, office furniture, beautiful design, superior engineering, or Apple in electronics, beautiful design, superior engineering.
The thing about a Black Diamond product is it's not only gonna give you the best performance, it's gonna have the best aesthetics, look, and feel, and the best emotional connection. And you can just see it in the imagery here. Many of the products that we've created over the years have become icons of the industry, some of which, by virtue of their beautiful design, have made it into the Museum of Modern Art. So moving forward, to unlock this potential, we have been doing a lot of heavy lifting this year, and I'd say if I categorize the challenges that existed when I stepped into this role, there are a couple of big ones. And I think number one is number one, which is the brand had become way overextended.
We were trying to do way too many things, go into too many categories with too much complexity, and it simply overwhelmed the organization. So we've spent the last year really narrowing down into the sports we serve, the kits we need to build for those sports, and taking first 30% of our SKUs out of the equipment side. Then we'll take another 20% out, and really focusing on doing fewer things, bigger and better. That's the mantra. Fewer, bigger, better. The easiest way to make money, in my experience, is to make the big things bigger. So you'll see us double down on those areas where we have market leadership position, product franchise, and turn those into growth vehicles for Black Diamond. Talent, as you could probably tell, was a huge issue.
We went through a period where, quite frankly, we lost a lot of the best talent at Black Diamond, and I'm very happy to say that that talent is coming back. If it's not back already, people are knocking at our door to get back in the Black Diamond game. Our inventories, you all know this, got out of control. We had these enormous visions for growth, riding the COVID boom, the market contracted, and we were left, like a lot of our retail partners, way too much inventory, and not just too much, but too much in the wrong places. So too much in the C and D styles that don't generate a lot of our revenue. We have a classic, actually, a more pronounced version of the 80-20 rule. Top 5% of our styles generate 50% of our revenue.
Make the big things bigger. That's where our franchises are. The top 17% of our styles generate 80% of our revenue. The bottom 70% of our styles generate less than 10% of our revenue. The bottom 70% of our styles generate less than 10% of our revenues. Do we need 69 different pairs of gloves, different styles? Probably not. When we get really focused on the sports we serve, the consumer needs in building those kits, you're gonna see this business get really simple and really clear. And that's what drives growth, that's what drives margin lift, that's what drives inventory turn, that's what drives GMROI, and that's what drives long-term value creation.
Then lastly, I would say there were a number of core processes and new product development, sales and operations planning, inventory management, that just didn't exist in the business. So we designed those processes, we spent a year putting them in place, and now they're up and running, and we're perfecting them. So all this work, what does it translate to? A roadmap for the next few years. To be clear, we all acknowledge 2023 was a reset year for us. We did about $200 million in sales, marginally, but really dragged down by the amount of clearance and cleanup that we did to our inventories to set ourselves up for growth. So in 2023, we reset the business to what the new demand is in the post-pandemic market reset.
We resized the business, we resized our inventory, we revamped our leadership team, and we installed these core processes. So really foundational moves in 2023 that set up 2024 and 2025. 2024, then, is about really taking this discipline of simplification and dialing it all the way through the business. So you'll see us exit some categories, you'll see us exit some styles, and you'll see this business gradually get more and more focused, where we're, our mantra is, "Make the big things bigger." We've also rationalized the organization structure, and we've got it to a point now where we've got the right team, it's the right size, and we can grow 8%-10% per year for the next three or four years without adding any headcount. And so the cost leverage that we have on the organization that we've built will be tremendous.
2025 is about showing the initiatives that we've got underway are gaining traction. The biggest one will be a breakout year for our new apparel line, which, again, if you go back to 55% of the global market, is apparel, and it's less than 20% for us today. We believe that in the next three to four years, apparel should be a $100 million business for us on the way to $150 million, maybe $200 million, but at least $100 million within our 2027 time horizon. And you'll see in 2025, we'll launch an apparel catalog. We'll have more digital marketing behind our apparel. You'll see it on our athletes, you'll see it in expeditions, and it will be a holistic presentation of our product line, and it will be a breakout year.
And then 2026 is really double down on our initiatives, let them take hold, and then start put some marketing behind the places that have traction to accelerate. Think about building blocks, 2023, revamp the leadership team, right-size cleanup inventory... restructure, the sales organization, particularly in North America. I think there was a period, maybe of three years, where we didn't have a full sales team in North America. We now have a great full sales team under Heath's leadership. We've closed unprofitable stores. We've stood up a whole new apparel team to deliver on this potential of $100 million plus in the apparel segment. And we've laid out our simplification roadmap. In 2024 then, we take that simplification roadmap into action.
You'll see us exit some styles, some categories, and really get the business over, I would say, 2025 and 2026, much more tight in terms of the assortment that we're bringing to market, the franchises that we're trying to build, and the kits, the solution sets that we're building for consumers. You'll see us relaunch our D2C platform, some system upgrades we need to run the business more efficiently, and really a big push on improving our margins through better sourcing. We're standing up this year in Taiwan, a BD Asia sourcing and product development office, and we expect to see lifts of 100-200 basis points in our margin as a result of BD Asia.
Implementing our new processes, and then this whole bottom line, which goes across all three years, is to expand our climb leadership. Our goal is to be undisputedly the number one climbing brand in the world, everything from gyms to 8,000-meter peaks. You will see this year, this spring, BD return to the top of the mountain. You'll see our athletes on Everest, in new prototype gear, putting up new routes, doing things that have never been done, all the way down to youthful, urban gym collaborations that roll out in 2025. So continued focus on building leadership and climb through new partnerships, through new athletes, collaborations, and launches. One of those new partnerships, by the way, is with Rainier Mountaineering, that'll unveil itself this spring. Rainier Mountaineering is the largest guide service in the United States.
70 guides around the world on Denali, Rainier, Aconcagua, Everest, McKinley. They will be head-to-toe Black Diamond apparel and equipment. And you'll see that expand over the course of 2025 and 2026. Flowing that all the way through the P&L, how does this line up? What's our investment thesis? So revenue growth, not crazy. We're not shooting for the moon. We're not getting over our skis, literally. We're being patient and deliberate, showing traction that then goes into steady growth, 8%-10% CAGR over this time period, by focusing on our consumer segmentation, growing apparel, focusing on completing kits, growing D2C, and reaching into some of the untapped, non-traditional channels that are available to us in growing APAC. All of those things have more than enough opportunity to sustain steady 8%-10% growth for the foreseeable future.
Gross margin's a huge driver of the value proposition here. 400 points minimum from the 2022 baseline. I wouldn't look at the 2023 baseline because it's got too much markdown and inventory clearance. But from the 2022 baseline, we will add at least 400 basis points of gross margin through these initiatives, by 2026, possibly more. And then lastly, cost leverage. You'll see about 200-300 basis points of cost leverage materialize by 2026, by leveraging this organization we built, not a lot of new headcount required to support the growth, and then getting the cost savings associated with the simplification. Really a focus on productivity, more output per headcount. Summarizing. Investment highlights, driven by reestablishing, first and foremost, our team, our strategy, our focus. Number two, thinking about the power of the Black Diamond brand.
And there aren't a lot of these, but I'd say Black Diamond is one of them, where the brand and the equity of the brand is actually much bigger than the financial results itself. So as we fill out the potential of the brand, known and revered all around the world in categories, in channels, in consumer segments, we wanna get the size of the business to match the size of the equity of the brand. We want to leverage those points of category leadership, build franchises, and then launch apparel and get digital to 30% of our mix. And with that, I'm gonna hand it over to Mike.
Real quick.
Thank you.
Thank you. Thank you very much.
Thank you, Matt. Great job. Hey, I mean, I've talked to many of you in the room over the last two years since I joined, and we've been talking about doing an analyst day for now, over the last year. I'm so excited we were able to pull it together. We did defer it for about six months as we went through the Precision Sport sales process.... But I think that in, in hindsight now, that ended up being a tremendous benefit, because it gave both Matt and Neil another six months to go through their businesses, get into their details, and really present what they shared today. And there's incredible vision, strategies, initiatives that they shared today of how they're going to turn both these brands around and execute over the coming three years.
I don't think we would've been able to present that six, eight, 10 months ago. So in some strange way, it's turned out tremendous that we had to delay this until we finalized the Precision Sport sale. But I'm super pleased with that. Hopefully you can see the passion and excitement that I know that Warren and I have with both Matt and Neil on the team now. So with that, let me walk through some of the summary. First, there was a typo, and I will call that out, back in one of Matt's slides, where we showed 15%, and $15 million of EBITDA on the $90 million. The 15% obviously is correct, but the number should have been $13.5 million.
Not sure how that happened, because I think we've checked these numbers 15 times, but, outdoors number is $90 million, 15% EBITDA margin, or $13.5 million, not $15 million. So if you add those all up with the numbers Neil shared, the 2024 numbers, the $275, the $283 of operating company EBITDA, the thirteen five and the fourteen eight that Neil just shared, less the corporate cost of $11, is the $17 million approximately, which is right in the midpoint of the guidance we gave between $16 million and $18 million of EBITDA, okay? So just to reconcile that. So 2024 ties outright to the guidance, just to be clear, that we shared last week, that Warren and I shared with you all last week. 2025 and 2026, you know, tie back to... Those do tie.
They do tie back to the presentations that Matt and Neil walked through today. Obviously, the lawyers require me to say something to the fact that they are projections. We reserve the right to update you, and we will update you if we see something materially different. But you can tell by the passion, the initiatives, the strategy, the detail behind, you know, what both these fellows are working on, that, you know, we're excited about presenting those numbers, but we will reserve the right to update you on those, and they are projections, right? Going on to corporate cost, you know, we're holding those relatively flat. You know, we finished 2023 at about $11 million. We're saying 2024 is about $11 million.
The corporate costs, there's just a fixed amount of legal, financial, insurance, costs that goes into being part of a public company, right? We also have some non-stock, non-cash costs there. It's entirely stock-based compensation that these numbers are adjusted for. So that's a summary of where this all kind of flows from a results and projection standpoint. You know, we do see cash flow growing greater than EBITDA here in 2024. That's as we continue to deleverage the balance sheet, probably essentially from favorable inventory performance. Going forward, we see cash flow being about 85% of EBITDA because we will have working capital increases in working capital as the business starts to grow. So that's the summary. I'm super excited about that.
If we move over to, you know, why invest in Clarus? You know, super amount of change has taken place over the last 18 months, right? And we're excited. We're, we're really excited to relaunch Clarus 2.0, the new Clarus, whatever we wanna call it. It really is a pure-play outdoor business. We view outdoor and adventure end markets as highly attractive and resilient. Both, both of these businesses has benefited tremendously during COVID, but the last couple of years have really resulted in a reset as the entire market finds its new baseline, right? But overall, we believe the long-term participation as, as, as Neil walked through, you know, and, and as Matt demonstrated in his slides, you know, let's just continue to grow. These, there's a secular tailwinds in these markets that we participate in now, right?
A pure-play outdoor business. Maybe the most important thing we heard about today is just the passion around the leadership teams, too. You know, both fellows have rebuilt their leadership teams. Some of the, you know, great renaissance of talent that's returned to BD and some of the great talent that's been infused at the adventure business is exciting as well. You know, the teams are all passionate about bringing these businesses to their potential. Management's work through, you know, the detail that we shared today with the goal of executing. Sure, there's execution risk, and that's why, you know, that's why we have to put up the caveats in the forward-looking statements, but, you know, we're excited about executing. With respect to the investments and changes made in 2023, we're beginning to see some green shoots.
I think we shared that last week during our call, Warren and I. We're seeing progress on our initiatives and overall brand strategies. These changes are really more pronounced in the results last week that we shared at Adventure. But we are super pleased with what Neil's up to and what the team is doing at Outdoor. And you can see the enhanced profitability that we're targeting at Outdoor in 2024. I mentioned this earlier, and I think Warren mentioned it. It's super important to understand, at this point, the balance sheet is as fortress as it could possibly be, right? We have a debt-free balance sheet as of today. This morning, I had over $43 million of cash on the balance sheet. You know, and the cash we view as is king. It's always king, right?
It provides us the flexibility and optionality to manage the business here, and we'll be super prudent with our cash as we see until we see all these operational initiatives and strategies really take hold. So before Q&A, I wanna share one last thing we did for my analyst friends in the room. Last week, when we filed the 10-K, we restated all of the... The 10-K's completely been restated, 2021, 2022, 2023, to just reflect the new Clarus. All of the Precision Sport information has been peeled out to and presented as assets held for sale at the end of 2023, and it's discontinued operations for the prior years presented. And that's kind of the way the lawyers worded that. But then what else we've provided today, and these are new numbers.
They've filed the presentation with the 8-K this afternoon, and these are the first 2023 quarters restated to just show Adventure and Outdoor. So when we present quarterly reports, first quarter, we'll be comparing against March of 2023. So, so if you wanna go and look and update your models, then here's the quarterly restatement as well. So we're excited we got that done over the weekend and wanted to share that with you all as well. These are also... We've updated our adjusted loss and income from continuing operations, essentially, simply said, it's adjusted earnings per share. And we're adjusting for non-cash items and a few unusual things like restructuring and transaction costs, and this is the new format that we'll be following. Pay attention, this is different than what we had done in the past, right?
This is a simpler, cleaner, version from my perspective. And then lastly, this is just adjusted EBITDA that has been updated as well by quarter. So with that, I think it's time to open up the floor to Q&A.
These guys are going to set up.
Okay, perfect. Thanks. Yeah. Move chairs?
Yeah, we'll bring them out.
Okay. Great job.
Thanks.
Thank you.
Okay, well, I, I know this has been a lot to digest this morning. We, we did that intentionally. There's a lot to think about, and it's taken us, you know, well over a year, to get to this point. But, I'm personally very excited about the the opportunity and, you know, as Mike said, the leadership team that we've put in place that you've been introduced to today. So with that, I've-- okay.
Sure. Neil, I have a question. Clearly, apparel is a huge opportunity for the brand and really core to the targets that you provided. To what extent do the targets assume that retailers will be more accepting of the apparel merchandising right now? You know, it really overindexes in DTC, which is encouraging to know that, you know, 55%-60% of the mix is there. But to get to the $100 million, how much do the retailers have to buy into the category?
Are these working, or do we need to-
I think those are working.
Can you-
Yeah.
So great question. First of all, just maybe a couple of things on apparel. I have a lot of years in the apparel business, and when I look back and try to be humble about it, but when I look back at what we did at Eddie Bauer in launching the First Ascent line, built by the best mountaineers in the world, and I look forward to that 12 years later, that is still the strength of the brand. Those styles are still the winning styles. And then Billabong, the same thing. When we sold Billabong to Quiksilver, the story that we had in Shopping, sorry, the trade press, was very clear message to Oaktree and Quiksilver, which is: Don't mess with the Billabong brand.
Their product is amazing, and they're light years ahead of the competition. So I think it's not just about building apparel, but it's building apparel to these kind of levels where, it, it's widely, widely regarded, and, best-in-class, and I've spent a lot of my career doing that. There is a process to how you get there. In my experience, when you follow that process, the results happen. Viesturs, the only American to climb all 8,000-meter peaks, once said, "There are no shortcuts to the top." The same is true for apparel. The process that we follow is a process that I developed back at Eddie Bauer, working with mountain guides, which is, at the front end of the process, a very deep, immersive, intensive intake with the athletes. Of what are their favorite products?
Why do they use them? You really get to the core need, and then three rounds of prototypes that go out for field testing, extensive field testing, where those products are fine-tuned, and so that by the time you launch that product, you know it's dialed. And, and it sounds simple, and it's hard to stay on. And I would say over the years, Black Diamond has had an inconsistent process, certainly nothing with that rigor or discipline. So the starting point is, you got to come up with great product, and you have to have a process that's credible to explain to retailers how you arrived at the product you did. Why is it credible? Why does it have that point of view? And I'm confident that they'll see that from Black Diamond.
With respect to how much of the growth needs to be driven by wholesale versus D2C, you'll see that our apparel strategy is really show it first in D2C, prove the sell-through, prove the uptake, and then. By the way, the same was true at Billabong. Led with D2C, and then wholesale took off right after that. And that's a little bit of an inverse to how we've tried to do it in the past, which is we developed this big line. We bought a lot of in inventory, and then we tried to jam it into the channel. This really needs to be consumer driven, led by D2C. The retailers will see the sell-through and the traction, and then they'll adopt it. And we'll have results to speak to that, that will drive that.
So there is some retail adoption assumed in here, but we're not, we're not unrealistic at all. In fact, I think we're quite conservative in what we're planning for the retailer uptake. An example, we really don't have any apparel in REI right now. If I look at other brands of our size and what they're able to do in REI, it's $30 million-$40 million a year. We haven't put $30 million-$40 million in the plan, but at some point, I think REI is going to pick up our apparel line again, and that will be an upside to this case. But basically, we've got to prove it to the consumer first, and then the retail will follow. Does that answer your question? Yeah. Thank you. Next, next question.
All right, guys, how's it going? Thanks for having us out, and nice presentation today. Matt, question for you on the adventures segment and specifically the domestic business in there. In 2022, that was a $25 million business. This last year, much lower than that. Curious, what kind of growth is contemplated in your 2026 targets from the domestic side of the business?
From a U.S. point of view?
Correct.
Yeah. Look, I'd say, you know, what we've done in ANZ, you know, I'd premise that, you know, the rebuilding of the leadership team and the organization there, what I've spent my last kind of 12 months doing. There's a huge amount of that that needs to happen in the next six months in the U.S. I'm working with the team here. You know, we've got great people, but we don't have the strength through top management, you know, mid-management and below. On top of that, I think, you know, to really attack the market here, we've had kind of a key focus on building our dealer base, and I think we need, again, to look at the strategies of how to grow our dealer base.
In Australia, you've got this incredible, you know, fleet of businesses that can do installation, and we need to find newer ways, or a new approach to do that here. Linking that with DTC, so we've, you know, we've been e-com led here. So how do we drive our DTC business, increase our dealer base? Again, the growth that we're building into our three-year plan, you know, it's still led from ANZ, but it's comfortable, and it's more like right-sizing. Again, the business got to peaks of $25 million, you know, two, three years ago, and it went down to $13 million. So we're not doing anything aggressive. We're trying to return that to a comfortable over $25 million in the next year, and that's just resetting it. It's not even growing it past, you know, past precedents.
Then beyond that, it's just stable growth with new product, new channels. It's the first time ever that we've got MAXTRAX and TRED. MAXTRAX was never under us. You know, it's been run by a distributor partner, and that accounted for over $5 million for our distributor partner. So again, it's very slow and steady, so we're not, we're not reaching for the stars. Does that answer?
Yes, sir. Thank you.
Yeah.
Next question. Okay.
Thank you very much for the presentation. I wanted to ask about outdoor. For this year, it's projected to decline by 9%, according to this slide. Just trying to understand how much of that is driven by just the industry itself or just a portion of that is due to the right sizing of the ski count? And then second question on doubling your apparel business over the next few years, how much of that, how do you think about that in the context of the PFAS regulation?
Yeah, two good questions. I would say the 2024 number really reflects businesses that we think will exit this year. The core categories that we're staying in will actually grow this year. So again, I think you have to sort of parse the business. There are some low margin, low growth, low productivity lines of business and styles that we just need to get out of. And that's really the step down from 2023 to 2024. It's not. It does not in any way reflect a decline in the core business. In fact, the core business will actually grow as some of these divestments happen. And we'll obviously tell you more about that as the year unfolds, but it's essentially chopping off parts of the business that aren't profitable.
With regard to PFAS, we've been working at this. Good news is we've been working at this for a while. All of our major programs, with the exception of one, are now coming out with PFC-free durable water repellent solutions, and we feel like we're in a good place. There will be some rotation of inventory out of the market, not just for us, but for everybody. And I think Mike talked about it on the analyst call. There might be some exposure end of this year for us in leftover inventory. I would say at two months into this year, we're feeling good about where we are in PFAS and working our way through it, but there could be a little bit of cleanup we need to do at the end of the year.
And again, I think it in the scheme of things will be relatively modest. Might be in the $2 million-$4 million impairment sort of range, but hopefully, we'll be through it by then.
So I kind of just on the American market, sorry, my brain's still got jet lag. The other thing to note is, in 2023, we didn't launch any new products in the U.S. market, whereas back in ANZ, we launched four new key platforms. Pioneer Six, which accounts for, you know, a huge amount of our revenue and I guess brand awareness. We're the leaders in that, launched in the fourth quarter, and that drove large incremental kind of revenue and margin point gains. It was 10 percentage points of margin upside just in that one product. We didn't launch that in the U.S. It's launching in April.
We launched Lite boards for MAXTRAX, which is an entry level, you know, with a premium price, and we gave a, you know, it's light in price and again, a smaller, slightly different customer. RX100, one of our best-selling crossbar systems, you know, accounts for over $2 million in revenue in Aussie alone. We didn't launch that. And so there's a number of factors in terms of 2023 and looking forward. It's just making sure, once again, that we've got one integrated business. So when we do a product launch, it's across markets, it's planned for market. So that had a big impact on 2023, and I think lack of freshness also hurt us. So as we rightsize inventory, I think not having newness definitely impacted us.
New, new product, new cargo box with new customer here in the U.S. as well.
New tents.
New tents.
Okay, next question.
Hey, guys, Matt Koranda with Roth Capital. Thanks for the great presentation. Appreciate all the detail from you guys. I guess one for Matt and one for Neil. For Matt, I guess why wasn't simplification in the business done before? Maybe you could address sort of why it was so siloed by region. And then how much of the margin expansion that you're expecting over the next few years is kind of baking in basically just operational improvement from not double shipping, some of the examples that you referenced in the presentation, versus just pricing and other elements. And then for Neil, curious, just an example of maybe a SKU or two that we're shrinking this coming year.
And I guess, were some of those negative margin, I would assume, just given, like, the swing that you're showing in EBITDA this year relative to last year, but expecting growth in some of the core. So maybe you could just address that, and then how we protect the brand as we kind of introduce lower price point items and address the more mass market. A lot in there. Sorry.
Go ahead.
Good question. So look, in terms of why the simplification hasn't happened. Look, family-founded business, different priorities, different objectives. Again, I think the simpler way of saying it is, we made product that was fantastic for our backyard, and it wasn't necessarily built for regions, for either U.S., Europe, or Asia-Pacific, and we're able to sell it over there based on being best in class. It necessarily wasn't built and it wasn't part of the plan, so I think that's the first thing. The lack of simplification in the last two years, you know, again, I can't talk to that, but for me, it's a big priority. Looking at... You know, I showed you that slide. That's just one example of our crossbar system, and we can do that across the range.
The fact that you buy different accessories for your tray platform versus your crossbar, it's not integrated, so you have to buy a whole new range of, you know, products and accessories. We launched something called the Zwifloc , which allows easy access. So when you're out and about, be it snow, mud, or on a trail, the last thing you want is complexity, taking things off your roof or your tray. But we had different systems. So again, it's just approaching it with this idea that consumer focus, use focus, how do we create integrated solutions? And I think that's half the problem. The other thing that's coming into this is, my big goal working with this new team is we're going from a components business to being a finished goods business.
You know, we're not there stacking up on nuts and bolts and washers and so forth, that our warehouse has been filled with because we're shipping parts all around the world. You know, again, like I said, I spent 20 years of my life living internationally, and none of those businesses was Australia a manufacturing hub. We do assembly in Australia. You know, last time I looked, it wasn't known for, you know, manufacturing. So I think just again, different process, different priorities. You know, our job with this incredible new team is to build a global brand. And so therefore, we're going to go through step by step, what that means and how do we compete it be competitive. You know, like I said, looking at Mexico for auto, huge industry.
How do we remove Chinese tariffs for some of the product to be competitive here? These are all things we need to go through to simplify, and now is just the time to do it. Does that answer that one?
Yeah, absolutely.
Okay.
And then maybe the margin expansion-
Oh, the margin expansion.
Yeah, just kind of if you could bucket.
Yeah. Look, I think again, like I said, not having a three-year product plan, it's very hard to go to your suppliers globally and find best opportunities in terms of volume and our supply and planning, you know, capability is pretty weak. Now. We've ramped that up. We've got new teams and ops. So again, finding suppliers who've got a long-term view, and instead of having a single product, you know, trying to compete between Australia and New Zealand and China, like, we're now looking at sources. We're looking at, you know, every time we do a competitive range, we look at three RFPs to make sure we're getting competitive pricing. Pioneer Six, 10 percentage points from under 40% to over 50%.
You know, and again, that's happened in Q4, and it will roll all the way through 2024. So that's gonna be consistent as we launch RX. We've just launched RX100. Again, that product was launched using our old sourcing, which is we're making parts in both Australia and China. Then they all come back to Australia, and we assemble them in our location there. By middle of this year, that won't be happening. We'll be, you know, focused on finished goods, and again, there'll be an upside through our crossbar system. So what you see happening in our margin upside from a trade point of view, you'll see roll into our RX program. This year, we launched RX 100, 200, and 300. Like I said, it's highly complex.
There are five roof types, so therefore, RX 100-500, and then the next two parts of that will be early next year. That's where you'll see that margin improvement roll all the way through. The same thing, we've been making accessories, but we literally are buying them off the shelf, and making them, you know, appropriate for our roof racks. We're not doing that. Like our tent, we work with a partner, and it took 12 months, and we developed, you know, our first tent. It's late to market, but it's also considered one of the best in price and again, with margins at, you know, again, premium pricing. The job is every single category.
We'll make sure that, you know, our goal is over 40% minimums, whereas in the past, you know, we've been performing under 20% in margins in some cases, because we're buying off-the-shelf accessories and adding them to our range. So there's a lot of work to do across our supply chain.
Let me just restate your two questions, make sure I got them. So number one, an example or two of things that we're exiting and what the profit profile of those would be. And number two, how do you build - how do you not lose authenticity and credibility of the brand as you fill out the pyramid underneath?
Right.
So on the first one, couple examples for you. Within our portfolio of climb products, there are some things that I think people are sort of emotionally attached to, low margin, and we have this conversation like: Why are we even offering this? And somebody will say, "Well, we offered it at one point as part of our history and heritage." And then the question is, was it valued? "Yeah, it's valued." Well, then why is it low margin? And my point is, if it's valued, we should get paid for the work that we're doing, and it should be high margin. Otherwise, the consumer's voting, and they're telling you there's no value.
So what we've done is, we've done this thing we call a quad, the quad approach to line simplification, which is basically array every category and every business on two dimensions: productivity, that we measure, sales per style and margin. You can imagine there are four quadrants that come out of that, high productivity, high margin, so we wanna concentrate our effort into accelerating those. High margin, low productivity, how do we get those to move to the right? And then really, that bottom part of the quadrant of low productivity, low margin, I would say is a target-rich environment right now, where we have a lot of things in that quadrant. A couple examples would be, bindings.
So we distribute ATK bindings, and the argument was, it's part of the kit, it goes along with everything that BD is selling, except it's very low margin. There's a ton of SKUs in it. The turn is less than one per year, the returns are high, the warranty claims are high, and the customer service costs are high. So when you add all that up together, that is a negative contribution margin segment for us. The other example I'd give you, our number one rope style, is a negative margin rope. And so why do we even need it? There are a lot of ropes out there. Ours isn't particularly differentiated.
And again, that kind of goes back to, well, climbers want ropes, but no, let's focus on the ones of ours that are actually differentiated and have good margin, and let the commodity part of the, part of the market be the commodity part of the market. We don't need to play there. So hopefully, that those are examples. I love your question on, like, how do you build out these consumer and distribution pyramids while still growing the regard and the equity for the brand? And I think we take a page out of sports marketing companies that do this really well. Think about Nike, and their investment behind athletes and their tiered distribution, but still, they serve at the bottom of the pyramid.
They serve a wide range of consumers, but nobody would ever say Nike's not authentic, incredible in running or basketball, whatever their sports are. The formula is they invest in the athletes, involve the athletes in product development. They always win at the top of the market, and then they let those innovations cascade down. If you stick to that approach to win at the top and fill down, you come to a very different place than if you start at the bottom of the pyramid and say: How do I build up? So that's really the playbook that we're following. And again, a thing I would say is that's not necessarily in every category.
It's true in trekking poles, it's true in lighting, but there may be some where you really have to follow the consumer, like in personal protective equipment. Maybe it doesn't make sense to have a good, better, best, 'cause, like, do you really wanna trust your life to the good version of the product, or are you gonna pay for the better and best? And so where we really have safety and PPE franchises, generally, those are better and best, and we don't in any way wanna go to products that have any margin of error for our consumer. So it's really consumer-specific, category-specific. Does that answer your questions, too?
Absolutely. Thank you.
Thanks.
Next.
Hi. Does the company intend to stay in a net cash position for this three-year planning horizon?
Absolutely. I mean, especially over the next 12 months.
Okay, great. And then is the company more inclined to replace its earnings power resulting from the ammo sale from M&A or share buyback?
In the short term, we'll be very disciplined and invest back into these two businesses over the next 12 months. I mentioned earlier, you know, we would look at small bolt-on type tuck-in acquisitions at Adventure, similar to what we did at the TRED business back in the fourth quarter of this past 2023, in the fall of 2023. But over the short term, it'd be only accretive, small type M&A. Once we, you know, demonstrate our, you know, some of the plans we shared today and the strategies are executing, we could, you know, in 2025, 2026, definitely be back, you know, full time in the M&A game.
Okay.
Hi. At Black Diamond, do you guys have a three-year product roadmap now? And then secondly, what are the categories of apparel that sort of get you to that $100 million that you're not in now?
Yeah. So, yes, we have a three-year product roadmap, really driven by the principles I laid out, which is, make the big things bigger, build franchises, build around those franchises, edit low productivity, and grow opportunity spaces like apparel. So give you a couple examples. I talked about the Distance Trail pole at the top of Hike and Trek. What we're doing now is we're actually building a whole franchise around Distance, 'cause it means something to a certain type of consumer, fast and light in the mountains. So now we have a Distance run pack, we have Distance headlamp, Distance trekking pole, we have Distance traction for your run shoes, gaiters for when you're in the snow. And we'll be launching a Distance wind shell.
We'll be launching a Distance ultralight rain shell, a Distance short, a Distance top. Very tight collection that will merge together really well. And by the way, then you say, "Okay, how does that play across that channel pyramid?" For the most part, Black Diamond, despite having really good product franchises in the trail run space, isn't in the specialty run stores that will sell those products. So once we get really tight on those franchises, the customer we're targeting, then it opens up the distribution. So all of that's laid out in our three-year product roadmap, but it starts with: What sports are we serving? What segments within those sports? What franchises are gonna deliver against those segments? And then, how do we roll those out to distribution? And all of those are mapped out for mountain, climb, footwear.
Footwear, we didn't talk a lot about today, maybe a good example of focus and simplification. There was a time when... And you could look at the global market, 55% apparel, 25% footwear, and 20% equipment, and say: Well, let's go after footwear in a big way. And there was a time at BD where we were putting, putting a lot of resources into trail run and other footwear, except that's not really our competency. That's not what we're good at. And by the way, when we put it through the athlete-driven process, the product wasn't meeting our standard. So, you know, the easy thing to say, "It's okay, launch it anyway." The hard thing to do is say: "No, it's not BD standard. We're not launching it.
And by the way, let's narrow our focus on footwear to just climbing shoes and approach shoes, and let other people have the market 'cause they're much better at it." That would be another example of categories and styles that we've really narrowed our focus on. And by the way, I'm really glad that we took that decision last year. I think it will pay back in spades. That sort of product roadmap. With regard to apparel, one of the things, again, if you follow the process, is go deep with the user, go deep in the market, and figure out where the space is, where the volume is, that you can attack, and do it in a brand right way.... So we would all look at the apparel, technical apparel market.
The beauty of that market is once you get a franchise, it'll run for 10, 15, 20 years. North Face Denali, been around for 20 years. North Face Nuptse, same thing. Patagonia Down Sweater, Patagonia Nano Puff, North Face Thermoball. We could look at the market, and we could pick 10 styles that drive most of the volume in the market, and then you'd look at the BD assortment, and you'd say: "What do you have actually, that competes in where the consumer is in the market?" We don't, for the most part, today, we don't have styles that compete against those big volume styles. Now, we don't want to copy them. We need to do them in a brand right way, bring our design language, bring our process through them.
But if we hit those big volume segments in apparel, it will take off, and you'll see, you'll see us launch a down sweater program, jacket, hoodie, vest. By the way, traditionally, a Black Diamond launch, an outerwear piece, it would have a hood, but no jacket, maybe a vest. Except a big part of the market actually wants a jacket, not a hood. So really just looking at where the volume is in the market, the intersection to our sports, putting it through our apparel development process and nailing it. And again, if, if we had 10 styles in apparel that we perfected, more than $100 million of business. So hopefully that answers your question.
I'm weirdly, again, my brain's a bit slow today. The two questions, one related to U.S. growth and then, you know, the margins. A big part of our business has been historically OEM. But you imagine, you're getting bids for Australia and New Zealand, and you're getting asked to create a new platform for the likes of Toyota or Ford. And we put a competitive bid in, but you're maybe 4,000 units. The same bid for the same vehicle in the U.S. is 40,000 units and 100,000 units. There hasn't been a focus on this, and we're focused on our backyard. So the investment into the U.S. as well. So we're placing the global head of OEM development, business development in the U.S. That's a hire that's focused on this year.
Again, trying to compete from down under, you know, with Ford and Toyota and do that, we'll never be competitive. The only reason I raise this as well is, you know, size and price and really going after those partnerships in the US. Managing that, OEM pipeline is vital, and that's where not just our own categories that we're owning, our crossbars and our trays that create the, I guess, the platform for growth in OE. If you're not managing that life cycle, which we haven't done a good job of historically, that's where you also get margin erosion. Because a product could take, you know, two to five years to bring to market, and through that time, historically, we've been...
You know, the price could change quite dramatically on a manufacturing, and especially in the last five years, manufacturing costs have gone through the roof, materials costs, and we haven't done a good job managing that. And now we've got category managers across each one of our three key categories. So it kind of touches on both. The focus on how we're really going to go after, I guess, U.S. OEM, you know, size of the price, and managing that business to make sure we're not getting margin erosion at the end of it. So just wanted to circle back. It touches on both.
Next question? No more. Okay, well, thank you all for coming, and, you know, we hope to keep you informed as we progress these, you know, these plans. You know, we're very excited about them, and, we think that, you know, this year, again, is gonna be quite a good year for us. So thank you all again for coming.
Thank you.
Thank you all.