Compass Diversified Reports Third Quarter 2025 Financial Results | CODI Stock News

WESTPORT, Conn., Jan. 14, 2026 (GLOBE NEWSWIRE) -- 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 nine months ended September 30, 2025 and filed its Quarterly Report on Form 10-Q for the period. “I’m pleased to report that with today’s filing we are now fully current with our SEC filings for 2025,” said Elias Sabo, Chief Executive Officer of Compass Diversified, “and we are in full compliance with the periodic reporting requirements of our credit facilities and bond indentures.” Sabo continued, “Excluding Lugano, our eight operating subsidiaries continue to deliver solid performance in an uncertain macroeconomic environment. We are focused on executing against our strategic priorities with the objective of delivering consistent, long-term shareholder value by partnering with our management teams to drive performance, invest for growth, and enhance profitability.” 2025 Outlook CODI now expects full-year 2025 subsidiary Adjusted EBITDA of $335 million to $355 million, excluding Lugano Holding, Inc. Conference Call Management will host a conference call today, Wednesday, January 14, 2026, at 5:00 p.m. E.T. / 2:00 p.m. P.T. 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 in to 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 and Adjusted Earnings (Loss) 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 (Loss) 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 (Loss). 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 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 (Loss) 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, 2024. 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 Subsidiary Adjusted EBITDA to its comparable GAAP measure because we do not provide guidance on Net Income (Loss) from Continuing Operations 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. 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 subsidiary Adjusted EBITDA and its future performance, 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 beliefs and assumptions by CODI’s Board of Directors and management, and on information currently available to CODI’s Board of Directors and management. 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 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; CODI’s ability to regain compliance with NYSE continued listing requirements; 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 Holding, Inc. (“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 Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2024 filed with the SEC on December 8, 2025 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 HoldingsCondensed Consolidated Balance Sheets September 30, 2025 December 31, 2024(in thousands) (Unaudited) (As Restated)Assets Current assets Cash and cash equivalents $61,139 $59,659 Accounts receivable, net 224,689 207,172 Inventories, net 602,180 571,248 Prepaid expenses and other current assets 122,742 126,692 Total current assets 1,010,750 964,771 Property, plant and equipment, net 214,451 244,746 Goodwill 895,420 895,916 Intangible assets, net 915,666 983,396 Other non-current assets 210,881 208,593 Total assets $3,247,168 $3,297,422 Liabilities and stockholders’ equity Current liabilities Accounts payable and accrued expenses $459,719 $421,715 Due to related party 22,604 18,036 Current portion, long-term debt 1,878,852 1,774,290 Subsidiary financing arrangements 183,853 169,765 Other current liabilities 53,910 49,617 Total current liabilities 2,598,938 2,433,423 Deferred income taxes 106,804 108,091 Long-term debt — — Other non-current liabilities 223,060 225,334 Total liabilities 2,928,802 2,766,848 Stockholders' equity Total stockholders' equity attributable to Holdings 519,217 678,620 Noncontrolling interest (200,851) (148,046)Total stockholders' equity 318,366 530,574 Total liabilities and stockholders’ equity $3,247,168 $3,297,422 Compass Diversified HoldingsConsolidated Statements of Operations(Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (in thousands, except per share data) (As Restated) (As Restated)Net sales $472,562 $456,553 $1,405,027 $1,294,084 Cost of sales 264,847 259,920 792,739 734,314 Gross profit 207,715 196,633 612,288 559,770 Operating expenses: Selling, general and administrative expense 179,315 145,959 491,804 421,264 Management fees 16,213 18,633 54,111 55,314 Amortization expense 23,254 23,721 69,722 71,317 Impairment expense — — 31,515 8,182 Operating income (loss) (11,067) 8,320 (34,864) 3,693 Other income (expense): Interest expense, net (66,721) (31,620) (136,668) (86,483)Amortization of debt issuance costs (826) (1,005) (2,922) (3,014)Loss on debt modification — — (2,827) — Gain (loss) on sale of Crosman — 388 — (24,218)Other income (expense), net (2,343) (37,769) (14,311) (125,853)Net loss from continuing operations before income taxes (80,957) (61,686) (191,592) (235,875)Provision for income taxes 5,763 2,772 25,659 21,475 Loss from continuing operations (86,720) (64,458) (217,251) (257,350)Income from discontinued operations, net of income tax — (1,088) — 101 Gain on sale of discontinued operations (523) — 2,326 3,345 Net loss (87,243) (65,546) (214,925) (253,904)Less: Net loss from continuing operations attributable to noncontrolling interest (13,228) (28,922) (59,700) (87,480)Less: Net loss from discontinued operations attributable to noncontrolling interest — (592) — (1,163)Net income (loss) attributable to Holdings $(74,015) $(36,032) $(155,225) $(165,261) Amounts attributable to Holdings Loss from continuing operations $(73,492) $(35,536) $(157,551) $(169,870)Income from discontinued operations — (496) — 1,264 Gain on sale of discontinued operations, net of income tax (523) — 2,326 3,345 Net loss attributable to Holdings $(74,015) $(36,032) $(155,225) $(165,261) Basic income (loss) per common share attributable to Holdings Continuing operations $(1.20) $(0.61) $(2.53) $(3.22)Discontinued operations (0.01) (0.01) 0.03 0.06 $(1.21) $(0.62) $(2.50) $(3.16) Basic weighted average number of common shares outstanding 75,236 75,645 75,236 75,437 Compass Diversified HoldingsNet Income (Loss) to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA(Unaudited) Three Months Ended September 30, Nine Months Ended September 30,(in thousands, except per share amounts) 2025 2024 2025 2024 (As Restated) (As Restated)Net loss $(87,243) $(65,546) $(214,925) $(253,904)Income from discontinued operations, net of tax — (1,088) — 101 Gain on sale of discontinued operations, net of tax (523) — 2,326 3,345 Net loss from continuing operations $(86,720) $(64,458) $(217,251) $(257,350)Less: loss from continuing operations attributable to noncontrolling interest (13,228) (28,922) (59,700) (87,480)Net loss attributable to Holdings – continuing operations $(73,492) $(35,536) $(157,551) $(169,870)Adjustments: Distributions paid – preferred shares (9,715) (6,345) (27,863) (18,491)Amortization expense – intangibles and inventory step up 23,254 23,721 69,722 75,006 Impairment expense — — 31,515 8,182 (Gain) loss on sale of Crosman — (388) — 24,218 Tax effect – loss on sale of Crosman — — — 7,254 Stock compensation 4,073 4,537 12,274 12,288 Acquisition expenses — — — 3,479 Integration services fee — 875 875 1,750 Other 3,155 964 8,582 1,368 Adjusted Earnings $(52,725) $(12,172) $(62,446) $(54,816)Plus (less): Depreciation expense 10,884 10,178 34,247 31,249 Income tax provision 5,763 2,772 25,659 21,475 Interest expense 66,721 31,620 136,668 86,483 Amortization of debt issuance costs 826 1,005 2,922 3,014 Loss on debt modification — — 2,827 — Tax effect – loss on sale of Crosman — — — (7,254)Income from continuing operations attributable to noncontrolling interest (13,228) (28,922) (59,700) (87,480)Distributions paid – preferred shares 9,715 6,345 27,863 18,491 Other (income) expense 2,343 37,769 14,311 125,853 Adjusted EBITDA $30,299 $48,595 $122,351 $137,015 Compass Diversified HoldingsNet Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA ReconciliationThree Months Ended September 30, 2025(Unaudited) Corporate 5.11 BOA Lugano PrimaLoft THP Velocity Outdoor Altor Arnold Sterno ConsolidatedIncome (loss) from continuing operations $(77,345) $9,628 $5,399 $(34,211) $(4,534) $196 $1,318 $(714) $7,546 $5,997 $(86,720)Adjusted for: Provision (benefit) for income taxes 9,601 3,006 1,573 — (1,439) 76 (72) (265) (8,643) 1,926 5,763 Interest expense, net 61,480 (1) (1) 5,084 (9) (1) 21 — 148 — 66,721 Intercompany interest (40,752) 3,819 3,515 16,555 4,037 2,347 1,908 4,427 2,152 1,992 — Depreciation and amortization (251) 5,443 5,253 725 5,296 4,156 1,353 6,672 2,781 3,536 34,964 EBITDA (47,267) 21,895 15,739 (11,847) 3,351 6,774 4,528 10,120 3,984 13,451 20,728 Other (income) expense — (257) 118 1,288 8 (21) (268) 1,587 4 (116) 2,343 Noncontrolling shareholder compensation — 571 1,375 643 585 382 5 239 4 269 4,073 Other (1) — — — — — — — 2,889 149 117 3,155 Adjusted EBITDA $(47,267) $22,209 $17,232 $(9,916) $3,944 $7,135 $4,265 $14,835 $4,141 $13,721 $30,299 (1) Other represents non-recurring 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 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 HoldingsNet Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA ReconciliationThree Months Ended September 30, 2024(Unaudited) Corporate 5.11 BOA Lugano PrimaLoft THP Velocity Outdoor Altor Arnold Sterno Consolidated (As Restated) (As Restated)Income (loss) from continuing operations $(10,855) $9,737 $3,902 $(72,736) $(4,273) $(160) $1,831 $2,682 $2,260 $3,154 $(64,458)Adjusted for: Provision (benefit) for income taxes — 1,782 1,451 496 (2,315) (20) (2,223) 1,466 1,196 939 2,772 Interest expense, net 27,239 (2) (4) 4,262 (10) (3) (1) — 139 — 31,620 Intercompany interest (39,258) 3,334 4,925 15,080 4,480 2,907 2,038 1,735 1,816 2,943 — Depreciation and amortization 140 5,617 5,402 1,463 5,337 4,166 1,397 4,080 2,340 4,960 34,902 EBITDA (22,734) 20,468 15,676 (51,435) 3,219 6,890 3,042 9,963 7,751 11,996 4,836 Other (income) expense (1) 12 (110) 37,641 2 25 (164) 58 — (82) 37,381 Noncontrolling shareholder compensation — 544 1,504 459 828 540 186 237 4 235 4,537 Integration services fee — — — — — 875 — — — — 875 Other 3 — — — — — — — 880 83 966 Adjusted EBITDA $(22,732) $21,024 $17,070 $(13,335) $4,049 $8,330 $3,064 $10,258 $8,635 $12,232 $48,595 Compass Diversified HoldingsNet Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA ReconciliationNine Months Ended September 30, 2025(Unaudited) Corporate 5.11 BOA Lugano PrimaLoft THP Velocity Outdoor Altor Arnold Sterno ConsolidatedIncome (loss) from continuing operations $(105,368) $18,392 $22,656 $(154,653) $(4,710) $2,785 $(5,413) $492 $(7,395) $15,963 $(217,251)Adjusted for: Provision (benefit) for income taxes 9,601 5,468 3,796 (255) (511) 846 41 377 1,172 5,124 25,659 Interest expense, net 115,406 (3) (3) 20,846 (22) (8) 8 — 444 — 136,668 Intercompany interest (121,688) 10,910 11,235 48,360 12,180 7,371 5,004 13,980 6,186 6,462 — Loss on debt extinguishment 2,827 — — — — — — — — — 2,827 Depreciation and amortization (283) 16,746 15,749 3,793 15,950 12,475 4,090 19,787 8,062 10,522 106,891 EBITDA (99,505) 51,513 53,433 (81,909) 22,887 23,469 3,730 34,636 8,469 38,071 54,794 Other (income) expense 12 (394) 223 13,017 20 18 (478) 2,177 25 (309) 14,311 Non-controlling shareholder compensation — 1,738 4,089 2,185 1,753 826 127 726 12 818 12,274 Impairment expense — — — 31,515 — — — — — — 31,515 Integration services fee — — — — — 875 — — — — 875 Other (1) — — — — — — — 5,943 2,359 280 8,582 Adjusted EBITDA $(99,493) $52,857 $57,745 $(35,192) $24,660 $25,188 $3,379 $43,482 $10,865 $38,860 $122,351 (1) Other represents non-recurring 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 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 HoldingsNet Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA ReconciliationNine Months Ended September 30, 2024(Unaudited) Corporate 5.11 BOA Lugano PrimaLoft THP Velocity Outdoor Altor Arnold Sterno Consolidated (As Restated) (As Restated)Income (loss) from continuing operations $(27,589) $18,594 $16,248 $(218,166) $(5,261) $(7,764) $(53,368) $6,076 $6,169 $7,711 $(257,350)Adjusted for: Provision (benefit) for income taxes — 4,792 3,920 1,041 (1,731) (2,589) 7,074 3,192 3,182 2,594 21,475 Interest expense, net 77,280 (3) (16) 8,992 (15) (28) 53 — 220 — 86,483 Intercompany interest (115,845) 10,114 15,716 40,417 13,526 7,827 7,620 5,612 5,313 9,700 — Depreciation and amortization 624 17,198 16,251 3,865 15,987 14,811 6,679 12,250 6,754 14,850 109,269 EBITDA (65,530) 50,695 52,119 (163,851) 22,506 12,257 (31,942) 27,130 21,638 34,855 (40,123)Other (income) expense 462 86 22 121,477 5 (5) 25,734 2,722 (9) (423) 150,071 Non-controlling shareholder compensation — 1,630 4,352 1,662 1,823 1,157 556 741 13 354 12,288 Impairment expense — — — — — — 8,182 — — — 8,182 Acquisition expenses — — — — — 3,479 — — — — 3,479 Integration services fee — — — — — 1,750 — — — — 1,750 Other — — — — — 90 — — 880 398 1,368 Adjusted EBITDA $(65,068) $52,411 $56,493 $(40,712) $24,334 $18,728 $2,530 $30,593 $22,522 $35,184 $137,015 Compass Diversified HoldingsNon-GAAP Adjusted EBITDA(Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (in thousands) (As Restated) (As Restated)Branded Consumer 5.11 $22,209 $21,024 $52,857 $52,411 BOA 17,232 17,070 57,745 56,493 Lugano (9,916) (13,335) (35,192) (40,712)PrimaLoft 3,944 4,049 24,660 24,334 The Honey Pot Co. (1) 7,135 8,330 25,188 18,728 Velocity Outdoor 4,265 3,064 3,379 2,530 Total Branded Consumer $44,869 $40,202 $128,637 $113,784 Niche Industrial Altor Solutions 14,835 10,258 43,482 30,593 Arnold Magnetics 4,141 8,635 10,865 22,522 Sterno 13,721 12,232 38,860 35,184 Total Niche Industrial $32,697 $31,125 $93,207 $88,299 Corporate expense (47,267) (22,732) (99,493) (65,068)Total Adjusted EBITDA $30,299 $48,595 $122,351 $137,015 (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 nine months ended September 30, 2024. The Honey Pot Co. was acquired on January 31, 2024. Compass Diversified HoldingsNet Sales to Pro Forma Net Sales Reconciliation(unaudited) Three Months Ended September 30, Nine Months Ended September 30,(in thousands) 2025 2024 2025 2024 (As Restated) (As Restated) Net Sales $472,562 $456,553 $1,405,027 $1,294,084 Acquisitions (1) — — — 10,671 Pro Forma Net Sales $472,562 $456,553 $1,405,027 $1,304,755 (1) Acquisitions reflects the net sales for The Honey Pot Co. on a pro forma basis as if the Company had acquired The Honey Pot Co. on January 1, 2024. Compass Diversified HoldingsSubsidiary Pro Forma Net Sales(unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (in thousands) (As Restated) (As Restated) Branded Consumer 5.11 $143,240 $139,218 $404,052 $387,393 BOA 43,941 45,607 141,187 142,670 Lugano 17,350 14,269 70,966 37,087 PrimaLoft 13,294 13,686 61,794 61,518 The Honey Pot (1) 34,727 31,545 103,716 55,018 Velocity Outdoor 29,040 28,809 57,454 48,610 Total Branded Consumer $281,592 $273,134 $839,169 $732,296 Niche Industrial Altor Solutions $79,824 52,129 $239,386 $157,746 Arnold Magnetics 37,686 46,103 110,126 130,545 Sterno 73,460 85,187 216,346 223,814 Total Niche Industrial $190,970 $183,419 $565,858 $512,105 Total Subsidiary Net Sales $472,562 $456,553 $1,405,027 $1,244,401 (1) Net sales for The Honey Pot Co. are pro forma as if the Company had acquired this business on January 1, 2024.