WESTPORT, Conn., Feb. 27, 2025 (GLOBE NEWSWIRE) -- Compass Diversified (NYSE: CODI) ("CODI" or the "Company"), an owner of leading middle market branded consumer and industrial businesses, announced today its consolidated operating results for the three months and full year ended December 31, 2024.
"In 2024, we once again delivered strong financial results, achieving double digit sales growth and over 30% growth in our Adjusted EBITDA for the full year," said Elias Sabo, CEO of Compass Diversified. "In the fourth quarter, we saw both sales and earnings growth accelerate, driven by continued strong performance from our consumer businesses as well as improving performance in our industrial businesses. Our differentiated business model, strong operating companies, and permanent capital base position us to create long-term value for all stakeholders. I want to take this opportunity to thank the CODI team as well as our subsidiary management teams and employees for their hard work fostering innovation, driving exceptional results, and exceeding expectations."
Fourth Quarter 2024 - Financial Highlights (vs Q4 2023)
- Net sales were $620.3 million, up 13.8%
- Branded consumer net sales increased 15.2% to $403.0 million
- Industrial net sales increased 11.4% to $217.2 million
- Subsidiary Adjusted EBITDA, a non-GAAP financial measure, was $140.9 million, up 25%
- Branded consumer Adjusted EBITDA increased 29.0%
- Industrial Adjusted EBITDA increased 5.2%
- Adjusted EBITDA, a non-GAAP financial measure, was $118.2 million, up 29.0%
Recent Business Highlights
- Sold Ergobaby for an enterprise value of $104 million on December 27, 2024
- In Q4 2024 - raised ~$90 million via issuance of preferred shares
- More than $115 million for full year 2024
- Flexible, low-cost source of capital
- In Q4 2024 - re-purchased more than 400,000 common shares
- Average price of $23.19 per share
- In January 2025 - raised $300 million in incremental term loan A
- Initial funding of $200 million; additional $100 million available with six month delayed draw
- Matures in July 2027, consistent with existing term loan A
Fourth Quarter and Full Year 2024 Financial Results
Net sales in the fourth quarter of 2024 were $620.3 million, up 13.8% compared to $544.9 million in the fourth quarter of 2023. For the full year 2024, net sales were $2.2 billion, up 11.9% compared to $2.0 billion a year ago. Growth was driven by the Company's acquisition of The Honey Pot Co. in January 2024 and continued strong sales growth at Lugano and BOA. On a pro forma basis, assuming CODI had acquired The Honey Pot Co. on January 1, 2023, net sales were up 7% in the full year 2024.
Branded consumer net sales increased 8% in the fourth quarter of 2024 to $403.0 million compared to the fourth quarter of 2023. On a pro forma basis, branded consumer net sales increased 10% to $1.5 billion in the full year 2024 compared to a year ago.
Industrial net sales increased 11% in the fourth quarter of 2024 to $217.2 million compared to the fourth quarter of 2023 and remained relatively flat at $729.4 million in the full year 2024 compared to a year ago.
Operating income for the fourth quarter of 2024 was $60.6 million compared to operating loss of $4.6 million in the fourth quarter of 2023. The increase was primarily due to a $56.8 million non-cash impairment expense associated with PrimaLoft in the fourth quarter of 2023. For the full year 2024, operating income increased 170% to $230.1 million compared to $85.2 million a year ago. The increase was due to an increase in net sales year-over-year, as well as non-cash impairment charges taken in 2023 of $89.4 million.
Net income in the fourth quarter of 2024 was $23.8 million compared to net income of $139.4 million in the fourth quarter of 2023. For the full year 2024, net income was $47.4 million compared to $262.4 million a year ago. The decreases in net income were due primarily to the $179.5 million gain on the sale of Marucci Sports in November 2023 and the $98.0 million gain on the sale of Advanced Circuits in February 2023.
Income from continuing operations in the fourth quarter of 2024 was $22.2 million compared to loss from continuing operations of $37.1 million in the fourth quarter of 2023. For the full year 2024, income from continuing operations was $42.3 million compared to loss from continuing operations of $44.8 million a year ago. The increases in net income from continuing operations were primarily due to the non-cash impairment expenses associated with PrimaLoft and Velocity Outdoor in 2023.
Adjusted Earnings (see "Note Regarding Use of Non-GAAP Financial Measures" below) for the fourth quarter of 2024 was $46.6 million compared to $34.7 million a year ago. For the full year 2024, Adjusted Earnings was $161.6 million compared to $101.2 million a year ago. CODI's weighted average number of shares outstanding in the fourth quarter of 2024 was 75.51 million compared to 72.43 million in the prior year fourth quarter. For the full year 2024, CODI's weighted average number of shares outstanding was 75.45 million compared to 72.11 million in 2023.
Adjusted EBITDA (see "Note Regarding Use of Non-GAAP Financial Measures" below) in the fourth quarter of 2024 was $118.2 million, up 29% compared to $91.6 million in the fourth quarter of 2023. For the full year 2024, Adjusted EBITDA was $424.8 million, up 30% compared to $326.5 million a year ago. The increases were primarily due to strong results at Lugano. Management fees incurred during the fourth quarter and full year were $19.5 million and $74.8 million, respectively.
Liquidity and Capital Resources
As of December 31, 2024, CODI had approximately $59.7 million in cash and cash equivalents, $113.5 million outstanding on its revolver, $375.0 million outstanding in term loans, $1.0 billion outstanding in 5.250% Senior Notes due 2029 and $300.0 million outstanding in 5.000% Senior Notes due 2032.
As of December 31, 2024, the Company had no significant debt maturities until 2027 and had net borrowing availability of approximately $486.6 million under its revolving credit facility.
Fourth Quarter 2024 Distributions
On January 3, 2025, CODI's Board of Directors (the "Board") declared a fourth quarter distribution of $0.25 per share on the Company's common shares. The cash distribution was paid on January 23, 2025, to all holders of record of common shares as of January 16, 2025.
The Board also declared a quarterly distribution of $0.453125 per share on the Company's 7.250% Series A Preferred Shares (the "Series A Preferred Shares"). The distribution on the Series A Preferred Shares covered the period from, and including, October 30, 2024, up to, but excluding, January 30, 2025. The cash distribution was paid on January 30, 2025, to all holders of record of Series A Preferred Shares as of January 15, 2025.
The Board also declared a quarterly distribution of $0.4921875 per share on the Company's 7.875% Series B Preferred Shares (the "Series B Preferred Shares"). The distribution on the Series B Preferred Shares covered the period from, and including, October 30, 2024, up to, but excluding, January 30, 2025. The cash distribution for such period was paid on January 30, 2025, to all holders of record of Series B Preferred Shares as of January 15, 2025.
The Board also declared a quarterly distribution of $0.4921875 per share on the Company's 7.875% Series C Preferred Shares (the "Series C Preferred Shares"). The distribution on the Series C Preferred Shares covered the period from, and including, October 30, 2024, up to, but excluding, January 30, 2025. The cash distribution was paid on January 30, 2025, to all holders of record of Series C Preferred Shares as of January 15, 2025.
CODI expects all cash distributions paid in the 2024 taxable year to be qualified dividends (assuming requisite holding periods are met) since CODI's earnings and profits in the 2024 taxable year are expected to exceed cash distributions.
2025 Outlook
For the full year 2025, CODI expects its current subsidiaries to produce consolidated Subsidiary Adjusted EBITDA (see "Note Regarding Use of Non-GAAP Financial Measures" below) of between $570 million and $610 million. Of this range, CODI expects its branded consumer vertical to produce $440 million to $465 million and its industrial vertical to produce $130 million to $145 million. This estimate is based on the summation of the Company's expectations for its current subsidiaries in 2025, and is absent additional acquisitions or divestitures, and excludes corporate expenses such as interest expense, management fees paid by CODI and corporate overhead.
CODI further expects Adjusted EBITDA (see "Note Regarding Use of Non-GAAP Financial Measures" below) including management fees and corporate expenses to be between $480 million and $520 million for the full year 2025.
In addition, the Company expects to earn between $170 million and $190 million in Adjusted Earnings (see "Note Regarding Use of Non-GAAP Financial Measures" below) for the full year 2025.
In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, CODI has not reconciled 2025 consolidated Subsidiary Adjusted EBITDA, 2025 Adjusted EBITDA or 2025 Adjusted Earnings to their comparable GAAP measure because it does not provide guidance on Income (Loss) from Continuing Operations or Net Income (Loss) or the applicable reconciling items as a result of the uncertainty regarding, and the potential variability of, these items. For the same reasons, CODI is unable to address the probable significance of the unavailable information, which could be material to future results.
Conference Call
Management will host a conference call on Thursday, February 27, 2025, at 5:00 p.m. E.T. / 2:00 p.m. P.T. with the Company's Chief Executive Officer, Elias Sabo, the Company's Chief Financial Officer, Stephen Keller, and Pat Maciariello, the Chief Operating Officer of Compass Group Management. A live webcast of the call will be available on the Investor Relations section of CODI's website. To access the call by phone, please go to this link (registration link) and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call 15 minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time on the Company's website.
Note Regarding Use of Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted Earnings are non-GAAP measures used by the Company to assess its performance. We have reconciled Adjusted EBITDA to Income (Loss) from Continuing Operations and Adjusted Earnings to Net Income (Loss) on the attached schedules. We consider Income (Loss) from Continuing Operations to be the most directly comparable GAAP financial measure to Adjusted EBITDA and Net Income (Loss) to be the most directly comparable GAAP financial measure to Adjusted Earnings. We believe that Adjusted EBITDA and Adjusted Earnings provides useful information to investors and reflect important financial measures as each excludes the effects of items which reflect the impact of long-term investment decisions, rather than the performance of near-term operations. When compared to Net Income (Loss) and Income (Loss) from Continuing Operations, Adjusted Earnings and Adjusted EBITDA, respectively, are each limited in that they do not reflect the periodic costs of certain capital assets used in generating revenues of our businesses or the non-cash charges associated with impairments, as well as certain cash charges. The presentation of Adjusted EBITDA allows investors to view the performance of our businesses in a manner similar to the methods used by us and the management of our businesses, provides additional insight into our operating results and provides a measure for evaluating targeted businesses for acquisition. The presentation of Adjusted Earnings provides insight into our operating results.
Pro forma net sales is defined as net sales including the historical net sales relating to the pre-acquisition periods of The Honey Pot Co., assuming that the Company acquired The Honey Pot Co. on January 1, 2023. We have reconciled pro forma net sales to net sales, the most directly comparable GAAP financial measure, on the attached schedules. We believe that pro forma net sales is useful information for investors as it provides a better understanding of sales performance, and relative changes thereto, on a comparable basis. Pro forma net sales is not necessarily indicative of what the actual results would have been if the acquisition had in fact occurred on the date or for the periods indicated nor does it purport to project net sales for any future periods or as of any date.
In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, we have not reconciled 2025 consolidated Subsidiary Adjusted EBITDA, 2025 Adjusted EBITDA or 2025 Adjusted Earnings to their comparable GAAP measures because we do not provide guidance on Net Income (Loss) from Continuing Operations or Net Income (Loss) or the applicable reconciling items as a result of the uncertainty regarding, and the potential variability of, these items. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
Adjusted EBITDA, Adjusted Earnings and pro forma net sales are not meant to be a substitute for GAAP measures and may be different from or otherwise inconsistent with non-GAAP financial measures used by other companies.
About Compass Diversified
Since its IPO in 2006, CODI has consistently executed its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the branded consumer, industrial, healthcare, and critical outsourced services sectors. The Company leverages its permanent capital base, long-term disciplined approach, and actionable expertise to maintain controlling ownership interests in each of its subsidiaries, maximizing its ability to impact long-term cash flow generation and value creation. The Company provides both debt and equity capital for its subsidiaries, contributing to their financial and operating flexibility. CODI utilizes the cash flows generated by its subsidiaries to invest in the long-term growth of the Company and has consistently generated strong returns through its culture of transparency, alignment and accountability. For more information, please visit compassdiversified.com.
Forward Looking Statements
Certain statements in this press release may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements as to our future performance or liquidity, such as expectations regarding our results of operations and financial condition, our 2025 consolidated Subsidiary Adjusted EBITDA, our 2025 Adjusted EBITDA, our 2025 Adjusted Earnings, our pending acquisitions and divestitures, and other statements with regard to the future performance of CODI. We may use words such as "plans," "anticipate," "believe," "expect," "intend," "will," "should," "may," "seek," "look," and similar expressions to identify forward-looking statements. The forward-looking statements contained in this press release involve risks and uncertainties. Actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in "Risk Factors" and elsewhere in CODI's annual report on Form 10-K for the year ended December 31, 2024 and its quarterly reports on Form 10-Q. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment, including changes in inflation, interest rates and U.S. tariff and import/export regulations; risks associated with possible disruption in CODI's operations or the economy generally due to terrorism, war, natural disasters, social, civil and political unrest or the COVID-19 pandemic; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); environmental risks affecting the business or operations of our subsidiaries; disruption in the global supply chain, labor shortages and high labor costs; our business prospects and the prospects of our subsidiaries; the impact of, and ability to successfully complete and integrate, acquisitions that we may make; the ability to successfully complete when we've executed divestitures agreements; the dependence of our future success on the general economy and its impact on the industries in which we operate; the ability of our subsidiaries to achieve their objectives; the adequacy of our cash resources and working capital; the timing of cash flows, if any, from the operations of our subsidiaries; and other considerations that may be disclosed from time to time in CODI's publicly disseminated documents and filings. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. Although, except as required by law, CODI undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that CODI may make directly to you or through reports that it in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Investor Relations
Compass Diversified
irinquiry@compassdiversified.com
Gateway Group
Cody Slach
949.574.3860
CODI@gateway-grp.com
Media Relations
Compass Diversified
mediainquiry@compassdiversified.com
The IGB Group
Leon Berman
212-477-8438
lberman@igbir.com
| Compass Diversified Holdings Condensed Consolidated Balance Sheets | |||||
| (in thousands) | December 31, 2024 | December 31, 2023 | |||
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | $ | 59,727 | $ | 446,684 | |
| Accounts receivable, net | 444,386 | 308,183 | |||
| Inventories, net | 962,408 | 723,194 | |||
| Prepaid expenses and other current assets | 101,129 | 88,844 | |||
| Current assets of discontinued operations | - | 36,915 | |||
| Total current assets | 1,567,650 | 1,603,820 | |||
| Property, plant and equipment, net | 244,746 | 191,283 | |||
| Goodwill | 982,253 | 859,907 | |||
| Intangible assets, net | 1,049,186 | 879,078 | |||
| Other non-current assets | 208,587 | 195,010 | |||
| Non-current assets of discontinued operations | - | 87,883 | |||
| Total assets | $ | 4,052,422 | $ | 3,816,981 | |
| Liabilities and stockholders' equity | |||||
| Current liabilities | |||||
| Accounts payable | $ | 104,304 | $ | 91,089 | |
| Accrued expenses | 197,829 | 151,443 | |||
| Due to related parties | 18,036 | 16,025 | |||
| Current portion, long-term debt | 15,000 | 10,000 | |||
| Other current liabilities | 49,617 | 34,812 | |||
| Current liabilities of discontinued operations | - | 8,986 | |||
| Total current liabilities | 384,786 | 312,355 | |||
| Deferred income taxes | 119,948 | 118,882 | |||
| Long-term debt | 1,759,290 | 1,661,879 | |||
| Other non-current liabilities | 225,334 | 203,207 | |||
| Non-current liabilities of discontinued operations | - | 1,277 | |||
| Total liabilities | 2,489,358 | 2,297,600 | |||
| Stockholders' equity | |||||
| Total stockholders' equity attributable to Holdings | 1,296,793 | 1,326,750 | |||
| Noncontrolling interest | 266,271 | 175,875 | |||
| Noncontrolling interest of discontinued operations | - | 16,756 | |||
| Total stockholders' equity | 1,563,064 | 1,519,381 | |||
| Total liabilities and stockholders' equity | $ | 4,052,422 | $ | 3,816,981 | |
| Compass Diversified Holdings Consolidated Statements of Operations | |||||||||||||||
| Three months ended December 31, | Year ended December 31, | ||||||||||||||
| (in thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Net revenues | $ | 620,255 | $ | 544,915 | $ | 2,198,233 | $ | 1,965,017 | |||||||
| Cost of revenues | 349,238 | 312,972 | 1,197,873 | 1,132,014 | |||||||||||
| Gross profit | 271,017 | 231,943 | 1,000,360 | 833,003 | |||||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative expense | 166,256 | 140,831 | 587,520 | 502,013 | |||||||||||
| Management fees | 19,453 | 16,784 | 74,767 | 67,945 | |||||||||||
| Amortization expense | 24,735 | 22,088 | 99,760 | 88,396 | |||||||||||
| Impairment expense | - | 56,832 | 8,182 | 89,400 | |||||||||||
| Operating income (loss) | 60,573 | (4,592 | ) | 230,131 | 85,249 | ||||||||||
| Other income (expense): | |||||||||||||||
| Interest expense, net | (29,189 | ) | (24,827 | ) | (106,683 | ) | (105,179 | ) | |||||||
| Amortization of debt issuance costs | (1,004 | ) | (1,004 | ) | (4,018 | ) | (4,038 | ) | |||||||
| Gain (loss) on sale of Crosman | - | (24,218 | ) | - | |||||||||||
| Other income (expense), net | 412 | (350 | ) | (3,902 | ) | 1,779 | |||||||||
| Net income (loss) before income taxes | 30,792 | (30,773 | ) | 91,310 | (22,189 | ) | |||||||||
| Provision for income taxes | 8,567 | 6,290 | 49,012 | 22,639 | |||||||||||
| Income (loss) from continuing operations | 22,225 | (37,063 | ) | 42,298 | (44,828 | ) | |||||||||
| Income (loss) from discontinued operations, net of income tax | (7,006 | ) | (3,026 | ) | (6,905 | ) | 24,208 | ||||||||
| Gain on sale of discontinued operations | 8,612 | 179,530 | 11,957 | 283,025 | |||||||||||
| Net income | 23,831 | 139,441 | 47,350 | 262,405 | |||||||||||
| Less: Net income (loss) attributable to noncontrolling interest | 13,631 | 2,828 | 37,426 | 16,423 | |||||||||||
| Less: Net income (loss) from discontinued operations attributable to noncontrolling interest | (1,721 | ) | (824 | ) | (2,884 | ) | (304 | ) | |||||||
| Net income attributable to Holdings | $ | 11,921 | $ | 137,437 | $ | 12,808 | $ | 246,286 | |||||||
| Basic income (loss) per common share attributable to Holdings | |||||||||||||||
| Continuing operations | $ | (0.10 | ) | $ | (0.75 | ) | $ | (1.25 | ) | $ | (1.81 | ) | |||
| Discontinued operations | 0.04 | 2.45 | 0.11 | 4.27 | |||||||||||
| $ | (0.06 | ) | $ | 1.70 | $ | (1.14 | ) | $ | 2.46 | ||||||
| Basic weighted average number of common shares outstanding | 75,505 | 72,429 | 75,454 | 72,105 | |||||||||||
| Cash distributions declared per Trust common share | $ | 0.25 | $ | 0.25 | $ | 1.00 | $ | 1.00 | |||||||
| Compass Diversified Holdings Net Income to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA - 2024 (Unaudited) | |||||||||||||||||||
| Three months ended | Year ended | ||||||||||||||||||
| (in thousands) | March 31, 2024 | June 30, 2024 | September 30, 2024 | December 31, 2024 | December 31, 2024 | ||||||||||||||
| Net income (loss) | $ | 5,781 | $ | (13,723 | ) | $ | 31,461 | $ | 23,831 | $ | 47,350 | ||||||||
| Income (loss) from discontinued operations, net of tax | 317 | 872 | (1,088 | ) | (7,006 | ) | (6,905 | ) | |||||||||||
| Gain on sale of discontinued operations, net of tax | 3,345 | - | - | 8,612 | 11,957 | ||||||||||||||
| Net income (loss) from continuing operations | $ | 2,119 | $ | (14,595 | ) | $ | 32,549 | $ | 22,225 | $ | 42,298 | ||||||||
| Less: income from continuing operations attributable to noncontrolling interest | 7,765 | 6,041 | 9,989 | 13,631 | 37,426 | ||||||||||||||
| Net income (loss) attributable to Holdings - continuing operations | $ | (5,646 | ) | $ | (20,636 | ) | $ | 22,560 | $ | 8,594 | $ | 4,872 | |||||||
| Adjustments: | |||||||||||||||||||
| Distributions paid - preferred shares | (6,045 | ) | (6,101 | ) | (6,345 | ) | (6,967 | ) | (25,458 | ) | |||||||||
| Amortization expense - intangible assets and inventory step-up | 27,116 | 26,642 | 24,956 | 26,341 | 105,055 | ||||||||||||||
| Impairment expense | 8,182 | - | - | - | 8,182 | ||||||||||||||
| Loss (gain) on sale of Crosman | - | 24,606 | (388 | ) | - | 24,218 | |||||||||||||
| Tax effect - loss on sale of Crosman | - | 7,254 | - | - | 7,254 | ||||||||||||||
| Non-controlling shareholder compensation | 4,071 | 3,680 | 4,537 | 4,057 | 16,345 | ||||||||||||||
| Acquisition expense | 3,479 | - | - | 1,872 | 5,351 | ||||||||||||||
| Integration services fee | - | 875 | 875 | 875 | 2,625 | ||||||||||||||
| Other | 274 | 130 | 964 | 11,820 | 13,188 | ||||||||||||||
| Adjusted earnings | $ | 31,431 | $ | 36,450 | $ | 47,159 | $ | 46,592 | $ | 161,632 | |||||||||
| Plus (less): | |||||||||||||||||||
| Depreciation expense | 10,730 | 10,339 | 10,180 | 12,642 | 43,891 | ||||||||||||||
| Income tax provision | 9,996 | 19,830 | 10,619 | 8,567 | 49,012 | ||||||||||||||
| Interest expense | 23,575 | 26,561 | 27,358 | 29,189 | 106,683 | ||||||||||||||
| Amortization of debt issuance costs | 1,005 | 1,004 | 1,005 | 1,004 | 4,018 | ||||||||||||||
| Income from continuing operations attributable to noncontrolling interest | 7,765 | 6,041 | 9,989 | 13,631 | 37,426 | ||||||||||||||
| Tax effect - loss on sale of Crosman | - | (7,254 | ) | - | - | (7,254 | ) | ||||||||||||
| Preferred distributions | 6,045 | 6,101 | 6,345 | 6,967 | 25,458 | ||||||||||||||
| Other | 2,879 | 1,375 | 60 | (412 | ) | 3,902 | |||||||||||||
| Adjusted EBITDA | $ | 93,426 | $ | 100,447 | $ | 112,715 | $ | 118,180 | $ | 424,768 | |||||||||
| Compass Diversified Holdings Net Income (Loss) to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA - 2023 (Unaudited) | |||||||||||||||||||
| Three months ended | Year ended | ||||||||||||||||||
| (in thousands) | March 31, 2023 | June 30, 2023 | September 30, 2023 | December 31, 2023 | December 31, 2023 | ||||||||||||||
| Net income (loss) | $ | 109,601 | $ | 17,123 | $ | (3,760 | ) | $ | 139,441 | $ | 262,405 | ||||||||
| Income (loss) from discontinued options, net of tax | 10,939 | 5,437 | 10,858 | (3,026 | ) | 24,208 | |||||||||||||
| Gain on sale of discontinued operations, net of tax | 97,989 | 4,232 | 1,274 | 179,530 | 283,025 | ||||||||||||||
| Net income (loss) from continuing operations | $ | 673 | $ | 7,454 | $ | (15,892 | ) | $ | (37,063 | ) | $ | (44,828 | ) | ||||||
| Less: income (loss) from continuing operations attributable to noncontrolling interest | 4,398 | 3,428 | 5,769 | 2,828 | 16,423 | ||||||||||||||
| Net income (loss) attributable to Holdings - continuing operations | $ | (3,725 | ) | $ | 4,026 | $ | (21,661 | ) | $ | (39,891 | ) | $ | (61,251 | ) | |||||
| Adjustments: | |||||||||||||||||||
| Distributions paid - preferred shares | (6,045 | ) | (6,046 | ) | (6,045 | ) | (6,045 | ) | (24,181 | ) | |||||||||
| Amortization expense - intangible assets and inventory step-up | 23,283 | 22,111 | 22,090 | 22,088 | 89,572 | ||||||||||||||
| Impairment expense | - | - | 32,568 | 56,832 | 89,400 | ||||||||||||||
| Tax effect - impairment expense | - | - | (4,308 | ) | 978 | (3,330 | ) | ||||||||||||
| Non-controlling interest - impairment expense | - | - | - | (5,382 | ) | (5,382 | ) | ||||||||||||
| Non-controlling shareholder compensation | 1,329 | 2,895 | 2,438 | 2,789 | 9,451 | ||||||||||||||
| Integration services fee | 1,187 | 1,188 | - | 2,375 | |||||||||||||||
| Other | 432 | 348 | 349 | 3,377 | 4,506 | ||||||||||||||
| Adjusted earnings | $ | 16,461 | $ | 24,522 | $ | 25,431 | $ | 34,746 | $ | 101,160 | |||||||||
| Plus (less): | |||||||||||||||||||
| Depreciation expense | 11,006 | 11,958 | 11,853 | 11,142 | 45,959 | ||||||||||||||
| Income tax provision | 7,471 | 4,421 | 4,457 | 6,290 | 22,639 | ||||||||||||||
| Interest expense | 26,180 | 26,613 | 27,559 | 24,828 | 105,180 | ||||||||||||||
| Amortization of debt issuance costs | 1,005 | 1,024 | 1,005 | 1,004 | 4,038 | ||||||||||||||
| Income from continuing operations attributable to noncontrolling interest | 4,398 | 3,428 | 5,769 | 2,828 | 16,423 | ||||||||||||||
| Tax effect - impairment expense | - | - | 4,308 | (978 | ) | 3,330 | |||||||||||||
| Non-controlling interest - impairment expense | - | - | - | 5,382 | 5,382 | ||||||||||||||
| Distributions paid - preferred shares | 6,045 | 6,046 | 6,045 | 6,045 | 24,181 | ||||||||||||||
| Other | (1,160 | ) | 75 | (1,044 | ) | 349 | (1,780 | ) | |||||||||||
| Adjusted EBITDA | $ | 71,406 | $ | 78,087 | $ | 85,383 | $ | 91,636 | $ | 326,512 | |||||||||
| Compass Diversified Holdings Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation Three Months Ended December 31, 2024 (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Corporate | 5.11 | BOA | Lugano | PrimaLoft | THP | Velocity Outdoor | Altor Solutions | Arnold | Sterno | Consolidated | ||||||||||||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | (8,045 | ) | $ | 2,040 | $ | 4,543 | $ | 35,133 | $ | (5,314 | ) | $ | (1,997 | ) | $ | (1,483 | ) | $ | (441 | ) | $ | (9,138 | ) | $ | 6,927 | $ | 22,225 | |||||||||||||||
| Adjusted for: | |||||||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | (2,095 | ) | (266 | ) | 1,042 | 11,294 | (2,010 | ) | (305 | ) | (264 | ) | (912 | ) | (196 | ) | 2,280 | 8,568 | |||||||||||||||||||||||||
| Interest expense, net | 29,134 | (11 | ) | (5 | ) | - | (55 | ) | (24 | ) | (1 | ) | - | 151 | - | 29,189 | |||||||||||||||||||||||||||
| Intercompany interest | (41,740 | ) | 3,252 | 4,409 | 15,596 | 4,390 | 2,725 | 1,635 | 5,159 | 1,808 | 2,766 | - | |||||||||||||||||||||||||||||||
| Depreciation and amortization | 51 | 5,536 | 5,343 | 2,763 | 5,331 | 4,163 | 1,363 | 9,303 | 2,511 | 3,623 | 39,987 | ||||||||||||||||||||||||||||||||
| EBITDA | (22,695 | ) | 10,551 | 15,332 | 64,786 | 2,342 | 4,562 | 1,250 | 13,109 | (4,864 | ) | 15,596 | 99,969 | ||||||||||||||||||||||||||||||
| Other (income) expense | - | (46 | ) | 489 | 280 | 176 | 8 | (1,177 | ) | 24 | - | (167 | ) | (413 | ) | ||||||||||||||||||||||||||||
| Non-controlling shareholder compensation | - | 499 | 1,331 | 775 | 559 | 517 | (153 | ) | 247 | 5 | 277 | 4,057 | |||||||||||||||||||||||||||||||
| Acquisition expenses | - | - | - | - | - | - | - | 1,872 | - | - | 1,872 | ||||||||||||||||||||||||||||||||
| Integration services fee | - | - | - | - | - | 875 | - | - | - | - | 875 | ||||||||||||||||||||||||||||||||
| Other | - | - | - | - | - | - | 1,500 | 696 | 9,546 | 78 | 11,820 | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (22,695 | ) | $ | 11,004 | $ | 17,152 | $ | 65,841 | $ | 3,077 | $ | 5,962 | $ | 1,420 | $ | 15,948 | $ | 4,687 | $ | 15,784 | $ | 118,180 | ||||||||||||||||||||
| Compass Diversified Holdings Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation Three Months Ended December 31, 2023 (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | Corporate | 5.11 | BOA | Lugano | PrimaLoft | Velocity Outdoor | Altor Solutions | Arnold | Sterno | Consolidated | ||||||||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | (12,982 | ) | $ | 9,840 | $ | 1,345 | $ | 20,847 | $ | (64,383 | ) | $ | (3,183 | ) | $ | 4,260 | $ | 3,523 | $ | 3,670 | $ | (37,063 | ) | ||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 301 | 1,004 | 639 | 4,293 | (2,549 | ) | 289 | 1,797 | 921 | (406 | ) | 6,289 | ||||||||||||||||||||||||||
| Interest expense, net | 24,732 | (4 | ) | (9 | ) | - | (2 | ) | 120 | - | (11 | ) | - | 24,826 | ||||||||||||||||||||||||
| Intercompany interest | (33,291 | ) | 4,546 | 2,548 | 10,177 | 4,780 | 3,440 | 2,303 | 1,728 | 3,769 | - | |||||||||||||||||||||||||||
| Depreciation and amortization | 366 | 6,143 | 5,496 | 2,258 | 5,394 | 3,259 | 4,183 | 2,193 | 4,943 | 34,235 | ||||||||||||||||||||||||||||
| EBITDA | (20,874 | ) | 21,529 | 10,019 | 37,575 | (56,760 | ) | 3,925 | 12,543 | 8,354 | 11,976 | 28,287 | ||||||||||||||||||||||||||
| Other (income) expense | (1 | ) | - | (412 | ) | - | (19 | ) | (75 | ) | (66 | ) | (31 | ) | 1,239 | (4 | ) | (280 | ) | 351 | ||||||||||||||||||
| Non-controlling shareholder compensation | - | 203 | 950 | 162 | 761 | 228 | 186 | 1 | 298 | 2,789 | ||||||||||||||||||||||||||||
| Impairment expense | - | - | - | - | 57,810 | (978 | ) | - | - | - | 56,832 | |||||||||||||||||||||||||||
| Other | - | - | 3,072 | - | - | - | - | - | 305 | 3,377 | ||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (20,875 | ) | $ | 21,320 | $ | 14,022 | $ | 37,662 | $ | 1,745 | $ | 3,144 | $ | 13,968 | $ | 8,351 | $ | 12,299 | $ | 91,636 | |||||||||||||||||
| Compass Diversified Holdings Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation Year ended December 31, 2024 (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Corporate | 5.11 | BOA | Lugano | PrimaLoft | THP | Velocity Outdoor | Altor Solutions | Arnold | Sterno | Consolidated | ||||||||||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | (35,634 | ) | $ | 20,634 | $ | 20,791 | $ | 94,390 | $ | (10,575 | ) | $ | (9,761 | ) | $ | (54,851 | ) | $ | 5,635 | $ | (2,969 | ) | $ | 14,638 | $ | 42,298 | ||||||||||||||
| Adjusted for: | |||||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | (2,095 | ) | 4,526 | 4,962 | 31,304 | (3,741 | ) | (2,894 | ) | 6,810 | 2,280 | 2,986 | 4,874 | 49,012 | |||||||||||||||||||||||||||
| Interest expense, net | 106,414 | (14 | ) | (21 | ) | 3 | (70 | ) | (52 | ) | 52 | - | 371 | - | 106,683 | ||||||||||||||||||||||||||
| Intercompany interest | (157,585 | ) | 13,366 | 20,125 | 56,013 | 17,916 | 10,552 | 9,255 | 10,771 | 7,121 | 12,466 | - | |||||||||||||||||||||||||||||
| Depreciation and amortization | 677 | 22,734 | 21,594 | 10,334 | 21,318 | 18,974 | 8,042 | 21,553 | 9,265 | 18,473 | 152,964 | ||||||||||||||||||||||||||||||
| EBITDA | (88,223 | ) | 61,246 | 67,451 | 192,044 | 24,848 | 16,819 | (30,692 | ) | 40,239 | 16,774 | 50,451 | 350,957 | ||||||||||||||||||||||||||||
| Other (income) expense | 462 | 40 | 511 | 219 | 181 | 3 | 24,557 | 2,746 | (9 | ) | (590 | ) | 28,120 | ||||||||||||||||||||||||||||
| Non-controlling shareholder compensation | - | 2,129 | 5,683 | 2,437 | 2,382 | 1,674 | 403 | 988 | 18 | 631 | 16,345 | ||||||||||||||||||||||||||||||
| Impairment expense | - | - | - | - | - | 8,182 | - | - | - | 8,182 | |||||||||||||||||||||||||||||||
| Acquisition expenses | - | - | - | - | - | 3,479 | - | 1,872 | - | - | 5,351 | ||||||||||||||||||||||||||||||
| Integration services fee | - | - | - | - | - | 2,625 | - | - | - | - | 2,625 | ||||||||||||||||||||||||||||||
| Other | - | - | - | - | - | 90 | 1,500 | 696 | 10,426 | 476 | 13,188 | ||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (87,761 | ) | $ | 63,415 | $ | 73,645 | $ | 194,700 | $ | 27,411 | $ | 24,690 | $ | 3,950 | $ | 46,541 | $ | 27,209 | $ | 50,968 | $ | 424,768 | ||||||||||||||||||
| Compass Diversified Holdings Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation Year ended December 31, 2023 (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | Corporate | 5.11 | BOA | Lugano | PrimaLoft | Velocity Outdoor | Altor Solutions | Arnold | Sterno | Consolidated | ||||||||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | (60,454 | ) | $ | 21,690 | $ | 16,496 | $ | 52,315 | $ | (69,883 | ) | $ | (40,045 | ) | $ | 16,504 | $ | 10,434 | $ | 8,115 | $ | (44,828 | ) | ||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 301 | 4,994 | 2,863 | 14,589 | (5,673 | ) | (5,616 | ) | 5,890 | 4,185 | 1,106 | 22,639 | ||||||||||||||||||||||||||
| Interest expense, net | 104,855 | (8 | ) | (18 | ) | 4 | (11 | ) | 352 | - | 5 | - | 105,179 | |||||||||||||||||||||||||
| Intercompany interest | (126,240 | ) | 20,244 | 7,580 | 32,837 | 18,123 | 13,510 | 10,486 | 6,806 | 16,654 | - | |||||||||||||||||||||||||||
| Depreciation and amortization | 1,498 | 26,009 | 22,932 | 9,229 | 21,478 | 13,282 | 16,741 | 8,441 | 19,959 | 139,569 | ||||||||||||||||||||||||||||
| EBITDA | (80,040 | ) | 72,929 | 49,853 | 108,974 | (35,966 | ) | (18,517 | ) | 49,621 | 29,871 | 45,834 | 222,559 | |||||||||||||||||||||||||
| Other (income) expense | (128 | ) | (515 | ) | 98 | (80 | ) | 62 | (1,210 | ) | 1,440 | (5 | ) | (1,441 | ) | (1,779 | ) | |||||||||||||||||||||
| Non-controlling shareholder compensation | - | 1,191 | 3,019 | 1,474 | 980 | 914 | 986 | 27 | 860 | 9,451 | ||||||||||||||||||||||||||||
| Impairment expense | - | - | - | - | 57,810 | 31,590 | - | - | - | 89,400 | ||||||||||||||||||||||||||||
| Integration services fee | - | - | - | - | 2,375 | - | - | - | - | 2,375 | ||||||||||||||||||||||||||||
| Other | - | - | 3,072 | - | - | - | - | - | 1,434 | 4,506 | ||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (80,168 | ) | $ | 73,605 | $ | 56,042 | $ | 110,368 | $ | 25,261 | $ | 12,777 | $ | 52,047 | $ | 29,893 | $ | 46,687 | $ | 326,512 | |||||||||||||||||
| Compass Diversified Holdings Adjusted EBITDA (Unaudited) | ||||||||||||||||
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Branded Consumer | ||||||||||||||||
| 5.11 | $ | 11,004 | $ | 21,320 | $ | 63,415 | $ | 73,605 | ||||||||
| BOA | 17,152 | 14,022 | 73,645 | 56,042 | ||||||||||||
| Lugano | 65,841 | 37,662 | 194,700 | 110,368 | ||||||||||||
| PrimaLoft | 3,077 | 1,745 | 27,411 | 25,261 | ||||||||||||
| The Honey Pot Co. (1) | 5,962 | - | 24,690 | - | ||||||||||||
| Velocity Outdoor | 1,420 | 3,144 | 3,950 | 12,777 | ||||||||||||
| Total Branded Consumer | $ | 104,456 | $ | 77,893 | $ | 387,811 | $ | 278,053 | ||||||||
| Industrial | ||||||||||||||||
| Altor Solutions | $ | 15,948 | $ | 13,968 | $ | 46,541 | $ | 52,047 | ||||||||
| Arnold Magnetics | 4,687 | 8,351 | 27,209 | 29,893 | ||||||||||||
| Sterno | 15,784 | 12,299 | 50,968 | 46,687 | ||||||||||||
| Total Industrial | $ | 36,419 | $ | 34,618 | $ | 124,718 | $ | 128,627 | ||||||||
| Corporate expense | (22,695 | ) | (20,874 | ) | (87,761 | ) | (80,168 | ) | ||||||||
| Total Adjusted EBITDA | $ | 118,180 | $ | 91,637 | $ | 424,768 | $ | 326,512 | ||||||||
| (1 | ) | The above results for The Honey Pot Co. do not include management's estimate of Adjusted EBITDA, before the Company's ownership of $3.9 million for the year ended December 31, 2024, and $7.8 million and $28.7 million, respectively, for the three months and year ended December 31, 2023. The Honey Pot Co. was acquired on January 31, 2024. | |
| Compass Diversified Holdings Net Sales to Pro Forma Net Sales Reconciliation (unaudited) | ||||||||||||
| Three months ended December 31, | Year ended December 31, | |||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Net Sales | $ | 620,255 | $ | 544,915 | $ | 2,198,233 | $ | 1,965,017 | ||||
| Acquisitions (1) | - | 24,905 | 10,671 | 107,311 | ||||||||
| Pro Forma Net Sales | $ | 620,255 | $ | 569,820 | $ | 2,208,904 | $ | 2,072,328 | ||||
| (1 | ) | Acquisitions reflects the net sales for The Honey Pot Co. on a proforma basis as if we had acquired this business on January 1, 2023. | |
| Compass Diversified Holdings Subsidiary Pro Forma Net Sales (unaudited) | ||||||||||||
| Three months ended December 31, | Year ended December 31, | |||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Branded Consumer | ||||||||||||
| 5.11 | $ | 144,768 | $ | 147,394 | $ | 532,161 | $ | 533,089 | ||||
| BOA | 48,141 | 42,435 | 190,811 | 155,825 | ||||||||
| Lugano | 149,685 | 104,750 | 470,666 | 308,321 | ||||||||
| PrimaLoft | 12,708 | 9,434 | 74,226 | 67,053 | ||||||||
| The Honey Pot (1) | 28,697 | 24,905 | 115,260 | 107,311 | ||||||||
| Velocity Outdoor | 19,008 | 45,842 | 96,427 | 172,190 | ||||||||
| Total Branded Consumer | $ | 403,007 | $ | 374,760 | $ | 1,479,551 | $ | 1,343,789 | ||||
| Industrial | ||||||||||||
| Altor Solutions | 81,322 | 56,417 | 239,068 | 238,030 | ||||||||
| Arnold Magnetics | 41,292 | 44,632 | 171,837 | 166,679 | ||||||||
| Sterno | 94,634 | 94,011 | 318,448 | 323,830 | ||||||||
| Total Industrial | $ | 217,248 | $ | 195,060 | $ | 729,353 | $ | 728,539 | ||||
| Total Subsidiary Net Sales | $ | 620,255 | $ | 569,820 | $ | 2,208,904 | $ | 2,072,328 | ||||
| (1 | ) | Net sales for The Honey Pot are pro forma as if we had acquired this business on January 1, 2023. | |
Compass Diversified Holdings
Condensed Consolidated Cash Flows
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net cash provided by (used in) operating activities | $ | 9,974 | $ | 21,128 | $ | (67,636 | ) | $ | 78,080 | |||||||
| Net cash provided by (used in) investing activities | (70,199 | ) | 466,213 | (422,450 | ) | 570,503 | ||||||||||
| Net cash provided by (used in) financing activities | 49,732 | (102,236 | ) | 100,614 | (260,163 | ) | ||||||||||
| Foreign currency impact on cash | (1,727 | ) | 636 | (1,278 | ) | 786 | ||||||||||
| Net increase (decrease) in cash and cash equivalents | (12,220 | ) | 385,741 | (390,750 | ) | 389,206 | ||||||||||
| Cash and cash equivalents - beginning of the period(1) | 71,947 | 64,736 | 450,477 | 61,271 | ||||||||||||
| Cash and cash equivalents - end of the period | $ | 59,727 | $ | 450,477 | $ | 59,727 | $ | 450,477 | ||||||||
| (1 | ) | Includes cash from discontinued operations of $3.8 million at January 1, 2024 and $8.5 million at January 1, 2023. | |
| Compass Diversified Holding | ||||||||||||||||
| Selected Financial Data - Cash Flows | ||||||||||||||||
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Changes in operating assets and liabilities | $ | (37,286 | ) | $ | (24,390 | ) | $ | (292,884 | ) | $ | (160,281 | ) | ||||
| Purchases of property and equipment | $ | (22,858 | ) | $ | (17,239 | ) | $ | (56,701 | ) | $ | (55,016 | ) | ||||
| Distributions paid - common shares | $ | (18,913 | ) | $ | (17,955 | ) | $ | (75,490 | ) | $ | (71,967 | ) | ||||
| Distributions paid - preferred shares | $ | (6,967 | ) | $ | (6,045 | ) | $ | (25,458 | ) | $ | (24,181 | ) | ||||
