• Compass Diversified Reports Third Quarter 2024 Financial Results

    来源: Nasdaq GlobeNewswire / 30 10月 2024 16:15:01   America/New_York

    WESTPORT, Conn., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market businesses, announced today its consolidated operating results for the three months ended September 30, 2024.

    “Despite a dynamic macroeconomic environment, we had another great quarter,” said Elias Sabo, CEO of Compass Diversified. “Our differentiated business model and strong operating companies position us to create long-term value for all stakeholders. In the third quarter, we saw double-digit sales growth driven by continued demand in our Branded Consumer businesses. Our Industrial businesses are stabilizing and delivered low single-digit growth in the quarter. Given our momentum, we are raising our 2024 outlook and believe we are well positioned for growth in 2025 and beyond.”

    Third Quarter 2024 Financial Summary vs. Same Year-Ago Period (where applicable)

    • Net sales up 11.8% to $582.6 million and up 6.6% on a pro forma basis.
    • Branded Consumer net sales up 9.2% on a pro forma basis to $399.2 million.
    • Industrial net sales up 1.2% to $183.4 million.
    • Income from continuing operations of $31.5 million vs. loss from continuing operations of $14.0 million.
    • Net income of $31.5 million vs. net loss of $3.8 million.
    • Adjusted Earnings, a non-GAAP financial measure, up 65% to $48.7 million vs. $29.6 million.
    • Adjusted EBITDA, a non-GAAP financial measure, was up 28% to $114.0 million vs. $89.0 million

    Recent Business Highlights

    • On October 24, 2024, CODI paid a third quarter 2024 cash distribution of $0.25 per share on its common shares.
    • On October 16, 2024, CODI announced a $100 million share repurchase program through December 31, 2024, subject to extension by the Company’s board.
    • On October 1, 2024, Altor Solutions, a subsidiary of CODI and a leading designer and manufacturer of custom protective and cold-chain packaging solutions for the industrial and life sciences markets, completed the acquisition of Lifoam Industries, a manufacturer and distributor of temperature-controlled shipping solutions.
    • On August 26, 2024, CODI announced the appointment of Stephen Keller as Chief Financial Officer.

    Third Quarter 2024 Financial Results

    Net sales in the third quarter of 2024 were $582.6 million, up 11.8% compared to $521.1 million in the third quarter of 2023. This 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 6.6%.

    On a pro forma basis, Branded Consumer net sales increased 9.2% to $399.2 million compared to the third quarter of 2023.

    Industrial net sales increased 1.2% to $183.4 million compared to the third quarter of 2023.

    Operating income for the third quarter of 2024 was $70.3 million compared to $17.4 million in the third quarter of 2023. Operating income in the third quarter of 2024 reflected higher gross profit at the Company’s Branded Consumer businesses, offset by increased SG&A and amortization expense from the acquisition of The Honey Pot Co. in the first quarter of 2024.

    Income from continuing operations in the third quarter of 2024 was $31.5 million compared to a loss from continuing operations of $14.0 million in the third quarter of 2023, primarily driven by strong growth at Lugano and BOA and the Company’s acquisition of The Honey Pot Co. in January 2024. In the prior year, the Company recognized an impairment charge of $32.6 million at Velocity that drove the loss in the third quarter.

    Net income in the third quarter of 2024 was $31.5 million compared to a net loss of $3.8 million in the third quarter of 2023.

    Adjusted Earnings (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the third quarter of 2024 increased 65% to $48.7 million compared to $29.6 million a year ago. CODI's weighted average number of shares outstanding in the third quarter of 2024 was 75.65 million compared to 71.88 million in the prior year third quarter.

    Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) in the third quarter of 2024 was $114.0 million, up 28% compared to $89.0 million in the third quarter of 2023. The increase was primarily due to strong results at Lugano and BOA, and the addition of The Honey Pot Co. in the first quarter of 2024. Management fees incurred during the third quarter were $18.8 million.

    Liquidity and Capital Resources

    As of September 30, 2024, CODI had approximately $71.9 million in cash and cash equivalents, $110 million outstanding on its revolver, $377.5 million outstanding in term loans, $1 billion outstanding in 5.250% Senior Notes due 2029 and $300 million outstanding in 5.000% Senior Notes due 2032.

    As of September 30, 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.

    Third Quarter 2024 Distributions

    On October 3, 2024, CODI’s board of directors declared a third quarter distribution of $0.25 per share on the Company's common shares. The cash distribution was paid on October 24, 2024, to all holders of record of common shares as of October 17, 2024.

    The board also declared a quarterly cash 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 covers the period from, and including, July 30, 2024, up to, but excluding, October 30, 2024. The distribution for such period was payable on October 30, 2024, to all holders of record of Series A Preferred Shares as of October 15, 2024.

    The board also declared a quarterly cash 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 covers the period from, and including, July 30, 2024, up to, but excluding, October 30, 2024. The distribution for such period was payable on October 30, 2024, to all holders of record of Series B Preferred Shares as of October 15, 2024.

    The board also declared a quarterly cash 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 covers the period from, and including, July 30, 2024, up to, but excluding, October 30, 2024. The distribution for such period was payable on October 30, 2024, to all holders of record of Series C Preferred Shares as of October 15, 2024.

    2024 Outlook

    As a result of CODI’s strong financial performance in the third quarter, the Company is raising its Adjusted EBITDA and Adjusted Earnings outlook (see “Note Regarding Use of Non-GAAP Financial Measures” below). For the full year 2024, CODI now expects consolidated pro-forma subsidiary Adjusted EBITDA of between $510 million and $525 million. This is inclusive of The Honey Pot Co. as if it was owned from January 1, 2024.

    Of this range, CODI now expects its Branded Consumer vertical to deliver between $390 million to $400 million and its Industrial vertical to deliver between $120 million to $125 million. These estimates are based on the summation of the Company’s expectations for its current subsidiaries in 2024, absent additional acquisitions or divestitures, and excludes corporate expenses such as interest expense, management fees paid by CODI and corporate overhead.

    CODI expects to earn Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below), which includes management fees and corporate expenses, of between $420 million and $435 million for the full year 2024. Adjusted EBITDA only includes results from The Honey Pot Co. from the date of acquisition.

    The Company further expects Adjusted Earnings to be between $155 million and $165 million (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the full year 2024.

    In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, CODI has not reconciled 2024 subsidiary Adjusted EBITDA, 2024 Adjusted EBITDA or 2024 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

    In conjunction with this announcement, CODI will host a conference call on October 30, 2024, at 5:00 p.m. E.T. / 2:00 p.m. PT 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.

    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 industrial, branded consumer and healthcare 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 2024 Subsidiary Adjusted EBITDA, our 2024 Adjusted EBITDA, our 2024 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 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 and interest rates; risks associated with possible disruption in CODI’s operations or the economy generally due to terrorism, war, natural disasters or social, civil and political unrest; 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
     
        
     September 30, 2024 December 31, 2023
    (in thousands)(Unaudited)  
    Assets   
    Current assets   
    Cash and cash equivalents$71,948 $450,477
    Accounts receivable, net 412,688  318,241
    Inventories, net 939,361  740,387
    Prepaid expenses and other current assets 100,550  94,715
    Total current assets 1,524,547  1,603,820
    Property, plant and equipment, net 186,555  192,562
    Goodwill 1,004,084  901,428
    Intangible assets, net 1,062,425  923,905
    Other non-current assets 183,803  195,266
    Total assets$3,961,414 $3,816,981
        
    Liabilities and stockholders’ equity   
    Current liabilities   
    Accounts payable and accrued expenses$293,267 $250,868
    Due to related party 18,116  16,025
    Current portion, long-term debt 12,500  10,000
    Other current liabilities 37,337  35,465
    Total current liabilities 361,220  312,358
    Deferred income taxes 135,777  120,131
    Long-term debt 1,763,687  1,661,879
    Other non-current liabilities 198,849  203,232
    Total liabilities 2,459,533  2,297,600
    Stockholders' equity   
    Total stockholders' equity attributable to Holdings 1,236,965  1,326,750
    Noncontrolling interest 264,916  192,631
    Total stockholders' equity 1,501,881  1,519,381
    Total liabilities and stockholders’ equity$3,961,414 $3,816,981
        


    Compass Diversified Holdings
    Consolidated Statements of Operations
    (Unaudited)
     
     Three Months Ended September 30, Nine Months Ended September 30,
    (in thousands, except per share data) 2024   2023   2024   2023 
    Net sales$582,623  $521,065  $1,649,508  $1,491,887 
    Cost of sales 308,045   295,754   873,989   844,871 
    Gross profit 274,578   225,311   775,519   647,016 
    Operating expenses:       
    Selling, general and administrative expense 158,754   132,944   460,914   396,963 
    Management fees 18,758   18,471   55,689   51,536 
    Amortization expense 26,798   23,955   80,547   71,906 
    Impairment expense    32,568   8,182   32,568 
    Operating income 70,268   17,373   170,187   94,043 
    Other income (expense):       
    Interest expense, net (27,358)  (27,560)  (77,494)  (80,353)
    Amortization of debt issuance costs (1,005)  (1,005)  (3,014)  (3,034)
    Gain (loss) on sale of Crosman 388      (24,218)   
    Other income (expense), net (78)  1,045   (4,327)  2,100 
    Net income (loss) from continuing operations before income taxes 42,215   (10,147)  61,134   12,756 
    Provision for income taxes 10,754   3,837   40,960   15,077 
    Income (loss) from continuing operations 31,461   (13,984)  20,174   (2,321)
    Income from discontinued operations, net of income tax    8,950      21,790 
    Gain on sale of discontinued operations    1,274   3,345   103,495 
    Net income (loss) 31,461   (3,760)  23,519   122,964 
    Less: Net income from continuing operations attributable to noncontrolling interest 9,397   5,721   22,632   13,390 
    Less: Net income from discontinued operations attributable to noncontrolling interest    673      725 
    Net income (loss) attributable to Holdings$22,064  $(10,154) $887  $108,849 
            
    Amounts attributable to Holdings       
    Income (loss) from continuing operations$22,064  $(19,705) $(2,458) $(15,711)
    Income from discontinued operations    8,277      21,065 
    Gain on sale of discontinued operations, net of income tax    1,274   3,345   103,495 
    Net income (loss) attributable to Holdings$22,064  $(10,154) $887  $108,849 
            
    Basic income (loss) per common share attributable to Holdings       
    Continuing operations$0.08  $(0.45) $(1.18) $(1.00)
    Discontinued operations    0.12   0.04   1.69 
     $0.08  $(0.33) $(1.14) $0.69 
            
    Basic weighted average number of common shares outstanding 75,645   71,881   75,437   71,996 
            
    Cash distributions declared per Trust common share$0.25  $0.25  $0.75  $0.75 
     


    Compass Diversified Holdings
    Net Income (Loss) to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA
    (Unaudited)
     
     Three Months Ended September 30, Nine Months Ended September 30,
    (in thousands) 2024   2023   2024   2023 
    Net income (loss)$31,461  $(3,760) $23,519  $122,964 
    Income from discontinued operations, net of tax    8,950      21,790 
    Gain on sale of discontinued operations, net of tax    1,274   3,345   103,495 
    Net income (loss) from continuing operations$31,461  $(13,984) $20,174  $(2,321)
    Less: income from continuing operations attributable to noncontrolling interest 9,397   5,721   22,632   13,390 
    Net income (loss) attributable to Holdings - continuing operations$22,064  $(19,705) $(2,458) $(15,711)
    Adjustments:       
    Distributions paid - preferred shares (6,345)  (6,045)  (18,491)  (18,136)
    Amortization expense - intangibles and inventory step up 26,798   23,956   84,553   73,081 
    Impairment expense    32,568   8,182   32,568 
    Tax effect - impairment expense    (4,308)     (4,308)
    (Gain) loss on sale of Crosman (388)     24,218    
    Tax effect - loss on sale of Crosman       7,254    
    Stock compensation 4,769   2,750   13,026   7,598 
    Acquisition expenses       3,479    
    Integration services fee 875      1,750   2,375 
    Other 963   349   1,368   1,129 
    Adjusted Earnings$48,736  $29,565  $122,881  $78,596 
    Plus (less):       
    Depreciation expense 10,366   11,994   31,763   35,255 
    Income tax provision 10,754   3,837   40,960   15,077 
    Interest expense 27,357   27,560   77,494   80,353 
    Amortization of debt issuance costs 1,005   1,005   3,014   3,034 
    Tax effect - loss on sale of Crosman      (7,254)   
    Income from continuing operations attributable to noncontrolling interest 9,397   5,721   22,632   13,390 
    Distributions paid - preferred shares 6,345   6,045   18,491   18,136 
    Other (income) expense 79   (1,045)  4,327   (2,100)
    Adjusted EBITDA$114,039  $88,990  $314,308  $246,049 
     


    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Three Months Ended September 30, 2024
    (Unaudited)
     
      Corporate  5.11  BOA Ergobaby Lugano PrimaLoft THP Velocity Outdoor Altor Arnold Sterno Consolidated
    Income (loss) from continuing operations $(8,715) $9,737  $3,902  $(3,229) $24,272  $(4,273) $(160) $1,831  $2,682 $2,260 $3,154  $31,461 
    Adjusted for:                        
    Provision (benefit) for income taxes     1,782   1,451   136   8,342   (2,315)  (20)  (2,223)  1,466  1,196  939   10,754 
    Interest expense, net  27,238   (2)  (4)        (10)  (3)  (1)    139     27,357 
    Intercompany interest  (41,375)  3,334   4,925   2,116   15,080   4,480   2,907   2,038   1,735  1,816  2,944    
    Depreciation and amortization  118   5,617   5,402   2,053   2,699   5,337   4,166   1,397   4,080  2,340  4,960   38,169 
    EBITDA  (22,734)  20,468   15,676   1,076   50,393   3,219   6,890   3,042   9,963  7,751  11,997   107,741 
    Other (income) expense     13   (110)  17   (68)  1   25   (164)  58    (81)  (309)
    Noncontrolling shareholder compensation     544   1,504   232   459   828   540   186   237  4  235   4,769 
    Integration services fee                    875             875 
    Other                            880  83   963 
    Adjusted EBITDA $(22,734) $21,025  $17,070  $1,325  $50,784  $4,048  $8,330  $3,064  $10,258 $8,635 $12,234  $114,039 
     


    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Three Months Ended September 30, 2023
    (Unaudited)
     
                           
      Corporate  5.11  BOA Ergobaby Lugano PrimaLoft Velocity Outdoor Altor Arnold Sterno Consolidated
    Income (loss) from continuing operations $(13,750) $5,834  $4,257  $(261) $14,584 $(4,893) $(28,881) $5,042  $2,103 $1,981  $(13,984)
    Adjusted for:                      
    Provision (benefit) for income taxes     1,920   865   (620)  4,210  (2,566)  (2,951)  1,460   876  643   3,837 
    Interest expense, net  27,525   (2)  (4)       (3)  38      6     27,560 
    Intercompany interest  (34,708)  5,477   1,571   2,144   8,930  4,635   3,633   2,549   1,706  4,063    
    Depreciation and amortization  380   6,573   5,930   2,033   2,081  5,361   3,272   4,215   2,126  4,984   36,955 
    EBITDA  (20,553)  19,802   12,619   3,296   29,805  2,534   (24,889)  13,266   6,817  11,671   54,368 
    Other (income) expense     98   (63)     71  (9)  (425)  (362)  8  (363)  (1,045)
    Noncontrolling shareholder compensation     258   736   312   472  262   228   234   8  240   2,750 
    Impairment expense                   32,568           32,568 
    Other                           349   349 
    Adjusted EBITDA $(20,553) $20,158  $13,292  $3,608  $30,348 $2,787  $7,482  $13,138  $6,833 $11,897  $88,990 
     


    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Nine Months Ended September 30, 2024
    (Unaudited)
                             
      Corporate  5.11  BOA Ergobaby Lugano PrimaLoft THP Velocity Outdoor Altor Arnold Sterno Consolidated
    Income (loss) from continuing operations $(21,151) $18,594  $16,248  $(6,337) $59,257  $(5,261) $(7,764) $(53,368) $6,076 $6,169  $7,711  $20,174
    Adjusted for:                        
    Provision (benefit) for income taxes     4,792   3,920   516   20,010   (1,731)  (2,589)  7,074   3,192  3,182   2,594   40,960
    Interest expense, net  77,280   (3)  (16)     3   (15)  (28)  53     220      77,494
    Intercompany interest  (122,209)  10,114   15,716   6,364   40,417   13,526   7,827   7,620   5,612  5,313   9,700   
    Depreciation and amortization  552   17,198   16,251   6,427   7,571   15,987   14,811   6,679   12,250  6,754   14,850   119,330
    EBITDA  (65,528)  50,695   52,119   6,970   127,258   22,506   12,257   (31,942)  27,130  21,638   34,855   257,958
    Other (income) expense  462   86   22   12   (61)  5   (5)  25,734   2,722  (9)  (423)  28,545
    Non-controlling shareholder compensation     1,630   4,352   738   1,662   1,823   1,157   556   741  13   354   13,026
    Impairment expense                       8,182           8,182
    Acquisition expenses                    3,479              3,479
    Integration services fee                    1,750              1,750
    Other                    90        880   398   1,368
    Adjusted EBITDA $(65,066) $52,411  $56,493  $7,720  $128,859  $24,334  $18,728  $2,530  $30,593 $22,522  $35,184  $314,308
     


    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Nine Months Ended September 30, 2023
    (Unaudited)
                           
      Corporate  5.11  BOA Ergobaby Lugano PrimaLoft Velocity Outdoor Altor Arnold Sterno Consolidated
    Income (loss) from continuing operations $(40,914) $11,850  $15,151  $(1,114) $31,468  $(5,500) $(36,862) $12,244 $6,911  $4,445  $(2,321)
    Adjusted for:                      
    Provision (benefit) for income taxes     3,990   2,224   (1,272)  10,295   (3,125)  (5,905)  4,094  3,264   1,512   15,077 
    Interest expense, net  80,123   (4)  (9)     4   (9)  232     16      80,353 
    Intercompany interest  (99,433)  15,698   5,032   6,484   22,660   13,343   10,070   8,183  5,078   12,885    
    Depreciation and amortization  1,056   19,866   17,436   6,112   6,971   16,084   10,023   12,558  6,248   15,016   111,370 
    EBITDA  (59,168)  51,400   39,834   10,210   71,398   20,793   (22,442)  37,079  21,517   33,858   204,479 
    Other (income) expense  (128)  (103)  117   29   (5)  130   (1,179)  201  (1)  (1,161)  (2,100)
    Non-controlling shareholder compensation     988   2,069   936   1,312   219   686   800  26   562   7,598 
    Impairment expense                    32,568           32,568 
    Integration services fee                 2,375              2,375 
    Other                            1,129   1,129 
    Adjusted EBITDA $(59,296) $52,285  $42,020  $11,175  $72,705  $23,517  $9,633  $38,080 $21,542  $34,388  $246,049 
     


    Compass Diversified Holdings
    Non-GAAP Adjusted EBITDA
    (Unaudited)
            
     Three Months Ended September 30, Nine Months Ended September 30,
    (in thousands) 2024   2023   2024   2023 
            
    Branded Consumer       
    5.11$21,025  $20,158  $52,411  $52,285 
    BOA 17,070   13,292   56,493   42,020 
    Ergobaby 1,325   3,608   7,720   11,175 
    Lugano 50,784   30,348   128,859   72,705 
    PrimaLoft 4,048   2,787   24,334   23,517 
    The Honey Pot Co.(1) 8,330      18,728    
    Velocity Outdoor 3,064   7,482   2,530   9,633 
    Total Branded Consumer$105,646  $77,675  $291,075  $211,335 
            
    Niche Industrial       
    Altor Solutions 10,258   13,138   30,593   38,080 
    Arnold Magnetics 8,635   6,833   22,522   21,542 
    Sterno 12,234   11,897   35,184   34,388 
    Total Niche Industrial$31,127  $31,868  $88,299  $94,010 
    Corporate expense (22,734)  (20,553)  (65,066)  (59,296)
    Total Adjusted EBITDA$114,039  $88,990  $314,308  $246,049 

    (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 nine months ended September 30, 2024, and $5.1 million and $20.9 million, respectively, for the three and nine months ended September 30, 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 September 30, Nine Months Ended September 30,
    (in thousands) 2024  2023  2024  2023
            
    Net Sales$582,623 $521,065 $1,649,508 $1,491,887
    Acquisitions(1)   25,560  10,671  82,447
    Pro Forma Net Sales$582,623 $546,625 $1,660,179 $1,574,334

    (1) Acquisitions reflects the net sales for The Honey Pot Co. on a pro forma basis as if the Company had acquired The Honey Pot Co. on January 1, 2023.


    Compass Diversified Holdings
    Subsidiary Pro Forma Net Sales
    (unaudited)
            
     Three Months Ended September 30, Nine Months Ended September 30,
    (in thousands) 2024  2023  2024  2023
            
    Branded Consumer       
    5.11$139,218 $135,213 $387,393 $385,695
    BOA 45,607  37,281  142,670  113,390
    Ergobaby 21,755  23,218  71,530  71,785
    Lugano 118,584  78,735  320,981  203,571
    PrimaLoft 13,686  10,930  61,518  57,619
    The Honey Pot(1) 31,545  25,560  86,563  82,447
    Velocity Outdoor 28,809  54,469  77,419  126,348
    Total Branded Consumer$399,204 $365,406 $1,148,074 $1,040,855
            
    Niche Industrial       
    Altor Solutions 52,129  59,215  157,746  181,613
    Arnold Magnetics 46,103  41,819  130,545  122,047
    Sterno 85,187  80,185  223,814  229,819
    Total Niche Industrial$183,419 $181,219 $512,105 $533,479
            
    Total Subsidiary Net Sales$582,623 $546,625 $1,660,179 $1,574,334

    (1) Net sales for The Honey Pot Co. are pro forma as if the Company had acquired this business on January 1, 2023.


    Compass Diversified Holdings
    Condensed Consolidated Cash Flows
    (unaudited)
     
     Three Months Ended September 30, Nine Months Ended September 30,
    (in thousands) 2024   2023   2024   2023 
            
    Net cash provided by (used in) operating activities$(29,227) $19,713  $(77,610) $56,952 
    Net cash provided by (used in) investing activities (16,177)  (13,538)  (352,251)  104,291 
    Net cash provided by (used in) financing activities 47,516   (8,308)  50,882   (157,927)
    Foreign currency impact on cash 1,466   (484)  449   150 
    Net increase (decrease) in cash and cash equivalents 3,578   (2,617)  (378,530)  3,466 
    Cash and cash equivalents - beginning of the period(1) 68,370   67,354   450,478   61,271 
    Cash and cash equivalents - end of the period(2)$71,948  $64,737  $71,948  $64,737 

    (1) Includes cash from discontinued operations of $4.7 million at January 1, 2023.

    (2) Includes cash from discontinued operations of $0.1 million at September 30, 2023.


    Compass Diversified Holding
    Selected Financial Data - Cash Flows
    (unaudited)
            
     Three Months Ended September 30, Nine Months Ended September 30,
    (in thousands) 2024   2023   2024   2023 
            
    Changes in operating assets and liabilities$(99,778) $(36,806) $(253,902) $(128,920)
    Purchases of property and equipment$(15,588) $(9,933) $(34,507) $(38,537)
    Distributions paid - common shares$(18,913) $(17,974) $(56,577) $(54,012)
    Distributions paid - preferred shares$(6,345) $(6,045) $(18,491) $(18,136)

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