Compass Diversified SEC Filings

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.

Compass Diversified Holdings reports that, on December 9, 2025, the required lenders under its Third Amended and Restated Credit Agreement agreed to waive a prior deadline for the company to deliver restated financial statements under a Fifth Forbearance Agreement. The lenders also confirmed that the financial statements and auditor’s report included in the company’s recently filed Form 10-K/A for the year ended December 31, 2024 satisfy the requirements of the credit agreement and the forbearance arrangement. As a result, the Fifth Forbearance Agreement, which provides for a forbearance period ending December 19, 2025 unless terminated sooner under its terms, remains in effect.

Compass Diversified Holdings (CODI) and its affiliated LLC reported that they filed an amended Annual Report on Form 10‑K/A for the year ended December 31, 2024. The amendment includes restated audited consolidated financial statements for year-end 2024, 2023 and 2022, as well as restated unaudited financial information for each interim period within those years. This means previously issued financial statements for three fiscal years and related quarters have been revised. The companies also issued a press release describing these matters, which is attached as an exhibit to this report.

Compass Diversified Holdings and Compass Group Diversified Holdings LLC filed Amendment No. 1 to their Annual Report for the year ended December 31, 2024, restating audited consolidated financial statements for 2024, 2023 and 2022 and all interim periods within those years. The company directs investors to rely only on the financial information and disclosures in this amended report and future filings, not on previously issued reports, press releases or presentations covering those periods.

The restatement follows an Audit Committee–led internal investigation into the financing, accounting and inventory practices of Lugano Holding, Inc., a subsidiary and operating segment, assisted by outside legal counsel and a forensic accounting firm. The filing highlights extensive forward‑looking risk factors, including litigation related to financial statement representations, potential additional material weaknesses in internal control over financial reporting, lenders’ ability to accelerate indebtedness that "could jeopardize our ability to continue as a going concern," and the possibility that an intercompany loan to Lugano may be subject to loss.

Compass Diversified Holdings (CODI) and its operating company entered a Fifth Forbearance Agreement with their bank group on November 24, 2025, extending lender forbearance on defaults tied to subsidiary Lugano’s issues until December 19, 2025. The agreement requires CODI to operate under a 13‑week cash budget, limits weekly cash outflows to no more than $1 million above budget, and allows Restricted Payments only if liquidity remains at least $10,000,000. Lenders will continue to honor revolving loan requests, but total revolving exposure, including letters of credit, is capped at $60 million. CODI must deliver restated audited financials for 2024 and any other restated years by December 5, 2025. The company notes Lugano’s Chapter 11 filing and warns that failure to obtain waivers or further relief from lenders would likely have a material adverse effect on its business, financial condition, and results of operations.