Compass Diversified SEC Filings

Compass Diversified Holdings reported weak Q3 2025 results. Net revenues were $472.6 million while the company posted a net loss of $87.2 million, deeper than the prior‑year loss. For the first nine months, revenue reached $1.41 billion with a net loss of $214.9 million.

Interest expense remained heavy and all long‑term borrowings are classified as current, with current debt of $1.88 billion helping bring total current liabilities to $2.60 billion against total equity of $318.4 million.

The company states there is “substantial doubt” about its ability to continue as a going concern due to past covenant noncompliance under its 2022 Credit Facility and the risk of failing amended covenants when they are next tested after year‑end 2025. The report also incorporates restated prior‑period results following an internal investigation at subsidiary Lugano and shows year‑to‑date negative operating cash flow of $53.8 million.

Compass Diversified Holdings reported that the New York Stock Exchange has notified it that it is out of compliance with NYSE corporate governance listing standards. The issue is that CODI did not hold an annual shareholder meeting during its 2025 fiscal year, as required under Section 302 of the NYSE Listed Company Manual.

The company explains that the missed meeting stemmed from the need to complete a restatement of its financial statements for the fiscal years ended December 31, 2024, 2023 and 2022, and the resulting delay in filing its amended Form 10-K for the year ended December 31, 2024. CODI filed this Amended Annual Report with the SEC on December 8, 2025.

CODI states that it intends to hold an annual meeting as soon as practicable in order to regain NYSE compliance. Until it does so, CODI will appear on the NYSE’s list of non-compliant issuers and a ".BC" (below compliance) indicator will be added to its ticker symbols.

Compass Diversified Holdings and Compass Group Diversified Holdings LLC disclosed that CODI will pay regular quarterly distributions on its preferred shares. The distributions cover the period from October 30, 2025 up to, but excluding, January 30, 2026 for the 7.250% Series A Preferred Shares, 7.875% Series B Preferred Shares, and 7.875% Series C Preferred Shares. These distributions are payable on January 30, 2026 to holders of record as of January 15, 2026. The companies also reference a press release providing further details, which is filed as an exhibit.

Compass Diversified Holdings and Compass Group Diversified Holdings LLC report a planned board change. Director James J. Bottiglieri, who had previously informed the companies in February 2025 that he would retire and not stand for re-election at the 2025 annual meeting, has now formally notified the Trust and the Board that he will resign as a director of the Company effective December 31, 2025.

The filing states that neither his earlier decision to retire nor his current resignation is due to any disagreement with CODI or its Board regarding operations, policies, or practices. The rest of the document is administrative, including exhibit information and signatures from trustee Stephen Keller and the Company’s Chief Financial Officer.

Compass Diversified Holdings and Compass Group Diversified Holdings LLC filed an update stating that on December 29, 2025 they issued a press release detailing consolidated operating results for the three and six months ended June 30, 2025. The press release, which contains the actual financial figures and commentary, is included as Exhibit 99.1 to this report.

The companies list their common and preferred equity securities as trading on the New York Stock Exchange under the symbols CODI, CODI PR A, CODI PR B and CODI PR C. This filing mainly serves to formally furnish the earnings release as part of their ongoing reporting obligations.

Compass Diversified Holdings reported higher sales but continued losses for the quarter ended June 30, 2025. Net revenues rose to $478.7M from $426.7M a year earlier, lifting gross profit to $208.5M. However, higher selling, general and administrative costs, management fees, and a $31.5M impairment drove an operating loss of $27.2M. Net loss attributable to Holdings narrowed to $51.2M, or $(0.88) per basic common share, compared with a $73.1M loss last year, while the Company continued quarterly cash distributions of $0.25 per Trust common share.

At June 30, 2025, the Company held $73.8M in cash and cash equivalents, with total assets of $3.27B, total liabilities of $2.86B, and total stockholders’ equity of $410.7M. Current portion of long-term debt was $1.86B, and cash used in operating activities from continuing operations was $64.5M for the first half of 2025. Management concluded that substantial doubt about the Company’s ability to continue as a going concern remains due to leverage and covenant risks under the 2022 Credit Facility, despite a Fifth Amendment that waived prior defaults and reset covenants.

The report also reflects restated prior-period financials following the Lugano Investigation, which identified unrecorded financing arrangements and irregularities at the Lugano subsidiary, and reclassifies Ergobaby as discontinued operations. The Company continues to evaluate potential divestitures, deleveraging actions, and other initiatives to improve liquidity, while acknowledging these plans are not sufficiently committed to resolve the going concern uncertainty.

Compass Diversified Holdings and its operating LLC amended their main credit agreement on December 19, 2025 through a Fifth Amendment and related transaction letter with Bank of America and lenders. The lenders agreed to waive certain past events of default tied to financial covenants and issues related to subsidiary Lugano Holding, Inc., which has filed for Chapter 11 protection in Delaware. Revolving commitments revert to $100,000,000, and loan interest margins now vary with the consolidated total leverage ratio.

The Company must use 100% of net cash from any asset dispositions or deleveraging transactions to repay debt and provide rolling 13-week cash flow forecasts every two weeks, including a separate Lugano cash flow budget. Management fees are capped at $15,000,000 per quarter, and most restricted payments over $10,000,000 per quarter require leverage at or below 4.50:1.00. If leverage is not less than 4.50:1.00 at specified quarter-ends from June 30, 2026 through March 31, 2027, the Company must pay milestone fees rising from $5,000,000 to $9,500,000.

Compass Diversified Holdings and its affiliate Compass Group Diversified Holdings LLC filed a Quarterly Report on Form 10‑Q for the fiscal quarter ended March 31, 2025. They also furnished a press release that discusses consolidated operating results for the three months ended March 31, 2025, which is attached as an exhibit to this current report.

Compass Diversified Holdings reported Q1 2025 results with net revenues of $453.8 million, up from $410.8 million a year earlier. Gross profit increased to $196.0 million and the company narrowed its net loss to $49.7 million from $85.3 million, with loss per common share from continuing operations improving to $0.59 from $1.57.

However, leverage and financing risk are central. All $1.86 billion of debt under the 2022 Credit Facility is classified as current, and management states that covenant breaches and reliance on a forbearance agreement expiring on December 19, 2025 raise substantial doubt about the company’s ability to continue as a going concern. Prior periods have been restated following the Lugano Investigation, Lugano Diamonds has entered Chapter 11, and total equity declined to $513.6 million. The company issued $58.1 million of preferred shares and drew $200.0 million on its term loan, boosting cash to $146.2 million while maintaining a $0.25 quarterly distribution per Trust common share.