WESTPORT, Conn., Dec. 08, 2025 (GLOBE NEWSWIRE) — Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle-market branded consumer and industrial businesses, today announced the filing of its restated financial results for fiscal years 2022, 2023, and 2024 and the financial information for each of the interim periods included within those years.
“We are pleased to have completed this extensive restatement process. The financial and accounting fraud perpetrated by the former CEO of Lugano Holding, Inc. (“Lugano”) was pervasive, complex and isolated to Lugano. Our restatement is an important step in putting this chapter behind us,” said Elias Sabo, CEO of CODI. “We are focused on reducing our leverage and continuing to execute on the strategy that has made CODI successful since inception: managing and growing high-quality middle-market companies to generate durable, long-term value for our shareholders.”
“Importantly, our eight other subsidiaries were not involved with the events at Lugano and, collectively, continue to perform well. Their execution highlights the strength of these businesses and the resilience of our business model,” Sabo continued. “As a result, we are adjusting our full year 2025 guidance for Subsidiary Adjusted EBITDA to between $330 million and $360 million, which is consistent with our prior guidance, when you exclude Lugano.”
Sabo added, “We are in active discussions with our senior lenders regarding an amendment to our credit agreement that would provide additional relief and flexibility with respect to our current leverage profile and certain other covenants. We currently anticipate announcing an amendment in the coming weeks.”
In the coming weeks CODI also expects to file 2025 first, second and third quarter financial results on Form 10-Q, which will bring the Company back into compliance with the Securities and Exchange Commission’s annual and quarterly filing requirements.
Note Regarding Use of Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP measure used by the Company to assess its performance. We have reconciled Adjusted EBITDA to Income (Loss) from Continuing Operations on the attached schedules. We consider Income (Loss) from Continuing Operations to be the most directly comparable GAAP financial measure to Adjusted EBITDA. We believe that Adjusted EBITDA provides useful information to investors and reflects important financial measures as it 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 Income (Loss) from Continuing Operations, Adjusted EBITDA is limited in that it does 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.
In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, we have not reconciled 2025 Subsidiary Adjusted EBITDA to its comparable GAAP measure because we do not provide guidance on Net Income (Loss) from Continuing Operations 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 is 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.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, CODI’s expectations with respect to the timing of its delinquent financial statements, CODI’s expectations regarding its future performance, liquidity and leverage, the future performance of CODI’s subsidiaries, potential amendments to CODI’s credit agreement and potential relief granted by CODI’s lenders and the filing or delay of CODI’s periodic reports. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believe,” “expect,” “may,” “could,” “would,” “plan,” “intend,” “estimate,” “predict,” “potential,” “continue,” “should” or “anticipate” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. These statements are based on beliefs and assumptions by CODI’s Board of Directors and management, and on information currently available to CODI’s Board of Directors and management. These statements involve risk and uncertainties that could cause CODI’s actual results and outcomes to differ, perhaps materially, including but not limited to: the discovery of additional information relevant to the Lugano investigation; a further material delay in CODI’s financial reporting or ability to hold an annual meeting of stockholders; the impacts of restatement; CODI’s ability to regain compliance with NYSE continued listing requirements; the cooperation of, and future concessions granted by, CODI’s lenders; control deficiencies identified or that may be identified in the future that will result in material weaknesses in CODI’s internal control over financial reporting; and litigation relating to the investigation, including CODI’s representations regarding its financial statements, and current and future litigation, enforcement actions or investigations relating to CODI’s internal controls, restatement reviews, the Lugano investigation or related matters. Please see CODI’s Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2024 filed with the SEC on December 8, 2025 for other risk factors that you should consider in connection with such forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date such statements have been made. Except as required by law, CODI does not undertake any public obligation to update any forward-looking statements to reflect events, circumstances, or new information after the date of this press release, or to reflect the occurrence of unanticipated events.
Investor Relations
Compass Diversified
irinquiry@compassdiversified.com
|
Compass Diversified Holdings |
||||||||
|
|
|
|||||||
|
(in thousands) |
December 31, 2024 |
|
December 31, 2023 |
|
||||
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
59,659 |
|
|
$ |
446,616 |
|
|
|
Accounts receivable, net |
|
207,172 |
|
|
|
185,237 |
|
|
|
Inventories, net |
|
571,248 |
|
|
|
522,509 |
|
|
|
Prepaid expenses and other current assets |
|
126,692 |
|
|
|
77,769 |
|
|
|
Current assets of discontinued operations |
|
— |
|
|
|
36,915 |
|
|
|
Total current assets |
|
964,771 |
|
|
|
1,269,046 |
|
|
|
Property, plant and equipment, net |
|
244,746 |
|
|
|
191,283 |
|
|
|
Goodwill |
|
895,916 |
|
|
|
773,569 |
|
|
|
Intangible assets, net |
|
983,396 |
|
|
|
808,344 |
|
|
|
Other non-current assets |
|
208,593 |
|
|
|
195,016 |
|
|
|
Non-current assets of discontinued operations |
|
— |
|
|
|
87,883 |
|
|
|
Total assets |
$ |
3,297,422 |
|
|
$ |
3,325,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
103,239 |
|
|
$ |
90,708 |
|
|
|
Accrued expenses |
|
318,476 |
|
|
|
237,817 |
|
|
|
Due to related parties |
|
18,036 |
|
|
|
16,025 |
|
|
|
Current portion, long-term debt |
|
1,774,290 |
|
|
|
1,671,879 |
|
|
|
Subsidiary financing arrangements |
|
169,765 |
|
|
|
100,741 |
|
|
|
Other current liabilities |
|
49,617 |
|
|
|
34,812 |
|
|
|
Current liabilities of discontinued operations |
|
— |
|
|
|
8,986 |
|
|
|
Total current liabilities |
|
2,433,423 |
|
|
|
2,160,968 |
|
|
|
Deferred income taxes |
|
108,091 |
|
|
|
103,264 |
|
|
|
Other non-current liabilities |
|
225,334 |
|
|
|
203,207 |
|
|
|
Non-current liabilities of discontinued operations |
|
— |
|
|
|
1,277 |
|
|
|
Total liabilities |
|
2,766,848 |
|
|
|
2,468,716 |
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
|
Total stockholders’ equity attributable to Holdings |
|
678,620 |
|
|
|
929,660 |
|
|
|
Noncontrolling interest |
|
(148,046 |
) |
|
|
(89,991 |
) |
|
|
Noncontrolling interest of discontinued operations |
|
— |
|
|
|
16,756 |
|
|
|
Total stockholders’ equity |
|
530,574 |
|
|
|
856,425 |
|
|
|
Total liabilities and stockholders’ equity |
$ |
3,297,422 |
|
|
$ |
3,325,141 |
|
|
|
|
||||||||
|
Compass Diversified Holdings |
||||||||
|
|
|
|||||||
|
|
Year ended December 31, |
|
||||||
|
(in thousands, except per share data) |
2024 |
|
2023 |
|
||||
|
Net revenues |
$ |
1,788,013 |
|
|
$ |
1,689,920 |
|
|
|
Cost of revenues |
|
1,037,594 |
|
|
|
1,015,200 |
|
|
|
Gross profit |
|
750,419 |
|
|
|
674,720 |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
587,521 |
|
|
|
502,013 |
|
|
|
Management fees |
|
74,767 |
|
|
|
67,945 |
|
|
|
Amortization expense |
|
94,817 |
|
|
|
83,574 |
|
|
|
Impairment expense |
|
8,182 |
|
|
|
90,597 |
|
|
|
Operating income (loss) |
|
(14,868 |
) |
|
|
(69,409 |
) |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(122,802 |
) |
|
|
(109,892 |
) |
|
|
Amortization of debt issuance costs |
|
(4,018 |
) |
|
|
(4,038 |
) |
|
|
Loss on sale of Crosman |
|
(24,218 |
) |
|
|
— |
|
|
|
Other income (expense), net |
|
(143,304 |
) |
|
|
(83,114 |
) |
|
|
Net income (loss) before income taxes |
|
(309,210 |
) |
|
|
(266,453 |
) |
|
|
Provision for income taxes |
|
18,612 |
|
|
|
8,198 |
|
|
|
Income (loss) from continuing operations |
|
(327,822 |
) |
|
|
(274,651 |
) |
|
|
Income (loss) from discontinued operations, net of income tax |
|
(6,905 |
) |
|
|
24,208 |
|
|
|
Gain on sale of discontinued operations |
|
11,957 |
|
|
|
283,025 |
|
|
|
Net income |
|
(322,770 |
) |
|
|
32,582 |
|
|
|
Less: Net income (loss) attributable to noncontrolling interest |
|
(111,025 |
) |
|
|
(75,761 |
) |
|
|
Less: Net income (loss) from discontinued operations attributable to |
|
(2,884 |
) |
|
|
(304 |
) |
|
|
Net income attributable to Holdings |
$ |
(208,861 |
) |
|
$ |
108,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per common share attributable to Holdings |
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(3.94 |
) |
|
$ |
(3.57 |
) |
|
|
Discontinued operations |
|
0.11 |
|
|
|
4.27 |
|
|
|
|
$ |
(3.83 |
) |
|
$ |
0.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average number of common shares outstanding |
|
75,454 |
|
|
|
72,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions declared per Trust common share |
$ |
1.00 |
|
|
$ |
1.00 |
|
|
|
|
||||||||
Restatement of Previously Issued Consolidated Financial Statements
The Company has restated its consolidated financial statements for the fiscal years ended December 31, 2024 and 2023 below. Below is a summary description of the significant adjustments made in connection with the restatement of the Consolidated Balance Sheet and Consolidated Statement of Operations for the fiscal years ended December 31, 2024 and 2023:
|
|
|
|
ADJ 1 |
Accounts Receivable – amounts were recorded at Lugano as accounts receivable which did not represent activity associated with a valid revenue transaction. |
|
|
|
|
ADJ 2 |
Inventory and Other Current Assets – amounts were recorded at Lugano as purchases of inventory or vendor prepayments which did not represent valid purchases. Invalid inventory transactions were also recorded in connection with barter purchases of jewelry or gems from customers in exchange for reducing accounts receivable transactions, and in connection with invalid revenue transactions. Other current assets increased as a result of the revised Lugano tax provision and a tax receivable that was recorded in each of the years presented in the consolidated financial statements. |
|
|
|
|
ADJ 3 |
Goodwill and Intangible Assets – the purchase price allocation of the assets acquired and liabilities assumed in the acquisition of Lugano in September 2021 was based upon materially incorrect financial information. As a result, the Company re-performed the purchase price allocation, which resulted in a change in the fair value of the intangible assets acquired and the calculation of goodwill. Additionally, due to the adjustments to historical financial information that resulted from the Lugano Investigation, the Company determined that a triggering event had occurred as of December 31, 2021 and December 31, 2022 and performed impairment testing of the goodwill and definite lived intangibles at Lugano as of these dates, resulting in the impairment of these balances. |
|
|
|
|
ADJ 4 |
Accrued expenses – Unrecorded liabilities related to inventory transactions at Lugano and accrued interest associated with the Lugano Financing Arrangements have been recorded in the consolidated balance sheets |
|
|
|
|
ADJ 5 |
Financing arrangements – Lugano entered into various financing arrangements with third parties that were not previously recorded in the historical financial statements of Lugano as debt. In connection with the Lugano Investigation, the Company determined that certain cash recorded as reduction of accounts receivable or purchases of inventory actually represented unrecorded financing arrangements made with third parties to purportedly jointly invest with Lugano in the purchase of a specified jewelry piece. These arrangements represent debt that has been recorded on the Company’s consolidated balance sheets as such. |
|
|
|
|
ADJ 6 |
Noncontrolling interest – the correction of the misstatements resulted in a decrease in the balance of noncontrolling interest at Lugano, and reduced the noncontrolling income that previously had been recorded related to Lugano. |
|
|
|
|
ADJ 7 |
Net revenues – net revenues at Lugano were overstated in each of the periods presented as a result of the recording of invalid revenue transactions or the misrepresentation of funds received as revenue. |
|
|
|
|
ADJ 8 |
Cost of revenues – cost of revenues at Lugano was overstated in each of the periods presented as a result of the recording of the cost of revenues associated with invalid revenue transactions and the misapplication of funds paid as inventory purchases. |
|
|
|
|
ADJ 9 |
Interest expense, net – interest expense associated with the Lugano financing arrangements described above have been recorded in the consolidated statement of operations in each of the periods presented. |
|
|
|
|
ADJ 10 |
Other income (expense), net – reflects the expense recognized at Lugano related to losses resulting from the accounting for the transactions associated with the Lugano financing arrangements. |
|
|
|
|
ADJ 11 |
Income tax provision (benefit) – the income tax provision (benefit) at Lugano has been recalculated in each of the periods presented as a result of the effect of the aforementioned adjustments to the consolidated statement of operations. |
|
|
|
|
Compass Diversified Holdings |
|
|||||||||||||
|
|
December 31, 2024 |
|
||||||||||||
|
|
ADJ |
|
As Reported |
|
Adjustments |
|
As Restated |
|
||||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
59,727 |
|
|
|
(68 |
) |
|
$ |
59,659 |
|
|
|
Accounts receivable, net |
ADJ 1 |
|
|
444,386 |
|
|
|
(237,214 |
) |
|
|
207,172 |
|
|
|
Inventories, net |
ADJ 2 |
|
|
962,408 |
|
|
|
(391,160 |
) |
|
|
571,248 |
|
|
|
Prepaid expenses and other current assets |
ADJ 2 |
|
|
101,129 |
|
|
|
25,563 |
|
|
|
126,692 |
|
|
|
Total current assets |
|
|
|
1,567,650 |
|
|
|
(602,879 |
) |
|
|
964,771 |
|
|
|
Property, plant and equipment, net |
|
|
|
244,746 |
|
|
|
— |
|
|
|
244,746 |
|
|
|
Goodwill |
ADJ 3 |
|
|
982,253 |
|
|
|
(86,337 |
) |
|
|
895,916 |
|
|
|
Intangible assets, net |
ADJ 3 |
|
|
1,049,186 |
|
|
|
(65,790 |
) |
|
|
983,396 |
|
|
|
Other non-current assets |
|
|
|
208,587 |
|
|
|
6 |
|
|
|
208,593 |
|
|
|
Total assets |
|
|
$ |
4,052,422 |
|
|
$ |
(755,000 |
) |
|
$ |
3,297,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
104,304 |
|
|
|
(1,065 |
) |
|
|
103,239 |
|
|
|
Accrued expenses |
ADJ 4 |
|
|
197,829 |
|
|
|
120,647 |
|
|
|
318,476 |
|
|
|
Due to related parties |
|
|
|
18,036 |
|
|
|
— |
|
|
|
18,036 |
|
|
|
Current portion, long-term debt(1) |
|
|
|
15,000 |
|
|
|
1,759,290 |
|
|
|
1,774,290 |
|
|
|
Subsidiary financing arrangements |
ADJ 5 |
|
|
— |
|
|
|
169,765 |
|
|
|
169,765 |
|
|
|
Other current liabilities |
|
|
|
49,617 |
|
|
|
— |
|
|
|
49,617 |
|
|
|
Total current liabilities |
|
|
|
384,786 |
|
|
|
2,048,637 |
|
|
|
2,433,423 |
|
|
|
Deferred income taxes |
|
|
|
119,948 |
|
|
|
(11,857 |
) |
|
|
108,091 |
|
|
|
Long-term debt(1) |
|
|
|
1,759,290 |
|
|
|
(1,759,290 |
) |
|
|
— |
|
|
|
Other non-current liabilities |
|
|
|
225,334 |
|
|
|
— |
|
|
|
225,334 |
|
|
|
Total liabilities |
|
|
|
2,489,358 |
|
|
|
277,490 |
|
|
|
2,766,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust preferred shares, 50,000 authorized; 17,497 shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A preferred shares, no par value, 4,551 shares |
|
|
|
109,159 |
|
|
|
— |
|
|
|
109,159 |
|
|
|
Series B preferred shares, no par value, 6,192 shares |
|
|
|
147,906 |
|
|
|
— |
|
|
|
147,906 |
|
|
|
Series C preferred shares, no par value, 6,754 shares |
|
|
|
161,767 |
|
|
|
— |
|
|
|
161,767 |
|
|
|
Trust common shares, no par value, 500,000 authorized; |
|
|
|
1,289,010 |
|
|
|
— |
|
|
|
1,289,010 |
|
|
|
Treasury shares, at cost |
|
|
|
(18,910 |
) |
|
|
— |
|
|
|
(18,910 |
) |
|
|
Accumulated other comprehensive income (loss) |
|
|
|
(5,815 |
) |
|
|
478 |
|
|
|
(5,337 |
) |
|
|
Accumulated deficit |
|
|
|
(386,324 |
) |
|
|
(618,651 |
) |
|
|
(1,004,975 |
) |
|
|
Total stockholders’ equity attributable to Holdings |
|
|
|
1,296,793 |
|
|
|
(618,173 |
) |
|
|
678,620 |
|
|
|
Noncontrolling interest |
ADJ 6 |
|
|
266,271 |
|
|
|
(414,317 |
) |
|
|
(148,046 |
) |
|
|
Total stockholders’ equity |
|
|
|
1,563,064 |
|
|
|
(1,032,490 |
) |
|
|
530,574 |
|
|
|
Total liabilities and stockholders’ equity |
|
|
$ |
4,052,422 |
|
|
$ |
(755,000 |
) |
|
$ |
3,297,422 |
|
|
|
|
||||||||||||||
|
(1) In retrospectively testing financial covenant compliance under the Company’s 2022 Credit Facility in each of the years ended December 31, 2024, 2023 and 2022 in reliance on the restated consolidated financial information, the Company would not have been in compliance with such financial covenants as of the years ended December 31, 2024 and 2023. As a result, the 2022 Term Loan and 2022 Revolving Credit Facility have been classified as current in the Consolidated Financial Statements as of December 31, 2024 and 2023. Additionally, because the 2029 Senior Notes and 2032 Senior Notes may have been subject to acceleration had the lenders under the 2022 Credit Facility exercised their acceleration rights during such historical periods, the 2029 Senior Notes and 2032 Senior Notes have also been classified as current at December 31, 2024 and 2023. |
||||||||||||||
|
|
||||||||||||||
|
Compass Diversified Holdings |
|
|||||||||||||
|
|
|
|||||||||||||
|
|
Year Ended December 31, 2024 |
|
||||||||||||
|
|
ADJ |
|
As Reported |
|
Adjustments |
|
As Restated |
|
||||||
|
Net revenues |
ADJ 7 |
|
$ |
2,198,233 |
|
|
$ |
(410,220 |
) |
|
$ |
1,788,013 |
|
|
|
Cost of revenues |
ADJ 8 |
|
|
1,197,873 |
|
|
|
(160,279 |
) |
|
|
1,037,594 |
|
|
|
Gross profit |
|
|
|
1,000,360 |
|
|
|
(249,941 |
) |
|
|
750,419 |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
|
|
587,521 |
|
|
|
— |
|
|
|
587,521 |
|
|
|
Management fees |
|
|
|
74,767 |
|
|
|
— |
|
|
|
74,767 |
|
|
|
Amortization expense |
ADJ 3 |
|
|
99,760 |
|
|
|
(4,943 |
) |
|
|
94,817 |
|
|
|
Impairment expense |
|
|
|
8,182 |
|
|
|
— |
|
|
|
8,182 |
|
|
|
Operating income (loss) |
|
|
|
230,130 |
|
|
|
(244,998 |
) |
|
|
(14,868 |
) |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
ADJ 9 |
|
|
(106,683 |
) |
|
|
(16,119 |
) |
|
|
(122,802 |
) |
|
|
Amortization of debt issuance costs |
|
|
|
(4,018 |
) |
|
|
— |
|
|
|
(4,018 |
) |
|
|
Loss on sale of Crosman |
|
|
|
(24,218 |
) |
|
|
— |
|
|
|
(24,218 |
) |
|
|
Other income (expense), net |
ADJ 10 |
|
|
(3,902 |
) |
|
|
(139,402 |
) |
|
|
(143,304 |
) |
|
|
Income (loss) from continuing operations before income |
|
|
|
91,309 |
|
|
|
(400,519 |
) |
|
|
(309,210 |
) |
|
|
Provision for income taxes |
ADJ 11 |
|
|
49,012 |
|
|
|
(30,400 |
) |
|
|
18,612 |
|
|
|
Income (loss) from continuing operations |
|
|
|
42,297 |
|
|
|
(370,119 |
) |
|
|
(327,822 |
) |
|
|
Loss from discontinued operations, net of income tax |
|
|
|
(6,905 |
) |
|
|
— |
|
|
|
(6,905 |
) |
|
|
Gain on sale of discontinued operations, net of income |
|
|
|
11,957 |
|
|
|
— |
|
|
|
11,957 |
|
|
|
Net income (loss) |
|
|
|
47,349 |
|
|
|
(370,119 |
) |
|
|
(322,770 |
) |
|
|
Less: Net income (loss) from continuing operations |
|
|
|
37,426 |
|
|
|
(148,451 |
) |
|
|
(111,025 |
) |
|
|
Less: Net loss from discontinued operations attributable |
|
|
|
(2,884 |
) |
|
|
— |
|
|
|
(2,884 |
) |
|
|
Net income (loss) attributable to Holdings |
|
|
$ |
12,807 |
|
|
$ |
(221,668 |
) |
|
$ |
(208,861 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to common shares of Holdings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
|
$ |
4,871 |
|
|
$ |
(221,668 |
) |
|
$ |
(216,797 |
) |
|
|
Loss from discontinued operations, net of income tax |
|
|
|
(4,021 |
) |
|
|
— |
|
|
|
(4,021 |
) |
|
|
Gain on sale of discontinued operations, net of income |
|
|
|
11,957 |
|
|
|
— |
|
|
|
11,957 |
|
|
|
Net income (loss) attributable to Holdings |
|
|
$ |
12,807 |
|
|
$ |
(221,668 |
) |
|
$ |
(208,861 |
) |
|
|
Basic and fully diluted income (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
(1.25 |
) |
|
|
(2.69 |
) |
|
|
(3.94 |
) |
|
|
Discontinued operations |
|
|
|
0.11 |
|
|
|
— |
|
|
|
0.11 |
|
|
|
|
|
|
$ |
(1.14 |
) |
|
$ |
(2.69 |
) |
|
$ |
(3.83 |
) |
|
|
|
||||||||||||||
|
Compass Diversified Holdings |
|
|||||||||||||
|
|
|
|||||||||||||
|
|
December 31, 2023 |
|
||||||||||||
|
|
ADJ |
|
As Reported |
|
Adjustments |
|
As Restated |
|
||||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
446,684 |
|
|
|
(68 |
) |
|
|
446,616 |
|
|
|
Accounts receivable, net |
ADJ 1 |
|
|
308,183 |
|
|
|
(122,946 |
) |
|
|
185,237 |
|
|
|
Inventories, net |
ADJ 2 |
|
|
723,194 |
|
|
|
(200,685 |
) |
|
|
522,509 |
|
|
|
Prepaid expenses and other current assets |
ADJ 2 |
|
|
88,844 |
|
|
|
(11,075 |
) |
|
|
77,769 |
|
|
|
Current assets of discontinued operations |
|
|
|
36,915 |
|
|
|
— |
|
|
|
36,915 |
|
|
|
Total current assets |
|
|
|
1,603,820 |
|
|
|
(334,774 |
) |
|
|
1,269,046 |
|
|
|
Property, plant and equipment, net |
|
|
|
191,283 |
|
|
|
— |
|
|
|
191,283 |
|
|
|
Goodwill |
ADJ 3 |
|
|
859,907 |
|
|
|
(86,338 |
) |
|
|
773,569 |
|
|
|
Intangible assets, net |
ADJ 3 |
|
|
879,078 |
|
|
|
(70,734 |
) |
|
|
808,344 |
|
|
|
Other non-current assets |
|
|
|
195,010 |
|
|
|
6 |
|
|
|
195,016 |
|
|
|
Non-current assets of discontinued operations |
|
|
|
87,883 |
|
|
|
— |
|
|
|
87,883 |
|
|
|
Total assets |
|
|
$ |
3,816,981 |
|
|
$ |
(491,840 |
) |
|
$ |
3,325,141 |
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
91,089 |
|
|
|
(381 |
) |
|
|
90,708 |
|
|
|
Accrued expenses |
ADJ 4 |
|
|
151,443 |
|
|
|
86,374 |
|
|
|
237,817 |
|
|
|
Due to related parties |
|
|
|
16,025 |
|
|
|
— |
|
|
|
16,025 |
|
|
|
Current portion, long-term debt(1) |
|
|
|
10,000 |
|
|
|
1,661,879 |
|
|
|
1,671,879 |
|
|
|
Subsidiary financing arrangements |
ADJ 5 |
|
|
— |
|
|
|
100,741 |
|
|
|
100,741 |
|
|
|
Other current liabilities |
|
|
|
34,812 |
|
|
|
— |
|
|
|
34,812 |
|
|
|
Current liabilities of discontinued operations |
|
|
|
8,986 |
|
|
|
— |
|
|
|
8,986 |
|
|
|
Total current liabilities |
|
|
|
312,355 |
|
|
|
1,848,613 |
|
|
|
2,160,968 |
|
|
|
Deferred income taxes |
|
|
|
118,882 |
|
|
|
(15,618 |
) |
|
|
103,264 |
|
|
|
Long-term debt(1) |
|
|
|
1,661,879 |
|
|
|
(1,661,879 |
) |
|
|
— |
|
|
|
Other non-current liabilities |
|
|
|
203,207 |
|
|
|
— |
|
|
|
203,207 |
|
|
|
Non-current liabilities of discontinued operations |
|
|
|
1,277 |
|
|
|
— |
|
|
|
1,277 |
|
|
|
Total liabilities |
|
|
|
2,297,600 |
|
|
|
171,116 |
|
|
|
2,468,716 |
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust preferred shares, 50,000 authorized; 12,600 shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A preferred shares, no par value, 4,000 shares issued |
|
|
|
96,417 |
|
|
|
— |
|
|
|
96,417 |
|
|
|
Series B preferred shares, no par value, 4,000 shares issued |
|
|
|
96,504 |
|
|
|
— |
|
|
|
96,504 |
|
|
|
Series C preferred shares, no par value, 4,600 shares issued |
|
|
|
110,997 |
|
|
|
— |
|
|
|
110,997 |
|
|
|
Trust common shares, no par value, 500,000 authorized; |
|
|
|
1,281,303 |
|
|
|
— |
|
|
|
1,281,303 |
|
|
|
Treasury shares, at cost |
|
|
|
(9,339 |
) |
|
|
— |
|
|
|
(9,339 |
) |
|
|
Accumulated other comprehensive income (loss) |
|
|
|
111 |
|
|
|
(108 |
) |
|
|
3 |
|
|
|
Accumulated deficit |
|
|
|
(249,243 |
) |
|
|
(396,982 |
) |
|
|
(646,225 |
) |
|
|
Total stockholders’ equity attributable to Holdings |
|
|
|
1,326,750 |
|
|
|
(397,090 |
) |
|
|
929,660 |
|
|
|
Noncontrolling interest |
ADJ 6 |
|
|
175,875 |
|
|
|
(265,866 |
) |
|
|
(89,991 |
) |
|
|
Noncontrolling interest of discontinued operations |
|
|
|
16,756 |
|
|
|
— |
|
|
|
16,756 |
|
|
|
Total stockholders’ equity |
|
|
|
1,519,381 |
|
|
|
(662,956 |
) |
|
|
856,425 |
|
|
|
Total liabilities and stockholders’ equity |
|
|
$ |
3,816,981 |
|
|
$ |
(491,840 |
) |
|
$ |
3,325,141 |
|
|
|
|
|
|||||||||||||
|
(1) In retrospectively testing financial covenant compliance under the Company’s 2022 Credit Facility in each of the years ended December 31, 2024, 2023 and 2022 in reliance on the restated consolidated financial information, the Company would not have been in compliance with such financial covenants as of the years ended December 31, 2024 and 2023. As a result, the 2022 Term Loan and 2022 Revolving Credit Facility have been classified as current in the Consolidated Financial Statements as of December 31, 2024 and 2023. Additionally, because the 2029 Senior Notes and 2032 Senior Notes may have been subject to acceleration had the lenders under the 2022 Credit Facility exercised their acceleration rights during such historical periods, the 2029 Senior Notes and 2032 Senior Notes have also been classified as current at December 31, 2024 and 2023. |
||||||||||||||
|
|
||||||||||||||
|
Compass Diversified Holdings |
|
|||||||||||||
|
|
|
|||||||||||||
|
|
Year Ended December 31, 2023 |
|
||||||||||||
|
|
ADJ Reference |
|
As Reported |
|
Adjustments |
|
As Restated |
|
||||||
|
Net revenues |
ADJ 7 |
|
$ |
1,965,017 |
|
|
$ |
(275,097 |
) |
|
$ |
1,689,920 |
|
|
|
Cost of revenues |
ADJ 8 |
|
|
1,132,014 |
|
|
|
(116,814 |
) |
|
|
1,015,200 |
|
|
|
Gross profit |
|
|
|
833,003 |
|
|
|
(158,283 |
) |
|
|
674,720 |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
|
|
502,013 |
|
|
|
— |
|
|
|
502,013 |
|
|
|
Management fees |
|
|
|
67,945 |
|
|
|
— |
|
|
|
67,945 |
|
|
|
Amortization expense |
ADJ 3 |
|
|
88,396 |
|
|
|
(4,822 |
) |
|
|
83,574 |
|
|
|
Impairment expense |
|
|
|
89,400 |
|
|
|
1,197 |
|
|
|
90,597 |
|
|
|
Operating income (loss) |
|
|
|
85,249 |
|
|
|
(154,658 |
) |
|
|
(69,409 |
) |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
ADJ 9 |
|
|
(105,179 |
) |
|
|
(4,713 |
) |
|
|
(109,892 |
) |
|
|
Amortization of debt issuance costs |
|
|
|
(4,038 |
) |
|
|
— |
|
|
|
(4,038 |
) |
|
|
Other income (expense), net |
ADJ 10 |
|
|
1,779 |
|
|
|
(84,893 |
) |
|
|
(83,114 |
) |
|
|
Income (loss) from continuing operations before income |
|
|
|
(22,189 |
) |
|
|
(244,264 |
) |
|
|
(266,453 |
) |
|
|
Provision for income taxes |
ADJ 11 |
|
|
22,639 |
|
|
|
(14,441 |
) |
|
|
8,198 |
|
|
|
Income (loss) from continuing operations |
|
|
|
(44,828 |
) |
|
|
(229,823 |
) |
|
|
(274,651 |
) |
|
|
Income (loss) from discontinued operations, net of income |
|
|
|
24,208 |
|
|
|
— |
|
|
|
24,208 |
|
|
|
Gain on sale of discontinued operations, net of income |
|
|
|
283,025 |
|
|
|
— |
|
|
|
283,025 |
|
|
|
Net income |
|
|
|
262,405 |
|
|
|
(229,823 |
) |
|
|
32,582 |
|
|
|
Less: Net income from continuing operations attributable |
|
|
|
16,423 |
|
|
|
(92,184 |
) |
|
|
(75,761 |
) |
|
|
Less: Net income (loss) from discontinued operations |
|
|
|
(304 |
) |
|
|
— |
|
|
|
(304 |
) |
|
|
Net income attributable to Holdings |
|
|
$ |
246,286 |
|
|
$ |
(137,639 |
) |
|
$ |
108,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to common shares of Holdings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
|
$ |
(61,251 |
) |
|
$ |
(137,639 |
) |
|
$ |
(198,890 |
) |
|
|
Income from discontinued operations, net of income tax |
|
|
|
24,512 |
|
|
|
— |
|
|
|
24,512 |
|
|
|
Gain on sale of discontinued operations, net of income |
|
|
|
283,025 |
|
|
|
— |
|
|
|
283,025 |
|
|
|
Net income attributable to Holdings |
|
|
$ |
246,286 |
|
|
$ |
(137,639 |
) |
|
$ |
108,647 |
|
|
|
Basic and fully diluted income (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
(1.81 |
) |
|
|
(1.76 |
) |
|
|
(3.57 |
) |
|
|
Discontinued operations |
|
|
|
4.27 |
|
|
|
— |
|
|
|
4.27 |
|
|
|
|
|
|
$ |
2.46 |
|
|
$ |
(1.76 |
) |
|
$ |
0.70 |
|
|
|
|
||||||||||||||
|
Compass Diversified Holdings |
||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
(in thousands) |
Corporate |
|
5.11 |
|
BOA |
Lugano |
PrimaLoft |
THP |
Velocity |
Altor Solutions |
Arnold |
Sterno |
Consolidated |
|||||||||||||||||||
|
Net income (loss) |
$ |
(35,634 |
) |
$ |
20,634 |
|
$ |
20,791 |
|
$ |
(275,730 |
) |
$ |
(10,575 |
) |
$ |
(9,761 |
) |
$ |
(54,851 |
) |
$ |
5,635 |
$ |
(2,969 |
) |
$ |
14,638 |
|
$ |
(327,822 |
) |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) |
|
(2,095 |
) |
|
4,526 |
|
|
4,962 |
|
|
904 |
|
|
(3,741 |
) |
|
(2,894 |
) |
|
6,810 |
|
|
2,280 |
|
2,986 |
|
|
4,874 |
|
|
18,612 |
|
|
Interest expense, |
|
106,414 |
|
|
(14 |
) |
|
(21 |
) |
|
16,122 |
|
|
(70 |
) |
|
(52 |
) |
|
52 |
|
|
— |
|
371 |
|
|
— |
|
|
122,802 |
|
|
Intercompany |
|
(157,585 |
) |
|
13,366 |
|
|
20,125 |
|
|
56,013 |
|
|
17,916 |
|
|
10,552 |
|
|
9,255 |
|
|
10,771 |
|
7,121 |
|
|
12,466 |
|
|
— |
|
|
Depreciation and |
|
675 |
|
|
22,734 |
|
|
21,594 |
|
|
5,391 |
|
|
21,318 |
|
|
18,974 |
|
|
8,042 |
|
|
21,553 |
|
9,265 |
|
|
18,473 |
|
|
148,019 |
|
|
EBITDA |
|
(88,225 |
) |
|
61,246 |
|
|
67,451 |
|
|
(197,300 |
) |
|
24,848 |
|
|
16,819 |
|
|
(30,692 |
) |
|
40,239 |
|
16,774 |
|
|
50,451 |
|
|
(38,389 |
) |
|
Other (income) |
|
460 |
|
|
40 |
|
|
511 |
|
|
139,623 |
|
|
181 |
|
|
3 |
|
|
24,557 |
|
|
2,746 |
|
(9 |
) |
|
(590 |
) |
|
167,522 |
|
|
Non-controlling |
|
— |
|
|
2,129 |
|
|
5,683 |
|
|
2,437 |
|
|
2,382 |
|
|
1,674 |
|
|
403 |
|
|
988 |
|
18 |
|
|
631 |
|
|
16,345 |
|
|
Impairment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
8,182 |
|
|
— |
|
— |
|
|
— |
|
|
8,182 |
|
|
Acquisition |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,479 |
|
|
— |
|
|
1,872 |
|
— |
|
|
— |
|
|
5,351 |
|
|
Integration |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,625 |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
2,625 |
|
|
Other(1) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
90 |
|
|
1,500 |
|
|
696 |
|
10,426 |
|
|
476 |
|
|
13,188 |
|
|
Adjusted EBITDA |
$ |
(87,765 |
) |
$ |
63,415 |
|
$ |
73,645 |
|
$ |
(55,240 |
) |
$ |
27,411 |
|
$ |
24,690 |
|
$ |
3,950 |
|
$ |
46,541 |
$ |
27,209 |
|
$ |
50,968 |
|
$ |
174,824 |
|
|
|
||||||||||||||||||||||||||||||||
|
(1) Other represents non-recurring operating expenses that are included by management in the calculation of Adjusted EBITDA when analyzing monthly operating results of our subsidiaries. In the current year, the calculation of Adjusted EBITDA for Arnold includes the add-back of certain expenses that have been incurred related to the relocation of two of Arnold’s facilities in the United States. |
||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Compass Diversified Holdings |
|||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
|
(in thousands) |
Corporate |
|
5.11 |
|
BOA |
Lugano |
PrimaLoft |
Velocity |
Altor |
Arnold |
Sterno |
Consolidated |
|||||||||||||||||
|
Net income (loss) |
$ |
(60,454 |
) |
$ |
21,690 |
|
$ |
16,496 |
|
$ |
(177,508 |
) |
$ |
(69,883 |
) |
$ |
(40,045 |
) |
$ |
16,504 |
$ |
10,434 |
|
$ |
8,115 |
|
$ |
(274,651 |
) |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) |
|
301 |
|
|
4,994 |
|
|
2,863 |
|
|
148 |
|
|
(5,673 |
) |
|
(5,616 |
) |
|
5,890 |
|
4,185 |
|
|
1,106 |
|
|
8,198 |
|
|
Interest expense, |
|
104,856 |
|
|
(8 |
) |
|
(18 |
) |
|
4,716 |
|
|
(11 |
) |
|
352 |
|
|
— |
|
5 |
|
|
— |
|
|
109,892 |
|
|
Intercompany |
|
(126,240 |
) |
|
20,244 |
|
|
7,580 |
|
|
32,837 |
|
|
18,123 |
|
|
13,510 |
|
|
10,486 |
|
6,806 |
|
|
16,654 |
|
|
— |
|
|
Depreciation and |
|
1,498 |
|
|
26,009 |
|
|
22,932 |
|
|
3,232 |
|
|
21,478 |
|
|
13,282 |
|
|
16,741 |
|
8,441 |
|
|
19,959 |
|
|
133,572 |
|
|
EBITDA |
|
(80,039 |
) |
|
72,929 |
|
|
49,853 |
|
|
(136,575 |
) |
|
(35,966 |
) |
|
(18,517 |
) |
|
49,621 |
|
29,871 |
|
|
45,834 |
|
|
(22,989 |
) |
|
Other (income) |
|
(130 |
) |
|
(515 |
) |
|
98 |
|
|
84,815 |
|
|
62 |
|
|
(1,210 |
) |
|
1,440 |
|
(5 |
) |
|
(1,441 |
) |
|
83,114 |
|
|
Non-controlling |
|
— |
|
|
1,191 |
|
|
3,019 |
|
|
1,474 |
|
|
980 |
|
|
914 |
|
|
986 |
|
27 |
|
|
860 |
|
|
9,451 |
|
|
Impairment |
|
— |
|
|
— |
|
|
— |
|
|
1,197 |
|
|
57,810 |
|
|
31,590 |
|
|
— |
|
— |
|
|
— |
|
|
90,597 |
|
|
Integration |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,375 |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
2,375 |
|
|
Other |
|
— |
|
|
— |
|
|
3,072 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
1,434 |
|
|
4,506 |
|
|
Adjusted EBITDA |
$ |
(80,169 |
) |
$ |
73,605 |
|
$ |
56,042 |
|
$ |
(49,089 |
) |
$ |
25,261 |
|
$ |
12,777 |
|
$ |
52,047 |
$ |
29,893 |
|
$ |
46,687 |
|
$ |
167,054 |
|