Compass Diversified (NYSE: CODI) boosts EBITDA, trims debt and extends credit maturities
Rhea-AI Filing Summary
Compass Diversified reported second-quarter 2026 results that reflect portfolio reshaping, debt reduction and mixed top-line trends. GAAP net sales were $424.0 million, down 11.4% year-over-year, but net income from continuing operations improved to $81.9 million from a loss of $80.8 million, driven largely by a $182.3 million gain on the sale of Sterno’s Food Service Business and partially offset by a $58.0 million reduction in the fair value of a receivable from Lugano.
On a non-GAAP basis excluding Lugano and the divested food service operations, Q2 net revenues were $410.6 million, approximately flat year-over-year. Subsidiary Adjusted EBITDA rose 12.6% to $91.5 million, with Branded Consumer up 24.2% and Industrial down 12.8%. Adjusted EBITDA was $65.6 million versus $46.5 million a year earlier.
The company applied more than $280 million of sale proceeds to debt reduction, cutting total debt to $1,592.3 million from $1,890.7 million at year-end 2025 and lowering its leverage ratio for covenant purposes to about 4.8x. A Sixth Amendment to the credit agreement reduced the revolving commitments to $54 million, extended the maturity of the term loan and revolver to January 12, 2028, tightened leverage covenants, and lowered certain availability and incremental facility limits. CODI maintained its 2026 Subsidiary Adjusted EBITDA outlook of $320–$365 million, with stronger expectations for Branded Consumer and weaker expectations for Industrial.
Positive
- Non-GAAP Subsidiary Adjusted EBITDA increased 12.6% year-over-year to $91.5 million, showing stronger profitability across continuing subsidiaries.
- The company reduced total debt from $1,890.7 million to $1,592.3 million, aided by applying more than $280 million of asset-sale proceeds to term-loan repayment.
- Leverage ratio for covenant purposes improved to approximately 4.8x at June 30, 2026, down from 5.3x at March 31, 2026.
- CODI reaffirmed its 2026 Subsidiary Adjusted EBITDA outlook of $320–$365 million, indicating unchanged full-year earnings expectations despite portfolio changes.
- Q2 2026 net cash provided by operating activities was $29.7 million versus cash used of $35.2 million in Q2 2025, reflecting improved cash generation.
Negative
- GAAP net sales declined 11.4% year-over-year to $424.0 million in Q2 2026.
- Industrial segment non-GAAP net revenues fell 11.5% and Subsidiary Adjusted EBITDA decreased 12.8% year-over-year, highlighting pressure in that portfolio.
- CODI recorded a $58.0 million reduction in the fair value of its receivable from Lugano in Q2 2026.
- The Sixth Amendment reduced aggregate revolving commitments from $100 million to $54 million, trimming undrawn liquidity.
- The company must meet tighter Consolidated Total Leverage Ratio covenants, stepping down to 4.50 to 1.00 for fiscal quarters after September 30, 2027.
Filing Explained
The executed Sixth Amendment creates a conditional
8-K Event Classification
3 items: 1.01, 2.02, 9.01
3 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q2 2026 Net Sales: $424.0 million
Q2 2026 Net Income from Continuing Operations: $81.9 million
Q2 2026 Adjusted EBITDA: $65.572 million
+5 more
8 metrics
Q2 2026 Net Sales
$424.0 million
GAAP net sales, Q2 2026, down 11.4% vs Q2 2025
Q2 2026 Net Income from Continuing Operations
$81.9 million
Compared with net loss from continuing operations of $80.8 million in Q2 2025
Q2 2026 Adjusted EBITDA
$65.572 million
Consolidated Adjusted EBITDA for three months ended June 30, 2026
Q2 2026 Subsidiary Adjusted EBITDA
$91.5 million
Non-GAAP, up 12.6% year-over-year excluding Lugano and divested Sterno Food Service Business
Total Debt
$1,592.3 million
Total debt as of June 30, 2026, versus $1,890.7 million at December 31, 2025
Cash and Cash Equivalents
$87,443 thousand
Cash and cash equivalents as of June 30, 2026
2026 Subsidiary Adjusted EBITDA Outlook
$320.0–$365.0 million
Full-year 2026 guidance range maintained by the company
Revolving Commitments After Amendment
$54,000,000
Aggregate revolving commitments under credit agreement reduced from $100,000,000
Key Terms
Subsidiary Adjusted EBITDA, Incremental Delayed Draw Term Loan, Combined Eligible Availability, senior secured net leverage, +1 more
5 terms
Subsidiary Adjusted EBITDA financial
"Subsidiary Adjusted EBITDA was $91.5 million, up 12.6% vs. Q2 2025"
Subsidiary adjusted EBITDA is a measure of a single unit’s operating profit calculated by taking that subsidiary’s earnings before interest, taxes, depreciation and amortization (EBITDA) and removing one‑time items or other noncore costs to show its recurring performance. Investors use it like inspecting one branch of a tree to judge how healthy that part is on its own, helping assess cash generation, compare profitability across units, and inform valuation or divestiture decisions.
Incremental Delayed Draw Term Loan financial
"the Incremental Delayed Draw Term Loan facility will be removed"
Combined Eligible Availability financial
"the portion of Combined Eligible Availability attributable to any one Portfolio Company"
senior secured net leverage financial
"senior secured net leverage was 0.66x as of June 30, 2026"
A ratio that compares the amount of a company's senior secured debt (debt backed by specific collateral and repaid before other claims) minus cash and equivalents to its earnings power, usually measured by trailing or adjusted EBITDA. It tells investors how many years of operating earnings would be needed to pay off the prioritized, collateralized debt, acting like a spotlight on the firm's secured debt burden and its relative ability to service that high-priority debt.
supply chain financing arrangements financial
"subsidiaries will be permitted to enter into supply chain financing arrangements"
Supply chain financing arrangements are agreements where a buyer, seller, or a third-party lender covers the gap between when goods or services are delivered and when payment is made, often letting suppliers get paid early while buyers postpone cash outflow. Investors care because these deals affect a company’s cash flow, apparent debt levels and supplier stability—similar to a short-term loan a store uses to keep shelves stocked; large or opaque use can change how risky or healthy a business appears.
Earnings Snapshot
Q2 2026 Net Sales: $424.0 million · Guidance included
three and six months ended June 30, 2026
Q2 2026 Net Sales
$424.0 million
down 11.4% vs Q2 2025 (GAAP)
Q2 2026 Net Income from Continuing Operations
$81.9 million
improved from a loss of $80.8 million in Q2 2025
Q2 2026 Subsidiary Adjusted EBITDA
$91.5 million
up 12.6% vs Q2 2025, excluding Lugano and divested Sterno Food Service Business
Q2 2026 Adjusted EBITDA
$65.572 million
up from $46.526 million in Q2 2025
Guidance
The company reaffirmed 2026 Subsidiary Adjusted EBITDA guidance of $320.0–$365.0 million, including approximately $9 million from Sterno’s Food Service Business through its May 1, 2026 sale date.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Compass Diversified (CODI) perform financially in Q2 2026?
Compass Diversified reported Q2 2026 net sales of $424.0 million, down 11.4% year-over-year, and net income from continuing operations of $81.9 million, versus a loss of $80.8 million in Q2 2025, aided by a gain on the Sterno Food Service sale.
What were CODI’s non-GAAP results for Q2 2026?
Excluding Lugano and the divested Sterno Food Service Business, CODI’s Q2 2026 net revenues were $410.6 million, roughly flat year-over-year, and Subsidiary Adjusted EBITDA increased 12.6% to $91.5 million, with strong growth in Branded Consumer and weaker Industrial performance.
How much debt did CODI repay and what is its current leverage?
Total debt declined to $1,592.3 million at June 30, 2026 from $1,890.7 million at December 31, 2025, as CODI applied more than $280 million of Sterno Food Service sale proceeds to term-loan repayment. Its leverage ratio for covenant purposes was about 4.8x.
What changes were made in CODI’s Sixth Amendment to its credit agreement?
The Sixth Amendment cut revolving commitments from $100 million to $54 million, extended the maturity of term loans and the revolver to January 12, 2028, tightened leverage covenants, removed the Incremental Delayed Draw Term Loan facility, and adjusted availability and incremental capacity limits.
What is CODI’s 2026 earnings outlook after Q2 2026 results?
CODI maintained its 2026 Subsidiary Adjusted EBITDA outlook of $320–$365 million. The guidance includes about $9 million from Sterno’s Food Service Business through its May 1, 2026 sale and reflects higher Branded Consumer and lower Industrial expectations versus prior guidance.
How did CODI’s operating cash flow change year-over-year in Q2 2026?
Net cash provided by operating activities was $29.7 million in Q2 2026, compared with cash used of $35.2 million in Q2 2025. The improvement reflects better working capital performance and earnings, alongside the impact of portfolio changes.
What liquidity does CODI have following the credit facility amendment?
As of June 30, 2026, CODI held $87.4 million in cash and cash equivalents and had about $97 million of revolver availability. After quarter-end, the company amended its senior credit facility, reducing revolving commitments to $54 million while extending maturity to January 12, 2028.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
COMPASS GROUP DIVERSIFIED HOLDINGS LLC
(Exact name of registrant as specified in its charter)
| Delaware | 001-34926 | 20-3812051 | ||||||||||||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (203 ) 221-1703
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | |||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
| Section 1 | Registrant's Business and Operations | |||||||
| Item 1.01 | Entry into a Material Definitive Agreement | |||||||
On August 6, 2026, Compass Group Diversified Holdings LLC (the “Company” and, together with Compass Diversified Holdings, “CODI”) entered into a Sixth Amendment to Credit Agreement (the “Sixth Amendment”) with Bank of America, N.A. (the “Administrative Agent”), in its capacity as administrative agent for the lenders, swing line lender, and L/C issuer under that certain Third Amended and Restated Credit Agreement, dated as of July 12, 2022 (as amended, modified, extended, restated, replaced, or supplemented in writing from time to time, the “Credit Agreement”), and the lenders party to the Credit Agreement representing more than 50% of the total credit exposure of all lenders under the Credit Agreement (the “Consenting Lenders”). Pursuant to the Sixth Amendment, among other things, (i) the lenders will waive the payment of milestone fees under the Fifth Amendment Transaction Letter, dated as of December 19, 2025, by and among the Company, the Administrative Agent and the Consenting Lenders, as previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission on December 19, 2025, which is incorporated herein by reference, (ii) the aggregate revolving commitments under the Credit Agreement will be decreased from $100,000,000 to $54,000,000, (iii) the maturity date will be extended to January 12, 2028, (iv) the portion of Combined Eligible Availability (as defined in the Credit Agreement) attributable to any one Portfolio Company (as defined in the Credit Agreement) will be decreased from 40% to 25%, (v) the Incremental Delayed Draw Term Loan (as defined in the Credit Agreement prior to the Sixth Amendment) facility will be removed, (vi) Rimports Holdings, Inc., any other Portfolio Company as approved by the Administrative Agent in its reasonable discretion, and each of their respective subsidiaries will be permitted to enter into supply chain financing arrangements, (vii) the Company and its subsidiaries will be permitted to pay fees pursuant to the Ninth Amended and Restated Management Services Agreement, dated as of July 12, 2026, by and between the Company and Compass Group Management LLC, (viii) the aggregate amount available under the incremental facilities will be decreased from $250,000,000 to $150,000,000, (ix) the Company will be required to maintain a Consolidated Total Leverage Ratio (as defined in the Credit Agreement) of (a) 5.75 to 1.00 for the fiscal quarter ending September 30, 2026, (b) 5.25 to 1.00 for the fiscal quarters ending December 31, 2026 and March 31, 2027, (c) 5.00 to 1.00 for fiscal quarters ending June 30, 2027 and September 30, 2027 and (d) 4.50 to 1.00 for each fiscal quarter thereafter, and (x) in the event that the Company has not repaid the term loans under the Credit Agreement on or prior to December 31, 2026, the Company will be required to pay a milestone fee in the amount of $4,000,000.
The foregoing description of the Sixth Amendment is a summary only and is qualified in their entirety by reference to the complete text of the Sixth Amendment, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Section 2 Financial Information
Item 2.02 Results of Operations and Financial Condition
On August 10, 2026, Compass Diversified Holdings (NYSE: CODI) and Compass Group Diversified Holdings LLC (collectively “CODI”) issued a press release announcing its consolidated operating results for the three and six months ended June 30, 2026. A copy of the press release is furnished within this report as Exhibit 99.1.
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit Number | Description | |||||||
| 10.1 | Sixth Amendment to Credit Agreement, dated August 6, 2026, by and among Compass Group Diversified Holdings LLC, the Lenders party thereto, and Bank of America, N.A., in its capacity as Administrative Agent for the Lenders, Swing Line Lender and L/C Issuer | |||||||
| 99.1 | Earnings Release of CODI dated August 10, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 10, 2026 | COMPASS DIVERSIFIED HOLDINGS | ||||||||||
| By: | /s/ Stephen Keller | ||||||||||
| Stephen Keller | |||||||||||
| Regular Trustee | |||||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 10, 2026 | COMPASS GROUP DIVERSIFIED HOLDINGS LLC | ||||||||||
| By: | /s/ Stephen Keller | ||||||||||
| Stephen Keller | |||||||||||
| Chief Financial Officer | |||||||||||
Exhibit 99.1
Compass Diversified Reports Second Quarter 2026 Financial Results
Westport, Conn., August 10, 2026 – Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market businesses, announced today its consolidated operating results for the three and six months ended June 30, 2026 and filed its Quarterly Report on Form 10-Q for the period.
“In the second quarter, our subsidiaries delivered strong operating performance and cash flow,” said Elias Sabo, Chief Executive Officer of Compass Diversified. “We took concrete actions to strengthen our balance sheet, including selling Sterno’s Food Service Business at an attractive valuation and applying more than $280 million of proceeds to debt reduction. We also amended our Management Services Agreement to lower expected fees and increase alignment with shareholders by tying more of the Manager’s compensation to shareholder returns and operating performance.”
“Our performance was broad-based, with Adjusted EBITDA growth across our Branded Consumer businesses and at Arnold,” added Zach Sawtelle, Chief Operating Officer of Compass Diversified. “BOA, PrimaLoft and The Honey Pot were each up more than 25% year-over-year, and Arnold was a standout, up nearly 50%. 5.11 expanded margins despite a softer top line.”
Sawtelle continued, “Our work is not done. Our shares trade at what we believe is a meaningful discount to intrinsic value, and we remain focused on closing that gap. Our near-term priorities are straightforward: drive profitable growth, pursue divestitures where we can realize attractive value, further reduce debt and, when appropriate, efficiently return capital to shareholders. We are moving with urgency and discipline to realize value for shareholders.”
Financial Summary – GAAP Results
Year-over-year GAAP comparisons reflect the operating results of Lugano and a full quarter of Sterno’s Food Service Business in the 2025 period, versus the 2026 period, which excludes Lugano's operating results (following its deconsolidation in connection with its bankruptcy proceedings) and includes the Food Service Business through its May 1 sale date.
Q2 2026 vs Q2 2025 (GAAP)
•Net revenues were $424.0 million, down 11.4% vs Q2 2025
•Net income from continuing operations: $81.9 million vs net loss from continuing operations of $80.8 million in Q2 2025
•Net income attributable to Holdings: $81.1 million, or $0.86 per common share, vs. a net loss of $51.2 million, or $(0.88) per common share
•Cash provided by operating activities: $29.7 million, vs. cash used of $35.2 million
•Q2 2026 results included a $182.3 million gain on the sale of Sterno’s Food Service Business and a $58.0 million reduction in the fair value of CODI’s receivable from Lugano.
Financial Summary – Non-GAAP Results
To facilitate comparison of CODI’s continuing subsidiaries, the following non-GAAP results exclude Lugano from the prior-year period and exclude net sales and Adjusted EBITDA attributable to the divested Sterno Food Service Business from both current and prior-year periods.
Rimports and the Food Service Business historically operated and were reported together as Sterno Group under a shared management structure. Following the sale, certain shared management and other indirect costs remained with Rimports. To provide a comparable view of the continuing business, the non-GAAP results exclude the Food Service Business’s net sales and Adjusted EBITDA and reflect the costs retained by Rimports on a consistent basis in both periods.
Q2 2026 vs Q2 2025 (Non-GAAP)
•Net revenues were $410.6 million, approximately flat vs. Q2 2025
◦Branded Consumer: $270.8 million, up 7.2%
◦Industrial: $139.8 million, down 11.5%
•Subsidiary Adjusted EBITDA was $91.5 million, up 12.6% vs. Q2 2025
◦Branded Consumer: $69.3 million, up 24.2%
◦Industrial: $22.3 million, down 12.8%
Key Business Updates
During and subsequent to the quarter, CODI:
•Completed the sale of Sterno’s Food Service Business and applied more than $280 million of the proceeds to senior secured term loan debt.
•Amended its Management Services Agreement to reduce expected management fees beginning in 2027 and further strengthen shareholder alignment.
•Amended its senior credit facility to extend the maturity of its term loan and revolving commitments, providing financial flexibility.
•Announced a settlement to facilitate the orderly liquidation of Lugano’s assets.
•Announced that Elias Sabo will retire as Chief Executive Officer on December 31, 2026, and appointed Zach Sawtelle Chief Operating Officer and named him CEO successor.
Liquidity and Capital Resources
As of June 30, 2026, CODI had approximately $87.4 million in cash and cash equivalents and approximately $97 million in revolver availability. Total debt was $1,592.3 million, compared with $1,890.7 million as of December 31, 2025.
CODI’s leverage ratio for debt covenant purposes was approximately 4.8x as of June 30, 2026, down from 5.3x as of March 31, 2026, and senior secured net leverage was 0.66x as of June 30, 2026.
Subsequent to quarter-end, CODI amended its senior credit facility to extend all outstanding term loan borrowings and its revolving commitments to January 12, 2028, and to reduce aggregate revolving commitments from $100 million to $54 million.
2026 Outlook
CODI is maintaining its fiscal 2026 total Subsidiary Adjusted EBITDA outlook of $320 million to $365 million.
The outlook includes approximately $9 million of Adjusted EBITDA generated by the Sterno Food Service Business through its May 1, 2026 sale date. That contribution will be reflected in CODI’s reported full-year results but will not recur following the sale.
CODI’s outlook reflects higher expectations for the Branded Consumer businesses and lower expectations for the Industrial businesses relative to prior guidance.
| 2026 Outlook | ||||||||||||||
| Low | High | |||||||||||||
| (in millions) | ||||||||||||||
| Subsidiary Adjusted EBITDA | ||||||||||||||
| Branded Consumer | $ | 235.0 | $ | 270.0 | ||||||||||
| Industrial | $ | 85.0 | $ | 95.0 | ||||||||||
| Subsidiary Adjusted EBITDA | $ | 320.0 | $ | 365.0 | ||||||||||
In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, CODI has not reconciled 2026 Subsidiary Adjusted EBITDA to its comparable GAAP measure because it does not provide guidance on Income (Loss) from Continuing Operations and because management cannot predict, with sufficient certainty, all of the inputs necessary to provide such a reconciliation. 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
In conjunction with this announcement, CODI will host a conference call on August 10, 2026, at 5:00 p.m. ET / 2:00 p.m. PT with the Company’s Chief Executive Officer, Elias Sabo, Chief Operating Officer, Zach Sawtelle and Chief Financial Officer, Stephen Keller. A live webcast of the call will be available on the Investor Relations section of CODI’s website. To avoid delays, we encourage participants to log into the webcast 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, Adjusted Earnings (Loss), Subsidiary Adjusted EBITDA, Subsidiary Adjusted EBITDA excluding Lugano and the divested Sterno Food Service Business, Net Sales excluding Lugano, and Net Sales excluding Lugano and the divested Sterno Food Service Business are non-GAAP financial measures used by the Company to assess its performance. We have reconciled Adjusted EBITDA, Subsidiary Adjusted EBITDA and Subsidiary Adjusted EBITDA excluding Lugano and the divested Sterno Food Service Business to Income (Loss) from Continuing Operations, Adjusted Earnings (Loss) to Net Income (Loss), and non-GAAP Net Sales measures to Net Sales on the attached schedules. We consider Income (Loss) from Continuing Operations to be the most directly comparable GAAP financial measure to Adjusted EBITDA, Subsidiary Adjusted EBITDA, and Subsidiary Adjusted EBITDA excluding Lugano and the divested Sterno Food Service Business; Net Income (Loss) to be the most directly comparable GAAP financial measure to Adjusted Earnings (Loss); and Net Sales to be the most directly comparable GAAP financial measure to the non-GAAP Net Sales measures. The attached schedules should be read together as continuous reconciliations of the applicable non-GAAP measures to their most directly comparable GAAP measures.
We believe that Adjusted EBITDA and Adjusted Earnings (Loss) provide useful information to investors and reflect important financial measures, as each excludes the effects of items that 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 (Loss) 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, non-cash charges associated with impairments and 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 (Loss) provides additional insight into our operating results.
As used in the body of this press release, Subsidiary Adjusted EBITDA refers to the sum of Adjusted EBITDA for the applicable period attributable to each consolidated subsidiary of the Company, disregarding corporate expense, unless the context indicates otherwise. Management uses Subsidiary Adjusted EBITDA to evaluate the operating performance of the subsidiary portfolio before corporate expense. Because the measure excludes corporate expense, it does not reflect CODI’s consolidated operating results and should be considered together with the comparable GAAP measure and the other information in this release.
Subsidiary Adjusted EBITDA, excluding Lugano and the divested Sterno Food Service Business, represents Subsidiary Adjusted EBITDA after excluding Adjusted EBITDA (loss) attributable to Lugano and Adjusted EBITDA attributable to the divested Sterno Food Service Business. Net Sales excluding Lugano represents reported Net Sales after excluding Net Sales attributable to Lugano for the applicable periods. Net Sales excluding Lugano and the divested Sterno Food Service Business represent reported Net Sales after excluding Net Sales attributable to those businesses for the applicable periods. We believe these measures facilitate comparison of the operating performance and net sales of CODI’s continuing subsidiaries across periods.
Adjusted EBITDA attributable to the divested Sterno Food Service Business is calculated from Rimports’ reported results by identifying the net sales and directly attributable expenses of the Food Service Business and applying CODI’s Adjusted EBITDA methodology. Rimports and the Food Service Business historically operated and were reported together as Sterno Group under a shared management structure. Following the sale, certain shared management and other indirect costs remained with Rimports. Those costs remain in Rimports' results for all periods presented. Therefore, the exclusion of the Food Service Business does not eliminate all costs historically shared by the combined operations.
In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, we have not reconciled our 2026 Subsidiary Adjusted EBITDA guidance to the most directly comparable GAAP measure because certain components of Income (Loss) from Continuing Operations, including potential impairment charges, acquisition- and disposition-related gains, losses and expenses, fair-value adjustments and related income-tax effects, cannot be reasonably predicted without unreasonable effort. These items could be material to our future results.
These non-GAAP financial measures are not intended to be substitutes for the most directly comparable GAAP financial measures and may differ from, or otherwise be inconsistent with, similarly titled non-GAAP financial measures used by other companies.
About Compass Diversified
CODI leverages its permanent capital base and long-term disciplined approach, maintaining controlling ownership interests in each of its subsidiaries and 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 seeks to generate strong returns through its culture of transparency, alignment and accountability.
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 regarding its Adjusted EBITDA, subsidiary Adjusted EBITDA, plans for future divestitures and return of capital and its future performance, growth, liquidity and leverage, and the future performance of CODI’s subsidiaries. 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,” “future,” “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 management’s current expectations, estimates, forecasts and assumptions and information available to management as of the date of this press release. These statements involve risks and uncertainties that could cause actual results and outcomes to differ, perhaps materially, including but not limited to: 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, or social, civil or political unrest; 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 labor costs; our business prospects and the prospects of our subsidiaries; the impact of, and ability to successfully complete and integrate, acquisitions that we have made or may make; the ability to successfully execute divestitures and complete divestitures that we may execute; 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;; 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 Lugano 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 Annual Report on Form 10-K filed with the SEC on February 27, 2026 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
Condensed Consolidated Balance Sheets
(Unaudited)
| June 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 87,443 | $ | 68,015 | |||||||
| Accounts receivable, net | 186,327 | 202,887 | |||||||||
| Inventories, net | 375,763 | 404,102 | |||||||||
| Prepaid expenses and other current assets | 57,468 | 78,398 | |||||||||
| Due from related parties | 6,275 | 20,757 | |||||||||
| Due from unconsolidated affiliate | 19,200 | 71,000 | |||||||||
| Total current assets | 732,476 | 845,159 | |||||||||
| Property, plant and equipment, net | 186,729 | 209,742 | |||||||||
| Goodwill | 830,902 | 895,421 | |||||||||
| Intangible assets, net | 817,310 | 892,811 | |||||||||
| Due from unconsolidated affiliate | 19,800 | 26,000 | |||||||||
| Other non-current assets | 165,221 | 170,051 | |||||||||
| Total assets | $ | 2,752,438 | $ | 3,039,184 | |||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and accrued expenses | $ | 231,605 | $ | 259,600 | |||||||
| Current portion, long-term debt | 43,250 | 37,500 | |||||||||
| Other current liabilities | 49,408 | 52,519 | |||||||||
| Total current liabilities | 324,263 | 349,619 | |||||||||
| Deferred income taxes | 92,804 | 104,189 | |||||||||
| Long-term debt | 1,538,680 | 1,839,817 | |||||||||
| Other non-current liabilities | 189,521 | 171,896 | |||||||||
| Total liabilities | 2,145,268 | 2,465,521 | |||||||||
| Stockholders' equity | |||||||||||
| Total stockholders' equity attributable to Holdings | 472,560 | 442,024 | |||||||||
| Noncontrolling interest | 134,610 | 131,639 | |||||||||
| Total stockholders' equity | 607,170 | 573,663 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,752,438 | $ | 3,039,184 | |||||||
Compass Diversified Holdings
Consolidated Statements of Operations
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net sales | $ | 424,042 | $ | 478,690 | $ | 850,897 | $ | 932,465 | |||||||||||||||
| Cost of sales | 224,079 | 270,149 | 461,576 | 527,892 | |||||||||||||||||||
| Gross profit | 199,963 | 208,541 | 389,321 | 404,573 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative expense | 134,337 | 162,112 | 266,347 | 312,489 | |||||||||||||||||||
| Management fees | 13,817 | 19,035 | 29,751 | 37,898 | |||||||||||||||||||
| Amortization expense | 22,686 | 23,117 | 45,530 | 46,468 | |||||||||||||||||||
| Impairment expense | — | 31,515 | 20,500 | 31,515 | |||||||||||||||||||
| Other operating (income) expense | 149 | — | (10,234) | — | |||||||||||||||||||
| Operating income (loss) | 28,974 | (27,238) | 37,427 | (23,797) | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense, net | (23,895) | (34,096) | (51,390) | (69,947) | |||||||||||||||||||
| Amortization of debt issuance costs | (2,047) | (971) | (4,094) | (2,096) | |||||||||||||||||||
| Loss on debt modification | — | (2,827) | — | (2,827) | |||||||||||||||||||
| Decrease in fair value of receivable due from unconsolidated affiliate | (58,000) | — | (58,000) | — | |||||||||||||||||||
| Gain on sale of product division | 182,342 | — | 182,342 | — | |||||||||||||||||||
| Other income (expense), net | (121) | 1,713 | (2,799) | (11,968) | |||||||||||||||||||
| Net income (loss) from continuing operations before income taxes | 127,253 | (63,419) | 103,486 | (110,635) | |||||||||||||||||||
| Provision for income taxes | 45,379 | 17,358 | 52,443 | 19,896 | |||||||||||||||||||
| Income (loss) from continuing operations | 81,874 | (80,777) | 51,043 | (130,531) | |||||||||||||||||||
| Gain on sale of discontinued operations | 1,480 | 2,805 | 1,637 | 2,849 | |||||||||||||||||||
| Net income (loss) | 83,354 | (77,972) | 52,680 | (127,682) | |||||||||||||||||||
| Less: Net income (loss) from continuing operations attributable to noncontrolling interest | 2,265 | (26,755) | 2,350 | (46,472) | |||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | 81,089 | $ | (51,217) | $ | 50,330 | $ | (81,210) | |||||||||||||||
| Amounts attributable to Holdings | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 79,609 | $ | (54,022) | $ | 48,693 | $ | (84,059) | |||||||||||||||
| Gain on sale of discontinued operations, net of income tax | 1,480 | 2,805 | 1,637 | 2,849 | |||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | 81,089 | $ | (51,217) | $ | 50,330 | $ | (81,210) | |||||||||||||||
| Basic income (loss) per common share attributable to Holdings | |||||||||||||||||||||||
| Continuing operations | $ | 0.84 | $ | (0.92) | $ | 0.29 | $ | (1.43) | |||||||||||||||
| Discontinued operations | 0.02 | 0.04 | 0.02 | 0.04 | |||||||||||||||||||
| $ | 0.86 | $ | (0.88) | $ | 0.31 | $ | (1.39) | ||||||||||||||||
| Basic weighted average number of common shares outstanding | 75,236 | 75,236 | 75,236 | 75,236 | |||||||||||||||||||
Compass Diversified Holdings
Net Income (Loss) to Non-GAAP Adjusted Earnings (Loss) and Non-GAAP Adjusted EBITDA
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income (loss) | $ | 83,354 | $ | (77,972) | $ | 52,680 | $ | (127,682) | |||||||||||||||
| Gain on sale of discontinued operations, net of tax | 1,480 | 2,805 | 1,637 | 2,849 | |||||||||||||||||||
| Net income (loss) from continuing operations | $ | 81,874 | $ | (80,777) | $ | 51,043 | $ | (130,531) | |||||||||||||||
| Less: income (loss) from continuing operations attributable to noncontrolling interest | 2,265 | (26,755) | 2,350 | (46,472) | |||||||||||||||||||
| Net income (loss) attributable to Holdings - continuing operations | $ | 79,609 | $ | (54,022) | $ | 48,693 | $ | (84,059) | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Distributions paid - preferred shares | (9,715) | (9,714) | (19,429) | (18,148) | |||||||||||||||||||
| Amortization expense - intangibles | 22,686 | 23,117 | 45,530 | 46,468 | |||||||||||||||||||
| Impairment expense | — | 31,515 | 20,500 | 31,515 | |||||||||||||||||||
| Stock compensation | 3,280 | 4,189 | 5,839 | 8,201 | |||||||||||||||||||
| Integration services fee | — | — | — | 875 | |||||||||||||||||||
| Change in fair value of receivable due from unconsolidated affiliate | 58,000 | — | 58,000 | — | |||||||||||||||||||
| Gain on sale of product division | (182,342) | — | (182,342) | — | |||||||||||||||||||
| Tax effect of gain on sale of product division | 21,348 | — | 21,348 | — | |||||||||||||||||||
| Other | 264 | 3,881 | (9,473) | 5,427 | |||||||||||||||||||
| Adjusted Earnings (Loss) | $ | (6,870) | $ | (1,034) | $ | (11,334) | $ | (9,721) | |||||||||||||||
| Plus (less): | |||||||||||||||||||||||
| Depreciation expense | 10,368 | 11,062 | 22,270 | 23,363 | |||||||||||||||||||
| Income tax provision | 45,379 | 17,358 | 52,443 | 19,896 | |||||||||||||||||||
| Tax effect of gain on sale of product division | (21,348) | — | (21,348) | — | |||||||||||||||||||
| Interest expense | 23,895 | 34,096 | 51,390 | 69,947 | |||||||||||||||||||
| Amortization of debt issuance costs | 2,047 | 971 | 4,094 | 2,096 | |||||||||||||||||||
| Loss on debt modification | — | 2,827 | — | 2,827 | |||||||||||||||||||
| Income (loss) from continuing operations attributable to noncontrolling interest | 2,265 | (26,755) | 2,350 | (46,472) | |||||||||||||||||||
| Distributions paid - preferred shares | 9,715 | 9,714 | 19,429 | 18,148 | |||||||||||||||||||
| Other (income) expense | 121 | (1,713) | 2,799 | 11,968 | |||||||||||||||||||
| Adjusted EBITDA | $ | 65,572 | $ | 46,526 | $ | 122,093 | $ | 92,052 | |||||||||||||||
Compass Diversified Holdings
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Three Months Ended June 30, 2026
(Unaudited)
| Corporate | 5.11 | BOA | PrimaLoft | THP | Velocity Outdoor | Altor | Arnold | Rimports (1) | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 53,204 | $ | 7,607 | $ | 14,832 | $ | 2,129 | $ | 3,478 | $ | (2,418) | $ | (2,589) | $ | 548 | $ | 5,083 | $ | 81,874 | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 35,910 | 2,058 | 2,428 | 1,935 | 1,087 | 61 | (754) | 696 | 1,958 | 45,379 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 23,857 | (2) | — | (9) | 6 | 10 | — | 140 | (107) | 23,895 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intercompany interest | (18,374) | 2,516 | 2,494 | 3,594 | 1,740 | 1,699 | 3,884 | 2,137 | 310 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 1,198 | 5,118 | 5,278 | 5,319 | 4,154 | 1,384 | 6,577 | 2,664 | 3,409 | 35,101 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| EBITDA | 95,795 | 17,297 | 25,032 | 12,968 | 10,465 | 736 | 7,118 | 6,185 | 10,653 | 186,249 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense (2) | (124,339) | (4) | 101 | 6 | (10) | (235) | 506 | 3 | (100) | (124,072) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling shareholder compensation | — | 697 | 953 | 864 | 403 | 3 | 226 | 26 | 108 | 3,280 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | — | — | 115 | 115 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (28,544) | $ | 17,990 | $ | 26,086 | $ | 13,838 | $ | 10,858 | $ | 504 | $ | 7,850 | $ | 6,214 | $ | 10,776 | $ | 65,572 | ||||||||||||||||||||||||||||||||||||||||||
(1) Rimports includes the Adjusted EBITDA of the Sterno food service product division from April 1, 2026 through the date of sale, May 1, 2026.
(2) The amount of Other (income) expense at corporate includes the change in the fair value of the receivable due from unconsolidated affiliate ($58.0 million) and the gain on the sale of the Sterno food service product division ($182.3 million).
Compass Diversified Holdings
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Three Months Ended June 30, 2025
(Unaudited)
| Corporate | 5.11 | BOA | Lugano | PrimaLoft | THP | Velocity Outdoor | Altor | Arnold | Sterno | Consolidated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | (19,259) | $ | 4,858 | $ | 9,014 | $ | (68,808) | $ | 261 | $ | 835 | $ | (2,564) | $ | 1,434 | $ | (13,335) | $ | 6,787 | $ | (80,777) | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | — | 1,318 | 1,057 | 1 | 534 | 351 | 69 | 629 | 11,198 | 2,201 | 17,358 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 27,083 | (3) | (1) | 6,887 | (6) | (5) | (12) | — | 153 | — | 34,096 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intercompany interest | (41,043) | 3,747 | 3,736 | 16,430 | 4,014 | 2,422 | 1,675 | 4,699 | 2,119 | 2,201 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on debt modification | 2,827 | — | — | — | — | — | — | — | — | — | 2,827 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (106) | 5,531 | 5,248 | 1,475 | 5,339 | 4,159 | 1,368 | 5,923 | 2,703 | 3,510 | 35,150 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EBITDA | (30,498) | 15,451 | 19,054 | (44,015) | 10,142 | 7,762 | 536 | 12,685 | 2,838 | 14,699 | 8,654 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense | (2) | (242) | 42 | (1,786) | 11 | 42 | (83) | 375 | 23 | (93) | (1,713) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling shareholder compensation | — | 622 | 1,368 | 626 | 619 | 419 | 17 | 242 | 4 | 272 | 4,189 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment expense | — | — | — | 31,515 | — | — | — | — | — | 31,515 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (1) | — | — | — | — | — | — | — | 2,492 | 1,295 | 94 | 3,881 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (30,500) | $ | 15,831 | $ | 20,464 | $ | (13,660) | $ | 10,772 | $ | 8,223 | $ | 470 | $ | 15,794 | $ | 4,160 | $ | 14,972 | $ | 46,526 | ||||||||||||||||||||||||||||||||||||||||||||||
(1) Other represents specified operating expenses that are included by management in the calculation of Adjusted EBITDA when analyzing monthly operating results of our subsidiaries. In the second quarter of 2025, 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 and severance costs related to chief executive officer at Arnold. For Altor, other includes the add-back of certain expenses incurred related to restructuring of their facilities after the acquisition of Lifoam.
Compass Diversified Holdings
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Six Months Ended June 30, 2026
(Unaudited)
| Corporate | 5.11 | BOA | PrimaLoft | THP | Velocity Outdoor | Altor | Arnold | Rimports (1) | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 14,235 | $ | 12,476 | $ | 26,472 | $ | (19,279) | $ | 9,306 | $ | (4,952) | $ | 2,458 | $ | 553 | $ | 9,774 | $ | 51,043 | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 35,910 | 1,793 | 3,871 | 1,980 | 2,907 | 125 | 1,704 | 708 | 3,445 | 52,443 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 51,199 | (2) | — | (16) | 11 | 16 | — | 288 | (106) | 51,390 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intercompany interest | (38,345) | 5,517 | 5,322 | 7,285 | 3,653 | 3,115 | 7,767 | 4,254 | 1,432 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 2,643 | 11,444 | 10,545 | 10,644 | 8,307 | 2,779 | 13,161 | 5,448 | 6,923 | 71,894 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| EBITDA | 65,642 | 31,228 | 46,210 | 614 | 24,184 | 1,083 | 25,090 | 11,251 | 21,468 | 226,770 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense (2) | (121,538) | 28 | 124 | 11 | (66) | (314) | 404 | 2 | (194) | (121,543) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-controlling shareholder compensation | — | 1,297 | 1,952 | 1,182 | 683 | 8 | 350 | 52 | 315 | 5,839 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment expense | — | — | — | 20,500 | — | — | — | — | — | 20,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (3) | — | — | — | — | — | — | (9,698) | — | 225 | (9,473) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (55,896) | $ | 32,553 | $ | 48,286 | $ | 22,307 | $ | 24,801 | $ | 777 | $ | 16,146 | $ | 11,305 | $ | 21,814 | $ | 122,093 | ||||||||||||||||||||||||||||||||||||||||||
(1) Rimports includes the Adjusted EBITDA of the Sterno food service product division from January 1, 2026 through the date of sale, May 1, 2026.
(2) The amount of Other (income) expense at corporate includes the change in the fair value of the receivable due from unconsolidated affiliate ($58.0 million) and the gain on the sale of the Sterno food service product division ($182.3 million).
(3) Other in the six months ended June 30, 2026 includes the add-back of a gain on sale leaseback at Altor.
Compass Diversified Holdings
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Six Months Ended June 30, 2025
(Unaudited)
| Corporate | 5.11 | BOA | Lugano | PrimaLoft | THP | Velocity Outdoor | Altor | Arnold | Sterno | Consolidated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | (28,023) | $ | 8,764 | $ | 17,257 | $ | (120,442) | $ | (176) | $ | 2,589 | $ | (6,731) | $ | 1,206 | $ | (14,941) | $ | 9,966 | $ | (130,531) | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | — | 2,462 | 2,223 | (255) | 928 | 770 | 113 | 642 | 9,815 | 3,198 | 19,896 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 53,926 | (2) | (2) | 15,762 | (13) | (7) | (13) | — | 296 | — | 69,947 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intercompany interest | (80,936) | 7,091 | 7,720 | 31,805 | 8,143 | 5,024 | 3,096 | 9,553 | 4,034 | 4,470 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on debt modification | 2,827 | — | — | — | — | — | — | — | — | — | 2,827 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (32) | 11,303 | 10,496 | 3,068 | 10,654 | 8,319 | 2,737 | 13,115 | 5,281 | 6,986 | 71,927 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EBITDA | (52,238) | 29,618 | 37,694 | (70,062) | 19,536 | 16,695 | (798) | 24,516 | 4,485 | 24,620 | 34,066 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense | 12 | (137) | 105 | 11,729 | 12 | 39 | (210) | 590 | 21 | (193) | 11,968 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-controlling shareholder compensation | — | 1,167 | 2,714 | 1,542 | 1,168 | 444 | 122 | 487 | 8 | 549 | 8,201 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment expense | — | — | — | 31,515 | — | — | — | — | — | — | 31,515 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Integration services fee | — | — | — | — | — | 875 | — | — | — | — | 875 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (1) | — | — | — | — | — | — | — | 3,054 | 2,210 | 163 | 5,427 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (52,226) | $ | 30,648 | $ | 40,513 | $ | (25,276) | $ | 20,716 | $ | 18,053 | $ | (886) | $ | 28,647 | $ | 6,724 | $ | 25,139 | $ | 92,052 | ||||||||||||||||||||||||||||||||||||||||||||||
(1) Other represents specified 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 and severance costs related to the chief executive officer at Arnold. For Altor, other includes the add-back of certain expenses incurred related to restructuring of their facilities after the acquisition of Lifoam.
Compass Diversified Holdings
Non-GAAP Adjusted EBITDA
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Branded Consumer | |||||||||||||||||||||||
| 5.11 | $ | 17,990 | $ | 15,831 | $ | 32,553 | $ | 30,648 | |||||||||||||||
| BOA | 26,086 | 20,464 | 48,286 | 40,513 | |||||||||||||||||||
| Lugano | — | (13,660) | — | (25,276) | |||||||||||||||||||
| PrimaLoft | 13,838 | 10,772 | 22,307 | 20,716 | |||||||||||||||||||
| The Honey Pot Co. | 10,858 | 8,223 | 24,801 | 18,053 | |||||||||||||||||||
| Velocity Outdoor | 504 | 470 | 777 | (886) | |||||||||||||||||||
| Total Branded Consumer | $ | 69,276 | $ | 42,100 | $ | 128,724 | $ | 83,768 | |||||||||||||||
| Industrial | |||||||||||||||||||||||
| Altor Solutions | 7,850 | 15,794 | 16,146 | 28,647 | |||||||||||||||||||
| Arnold Magnetics | 6,214 | 4,160 | 11,305 | 6,724 | |||||||||||||||||||
| Rimports | 10,776 | 14,972 | 21,814 | 25,139 | |||||||||||||||||||
| Total Industrial | $ | 24,840 | $ | 34,926 | $ | 49,265 | $ | 60,510 | |||||||||||||||
| Total Subsidiary Adjusted EBITDA | 94,116 | 77,026 | 177,989 | 144,278 | |||||||||||||||||||
Corporate expense | (28,544) | (30,500) | (55,896) | (52,226) | |||||||||||||||||||
| Total Adjusted EBITDA | $ | 65,572 | $ | 46,526 | $ | 122,093 | $ | 92,052 | |||||||||||||||
Compass Diversified Holdings
Subsidiary Adjusted EBITDA, Excluding Lugano and Divested Sterno Food Service Business
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Total Branded Consumer | $ | 69,276 | $ | 42,100 | $ | 128,724 | $ | 83,768 | |||||||||||||||
| Less: Adjusted EBITDA (loss) attributable to Lugano | — | (13,660) | — | (25,276) | |||||||||||||||||||
| Total Branded Consumer, excluding Lugano | $ | 69,276 | $ | 55,760 | $ | 128,724 | $ | 109,044 | |||||||||||||||
| Total Industrial | $ | 24,840 | $ | 34,926 | $ | 49,265 | $ | 60,510 | |||||||||||||||
Less: Adjusted EBITDA attributable to the divested Sterno Food Service Business (1) | 2,576 | 9,407 | 9,401 | 16,363 | |||||||||||||||||||
| Total Industrial, excluding the divested Sterno Food Service Business | $ | 22,264 | $ | 25,519 | $ | 39,864 | $ | 44,147 | |||||||||||||||
| Subsidiary Adjusted EBITDA, excluding Lugano and the divested Sterno Food Service Business | $ | 91,540 | $ | 81,279 | $ | 168,588 | $ | 153,191 | |||||||||||||||
(1) Adjusted EBITDA attributable to the divested Sterno Food Service Business is calculated from the reported results of Rimports by identifying the net sales and directly attributable expenses of the Food Service Business and applying CODI’s Adjusted EBITDA methodology. The calculation does not allocate to the Food Service Business shared management or other indirect costs that were not specifically attributable to that business.
Compass Diversified Holdings
Subsidiary Net Sales
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Branded Consumer | |||||||||||||||||||||||
| 5.11 | $ | 126,499 | $ | 131,442 | $ | 250,470 | $ | 260,812 | |||||||||||||||
| BOA | 59,068 | 48,369 | 111,176 | 97,246 | |||||||||||||||||||
| Lugano | — | 26,771 | — | 53,616 | |||||||||||||||||||
| PrimaLoft | 29,749 | 24,855 | 51,666 | 48,500 | |||||||||||||||||||
| The Honey Pot | 38,387 | 32,798 | 83,546 | 68,989 | |||||||||||||||||||
| Velocity Outdoor | 17,109 | 15,213 | 30,935 | 28,414 | |||||||||||||||||||
Total Branded Consumer | $ | 270,812 | $ | 279,448 | $ | 527,793 | $ | 557,577 | |||||||||||||||
| Industrial | |||||||||||||||||||||||
| Altor Solutions | $ | 65,662 | 83,305 | $ | 130,304 | $ | 159,562 | ||||||||||||||||
| Arnold Magnetics | 43,222 | 38,432 | 83,404 | 72,440 | |||||||||||||||||||
Rimports (1) | 44,346 | 77,505 | 109,396 | 142,886 | |||||||||||||||||||
| Total Industrial | $ | 153,230 | $ | 199,242 | $ | 323,104 | $ | 374,888 | |||||||||||||||
| Total Subsidiary Net Sales | $ | 424,042 | $ | 478,690 | $ | 850,897 | $ | 932,465 | |||||||||||||||
(1) During the second quarter of 2026, the Company completed the sale of Sterno’s food service business. Prior to the sale, Sterno distributed Rimports, its home fragrance business, to its stockholders, and Rimports remained a majority owned subsidiary of the LLC. Accordingly, the net sales presented above includes the results of Sterno’s food service business through the May 1, 2026 date of sale and the results of Rimports for all periods presented, including the three and six months ended June 30, 2025 and 2026.
Compass Diversified Holdings
Net Sales to Non-GAAP Net Sales (excluding Lugano and the Divested Sterno Food Service Business) Reconciliation
(unaudited)
| Three months ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net sales | $ | 424,042 | $ | 478,690 | $ | 850,897 | $ | 932,465 | |||||||||||||||
| Less: net sales attributable to Lugano | — | (26,771) | — | (53,616) | |||||||||||||||||||
| Net sales, excluding Lugano | $ | 424,042 | $ | 451,919 | $ | 850,897 | $ | 878,849 | |||||||||||||||
Less: net sales attributable to the divested Sterno Food Service Business (1) | (13,424) | (41,223) | (45,125) | (71,426) | |||||||||||||||||||
| Net sales, excluding Lugano and the divested Sterno Food Service Business | $ | 410,618 | $ | 410,696 | $ | 805,772 | $ | 807,423 | |||||||||||||||
| Total Branded Consumer | $ | 270,812 | $ | 279,448 | $ | 527,793 | $ | 557,577 | |||||||||||||||
| Less: net sales attributable to Lugano | — | (26,771) | — | (53,616) | |||||||||||||||||||
| Total Branded Consumer, excluding Lugano | $ | 270,812 | $ | 252,677 | $ | 527,793 | $ | 503,961 | |||||||||||||||
| Total Industrial | $ | 153,230 | $ | 199,242 | $ | 323,104 | $ | 374,888 | |||||||||||||||
| Less: net sales attributable to the divested Sterno Food Service Business | (13,424) | (41,223) | (45,125) | (71,426) | |||||||||||||||||||
| Total Industrial, excluding the divested Sterno Food Service Business | $ | 139,806 | $ | 158,019 | $ | 277,979 | $ | 303,462 | |||||||||||||||
| Net sales, excluding Lugano and the divested Sterno Food Service Business | $ | 410,618 | $ | 410,696 | $ | 805,772 | $ | 807,423 | |||||||||||||||
(1) Net sales attributable to the divested Sterno Food Service Business represent the net sales of those operations through the May 1, 2026 date of sale and for all prior periods presented.
Compass Diversified Holdings
Condensed Consolidated Cash Flows
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 29,702 | $ | (35,160) | $ | 53,617 | $ | (64,508) | |||||||||||||||
| Net cash provided by (used in) investing activities | 282,902 | (9,265) | 289,127 | (22,187) | |||||||||||||||||||
| Net cash provided by (used in) financing activities | (289,652) | (29,862) | (322,464) | 98,378 | |||||||||||||||||||
| Foreign currency impact on cash | (689) | 1,809 | (852) | 2,415 | |||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 22,260 | (72,478) | 19,428 | 14,098 | |||||||||||||||||||
| Cash and cash equivalents - beginning of the period | 65,183 | 146,235 | 68,015 | 59,659 | |||||||||||||||||||
| Cash and cash equivalents - end of the period | $ | 87,443 | $ | 73,757 | $ | 87,443 | $ | 73,757 | |||||||||||||||
| Compass Diversified Holding | |||||||||||||||||||||||
| Selected Financial Data - Cash Flows | |||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Changes in operating assets and liabilities | $ | 33,151 | $ | (38,196) | $ | 40,871 | $ | (50,767) | |||||||||||||||
| Purchases of property and equipment | $ | (6,237) | $ | (10,883) | $ | (11,343) | $ | (23,983) | |||||||||||||||
| Distributions paid - common shares | $ | — | $ | (18,809) | $ | — | $ | (37,618) | |||||||||||||||
| Distributions paid - preferred shares | $ | (9,715) | $ | (9,714) | $ | (19,429) | $ | (18,148) | |||||||||||||||