EX-99.1 2 exhibit991earningsreleaseq.htm EX-99.1 Document

Exhibit 99.1
codilogo2020a02.jpg

Compass Diversified Reports Second Quarter 2023 Financial Results

Westport, Conn., August 2, 2023 – 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 June 30, 2023.
“Our second quarter results were once again driven by the strength and diversification of CODI’s subsidiary businesses,” said Elias Sabo, CEO of Compass Diversified. “The easing of inflationary pressures in our niche industrials businesses drove solid Adjusted EBITDA expansion, and in our consumer businesses, despite inventory destocking headwinds continuing to constrain growth, end-market demand across most of our brands performed at or above our expectations. Given our resilient performance, we remain confident that our diversified group of subsidiaries will continue to drive value for our shareholders in 2023 and beyond.”
Second Quarter 2023 Financial Summary vs. Same Year-Ago Period (where applicable)
•Net sales up 2% and down 3% on a pro forma basis to $524.2 million.
•Branded consumer pro forma net sales down 1% to $348.5 million.
•Niche industrial net sales down 7% to $175.6 million.
•Net income of $17.1 million vs. $31.0 million primarily due to higher SG&A expense, interest and amortization expenses.
•Income from continuing operations of $12.9 million vs. $26.5 million.
•Adjusted Earnings, a non-GAAP financial measure, was $35.6 million vs. $39.3 million.
•Adjusted EBITDA, a non-GAAP financial measure, was up 3% to $90.1 million.
•Paid a second quarter 2023 cash distribution of $0.25 per share on CODI's common shares in July 2023.
Recent Business Highlights
•On April 4, 2023, Marucci Sports, a subsidiary of CODI and leading designer and manufacturer of baseball and fastpitch equipment and apparel, announced the acquisition of Baum Enterprises LLC, a designer and manufacturer of composite wood bats.
•On July 5, 2023, subsequent to quarter-end, CODI announced that Mr. C. Sean Day retired from the Board of Directors of Compass Group Diversified Holdings LLC, effective June 30, 2023. The Board elected Ms. Heidi Locke Simon to fill the vacancy resulting from Mr. Day’s departure from the Board. Ms. Locke Simon’s election became effective as of July 5, 2023.
•On July 17, 2023, subsequent to quarter-end, The Sterno Group, a subsidiary of CODI and manufacturer and marketer of portable food warming systems, creative indoor and outdoor lighting, and home fragrance solutions for the foodservice industry and consumer markets, announced the appointment of Geoffrey Feil as CEO.
Second Quarter 2023 Financial Results
Net sales in the second quarter of 2023 were $524.2 million, up 2% compared to $515.6 million in the second quarter of 2022. The increase was primarily due to the acquisition of PrimaLoft, the strong performance at Lugano and Marucci, partially offset by lower sales at BOA due to inventory destocking in


the footwear industry and lower sales at Velocity in the second quarter of 2023. On a pro forma basis, assuming CODI had acquired PrimaLoft on January 1, 2022, net sales were down 3% in the second quarter of 2023 as compared to prior year.
Branded consumer net sales, pro forma for the PrimaLoft acquisition, decreased 1% in the second quarter of 2023 to $348.5 million compared to the second quarter of 2022. Niche industrial net sales decreased 7% in the second quarter of 2023 to $175.6 million compared to the second quarter of 2022.
Net income in the second quarter of 2023 was $17.1 million compared to $31.0 million in the second quarter of 2022. Net income from continuing operations in the second quarter of 2023 was $12.9 million compared to $26.5 million in the second quarter of 2022. The decrease in net income and net income from continuing operations are due to higher SG&A expense, interest expense, and amortization expense. Operating income for the second quarter of 2023 was $45.1 million compared to $50.3 million in the second quarter of 2022 due to higher SG&A and amortization expenses.
Adjusted Earnings (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the second quarter of 2023 was $35.6 million compared to $39.3 million a year ago. CODI's weighted average number of shares outstanding in the second quarter of 2023 was 71.9 million compared to 70.2 million in the prior year second quarter.
Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) in the second quarter of 2023 was $90.1 million, up 3% compared to $87.4 million in the second quarter of 2022. The increase was primarily due to the acquisition of PrimaLoft. The Company no longer adds back management fees in its calculation of Adjusted EBITDA. Management fees incurred during the second quarter of 2023 were $16.9 million.
Liquidity and Capital Resources
As of June 30, 2023, CODI had approximately $67.4 million in cash and cash equivalents, $92.0 million outstanding on its revolver, $390.0 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 June 30, 2023, the Company had no significant debt maturities until 2027 and had net borrowing availability of approximately $505.8 million under its revolving credit facility.

Second Quarter 2023 Distributions
On July 5, 2023, CODI’s Board of Directors (the “Board”) declared a second quarter distribution of $0.25 per share on the Company's common shares. The cash distribution was paid on July 27, 2023, to all holders of record of common shares as of July 20, 2023.
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, April 30, 2023, up to, but excluding, July 30, 2023. The distribution for such period was payable on July 30, 2023, to all holders of record of Series A Preferred Shares as of July 15, 2023.
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, April 30, 2023, up to, but excluding, July 30, 2023. The distribution for such period was payable on July 30, 2023, to all holders of record of Series B Preferred Shares as of July 15, 2023.
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, April 30, 2023, up to, but excluding, July 30, 2023. The


distribution for such period was payable on July 30, 2023, to all holders of record of Series C Preferred Shares as of July 15, 2023.

2023 Outlook
CODI expects its current subsidiaries to produce consolidated subsidiary Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the full year 2023 of between $430 million and $460 million. This estimate is based on the summation of the Company’s expectations for its current subsidiaries in 2023 and is absent additional acquisitions or divestitures, and excludes corporate expenses such as interest expense, management fees paid by CODI and corporate overhead. For the full year 2023, CODI expects to earn between $110 million and $135 million in Adjusted Earnings (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the full year 2023.
In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, CODI has not reconciled 2023 Adjusted EBITDA or 2023 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 Wednesday, August 2, 2023, at 5:00 p.m. ET to discuss the latest corporate developments and financial results. The dial-in number for callers in the U.S. is (888) 886-7786 and the dial-in number for international callers is (416) 764-8658. The Conference ID is 88847585. The conference call will also be available via a live listen-only webcast and can be accessed through the Investor Relations section of CODI's website. An online replay of the webcast will be available on the same website following the call. Please allow extra time prior to the call to visit the site and download any necessary software that may be needed to listen to the Internet broadcast. A replay of the call will be available through Wednesday, August 9, 2023. To access the replay, please dial (877) 674-7070 in the U.S. and (416) 764-8692 outside the U.S.

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 and provides a measure for evaluating earnings from continuing operations available to common shareholders. We believe Adjusted EBITDA and Adjusted Earnings are also useful in measuring our ability to service debt and other payment obligations.
Pro forma net sales is defined as net sales including the historical net sales relating to the pre-acquisition periods of PrimaLoft, assuming that the Company acquired PrimaLoft on January 1, 2022. 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 2023 Adjusted EBITDA or 2023 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 founding in 1998, and IPO in 2006, CODI has consistently executed on its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the niche 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 2023 Adjusted EBITDA, our 2023 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, 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 divestitures 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:Media:
Compass DiversifiedThe IGB Group
irinquiry@CompassDiversified.comLeon Berman
212.477.8438
lberman@igbir.com
Cody Slach
Gateway Group
949.574.3860
CODI@gateway-grp.com



Compass Diversified Holdings
Condensed Consolidated Balance Sheets
June 30, 2023December 31, 2022
(in thousands)(Unaudited)
Assets
Current assets
Cash and cash equivalents
$67,354 $57,880 
Accounts receivable, net
296,291 331,396 
Inventories, net788,283 728,083 
Prepaid expenses and other current assets
95,245 74,700 
Current assets of discontinued operations— 18,126 
Total current assets
1,247,173 1,210,185 
Property, plant and equipment, net204,804 198,525 
Goodwill1,072,951 1,066,726 
Intangible assets, net1,096,260 1,127,936 
Other non-current assets174,505 166,412 
Non-current assets of discontinued operations— 79,847 
Total assets$3,795,693 $3,849,631 
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses $268,521 $286,643 
Due to related party15,402 15,495 
Current portion, long-term debt10,000 10,000 
Other current liabilities36,951 36,545 
Current liabilities of discontinued operations— 11,148 
Total current liabilities
330,874 359,831 
Deferred income taxes137,466 145,643 
Long-term debt1,757,673 1,824,468 
Other non-current liabilities152,075 141,535 
Non-current liabilities of discontinued operations— 16,192 
Total liabilities
2,378,088 2,487,669 
Stockholders' equity
Total stockholders' equity attributable to Holdings1,176,790 1,136,920 
Noncontrolling interest 240,815 223,509 
Noncontrolling interest of discontinued operations— 1,533 
Total stockholders' equity
1,417,605 1,361,962 
Total liabilities and stockholders’ equity$3,795,693 $3,849,631 



Compass Diversified Holdings
Consolidated Statements of Operations
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands, except per share data)2023202220232022
Net sales$524,159 $515,597 $1,066,387 $1,026,110 
Cost of sales287,269 303,840 591,666 613,538 
Gross profit236,890 211,757 474,721 412,572 
Operating expenses:
Selling, general and administrative expense148,218 125,624 294,383 246,296 
Management fees16,920 14,901 33,315 29,337 
Amortization expense26,677 20,921 53,051 42,026 
Operating income 45,075 50,311 93,972 94,913 
Other income (expense):
Interest expense, net(26,615)(17,519)(52,795)(34,938)
Amortization of debt issuance costs(1,024)(865)(2,029)(1,731)
Other income (expense), net(101)737 1,026 2,773 
Net income from continuing operations before income taxes17,335 32,664 40,174 61,017 
Provision for income taxes4,444 6,132 14,280 16,108 
Income from continuing operations12,891 26,532 25,894 44,909 
Income (loss) from discontinued operations, net of income tax— 5,004 (1,391)10,374 
Gain (loss) on sale of discontinued operations4,232 (579)102,221 5,414 
Net income 17,123 30,957 126,724 60,697 
Less: Net income from continuing operations attributable to noncontrolling interest3,517 3,635 8,498 8,572 
Less: Net income (loss) from discontinued operations attributable to noncontrolling interest— 955 (777)1,996 
Net income attributable to Holdings$13,606 $26,367 $119,003 $50,129 
Amounts attributable to Holdings
Income from continuing operations$9,374 $22,897 $17,396 $36,337 
Income (loss) from discontinued operations— 4,049 (614)8,378 
Gain (loss) on sale of discontinued operations, net of income tax4,232 (579)102,221 5,414 
Net income attributable to Holdings$13,606 $26,367 $119,003 $50,129 
Basic income (loss) per common share attributable to Holdings
Continuing operations$(0.41)$0.13 $(0.43)$0.19 
Discontinued operations0.06 0.04 1.41 0.18 
$(0.35)$0.17 $0.98 $0.37 
Basic weighted average number of common shares outstanding71,932 70,227 72,055 69,804 
Cash distributions declared per Trust common share$0.25 $0.25 $0.50 $0.50 


Compass Diversified Holdings
Net Income (Loss) to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA
(Unaudited)


Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Net income $17,123 $30,957 $126,724 $60,697 
Income (loss) from discontinued operations, net of tax— 5,004 (1,391)10,374 
Gain (loss) on sale of discontinued operations, net of tax4,232 (579)102,221 5,414 
Income from continuing operations$12,891 $26,532 $25,894 $44,909 
Less: income from continuing operations attributable to noncontrolling interest3,517 3,635 8,498 8,572 
Net income attributable to Holdings - continuing operations$9,374 $22,897 $17,396 $36,337 
Adjustments:
Distributions paid - preferred shares(6,046)(6,046)(12,091)(12,091)
Amortization expense - intangibles and inventory step up26,677 22,471 54,185 45,837 
Stock compensation3,666 2,680 5,711 5,361 
Acquisition expenses364 — 364 216 
Integration services fee1,188 563 2,375 1,125 
Held for sale corporate tax impact— (4,338)— (4,338)
 Other348 1,027 780 2,829 
Adjusted Earnings$35,571 $39,254 $68,720 $75,276 
Plus (less):
Depreciation expense12,765 10,355 24,574 20,282 
Income tax provision4,444 6,132 14,280 16,108 
Held for sale corporate tax impact— 4,338 — 4,338 
Interest expense26,615 17,519 52,795 34,938 
Amortization of debt issuance costs1,024 865 2,029 1,731 
Income from continuing operations attributable to noncontrolling interest3,517 3,635 8,498 8,572 
Distributions paid - preferred shares6,046 6,046 12,091 12,091 
Other (income) expense101 (737)(1,026)(2,773)
Adjusted EBITDA$90,083 $87,407 $181,961 $170,563 




Compass Diversified Holdings
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Three Months Ended June 30, 2023
(Unaudited)




Corporate5.11BOAErgobabyLuganoMarucci SportsPrimaLoftVelocity OutdoorAltor ArnoldSternoConsolidated
Income (loss) from continuing operations$(10,517)$3,866 $5,526 $382 $6,916 $405 $620 $(3,480)$4,501 $2,503 $2,169 $12,891 
Adjusted for:
Provision (benefit) for income taxes— 1,344 737 (101)2,698 124 (2,508)(1,499)1,540 1,348 761 4,444 
Interest expense, net26,547 (1)(3)— — 1 (4)70 — 5 — 26,615 
Intercompany interest(35,647)5,422 1,669 2,191 7,446 2,389 4,386 3,309 2,760 1,723 4,352 — 
Depreciation and amortization 315 6,841 5,813 2,040 2,040 3,404 5,363 3,364 4,178 2,103 5,005 40,466 
EBITDA(19,302)17,472 13,742 4,512 19,100 6,323 7,857 1,764 12,979 7,682 12,287 84,416 
Other (income) expense(1)(124)66 29 (76)(3)243 (79)359 (7)(306)101 
Non-controlling shareholder compensation— 478 669 312 445 459 665 228 250 9 151 3,666 
Acquisition expenses— — — — — 364 — — — — — 364 
Integration services fee— — — — — — 1,188 — — — — 1,188 
Other— — — — — — — — — — 348 348 
Adjusted EBITDA
$(19,303)$17,826 $14,477 $4,853 $19,469 $7,143 $9,953 $1,913 $13,588 $7,684 $12,480 $90,083 





Compass Diversified Holdings
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Three Months Ended June 30, 2022
(Unaudited)


Corporate5.11BOAErgobabyLuganoMarucci SportsVelocity OutdoorAltor ArnoldSternoConsolidated
Income (loss) from continuing operations$(9,790)$6,990 $13,988 $1,604 $5,282 $(1,990)$2,434 $2,448 $2,782 $2,784 $26,532 
Adjusted for:
Provision (benefit) for income taxes(4,338)2,274 2,566 443 1,802 (794)754 1,043 1,219 1,163 6,132 
Interest expense, net17,466 (16)(7)1 4 9 55 — 7 — 17,519 
Intercompany interest(20,460)3,078 1,798 1,476 2,453 1,320 2,137 2,558 1,278 4,362 — 
Depreciation and amortization 301 5,584 5,451 2,020 3,048 2,865 3,292 4,140 1,903 5,087 33,691 
EBITDA(16,821)17,910 23,796 5,544 12,589 1,410 8,672 10,189 7,189 13,396 83,874 
Other (income) expense— (68)45 — — (18)(26)(203)— (467)(737)
Non-controlling shareholder compensation— 418 633 379 204 276 251 267 12 240 2,680 
Integration services fee— — — — 563 — — — — — 563 
Other— — — 250 — — — — — 777 1,027 
Adjusted EBITDA
$(16,821)$18,260 $24,474 $6,173 $13,356 $1,668 $8,897 $10,253 $7,201 $13,946 $87,407 





Compass Diversified Holdings
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Six Months Ended June 30, 2023
(Unaudited)



Corporate5.11BOAErgobabyLuganoMarucci SportsPrimaLoftVelocity OutdoorAltor ArnoldSternoConsolidated
Income (loss) from continuing operations$(22,352)$6,016 $10,894 $(853)$16,884 $9,419 $(607)$(7,981)$7,202 $4,808 $2,464 $25,894 
Adjusted for:
Provision (benefit) for income taxes— 2,070 1,359 (652)6,085 3,040 (559)(2,954)2,634 2,388 869 14,280 
Interest expense, net52,598 (2)(5)— 4 2 (6)194 — 10 — 52,795 
Intercompany interest(69,453)10,221 3,461 4,340 13,730 4,728 8,708 6,437 5,634 3,372 8,822 — 
Depreciation and amortization 594 13,293 11,506 4,079 4,890 6,455 10,723 6,751 8,343 4,122 10,032 80,788 
EBITDA(38,613)31,598 27,215 6,914 41,593 23,644 18,259 2,447 23,813 14,700 22,187 173,757 
Other (income) expense(128)(201)180 29 (76)29 139 (754)563 (9)(798)(1,026)
Non-controlling shareholder compensation— 730 1,333 624 840 863 (43)458 566 18 322 5,711 
Acquisition expenses— — — — — 364 — — — — — 364 
Integration services fee— — — — — — 2,375 — — — — 2,375 
Other— — — — — — — — — — 780 780 
Adjusted EBITDA
$(38,741)$32,127 $28,728 $7,567 $42,357 $24,900 $20,730 $2,151 $24,942 $14,709 $22,491 $181,961 




Compass Diversified Holdings
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Six Months Ended June 30, 2022
(Unaudited)



Corporate5.11BOAErgobabyLuganoMarucci SportsVelocity OutdoorAltor ArnoldSternoConsolidated
Income (loss) from continuing operations$(24,771)$9,635 $28,187 $125 $13,776 $4,144 $3,147 $4,384 $3,742 $2,540 $44,909 
Adjusted for:
Provision (benefit) for income taxes(4,338)3,093 5,043 842 4,697 1,212 956 2,102 2,231 270 16,108 
Interest expense, net34,834 10 (12)2 9 10 72 — 13 — 34,938 
Intercompany interest(39,735)5,998 3,826 2,263 4,578 2,837 3,990 5,023 2,545 8,675 — 
Depreciation and amortization 637 11,038 10,768 4,028 5,302 7,054 6,561 8,130 4,129 10,203 67,850 
EBITDA(33,373)29,774 47,812 7,260 28,362 15,257 14,726 19,639 12,660 21,688 163,805 
Other (income) expense— (616)95 4 2 (1,828)183 109 — (722)(2,773)
Non-controlling shareholder compensation— 829 1,268 792 444 552 502 535 25 414 5,361 
Acquisition expenses— — — — — — — 216 — — 216 
Integration services fee— — — — 1,125 — — — — — 1,125 
Other— — — 250 — 1,802 — — 777 2,829 
Adjusted EBITDA
$(33,373)$29,987 $49,175 $8,306 $29,933 $15,783 $15,411 $20,499 $12,685 $22,157 $170,563 


Compass Diversified Holdings
Non-GAAP Adjusted EBITDA
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Branded Consumer
5.11 $17,826 $18,260 $32,127 $29,987 
BOA 14,477 24,474 28,728 49,175 
Ergobaby4,853 6,173 7,567 8,306 
Lugano19,469 13,356 42,357 29,933 
Marucci Sports
7,143 1,668 24,900 15,783 
PrimaLoft (1)
9,953 — 20,730 — 
Velocity Outdoor 1,913 8,897 2,151 15,411 
Total Branded Consumer$75,634 $72,828 $158,560 $148,595 
Niche Industrial
Altor Solutions13,588 10,253 24,942 20,499 
Arnold Magnetics7,684 7,201 14,709 12,685 
Sterno 12,480 13,946 22,491 22,157 
Total Niche Industrial$33,752 $31,400 $62,142 $55,341 
Corporate expense
(19,303)(16,821)(38,741)(33,373)
Total Adjusted EBITDA$90,083 $87,407 $181,961 $170,563 

(1)The above results for PrimaLoft do not include management's estimate of Adjusted EBITDA, before the Company's ownership, of $11.6 million and $22.9 million, respectively, for the three and six months ended June 30, 2022. PrimaLoft was acquired on July 12, 2022.




Compass Diversified Holdings
Net Sales to Pro Forma Net Sales Reconciliation
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Net Sales$524,159 $515,597 $1,066,387 $1,026,110 
Acquisitions (1)
— 27,118 — 52,866 
Pro Forma Net Sales$524,159 $542,715 $1,066,387 $1,078,976 
(1) Acquisitions reflects the net sales for PrimaLoft on a pro forma basis as if the Company had acquired PrimaLoft on January 1, 2022.


Compass Diversified Holdings
Subsidiary Pro Forma Net Sales
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Branded Consumer
5.11 $126,030 $120,048 $250,482 $224,071 
BOA 38,123 59,386 76,109 116,196 
Ergobaby26,149 26,506 48,567 46,716 
Lugano 60,949 39,065 124,836 86,084 
Marucci Sports 37,270 27,636 95,565 79,728 
PrimaLoft (1)
22,160 27,118 46,689 52,866 
Velocity Outdoor 37,839 53,846 71,879 105,292 
Total Branded Consumer$348,520 $353,605 $714,127 $710,953 
Niche Industrial
Altor Solutions60,886 66,144 122,398 129,972 
Arnold Magnetics40,138 38,777 80,228 76,942 
Sterno 74,615 84,189 149,634 161,109 
Total Niche Industrial$175,639 $189,110 $352,260 $368,023 
Total Subsidiary Net Sales$524,159 $542,715 $1,066,387 $1,078,976 
(1) Net sales for PrimaLoft are pro forma as if the Company had acquired this business on January 1, 2022.



Compass Diversified Holdings
Condensed Consolidated Cash Flows
(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Net cash provided by (used in) operating activities$21,694 $(1,808)$37,239 $(35,337)
Net cash provided by (used in) investing activities(36,895)(13,946)117,829 (22,238)
Net cash provided by (used in) financing activities28,827 18,049 (149,619)3,597 
Foreign currency impact on cash72 (873)634 (1,132)
Net increase (decrease) in cash and cash equivalents13,698 1,422 6,083 (55,110)
Cash and cash equivalents - beginning of the period53,656 104,201 61,271 160,733 
Cash and cash equivalents - end of the period$67,354 $105,623 $67,354 $105,623 




Compass Diversified Holding
Selected Financial Data - Cash Flows
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Changes in operating assets and liabilities$(33,652)$(63,478)$(65,197)$(159,195)
Purchases of property and equipment$(15,460)$(14,044)$(31,540)$(24,435)
Distributions paid - common shares$(17,987)$(17,511)$(36,038)$(34,863)
Distributions paid - preferred shares$(6,046)$(6,046)$(12,091)$(12,091)