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 March 31,
2022.
“CODI delivered outstanding first quarter
results, recording our fifth consecutive quarter of record
financial performance that is enabling us to raise our 2022
outlook,” said Elias Sabo, CEO of Compass Diversified. “Despite
supply chain challenges and a heightened inflationary environment,
our operating teams delivered double-digit sales growth in both our
branded consumer and niche industrial businesses. In addition, we
produced the highest level of quarterly Adjusted EBITDA CODI has
ever reported. As we look ahead at the remainder of 2022, we are
pleased with the performance of our businesses to date and remain
confident in our team’s ability to continue deploying capital to
drive long-term, sustainable value for our shareholders.”
First Quarter 2022 Financial Highlights
vs. Same Year-Ago Quarter (where applicable)
- Net sales up 25% to $510.5
million;
- Branded consumer net sales up 27%
to $331.6 million, and up 14% on a proforma basis;
- Niche industrial net sales up 21%
to $178.9 million;
- Net income up 35% to $29.7
million;
- Adjusted Earnings, a non-GAAP
financial measure, up 38% to $36.0 million;
- Income from continuing operations
up 41% to $18.4 million;
- Adjusted EBITDA, a non-GAAP
financial measure, up 29% to $97.6 million; and
- Paid a first quarter 2022 cash
distribution of $0.25 per share on CODI's common shares in April
2022.
First Quarter 2022 Business
Highlights
- Expanded board of directors to nine
members with appointment of Alex Bhathal, a business leader with
more than 15 years of asset management experience and a successful
track record of actively managing investments in sports, consumer
products and real estate.
- CODI subsidiary Altor Solutions
acquired Foam Concepts, Inc., strengthening its position as a
leading provider of packaging and componentry solutions.
First Quarter 2022 Financial
Results
Net sales in the first quarter of 2022 were
$510.5 million, up 25% compared to $408.6 million in the first
quarter of 2021. The increase was due to the Company’s acquisition
of Lugano Diamonds & Jewelry in September 2021, as well as
strong growth from BOA, Marucci Sports and Altor Solutions. On a
pro forma basis, assuming CODI had acquired Lugano on January 1,
2021, net sales were up 17% compared to the prior year period.
Branded consumer pro forma net sales increased
14% in the first quarter of 2022 to $331.6 million compared to
$290.4 million in the first quarter of 2021. Niche industrial net
sales increased 21% in the first quarter of 2022 to $178.9 million
compared to $147.6 million in the first quarter of 2021.
Net income for the first quarter of 2022 was
$29.7 million, up 35% compared to net income of $22.0 million in
the first quarter of 2021. The increase was primarily due to the
strong performance across our branded consumer and niche industrial
businesses on a combined basis.
Adjusted Earnings (see “Note Regarding Use of
Non-GAAP Financial Measures” below) for the first quarter of 2022
was $36.0 million, up 38% compared to $26.2 million in the first
quarter of 2021. CODI's weighted average number of shares
outstanding for the quarter ended March 31, 2022, was 69.4 million
and for the quarter ended March 31, 2021, was 64.9 million.
Income from continuing operations for the first
quarter of 2022 was $18.4 million, up 40% compared to income from
continuing operations of $13.1 million in the first quarter of
2021. The increase was primarily due to the strong performance
across our branded consumer and niche industrial businesses on a
combined basis.
Adjusted EBITDA (see "Note Regarding Use of
Non-GAAP Financial Measures" below) in the first quarter of 2022
was $97.6 million, up 29% compared to $75.5 million in the first
quarter of 2021.
Liquidity and Capital
Resources
As of March 31, 2022, CODI had approximately
$97.3 million in cash and cash equivalents, no borrowings
outstanding on its revolver, $1.0 billion outstanding in 5.250%
Senior Notes due 2029 and $300 million outstanding in 5.000% Senior
Notes due 2032.
The Company has no significant debt maturities
until 2029 and had net borrowing availability of $599 million on
March 31, 2022, under its revolving credit facility.
First Quarter 2022
Distributions
On April 1, 2022, CODI's Board of Directors (the
“Board”) declared a first quarter distribution of $0.25 per share
on the Company's common shares. The cash distribution was paid on
April 28, 2022, to all holders of record of common shares as of
April 21, 2022.
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, January 30, 2022, up to, but excluding, April
30, 2022. The distribution for such period was payable on April 30,
2022, to all holders of record of Series A Preferred Shares as of
April 15, 2022. The payment occurred on May 2, 2022, the next
business day following the payment date.
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, January 30, 2022, up to, but excluding, April
30, 2022. The distribution for such period was payable on April 30,
2022, to all holders of record of Series B Preferred Shares as of
April 15, 2022. The payment occurred on May 2, 2022, the next
business day following the payment date.
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, January 30, 2022, up to, but excluding, April
30, 2022. The distribution for such period was payable on April 30,
2022, to all holders of record of Series C Preferred Shares as of
April 15, 2022. The payment occurred on May 2, 2022, the next
business day following the payment date.
CODI’s common and preferred cash distributions
should generally constitute “qualified dividends” for U.S. federal
income tax purposes to the extent paid from “earnings and profits”
(as determined under U.S. federal income tax principles), provided
that the requisite holding period is met. To the extent that the
amount of the cash distributions exceeds earnings and profits, such
distribution will first be treated as a non-taxable return of
capital to the extent of the holder’s adjusted tax basis in the
shares, and thereafter be treated as capital gain from the sale or
exchange of such shares. In addition, shareholders subject to tax
rules regarding “unrelated business taxable income” (or “UBTI”)
will no longer be allocated UBTI from the Trust allowing ownership
by certain retirement accounts that previously created tax
implications.
Increased 2022 Outlook
As a result of the strong financial performance
in the first quarter, as well as the expectations for the remainder
of 2022, the Company is raising its guidance and expects its
current subsidiaries, including Advanced Circuits, to produce
consolidated Adjusted EBITDA the full calendar year of 2022 of
between $410 million and $430 million. This estimate is based on
the summation of our expectations for our current subsidiaries in
2022, absent additional acquisitions or divestitures, and excludes
corporate expenses such as interest expense, management fees and
corporate overhead. In addition, the Company expects to earn
between $120 million and $135 million in Adjusted Earnings for the
full year of 2022, excluding Advanced Circuits subsidiary results
as this business has been classified as held for sale and is
presented as discontinued operations.
Conference Call
Management will host a conference call on
Thursday, May 5, 2022, 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 (833) 900-1532 and the dial-in number
for international callers is (236) 712-2273. The Conference ID is
5477725. A live webcast will also be available on the Company's
website at https://www.compassdiversified.com. A replay of the
call will be available through Monday, December 5, 2022. To access
the replay, please dial (800) 585-8367 in the U.S. and (416)
621-4642 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 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 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 Lugano, assuming that the Company acquired Lugano on
January 1, 2021. 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 2022 Adjusted EBITDA or 2022 Adjusted Earnings
to their comparable GAAP measure 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
(“CODI”)
Since its founding in 1998, CODI has
consistently executed on its strategy of owning and managing a
diverse set of highly defensible, middle-market businesses across
the niche industrial and branded consumer 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 2022 Adjusted
EBITDA, our 2022 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; 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); general considerations associated with the COVID-19
pandemic and its impact on the markets in which we operate;
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 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 DiversifiedChris Gasiewski 203.635.8320
irinquiry@compassdiversified.comCody SlachGateway
Group949.574.3860 |
Media Contact:The IGB Group Leon Berman 212.477.8438
lberman@igbir.com |
CODI@gatewayir.com |
|
|
|
Compass Diversified
HoldingsCondensed Consolidated Balance
Sheets
|
|
|
|
|
March 31, 2022 |
|
December 31, 2021 |
(in thousands) |
(Unaudited) |
|
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
97,345 |
|
|
$ |
157,125 |
|
Accounts receivable, net |
|
265,287 |
|
|
|
268,262 |
|
Inventories, net |
|
617,159 |
|
|
|
562,084 |
|
Prepaid expenses and other current assets |
|
69,108 |
|
|
|
56,575 |
|
Current assets held-for-sale |
|
102,293 |
|
|
|
99,423 |
|
Total current assets |
|
1,151,192 |
|
|
|
1,143,469 |
|
Property, plant and equipment,
net |
|
179,177 |
|
|
|
178,393 |
|
Goodwill and intangible
assets, net |
|
1,670,519 |
|
|
|
1,688,082 |
|
Other non-current assets |
|
136,641 |
|
|
|
134,317 |
|
Total
assets |
$ |
3,137,529 |
|
|
$ |
3,144,261 |
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued expenses |
$ |
270,318 |
|
|
$ |
295,206 |
|
Due to related party |
|
13,099 |
|
|
|
11,705 |
|
Other current liabilities |
|
41,942 |
|
|
|
45,490 |
|
Current liabilities held-for-sale |
|
30,905 |
|
|
|
29,127 |
|
Total current liabilities |
|
356,264 |
|
|
|
381,528 |
|
Deferred income taxes |
|
82,858 |
|
|
|
84,344 |
|
Long-term debt |
|
1,285,304 |
|
|
|
1,284,826 |
|
Other non-current
liabilities |
|
109,675 |
|
|
|
109,033 |
|
Total liabilities |
|
1,834,101 |
|
|
|
1,859,731 |
|
Stockholders'
equity |
|
|
|
Total stockholders' equity
attributable to Holdings |
|
1,133,142 |
|
|
|
1,111,816 |
|
Noncontrolling interest |
|
171,735 |
|
|
|
175,328 |
|
Noncontrolling interest
held-for-sale |
|
(1,449 |
) |
|
|
(2,614 |
) |
Total stockholders' equity |
|
1,303,428 |
|
|
|
1,284,530 |
|
Total liabilities and
stockholders’ equity |
$ |
3,137,529 |
|
|
$ |
3,144,261 |
|
|
|
|
|
|
|
|
|
Compass Diversified
HoldingsConsolidated Statements of
Operations(Unaudited)
|
|
|
|
|
Three months ended March 31, |
(in thousands, except per share data) |
|
2022 |
|
|
|
2021 |
|
Net sales |
$ |
510,513 |
|
|
$ |
408,556 |
|
Cost of sales |
|
309,698 |
|
|
|
240,008 |
|
Gross
profit |
|
200,815 |
|
|
|
168,548 |
|
Operating expenses: |
|
|
|
Selling, general and administrative expense |
|
120,672 |
|
|
|
104,052 |
|
Management fees |
|
14,436 |
|
|
|
10,798 |
|
Amortization expense |
|
21,105 |
|
|
|
18,589 |
|
Operating
income |
|
44,602 |
|
|
|
35,109 |
|
Other income (expense): |
|
|
|
Interest expense, net |
|
(17,419 |
) |
|
|
(13,805 |
) |
Amortization of debt issuance costs |
|
(866 |
) |
|
|
(686 |
) |
Other income (expense), net |
|
2,036 |
|
|
|
(2,228 |
) |
Net income from
continuing operations before income taxes |
|
28,353 |
|
|
|
18,390 |
|
Provision for income taxes |
|
9,976 |
|
|
|
5,308 |
|
Income from continuing
operations |
|
18,377 |
|
|
|
13,082 |
|
Income from discontinued operations, net of income tax |
|
5,370 |
|
|
|
8,914 |
|
Gain on sale of discontinued operations |
|
5,993 |
|
|
|
— |
|
Net
income |
|
29,740 |
|
|
|
21,996 |
|
Less: Net income from continuing operations attributable to
noncontrolling interest |
|
4,937 |
|
|
|
1,903 |
|
Less: Net income from discontinued operations attributable to
noncontrolling interest |
|
1,041 |
|
|
|
1,099 |
|
Net income
attributable to Holdings |
$ |
23,762 |
|
|
$ |
18,994 |
|
|
|
|
|
Basic income (loss) per common
share attributable to Holdings |
|
|
|
Continuing operations |
$ |
(0.00 |
) |
|
$ |
(0.10 |
) |
Discontinued operations |
|
0.14 |
|
|
|
0.11 |
|
|
$ |
0.14 |
|
|
$ |
0.01 |
|
|
|
|
|
Basic weighted average number
of common shares outstanding |
|
69,375 |
|
|
|
64,900 |
|
|
|
|
|
Cash distributions declared
per Trust common share |
$ |
0.25 |
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
Compass Diversified
HoldingsNet Income to Non-GAAP Adjusted Earnings
and Non-GAAP Adjusted
EBITDA(Unaudited)
|
|
|
|
|
Three months ended March 31, |
(in thousands) |
|
2022 |
|
|
|
2021 |
|
Net income |
$ |
29,740 |
|
|
$ |
21,996 |
|
Gain on sale of discontinued
operations |
|
5,993 |
|
|
|
— |
|
Income from discontinued
operations, net of tax |
|
5,370 |
|
|
|
8,914 |
|
Income from continuing
operations |
$ |
18,377 |
|
|
$ |
13,082 |
|
Less: income from continuing
operations attributable to noncontrolling interest |
|
4,937 |
|
|
|
1,903 |
|
Net income attributable to
Holdings - continuing operations |
$ |
13,440 |
|
|
$ |
11,179 |
|
Adjustments: |
|
|
|
Distributions paid - Preferred Shares |
|
(6,045 |
) |
|
|
(6,045 |
) |
Amortization expense - intangibles and inventory step up |
|
23,366 |
|
|
|
18,589 |
|
Stock compensation |
|
2,681 |
|
|
|
2,640 |
|
Acquisition expenses |
|
216 |
|
|
|
299 |
|
Integration Services Fee |
|
563 |
|
|
|
1,600 |
|
Other |
|
1,802 |
|
|
|
(2,101 |
) |
Adjusted
Earnings |
$ |
36,023 |
|
|
$ |
26,161 |
|
Plus (less): |
|
|
|
Depreciation |
|
9,927 |
|
|
|
8,557 |
|
Income taxes |
|
9,976 |
|
|
|
5,308 |
|
Interest expense, net |
|
17,419 |
|
|
|
13,805 |
|
Amortization of debt issuance |
|
866 |
|
|
|
686 |
|
Management fees |
|
14,436 |
|
|
|
10,798 |
|
Noncontrolling interest |
|
4,937 |
|
|
|
1,903 |
|
Preferred distributions |
|
6,045 |
|
|
|
6,045 |
|
Other expense (income) |
|
(2,036 |
) |
|
|
2,228 |
|
Adjusted
EBITDA |
$ |
97,593 |
|
|
$ |
75,491 |
|
|
|
|
|
|
|
|
|
Compass Diversified
HoldingsIncome (Loss) from Continuing Operations
to Non-GAAP Consolidated Adjusted EBITDA
ReconciliationThree months ended March 31,
2022(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
5.11 |
|
|
BOA |
|
Ergo |
|
Lugano |
|
Marucci Sports |
|
Velocity Outdoor |
|
Altor Solutions |
|
Arnold |
|
Sterno |
|
Consolidated |
Income (loss) from continuing operations (1) |
|
$ |
(14,981 |
) |
|
$ |
2,645 |
|
|
$ |
14,199 |
|
|
$ |
(1,479 |
) |
|
$ |
8,494 |
|
$ |
6,134 |
|
|
$ |
713 |
|
$ |
1,936 |
|
$ |
960 |
|
$ |
(244 |
) |
|
$ |
18,377 |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes |
|
|
— |
|
|
|
819 |
|
|
|
2,477 |
|
|
|
399 |
|
|
|
2,895 |
|
|
2,006 |
|
|
|
202 |
|
|
1,059 |
|
|
1,012 |
|
|
(893 |
) |
|
|
9,976 |
|
Interest expense, net |
|
|
17,368 |
|
|
|
26 |
|
|
|
(5 |
) |
|
|
1 |
|
|
|
5 |
|
|
1 |
|
|
|
17 |
|
|
— |
|
|
6 |
|
|
— |
|
|
|
17,419 |
|
Intercompany interest |
|
|
(19,275 |
) |
|
|
2,920 |
|
|
|
2,028 |
|
|
|
787 |
|
|
|
2,125 |
|
|
1,517 |
|
|
|
1,853 |
|
|
2,465 |
|
|
1,267 |
|
|
4,313 |
|
|
|
— |
|
Depreciation and amortization expense |
|
|
336 |
|
|
|
5,454 |
|
|
|
5,317 |
|
|
|
2,008 |
|
|
|
2,254 |
|
|
4,189 |
|
|
|
3,269 |
|
|
3,990 |
|
|
2,226 |
|
|
5,116 |
|
|
|
34,159 |
|
EBITDA |
|
|
(16,552 |
) |
|
|
11,864 |
|
|
|
24,016 |
|
|
|
1,716 |
|
|
|
15,773 |
|
|
13,847 |
|
|
|
6,054 |
|
|
9,450 |
|
|
5,471 |
|
|
8,292 |
|
|
|
79,931 |
|
Other (income) expense |
|
|
— |
|
|
|
(548 |
) |
|
|
50 |
|
|
|
4 |
|
|
|
2 |
|
|
(1,810 |
) |
|
|
209 |
|
|
312 |
|
|
— |
|
|
(255 |
) |
|
|
(2,036 |
) |
Non-controlling shareholder compensation |
|
|
— |
|
|
|
411 |
|
|
|
635 |
|
|
|
413 |
|
|
|
240 |
|
|
276 |
|
|
|
251 |
|
|
268 |
|
|
13 |
|
|
174 |
|
|
|
2,681 |
|
Acquisition expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
216 |
|
|
— |
|
|
— |
|
|
|
216 |
|
Integration services fee |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
563 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
563 |
|
Other |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
1,802 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
1,802 |
|
Management fees |
|
|
12,935 |
|
|
|
250 |
|
|
|
250 |
|
|
|
125 |
|
|
|
188 |
|
|
125 |
|
|
|
125 |
|
|
188 |
|
|
125 |
|
|
125 |
|
|
|
14,436 |
|
Adjusted
EBITDA (2) |
|
$ |
(3,617 |
) |
|
$ |
11,977 |
|
|
$ |
24,951 |
|
|
$ |
2,258 |
|
|
$ |
16,766 |
|
$ |
14,240 |
|
|
$ |
6,639 |
|
$ |
10,434 |
|
$ |
5,609 |
|
$ |
8,336 |
|
|
$ |
97,593 |
|
(1) Income from continuing operations does not
include income from discontinued operations for the three months
ended March 31, 2022.
(2) As a result of the classification of ACI as
Held for Sale at March 31, 2022, Adjusted EBITDA for the three
months ended March 31, 2022 does not include $7.3 million in
Adjusted EBITDA from ACI.
Compass Diversified
HoldingsIncome (Loss) from Continuing Operations
to Non-GAAP Consolidated Adjusted EBITDA
ReconciliationThree months ended March 31,
2021(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
5.11 |
|
|
BOA |
|
Ergo |
|
Marucci Sports |
|
Velocity Outdoor |
|
Altor Solutions |
|
Arnold |
|
Sterno |
|
Consolidated |
Income (loss) from continuing operations (1) |
|
$ |
(11,407 |
) |
|
$ |
1,999 |
|
|
$ |
5,544 |
|
|
$ |
1,043 |
|
|
7,528 |
|
|
$ |
5,225 |
|
|
$ |
2,215 |
|
|
$ |
958 |
|
$ |
(23 |
) |
|
$ |
13,082 |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes |
|
|
— |
|
|
|
768 |
|
|
|
(707 |
) |
|
|
347 |
|
|
2,398 |
|
|
|
1,506 |
|
|
|
935 |
|
|
|
536 |
|
|
(475 |
) |
|
|
5,308 |
|
Interest expense, net |
|
|
13,759 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
2 |
|
|
|
44 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
13,805 |
|
Intercompany interest |
|
|
(16,131 |
) |
|
|
2,984 |
|
|
|
2,286 |
|
|
|
566 |
|
|
552 |
|
|
|
1,818 |
|
|
|
1,738 |
|
|
|
1,462 |
|
|
4,725 |
|
|
|
— |
|
Depreciation and amortization |
|
|
206 |
|
|
|
5,455 |
|
|
|
4,967 |
|
|
|
2,225 |
|
|
2,169 |
|
|
|
3,128 |
|
|
|
2,623 |
|
|
|
1,761 |
|
|
5,298 |
|
|
|
27,832 |
|
EBITDA |
|
|
(13,573 |
) |
|
|
11,206 |
|
|
|
12,090 |
|
|
|
4,181 |
|
|
12,649 |
|
|
|
11,721 |
|
|
|
7,511 |
|
|
|
4,717 |
|
|
9,525 |
|
|
|
60,027 |
|
Other (income) expense |
|
|
120 |
|
|
|
(12 |
) |
|
|
55 |
|
|
|
— |
|
|
(2 |
) |
|
|
2,386 |
|
|
|
(264 |
) |
|
|
— |
|
|
(55 |
) |
|
|
2,228 |
|
Non-controlling shareholder compensation |
|
|
— |
|
|
|
628 |
|
|
|
560 |
|
|
|
404 |
|
|
275 |
|
|
|
262 |
|
|
|
257 |
|
|
|
— |
|
|
254 |
|
|
|
2,640 |
|
Acquisition expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
299 |
|
|
— |
|
|
|
299 |
|
Integration services fees |
|
|
— |
|
|
|
— |
|
|
|
1,100 |
|
|
|
— |
|
|
500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
1,600 |
|
Other |
|
|
199 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
(2,300 |
) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(2,101 |
) |
Management fees |
|
|
9,485 |
|
|
|
250 |
|
|
|
250 |
|
|
|
125 |
|
|
125 |
|
|
|
125 |
|
|
|
188 |
|
|
|
125 |
|
|
125 |
|
|
|
10,798 |
|
Adjusted
EBITDA (2) |
|
$ |
(3,769 |
) |
|
$ |
12,072 |
|
|
$ |
14,055 |
|
|
$ |
4,710 |
|
$ |
13,547 |
|
|
$ |
12,194 |
|
|
$ |
7,692 |
|
|
$ |
5,141 |
|
$ |
9,849 |
|
|
$ |
75,491 |
|
(1) Income (loss) from
continuing operations does not include income from discontinued
operations for the three months ended March 31, 2021.
(2) As a result of the sale of
Liberty Safe in August 2021, and the classification of ACI as Held
for Sale at December 31, 2021, Adjusted EBITDA for the three months
ended March 31, 2021 does not include $6.2 million in Adjusted
EBITDA from Liberty and $6.3 million in Adjusted EBITDA from
ACI.
Compass Diversified
HoldingsNon-GAAP Adjusted
EBITDA(Unaudited)
|
|
|
|
|
|
|
Three months ended March 31, |
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Branded
Consumer |
|
|
|
|
5.11 |
|
$ |
11,977 |
|
|
$ |
12,072 |
|
BOA |
|
|
24,951 |
|
|
|
14,055 |
|
Ergobaby |
|
|
2,258 |
|
|
|
4,710 |
|
Lugano
(1) |
|
|
16,766 |
|
|
|
— |
|
Marucci Sports |
|
|
14,240 |
|
|
|
13,547 |
|
Velocity Outdoor |
|
|
6,639 |
|
|
|
12,194 |
|
Total Branded Consumer |
|
$ |
76,831 |
|
|
$ |
56,578 |
|
|
|
|
|
|
Niche
Industrial |
|
|
|
|
Altor Solutions |
|
$ |
10,434 |
|
|
$ |
7,692 |
|
Arnold Magnetics |
|
|
5,609 |
|
|
|
5,141 |
|
Sterno |
|
|
8,336 |
|
|
|
9,849 |
|
Total Niche Industrial |
|
$ |
24,379 |
|
|
$ |
22,682 |
|
Corporate expense |
|
|
(3,617 |
) |
|
|
(3,769 |
) |
Total Adjusted EBITDA |
|
$ |
97,593 |
|
|
$ |
75,491 |
|
(1 |
) |
|
The above results for Lugano do not include management's estimate
of Adjusted EBITDA, before our ownership, of $11.4 million for the
three months ended March 31, 2021. Lugano was acquired on September
3, 2021. |
Compass Diversified
HoldingsNet Sales to Pro Forma Net Sales
Reconciliation(Unaudited)
|
|
Three months ended March 31, |
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Net Sales |
|
$ |
510,513 |
|
|
$ |
408,556 |
|
Acquisitions (1) |
|
|
— |
|
|
|
29,439 |
|
Pro Forma Net Sales |
|
$ |
510,513 |
|
|
$ |
437,995 |
|
(1) Acquisitions reflects the
net sales for Lugano on a pro forma basis as if we had acquired
this business on January 1, 2021.
Compass Diversified
HoldingsSubsidiary Pro Forma Net
Sales(Unaudited)
|
|
|
|
|
|
|
Three months ended March 31, |
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Branded
Consumer |
|
|
|
|
5.11 |
|
$ |
104,023 |
|
|
$ |
99,877 |
|
BOA |
|
|
56,810 |
|
|
|
36,452 |
|
Ergobaby |
|
|
20,210 |
|
|
|
22,328 |
|
Lugano
(1) |
|
|
47,019 |
|
|
|
29,439 |
|
Marucci Sports |
|
|
52,092 |
|
|
|
36,648 |
|
Velocity Outdoor |
|
|
51,446 |
|
|
|
65,632 |
|
Total Branded Consumer |
|
$ |
331,600 |
|
|
$ |
290,376 |
|
|
|
|
|
|
Niche
Industrial |
|
|
|
|
Altor Solutions |
|
$ |
63,828 |
|
|
$ |
37,820 |
|
Arnold Magnetics |
|
|
38,165 |
|
|
|
32,485 |
|
Sterno |
|
|
76,920 |
|
|
|
77,314 |
|
Total Niche Industrial |
|
$ |
178,913 |
|
|
$ |
147,619 |
|
|
|
|
|
|
Total Subsidiary Net
Sales |
|
$ |
510,513 |
|
|
$ |
437,995 |
|
(1) Net sales for Lugano are pro forma as if we
had acquired this business on January 1, 2021.
Compass Diversified
HoldingsCondensed Consolidated Cash Flows
(Unaudited)
|
|
Three months ended March 31, |
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Net cash provided by
(used in) operating activities |
|
$ |
(33,529 |
) |
|
$ |
36,390 |
|
Net cash used in
investing activities |
|
|
(8,292 |
) |
|
|
(42,267 |
) |
Net cash used in
financing activities |
|
|
(14,452 |
) |
|
|
(1,493 |
) |
Foreign currency impact on
cash |
|
|
(259 |
) |
|
|
(182 |
) |
Net decrease in cash and cash
equivalents |
|
|
(56,532 |
) |
|
|
(7,552 |
) |
Cash and cash equivalents -
beginning of the period (1) |
|
|
160,733 |
|
|
|
70,744 |
|
Cash and cash
equivalents - end of the period (2) |
|
$ |
104,201 |
|
|
$ |
63,192 |
|
(1) Includes cash from
discontinued operations of $3.6 million at January 1, 2022 and
$10.7 million at January 1, 2021.
(2) Includes cash from discontinued operations
of $6.9 million at March 31, 2022 and $7.6 million at March 31,
2021.
|
Compass Diversified Holding |
Selected Financial Data - Cash Flows |
(Unaudited) |
|
|
Three months ended March 31, |
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Changes in operating assets
and liabilities |
|
$ |
(95,717 |
) |
|
$ |
(25,559 |
) |
Purchases of property and
equipment |
|
$ |
(10,391 |
) |
|
$ |
(7,303 |
) |
Distributions paid - common
shares |
|
$ |
(17,352 |
) |
|
$ |
(23,364 |
) |
Distributions paid - preferred
shares |
|
$ |
(6,045 |
) |
|
$ |
(6,045 |
) |
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