Compass Diversified Stock Price, News & Analysis

Compass Diversified (NYSE: CODI) has announced non-reliance on its financial statements for fiscal years 2022 and 2023, following a similar disclosure for 2024 statements made on May 7. The announcement comes amid an ongoing investigation into subsidiary Lugano Holding, Inc., where irregularities in financing, accounting, and inventory practices have been preliminarily identified.

CEO Elias Sabo emphasized that the investigation is limited to Lugano and does not affect CODI's eight other subsidiaries, which continue to operate normally with strong balance sheets. The company maintains ample liquidity and access to capital through its revolving credit facility and is working with banking partners and bondholders to ensure stability during this period.

Compass Diversified (NYSE: CODI) has announced several urgent measures to enhance liquidity and reduce costs following the discovery of irregularities in financing, accounting, and inventory practices at its subsidiary, Lugano Holding. Key actions include: entering a forbearance agreement with lenders, reducing management fees, restricting investment in Lugano, and suspending quarterly cash distributions to common shareholders. Additionally, CODI received a NYSE non-compliance notice on May 20, 2025, for failing to file its Q1 2025 Form 10-Q. The company has a six-month period until November 19, 2025, to regain compliance, with a possible additional six-month extension. CODI emphasizes that its eight other subsidiaries continue to perform well, and management is focused on deleveraging and maximizing shareholder value while isolating Lugano's challenges.

Compass Diversified (NYSE: CODI) has announced non-reliance on its fiscal 2024 financial statements and a delay in filing its Q1 2025 Form 10-Q due to an ongoing internal investigation at its subsidiary, Lugano Holding, Inc. The investigation, initiated by CODI's Audit Committee, revealed irregularities in Lugano's non-CODI financing, accounting, and inventory practices. Lugano's founder and CEO, Moti Ferder, has resigned without severance compensation. The issues are confined to Lugano, which is 60% owned by CODI, and do not affect its other eight subsidiaries. Josh Gaynor, who joined as President in 2024, has been appointed interim CEO of Lugano, alongside CFO Christoph Pachler, to manage operations. CODI's Board maintains confidence in the company's leadership and external manager, emphasizing their swift response to the concerns.

Compass Diversified (NYSE: CODI) has announced its Q1 2025 dividend distributions for both common and preferred shares. The company declared a quarterly cash distribution of $0.25 per common share, payable on April 24, 2025, to shareholders of record as of April 17, 2025.

Additionally, CODI declared distributions for its preferred shares:

• Series A Preferred Shares: $0.453125 per share (7.250%)
• Series B Preferred Shares: $0.4921875 per share (7.875%)
• Series C Preferred Shares: $0.4921875 per share (7.875%)

All preferred share distributions cover the period from January 30, 2025, to April 30, 2025, and are payable on April 30, 2025.

Compass Diversified Holdings (NYSE: CODI) has announced the appointment of Matthew Blake as the new Chief Executive Officer of its subsidiary, Arnold Magnetic Technologies , effective March 31, 2025. Blake, who will also join Arnold's Board of Directors, succeeds Dan Miller, who concludes his nine-year tenure as CEO after a transition period ending April 30, 2025.

Blake brings extensive global operations experience in industrial manufacturing. He previously served as Chief Operations Officer at DwyerOmega and held leadership positions at Alpha Packaging, Cleaver-Brooks, and ESAB Welding & Cutting Products. He holds an MS in Engineering and Global Operations Management from Clarkson University and an MBA from Webster University.

Under Miller's leadership, Arnold strengthened its position as a leading solutions provider in high-performance electric motors, magnets, and thin metals, successfully navigated the COVID-19 pandemic, and completed a plant relocation.

Compass Diversified (NYSE: CODI) reported strong Q4 and full-year 2024 results, with Q4 net sales reaching $620.3 million, up 13.8% year-over-year. The company's branded consumer segment saw a 15.2% increase to $403.0 million, while industrial net sales grew 11.4% to $217.2 million.

Q4 2024 highlights include Adjusted EBITDA of $118.2 million (up 29%) and net income of $23.8 million. For full-year 2024, CODI achieved total net sales of $2.2 billion (up 11.9%) and Adjusted EBITDA of $424.8 million (up 30%).

Notable transactions include the sale of Ergobaby for $104 million, raising $90 million through preferred shares issuance, and securing a $300 million incremental term loan. The company repurchased over 400,000 common shares at an average price of $23.19.

Looking ahead to 2025, CODI expects consolidated Subsidiary Adjusted EBITDA between $570-610 million, with $440-465 million from consumer brands and $130-145 million from industrial businesses. The company forecasts overall Adjusted EBITDA of $480-520 million and Adjusted Earnings of $170-190 million.

Compass Diversified Holdings (NYSE: CODI) announced the retirement of director James J. Bottiglieri, who will step down prior to the company's 2025 annual shareholders meeting. Bottiglieri, who joined the Board in December 2005, previously served as the Company's Chief Financial Officer and Executive Vice President from 2005 to 2013.

The company does not plan to fill the Board vacancy created by Bottiglieri's retirement. During his tenure, Bottiglieri played a important role in CODI's initial public offering in 2006 and established strong financial controls and shareholder transparency measures. He will continue serving on the company's Nominating and Corporate Governance Committee and Audit Committee until the 2025 Annual Meeting.

Compass Diversified (NYSE: CODI) has scheduled its fourth quarter and full year 2024 earnings release for Thursday, February 27, 2025, after market close. The company will host a conference call at 5:00 p.m. ET / 2:00 p.m. PT on the same day to discuss the results.

The earnings call will feature CEO Elias Sabo, CFO Stephen Keller, and Compass Group Management COO Pat Maciariello. Investors can access the live webcast through CODI's Investor Relations website, with dial-in details available through a registration link. Participants are encouraged to join 15 minutes before the scheduled start time to avoid delays.

Compass Diversified Holdings (NYSE: CODI) has announced a significant amendment to its Management Services Agreement with Compass Group Management , effective January 1, 2025. The new structure introduces a tiered base management fee system and an incentive management fee.

The base management fee will be:

• 2.0% for adjusted net assets up to $3.5 billion
• Initial threshold fee plus 1.25% for assets between $3.5-10 billion
• 1.5% for assets of $10 billion or more

An additional incentive fee of 0.25% applies on assets exceeding $3.5 billion (up to $10 billion), contingent on achieving a three-year annualized internal rate of return above 12% and requires Compensation Committee approval. The amendment also eliminates integration services fees and excludes excess cash from adjusted net assets calculations.