CODI Compass Diversified

Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market branded consumer and industrial businesses, announced today its consolidated operating results for the three months and full year ended December 31, 2024.

“In 2024, we once again delivered strong financial results, achieving double digit sales growth and over 30% growth in our Adjusted EBITDA for the full year,” said Elias Sabo, CEO of Compass Diversified. “In the fourth quarter, we saw both sales and earnings growth accelerate, driven by continued strong performance from our consumer businesses as well as improving performance in our industrial businesses. Our differentiated business model, strong operating companies, and permanent capital base position us to create long-term value for all stakeholders. I want to take this opportunity to thank the CODI team as well as our subsidiary management teams and employees for their hard work fostering innovation, driving exceptional results, and exceeding expectations.”

Fourth Quarter 2024 – Financial Highlights (vs Q4 2023)

• Net sales were $620.3 million, up 13.8%
  • Branded consumer net sales increased 15.2% to $403.0 million
  • Industrial net sales increased 11.4% to $217.2 million
• Subsidiary Adjusted EBITDA, a non-GAAP financial measure, was $140.9 million, up 25%
  • Branded consumer Adjusted EBITDA increased 29.0%
  • Industrial Adjusted EBITDA increased 5.2%
• Adjusted EBITDA, a non-GAAP financial measure, was $118.2 million, up 29.0%

Recent Business Highlights

• Sold Ergobaby for an enterprise value of $104 million on December 27, 2024
• In Q4 2024 - raised ~$90 million via issuance of preferred shares
  • More than $115 million for full year 2024
  • Flexible, low-cost source of capital
• In Q4 2024 - re-purchased more than 400,000 common shares
  • Average price of $23.19 per share

• In January 2025 - raised $300 million in incremental term loan A
  • Initial funding of $200 million; additional $100 million available with six month delayed draw
  • Matures in July 2027, consistent with existing term loan A

Fourth Quarter and Full Year 2024 Financial Results

Net sales in the fourth quarter of 2024 were $620.3 million, up 13.8% compared to $544.9 million in the fourth quarter of 2023. For the full year 2024, net sales were $2.2 billion, up 11.9% compared to $2.0 billion a year ago. Growth was driven by the Company’s acquisition of The Honey Pot Co. in January 2024 and continued strong sales growth at Lugano and BOA. On a pro forma basis, assuming CODI had acquired The Honey Pot Co. on January 1, 2023, net sales were up 7% in the full year 2024.

Branded consumer net sales increased 8% in the fourth quarter of 2024 to $403.0 million compared to the fourth quarter of 2023. On a pro forma basis, branded consumer net sales increased 10% to $1.5 billion in the full year 2024 compared to a year ago.

Industrial net sales increased 11% in the fourth quarter of 2024 to $217.2 million compared to the fourth quarter of 2023 and remained relatively flat at $729.4 million in the full year 2024 compared to a year ago.

Operating income for the fourth quarter of 2024 was $60.6 million compared to operating loss of $4.6 million in the fourth quarter of 2023. The increase was primarily due to a $56.8 million non-cash impairment expense associated with PrimaLoft in the fourth quarter of 2023. For the full year 2024, operating income increased 170% to $230.1 million compared to $85.2 million a year ago. The increase was due to an increase in net sales year-over-year, as well as non-cash impairment charges taken in 2023 of $89.4 million.

Net income in the fourth quarter of 2024 was $23.8 million compared to net income of $139.4 million in the fourth quarter of 2023. For the full year 2024, net income was $47.4 million compared to $262.4 million a year ago. The decreases in net income were due primarily to the $179.5 million gain on the sale of Marucci Sports in November 2023 and the $98.0 million gain on the sale of Advanced Circuits in February 2023.

Income from continuing operations in the fourth quarter of 2024 was $22.2 million compared to loss from continuing operations of $37.1 million in the fourth quarter of 2023. For the full year 2024, income from continuing operations was $42.3 million compared to loss from continuing operations of $44.8 million a year ago. The increases in net income from continuing operations were primarily due to the non-cash impairment expenses associated with PrimaLoft and Velocity Outdoor in 2023.

Adjusted Earnings (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the fourth quarter of 2024 was $46.6 million compared to $34.7 million a year ago. For the full year 2024, Adjusted Earnings was $161.6 million compared to $101.2 million a year ago. CODI's weighted average number of shares outstanding in the fourth quarter of 2024 was 75.51 million compared to 72.43 million in the prior year fourth quarter. For the full year 2024, CODI’s weighted average number of shares outstanding was 75.45 million compared to 72.11 million in 2023.

Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) in the fourth quarter of 2024 was $118.2 million, up 29% compared to $91.6 million in the fourth quarter of 2023. For the full year 2024, Adjusted EBITDA was $424.8 million, up 30% compared to $326.5 million a year ago. The increases were primarily due to strong results at Lugano. Management fees incurred during the fourth quarter and full year were $19.5 million and $74.8 million, respectively.

Liquidity and Capital Resources

As of December 31, 2024, CODI had approximately $59.7 million in cash and cash equivalents, $113.5 million outstanding on its revolver, $375.0 million outstanding in term loans, $1.0 billion outstanding in 5.250% Senior Notes due 2029 and $300.0 million outstanding in 5.000% Senior Notes due 2032.

As of December 31, 2024, the Company had no significant debt maturities until 2027 and had net borrowing availability of approximately $486.6 million under its revolving credit facility.

Fourth Quarter 2024 Distributions

On January 3, 2025, CODI’s Board of Directors (the “Board”) declared a fourth quarter distribution of $0.25 per share on the Company's common shares. The cash distribution was paid on January 23, 2025, to all holders of record of common shares as of January 16, 2025.

The Board also declared a quarterly distribution of $0.453125 per share on the Company’s 7.250% Series A Preferred Shares (the “Series A Preferred Shares”). The distribution on the Series A Preferred Shares covered the period from, and including, October 30, 2024, up to, but excluding, January 30, 2025. The cash distribution was paid on January 30, 2025, to all holders of record of Series A Preferred Shares as of January 15, 2025.

The Board also declared a quarterly distribution of $0.4921875 per share on the Company’s 7.875% Series B Preferred Shares (the “Series B Preferred Shares”). The distribution on the Series B Preferred Shares covered the period from, and including, October 30, 2024, up to, but excluding, January 30, 2025. The cash distribution for such period was paid on January 30, 2025, to all holders of record of Series B Preferred Shares as of January 15, 2025.

The Board also declared a quarterly distribution of $0.4921875 per share on the Company’s 7.875% Series C Preferred Shares (the “Series C Preferred Shares”). The distribution on the Series C Preferred Shares covered the period from, and including, October 30, 2024, up to, but excluding, January 30, 2025. The cash distribution was paid on January 30, 2025, to all holders of record of Series C Preferred Shares as of January 15, 2025.

CODI expects all cash distributions paid in the 2024 taxable year to be qualified dividends (assuming requisite holding periods are met) since CODI’s earnings and profits in the 2024 taxable year are expected to exceed cash distributions.

2025 Outlook

For the full year 2025, CODI expects its current subsidiaries to produce consolidated Subsidiary Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) of between $570 million and $610 million. Of this range, CODI expects its branded consumer vertical to produce $440 million to $465 million and its industrial vertical to produce $130 million to $145 million. This estimate is based on the summation of the Company’s expectations for its current subsidiaries in 2025, and is absent additional acquisitions or divestitures, and excludes corporate expenses such as interest expense, management fees paid by CODI and corporate overhead.

CODI further expects Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) including management fees and corporate expenses to be between $480 million and $520 million for the full year 2025.

In addition, the Company expects to earn between $170 million and $190 million in Adjusted Earnings (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the full year 2025.

In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, CODI has not reconciled 2025 consolidated Subsidiary Adjusted EBITDA, 2025 Adjusted EBITDA or 2025 Adjusted Earnings to their comparable GAAP measure because it does not provide guidance on Income (Loss) from Continuing Operations or Net Income (Loss) or the applicable reconciling items as a result of the uncertainty regarding, and the potential variability of, these items. For the same reasons, CODI is unable to address the probable significance of the unavailable information, which could be material to future results.

Conference Call

Management will host a conference call on Thursday, February 27, 2025, at 5:00 p.m. E.T. / 2:00 p.m. P.T. with the Company’s Chief Executive Officer, Elias Sabo, the Company’s Chief Financial Officer, Stephen Keller, and Pat Maciariello, the Chief Operating Officer of Compass Group Management. A live webcast of the call will be available on the Investor Relations section of CODI’s website. To access the call by phone, please go to this link (registration link) and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call 15 minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time on the Company’s website.

Note Regarding Use of Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted Earnings are non-GAAP measures used by the Company to assess its performance. We have reconciled Adjusted EBITDA to Income (Loss) from Continuing Operations and Adjusted Earnings to Net Income (Loss) on the attached schedules. We consider Income (Loss) from Continuing Operations to be the most directly comparable GAAP financial measure to Adjusted EBITDA and Net Income (Loss) to be the most directly comparable GAAP financial measure to Adjusted Earnings. We believe that Adjusted EBITDA and Adjusted Earnings provides useful information to investors and reflect important financial measures as each excludes the effects of items which reflect the impact of long-term investment decisions, rather than the performance of near-term operations. When compared to Net Income (Loss) and Income (Loss) from Continuing Operations, Adjusted Earnings and Adjusted EBITDA, respectively, are each limited in that they do not reflect the periodic costs of certain capital assets used in generating revenues of our businesses or the non-cash charges associated with impairments, as well as certain cash charges. The presentation of Adjusted EBITDA allows investors to view the performance of our businesses in a manner similar to the methods used by us and the management of our businesses, provides additional insight into our operating results and provides a measure for evaluating targeted businesses for acquisition. The presentation of Adjusted Earnings provides insight into our operating results.

Pro forma net sales is defined as net sales including the historical net sales relating to the pre-acquisition periods of The Honey Pot Co., assuming that the Company acquired The Honey Pot Co. on January 1, 2023. We have reconciled pro forma net sales to net sales, the most directly comparable GAAP financial measure, on the attached schedules. We believe that pro forma net sales is useful information for investors as it provides a better understanding of sales performance, and relative changes thereto, on a comparable basis. Pro forma net sales is not necessarily indicative of what the actual results would have been if the acquisition had in fact occurred on the date or for the periods indicated nor does it purport to project net sales for any future periods or as of any date.

In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, we have not reconciled 2025 consolidated Subsidiary Adjusted EBITDA, 2025 Adjusted EBITDA or 2025 Adjusted Earnings to their comparable GAAP measures because we do not provide guidance on Net Income (Loss) from Continuing Operations or Net Income (Loss) or the applicable reconciling items as a result of the uncertainty regarding, and the potential variability of, these items. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.

Adjusted EBITDA, Adjusted Earnings and pro forma net sales are not meant to be a substitute for GAAP measures and may be different from or otherwise inconsistent with non-GAAP financial measures used by other companies.

About Compass Diversified

Since its IPO in 2006, CODI has consistently executed its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the branded consumer, industrial, healthcare, and critical outsourced services sectors. The Company leverages its permanent capital base, long-term disciplined approach, and actionable expertise to maintain controlling ownership interests in each of its subsidiaries, maximizing its ability to impact long-term cash flow generation and value creation. The Company provides both debt and equity capital for its subsidiaries, contributing to their financial and operating flexibility. CODI utilizes the cash flows generated by its subsidiaries to invest in the long-term growth of the Company and has consistently generated strong returns through its culture of transparency, alignment and accountability. For more information, please visit compassdiversified.com.

Forward Looking Statements

Certain statements in this press release may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements as to our future performance or liquidity, such as expectations regarding our results of operations and financial condition, our 2025 consolidated Subsidiary Adjusted EBITDA, our 2025 Adjusted EBITDA, our 2025 Adjusted Earnings, our pending acquisitions and divestitures, and other statements with regard to the future performance of CODI. We may use words such as “plans,” “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “seek,” “look,” and similar expressions to identify forward-looking statements. The forward-looking statements contained in this press release involve risks and uncertainties. Actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in CODI’s annual report on Form 10-K for the year ended December 31, 2024 and its quarterly reports on Form 10-Q. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment, including changes in inflation, interest rates and U.S. tariff and import/export regulations; risks associated with possible disruption in CODI’s operations or the economy generally due to terrorism, war, natural disasters, social, civil and political unrest or the COVID-19 pandemic; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); environmental risks affecting the business or operations of our subsidiaries; disruption in the global supply chain, labor shortages and high labor costs; our business prospects and the prospects of our subsidiaries; the impact of, and ability to successfully complete and integrate, acquisitions that we may make; the ability to successfully complete when we’ve executed divestitures agreements; the dependence of our future success on the general economy and its impact on the industries in which we operate; the ability of our subsidiaries to achieve their objectives; the adequacy of our cash resources and working capital; the timing of cash flows, if any, from the operations of our subsidiaries; and other considerations that may be disclosed from time to time in CODI’s publicly disseminated documents and filings. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. Although, except as required by law, CODI undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that CODI may make directly to you or through reports that it in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Investor Relations

Compass Diversified irinquiry@compassdiversified.com

Gateway GroupCody Slach949.574.3860CODI@gateway-grp.com

Media RelationsCompass Diversifiedmediainquiry@compassdiversified.com

The IGB Group        Leon Berman212-477-8438lberman@igbir.com

Compass Diversified HoldingsCondensed Consolidated Balance Sheets
(in thousands)	December 31, 2024			December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	59,727		$	446,684
Accounts receivable, net		444,386			308,183
Inventories, net		962,408			723,194
Prepaid expenses and other current assets		101,129			88,844
Current assets of discontinued operations		—			36,915
Total current assets		1,567,650			1,603,820
Property, plant and equipment, net		244,746			191,283
Goodwill		982,253			859,907
Intangible assets, net		1,049,186			879,078
Other non-current assets		208,587			195,010
Non-current assets of discontinued operations		—			87,883
Total assets	$	4,052,422		$	3,816,981
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	104,304		$	91,089
Accrued expenses		197,829			151,443
Due to related parties		18,036			16,025
Current portion, long-term debt		15,000			10,000
Other current liabilities		49,617			34,812
Current liabilities of discontinued operations		—			8,986
Total current liabilities		384,786			312,355
Deferred income taxes		119,948			118,882
Long-term debt		1,759,290			1,661,879
Other non-current liabilities		225,334			203,207
Non-current liabilities of discontinued operations		—			1,277
Total liabilities		2,489,358			2,297,600
Stockholders' equity
Total stockholders' equity attributable to Holdings		1,296,793			1,326,750
Noncontrolling interest		266,271			175,875
Noncontrolling interest of discontinued operations		—			16,756
Total stockholders' equity		1,563,064			1,519,381
Total liabilities and stockholders’ equity	$	4,052,422		$	3,816,981

Compass Diversified HoldingsConsolidated Statements of Operations
	Three months ended December 31,								Year ended December 31,
(in thousands, except per share data)		2024				2023				2024				2023
Net revenues	$	620,255			$	544,915			$	2,198,233			$	1,965,017
Cost of revenues		349,238				312,972				1,197,873				1,132,014
Gross profit		271,017				231,943				1,000,360				833,003
Operating expenses:
Selling, general and administrative expense		166,256				140,831				587,520				502,013
Management fees		19,453				16,784				74,767				67,945
Amortization expense		24,735				22,088				99,760				88,396
Impairment expense		—				56,832				8,182				89,400
Operating income (loss)		60,573				(4,592	)			230,131				85,249
Other income (expense):
Interest expense, net		(29,189	)			(24,827	)			(106,683	)			(105,179	)
Amortization of debt issuance costs		(1,004	)			(1,004	)			(4,018	)			(4,038	)
Gain (loss) on sale of Crosman		—								(24,218	)			—
Other income (expense), net		412				(350	)			(3,902	)			1,779
Net income (loss) before income taxes		30,792				(30,773	)			91,310				(22,189	)
Provision for income taxes		8,567				6,290				49,012				22,639
Income (loss) from continuing operations		22,225				(37,063	)			42,298				(44,828	)
Income (loss) from discontinued operations, net of income tax		(7,006	)			(3,026	)			(6,905	)			24,208
Gain on sale of discontinued operations		8,612				179,530				11,957				283,025
Net income		23,831				139,441				47,350				262,405
Less: Net income (loss) attributable to noncontrolling interest		13,631				2,828				37,426				16,423
Less: Net income (loss) from discontinued operations attributable to noncontrolling interest		(1,721	)			(824	)			(2,884	)			(304	)
Net income attributable to Holdings	$	11,921			$	137,437			$	12,808			$	246,286
Basic income (loss) per common share attributable to Holdings
Continuing operations	$	(0.10	)		$	(0.75	)		$	(1.25	)		$	(1.81	)
Discontinued operations		0.04				2.45				0.11				4.27
	$	(0.06	)		$	1.70			$	(1.14	)		$	2.46
Basic weighted average number of common shares outstanding		75,505				72,429				75,454				72,105
Cash distributions declared per Trust common share	$	0.25			$	0.25			$	1.00			$	1.00

Compass Diversified HoldingsNet Income to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA - 2024(Unaudited)
	Three months ended																Year ended
(in thousands)	March 31, 2024				June 30, 2024				September 30, 2024				December 31, 2024				December 31, 2024
Net income (loss)	$	5,781			$	(13,723	)		$	31,461			$	23,831			$	47,350
Income (loss) from discontinued operations, net of tax		317				872				(1,088	)			(7,006	)			(6,905	)
Gain on sale of discontinued operations, net of tax		3,345				—				—				8,612				11,957
Net income (loss) from continuing operations	$	2,119			$	(14,595	)		$	32,549			$	22,225			$	42,298
Less: income from continuing operations attributable to noncontrolling interest		7,765				6,041				9,989				13,631				37,426
Net income (loss) attributable to Holdings - continuing operations	$	(5,646	)		$	(20,636	)		$	22,560			$	8,594			$	4,872
Adjustments:
Distributions paid - preferred shares		(6,045	)			(6,101	)			(6,345	)			(6,967	)			(25,458	)
Amortization expense - intangible assets and inventory step-up		27,116				26,642				24,956				26,341				105,055
Impairment expense		8,182				—				—				—				8,182
Loss (gain) on sale of Crosman		—				24,606				(388	)			—				24,218
Tax effect - loss on sale of Crosman		—				7,254				—				—				7,254
Non-controlling shareholder compensation		4,071				3,680				4,537				4,057				16,345
Acquisition expense		3,479				—				—				1,872				5,351
Integration services fee		—				875				875				875				2,625
Other		274				130				964				11,820				13,188
Adjusted earnings	$	31,431			$	36,450			$	47,159			$	46,592			$	161,632
Plus (less):
Depreciation expense		10,730				10,339				10,180				12,642				43,891
Income tax provision		9,996				19,830				10,619				8,567				49,012
Interest expense		23,575				26,561				27,358				29,189				106,683
Amortization of debt issuance costs		1,005				1,004				1,005				1,004				4,018
Income from continuing operations attributable to noncontrolling interest		7,765				6,041				9,989				13,631				37,426
Tax effect - loss on sale of Crosman		—				(7,254	)			—				—				(7,254	)
Preferred distributions		6,045				6,101				6,345				6,967				25,458
Other		2,879				1,375				60				(412	)			3,902
Adjusted EBITDA	$	93,426			$	100,447			$	112,715			$	118,180			$	424,768

Compass Diversified HoldingsNet Income (Loss) to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA - 2023(Unaudited)
	Three months ended																Year ended
(in thousands)	March 31, 2023				June 30, 2023				September 30, 2023				December 31, 2023				December 31, 2023
Net income (loss)	$	109,601			$	17,123			$	(3,760	)		$	139,441			$	262,405
Income (loss) from discontinued options, net of tax		10,939				5,437				10,858				(3,026	)			24,208
Gain on sale of discontinued operations, net of tax		97,989				4,232				1,274				179,530				283,025
Net income (loss) from continuing operations	$	673			$	7,454			$	(15,892	)		$	(37,063	)		$	(44,828	)
Less: income (loss) from continuing operations attributable to noncontrolling interest		4,398				3,428				5,769				2,828				16,423
Net income (loss) attributable to Holdings - continuing operations	$	(3,725	)		$	4,026			$	(21,661	)		$	(39,891	)		$	(61,251	)
Adjustments:
Distributions paid - preferred shares		(6,045	)			(6,046	)			(6,045	)			(6,045	)			(24,181	)
Amortization expense - intangible assets and inventory step-up		23,283				22,111				22,090				22,088				89,572
Impairment expense		—				—				32,568				56,832				89,400
Tax effect - impairment expense		—				—				(4,308	)			978				(3,330	)
Non-controlling interest - impairment expense		—				—				—				(5,382	)			(5,382	)
Non-controlling shareholder compensation		1,329				2,895				2,438				2,789				9,451
Integration services fee		1,187				1,188								—				2,375
Other		432				348				349				3,377				4,506
Adjusted earnings	$	16,461			$	24,522			$	25,431			$	34,746			$	101,160
Plus (less):
Depreciation expense		11,006				11,958				11,853				11,142				45,959
Income tax provision		7,471				4,421				4,457				6,290				22,639
Interest expense		26,180				26,613				27,559				24,828				105,180
Amortization of debt issuance costs		1,005				1,024				1,005				1,004				4,038
Income from continuing operations attributable to noncontrolling interest		4,398				3,428				5,769				2,828				16,423
Tax effect - impairment expense		—				—				4,308				(978	)			3,330
Non-controlling interest - impairment expense		—				—				—				5,382				5,382
Distributions paid - preferred shares		6,045				6,046				6,045				6,045				24,181
Other		(1,160	)			75				(1,044	)			349				(1,780	)
Adjusted EBITDA	$	71,406			$	78,087			$	85,383			$	91,636			$	326,512

Compass Diversified HoldingsNet Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA ReconciliationThree Months Ended December 31, 2024(Unaudited)
(in thousands)		Corporate					5.11			BOA				Lugano			PrimaLoft				THP				Velocity Outdoor				Altor Solutions				Arnold				Sterno				Consolidated
Net income (loss) from continuing operations		$	(8,045	)		$	2,040			$	4,543			$	35,133		$	(5,314	)		$	(1,997	)		$	(1,483	)		$	(441	)		$	(9,138	)		$	6,927			$	22,225
Adjusted for:
Provision (benefit) for income taxes			(2,095	)			(266	)			1,042				11,294			(2,010	)			(305	)			(264	)			(912	)			(196	)			2,280				8,568
Interest expense, net			29,134				(11	)			(5	)			—			(55	)			(24	)			(1	)			—				151				—				29,189
Intercompany interest			(41,740	)			3,252				4,409				15,596			4,390				2,725				1,635				5,159				1,808				2,766				—
Depreciation and amortization			51				5,536				5,343				2,763			5,331				4,163				1,363				9,303				2,511				3,623				39,987
EBITDA			(22,695	)			10,551				15,332				64,786			2,342				4,562				1,250				13,109				(4,864	)			15,596				99,969
Other (income) expense			—				(46	)			489				280			176				8				(1,177	)			24				—				(167	)			(413	)
Non-controlling shareholder compensation			—				499				1,331				775			559				517				(153	)			247				5				277				4,057
Acquisition expenses			—				—				—				—			—				—				—				1,872				—				—				1,872
Integration services fee			—				—				—				—			—				875				—				—				—				—				875
Other			—				—				—				—			—				—				1,500				696				9,546				78				11,820
Adjusted EBITDA		$	(22,695	)		$	11,004			$	17,152			$	65,841		$	3,077			$	5,962			$	1,420			$	15,948			$	4,687			$	15,784			$	118,180

Compass Diversified HoldingsNet Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA ReconciliationThree Months Ended December 31, 2023(Unaudited)
(in thousands)	Corporate					5.11			BOA				Lugano				PrimaLoft				Velocity Outdoor				Altor Solutions			Arnold				Sterno				Consolidated
Net income (loss) from continuing operations	$	(12,982	)		$	9,840			$	1,345			$	20,847			$	(64,383	)		$	(3,183	)		$	4,260		$	3,523			$	3,670			$	(37,063	)
Adjusted for:
Provision (benefit) for income taxes		301				1,004				639				4,293				(2,549	)			289				1,797			921				(406	)			6,289
Interest expense, net		24,732				(4	)			(9	)			—				(2	)			120				—			(11	)			—				24,826
Intercompany interest		(33,291	)			4,546				2,548				10,177				4,780				3,440				2,303			1,728				3,769				—
Depreciation and amortization		366				6,143				5,496				2,258				5,394				3,259				4,183			2,193				4,943				34,235
EBITDA		(20,874	)			21,529				10,019				37,575				(56,760	)			3,925				12,543			8,354				11,976				28,287
Other (income) expense		(1	)	—		(412	)	—		(19	)			(75	)			(66	)			(31	)			1,239			(4	)			(280	)			351
Non-controlling shareholder compensation		—				203				950				162				761				228				186			1				298				2,789
Impairment expense		—				—				—				—				57,810				(978	)			—			—				—				56,832
Other		—				—				3,072				—				—				—				—			—				305				3,377
Adjusted EBITDA	$	(20,875	)		$	21,320			$	14,022			$	37,662			$	1,745			$	3,144			$	13,968		$	8,351			$	12,299			$	91,636

Compass Diversified HoldingsNet Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA ReconciliationYear ended December 31, 2024(Unaudited)
(in thousands)		Corporate					5.11			BOA				Lugano			PrimaLoft				THP				Velocity Outdoor				Altor Solutions			Arnold				Sterno				Consolidated
Net income (loss) from continuing operations		$	(35,634	)		$	20,634			$	20,791			$	94,390		$	(10,575	)		$	(9,761	)		$	(54,851	)		$	5,635		$	(2,969	)		$	14,638			$	42,298
Adjusted for:
Provision (benefit) for income taxes			(2,095	)			4,526				4,962				31,304			(3,741	)			(2,894	)			6,810				2,280			2,986				4,874				49,012
Interest expense, net			106,414				(14	)			(21	)			3			(70	)			(52	)			52				—			371				—				106,683
Intercompany interest			(157,585	)			13,366				20,125				56,013			17,916				10,552				9,255				10,771			7,121				12,466				—
Depreciation and amortization			677				22,734				21,594				10,334			21,318				18,974				8,042				21,553			9,265				18,473				152,964
EBITDA			(88,223	)			61,246				67,451				192,044			24,848				16,819				(30,692	)			40,239			16,774				50,451				350,957
Other (income) expense			462				40				511				219			181				3				24,557				2,746			(9	)			(590	)			28,120
Non-controlling shareholder compensation			—				2,129				5,683				2,437			2,382				1,674				403				988			18				631				16,345
Impairment expense			—				—				—				—			—								8,182				—			—				—				8,182
Acquisition expenses			—				—				—				—			—				3,479				—				1,872			—				—				5,351
Integration services fee			—				—				—				—			—				2,625				—				—			—				—				2,625
Other			—				—				—				—			—				90				1,500				696			10,426				476				13,188
Adjusted EBITDA		$	(87,761	)		$	63,415			$	73,645			$	194,700		$	27,411			$	24,690			$	3,950			$	46,541		$	27,209			$	50,968			$	424,768

Compass Diversified HoldingsNet Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA ReconciliationYear ended December 31, 2023(Unaudited)
(in thousands)	Corporate					5.11			BOA				Lugano				PrimaLoft				Velocity Outdoor				Altor Solutions			Arnold				Sterno				Consolidated
Net income (loss) from continuing operations	$	(60,454	)		$	21,690			$	16,496			$	52,315			$	(69,883	)		$	(40,045	)		$	16,504		$	10,434			$	8,115			$	(44,828	)
Adjusted for:
Provision (benefit) for income taxes		301				4,994				2,863				14,589				(5,673	)			(5,616	)			5,890			4,185				1,106				22,639
Interest expense, net		104,855				(8	)			(18	)			4				(11	)			352				—			5				—				105,179
Intercompany interest		(126,240	)			20,244				7,580				32,837				18,123				13,510				10,486			6,806				16,654				—
Depreciation and amortization		1,498				26,009				22,932				9,229				21,478				13,282				16,741			8,441				19,959				139,569
EBITDA		(80,040	)			72,929				49,853				108,974				(35,966	)			(18,517	)			49,621			29,871				45,834				222,559
Other (income) expense		(128	)			(515	)			98				(80	)			62				(1,210	)			1,440			(5	)			(1,441	)			(1,779	)
Non-controlling shareholder compensation		—				1,191				3,019				1,474				980				914				986			27				860				9,451
Impairment expense		—				—				—				—				57,810				31,590				—			—				—				89,400
Integration services fee		—				—				—				—				2,375				—				—			—				—				2,375
Other		—				—				3,072				—				—				—				—			—				1,434				4,506
Adjusted EBITDA	$	(80,168	)		$	73,605			$	56,042			$	110,368			$	25,261			$	12,777			$	52,047		$	29,893			$	46,687			$	326,512

Compass Diversified HoldingsAdjusted EBITDA(Unaudited)
		Three months ended December 31,								Year ended December 31,
(in thousands)			2024				2023				2024				2023
Branded Consumer
5.11		$	11,004			$	21,320			$	63,415			$	73,605
BOA			17,152				14,022				73,645				56,042
Lugano			65,841				37,662				194,700				110,368
PrimaLoft			3,077				1,745				27,411				25,261
The Honey Pot Co. (1)			5,962				—				24,690				—
Velocity Outdoor			1,420				3,144				3,950				12,777
Total Branded Consumer		$	104,456			$	77,893			$	387,811			$	278,053
Industrial
Altor Solutions		$	15,948			$	13,968			$	46,541			$	52,047
Arnold Magnetics			4,687				8,351				27,209				29,893
Sterno			15,784				12,299				50,968				46,687
Total Industrial		$	36,419			$	34,618			$	124,718			$	128,627
Corporate expense			(22,695	)			(20,874	)			(87,761	)			(80,168	)
Total Adjusted EBITDA		$	118,180			$	91,637			$	424,768			$	326,512

(1	)		The above results for The Honey Pot Co. do not include management's estimate of Adjusted EBITDA, before the Company's ownership of $3.9 million for the year ended December 31, 2024, and $7.8 million and $28.7 million, respectively, for the three months and year ended December 31, 2023. The Honey Pot Co. was acquired on January 31, 2024.

Compass Diversified HoldingsNet Sales to Pro Forma Net Sales Reconciliation(unaudited)
		Three months ended December 31,						Year ended December 31,
(in thousands)			2024			2023			2024			2023
Net Sales		$	620,255		$	544,915		$	2,198,233		$	1,965,017
Acquisitions (1)			—			24,905			10,671			107,311
Pro Forma Net Sales		$	620,255		$	569,820		$	2,208,904		$	2,072,328

(1	)		Acquisitions reflects the net sales for The Honey Pot Co. on a proforma basis as if we had acquired this business on January 1, 2023.

Compass Diversified HoldingsSubsidiary Pro Forma Net Sales(unaudited)
		Three months ended December 31,						Year ended December 31,
(in thousands)			2024			2023			2024			2023
Branded Consumer
5.11		$	144,768		$	147,394		$	532,161		$	533,089
BOA			48,141			42,435			190,811			155,825
Lugano			149,685			104,750			470,666			308,321
PrimaLoft			12,708			9,434			74,226			67,053
The Honey Pot (1)			28,697			24,905			115,260			107,311
Velocity Outdoor			19,008			45,842			96,427			172,190
Total Branded Consumer		$	403,007		$	374,760		$	1,479,551		$	1,343,789
Industrial
Altor Solutions			81,322			56,417			239,068			238,030
Arnold Magnetics			41,292			44,632			171,837			166,679
Sterno			94,634			94,011			318,448			323,830
Total Industrial		$	217,248		$	195,060		$	729,353		$	728,539
Total Subsidiary Net Sales		$	620,255		$	569,820		$	2,208,904		$	2,072,328

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

Compass Diversified HoldingsCondensed Consolidated Cash Flows

		Three months ended December 31,								Year ended December 31,
(in thousands)			2024				2023				2024				2023
Net cash provided by (used in) operating activities		$	9,974			$	21,128			$	(67,636	)		$	78,080
Net cash provided by (used in) investing activities			(70,199	)			466,213				(422,450	)			570,503
Net cash provided by (used in) financing activities			49,732				(102,236	)			100,614				(260,163	)
Foreign currency impact on cash			(1,727	)			636				(1,278	)			786
Net increase (decrease) in cash and cash equivalents			(12,220	)			385,741				(390,750	)			389,206
Cash and cash equivalents - beginning of the period(1)			71,947				64,736				450,477				61,271
Cash and cash equivalents - end of the period		$	59,727			$	450,477			$	59,727			$	450,477

(1	)		Includes cash from discontinued operations of $3.8 million at January 1, 2024 and $8.5 million at January 1, 2023.

Compass Diversified Holding
Selected Financial Data - Cash Flows
		Three months ended December 31,								Year ended December 31,
(in thousands)			2024				2023				2024				2023
Changes in operating assets and liabilities		$	(37,286	)		$	(24,390	)		$	(292,884	)		$	(160,281	)
Purchases of property and equipment		$	(22,858	)		$	(17,239	)		$	(56,701	)		$	(55,016	)
Distributions paid - common shares		$	(18,913	)		$	(17,955	)		$	(75,490	)		$	(71,967	)
Distributions paid - preferred shares		$	(6,967	)		$	(6,045	)		$	(25,458	)		$	(24,181	)