Compass Diversified Holdings (CODI) reported $582.62 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 2.3%. EPS of $0.43 for the same period compares to $0.38 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $570.52 million, representing a surprise of +2.12%. The company delivered an EPS surprise of -20.37%, with the consensus EPS estimate being $0.54.While investors scrutinize revenue and earnings changes year-over-year and how th ...

Acquisition and Strategic Growth - The Company recorded a total enterprise value of $380 million for the acquisition of The Honey Pot Co. on January 31, 2024[195]. - The Honey Pot Co. is expected to enhance the Company's portfolio in the healthcare sector, which is identified as a high-growth area[175]. - The Company is actively pursuing strategic acquisitions and rigorous integration processes to enhance growth opportunities[193]. - The Honey Pot Co. contributed $75.9 million in net revenues in 2024 post-acquisition[217]. - Amortization expense for the three months ended September 30, 2024 increased by $2.8 million due to the acquisition of The Honey Pot Co.[210]. - Amortization expense increased by $8.6 million for the nine months ended September 30, 2024, due to intangibles recognized from the acquisition of The Honey Pot Co.[223]. - Acquisition expenses recorded are $3,479,000, indicating ongoing strategic investments[372]. Financial Performance - Consolidated net revenues for the three months ended September 30, 2024 increased by approximately $61.6 million, or 11.8%, compared to the same period in 2023[203]. - Net revenues for the nine months ended September 30, 2024 increased by approximately $157.6 million, or 10.6%, compared to the same period in 2023[217]. - Operating income for the three months ended September 30, 2024 was $70.3 million, compared to $17.4 million for the same period in 2023[202]. - Gross profit as a percentage of net revenues was approximately 47.1% for the three months ended September 30, 2024, compared to 43.2% for the same period in 2023[207]. - Gross profit for the nine months ended September 30, 2024 was $208.1 million, an increase of $4.9 million from $203.2 million in the same period of 2023, with gross profit as a percentage of net sales at 53.7%[238]. - Segment operating income increased to $120.5 million for the nine months ended September 30, 2024, compared to $64.9 million in the same period of 2023[268]. - Adjusted EBITDA for the nine months ended September 30, 2024, is $314,308,000, with significant contributions from various subsidiaries[372]. - The overall EBITDA across all subsidiaries is reported at $257,958,000, highlighting operational performance[372]. Expenses and Costs - Consolidated selling, general and administrative expenses increased by approximately $25.8 million during the three months ended September 30, 2024, compared to the same period in 2023[208]. - Selling, general and administrative expenses increased by approximately $64.0 million during the nine months ended September 30, 2024, with significant increases at Lugano ($22.6 million) and BOA ($7.6 million)[221]. - Interest expense totaled $27.4 million for the three months ended September 30, 2024, compared to $27.6 million for the same period in 2023[213]. - Interest expense for the nine months ended September 30, 2024, totaled $77.5 million, slightly down from $80.4 million in the same period of 2023[360]. - Selling, general and administrative expenses for the nine months ended September 30, 2024, were $167.1 million, representing 43.1% of net sales, compared to $164.2 million or 42.6% of net sales in the same period of 2023[239]. - Selling, general and administrative expenses for the nine months ended September 30, 2024 were $30.7 million, or 35.5% of net sales, compared to $28.4 million, or 34.5% in the prior year[289]. - The total impairment expense recognized is $8,182,000, reflecting non-recurring charges[372]. Market Conditions and Challenges - Inflationary pressures and rising labor costs are expected to impact margins for the remainder of 2024 and into early 2025[189]. - The Company plans to raise prices on goods when appropriate to preserve operating margins due to rising input costs[190]. - The effective tax rate for the quarter ended September 30, 2024 was 25.5%, compared to an effective tax rate of (37.8)% during the same period in 2023[216]. - The effective tax rate for the nine months ended September 30, 2024, was 67.0%, compared to 118.2% in the same period of 2023, influenced by various recurring and discrete items[230]. Cash Flow and Financing - Cash flows used in operating activities for the nine months ended September 30, 2024 totaled approximately $77.6 million, a $134.6 million increase in cash use compared to the same period in 2023[338]. - Cash flows used in investing activities for the nine months ended September 30, 2024 totaled $352.3 million, compared to cash provided by investing activities of $104.3 million in the same period of 2023[339]. - Cash flows provided by financing activities totaled approximately $50.9 million during the nine months ended September 30, 2024, compared to cash flows used of $157.9 million in the same period of 2023[340]. - Total intercompany debt as of September 30, 2024, amounted to $1,523.8 million, with significant balances in subsidiaries such as Lugano ($589.2 million) and PrimaLoft ($156.8 million)[350]. - The company had $486.6 million in net availability under the 2022 Revolving Credit Facility as of September 30, 2024[353]. - The 2022 Credit Facility allows for revolving loans and term loans up to a maximum aggregate amount of $600 million, with a maturity date of July 12, 2027[352]. - The company expects to continue funding Lugano to support profitable sales growth through amendments to its intercompany credit agreement[343]. Segment Performance - Net sales for the three months ended September 30, 2024 were $45.6 million, an increase of $8.3 million, or 22.3%, compared to the same period in 2023[242]. - Lugano's net sales for the three months ended September 30, 2024 increased by approximately $39.8 million, or 50.6%, to $118.6 million compared to the same period in 2023[260]. - Segment operating income for Lugano increased to $48.0 million for the three months ended September 30, 2024, compared to $28.0 million in the same period in 2023[264]. - Net sales for Altor Solutions for the three months ended September 30, 2024 were $52.1 million, a decrease of $7.1 million or 12.0% compared to the same period in 2023, attributed to shifting market conditions[307]. - Segment operating income for Altor Solutions was $6.0 million in the three months ended September 30, 2024, a decrease of $2.7 million compared to the same period in 2023[310].

Exhibit 99.1 Compass Diversified Reports Third Quarter 2024 Financial Results Westport, Conn., October 30, 2024 – Compass Diversified (NYSE: CODI) ("CODI" or the "Company"), an owner of leading middle market businesses, announced today its consolidated operating results for the three months ended September 30, 2024. "Despite a dynamic macroeconomic environment, we had another great quarter," said Elias Sabo, CEO of Compass Diversified. "Our differentiated business model and strong operating companies positi ...

NEW YORK, Oct. 2, 2024 /PRNewswire/ -- Jadex Inc. ("Jadex"), a manufacturer and material sciences company, today announced it has completed the previously announced sale of Lifoam Industries, LLC ("Lifoam" or the "Company") to Altor Solutions ("Altor"), a subsidiary of Compass Diversified (NYSE: CODI), for $137 million in cash (excluding working capital and certain other adjustments). Lifoam is a leading manufacturer of temperature-controlled packaging products such as thermal shippers and refrigerant gel p ...

NEW YORK, Aug. 19, 2024 /PRNewswire/ -- Jadex Inc. ("Jadex"), a manufacturer and material sciences company, today announced it has entered into a definitive agreement to sell Lifoam Industries, LLC ("Lifoam" or the "Company") to Altor Solutions ("Altor"), a subsidiary of Compass Diversified (NYSE: CODI), for $137 million in cash. Post-tax net proceeds from the sale are expected to be used to pay down debt and fund investment in the remaining business. Lifoam is a leading manufacturer of temperature-controll ...

Compass Diversified (NYSE:CODI) Q2 2024 Earnings Conference Call July 31, 2024 5:00 PM ET Company Participants Cody Slach - IR, Gateway Group Elias Sabo - CEO Ryan Faulkingham - CFO Pat Maciariello - COO of Compass Group Management Conference Call Participants Larry Solow - CJS Securities Matt Koranda - ROTH Capital Derek Sommers - Jefferies Robert Dodd - Raymond James Matthew P. Howlett - B. Riley Operator Good afternoon, and welcome to Compass Diversified Second Quarter 2024 Conference Call. Today's call ...

Net Sales Performance - Net sales increased 11% to $542.6 million in Q2 2024, with pro forma net sales up 6%[1][3] - Branded Consumer net sales rose 11% on a pro forma basis to $373.5 million, while Industrial net sales declined 4% to $169.1 million[1][4] - Net sales for the six months ended June 30, 2024, were $1.066885 billion, compared to $970.822 million in the same period in 2023, an increase of 9.9%[22] - Pro Forma Net Sales for the six months ended June 30, 2023, were $1.03 billion, reflecting a $56.89 million contribution from The Honey Pot Co. acquisition[30] - Total Branded Consumer Net Sales for the six months ended June 30, 2023, were $675.45 million, with Lugano contributing $124.84 million and 5.11 contributing $250.48 million[31] - Total Niche Industrial Net Sales for the six months ended June 30, 2023, were $352.26 million, with Altor Solutions contributing $122.40 million and Sterno contributing $149.63 million[31] Adjusted EBITDA and Earnings - Adjusted EBITDA increased 27% to $105.4 million, driven by strong performance at BOA and Lugano, and the addition of The Honey Pot Co.[5] - Adjusted Earnings grew 36% to $39.8 million compared to $29.2 million in the prior year[5] - CODI expects full-year 2024 Subsidiary Adjusted EBITDA between $480 million and $520 million, with Branded Consumer vertical revised upward to $365 million-$395 million and Industrial vertical revised downward to $115 million-$125 million[9] - Full-year 2024 Adjusted EBITDA guidance is maintained at $390 million-$430 million, including management fees and corporate expenses[10] - Adjusted EBITDA for the six months ended June 30, 2024, was $200.268 million, compared to $157.060 million in the same period in 2023, an increase of 27.5%[24] - Consolidated Adjusted EBITDA for Q2 2024 was $105.42 million, compared to $82.94 million in Q2 2023, reflecting a 27.1% increase[25][26] - Adjusted EBITDA for the six months ended June 30, 2024, was $200.27 million, compared to $150.22 million in EBITDA, showing a 33.3% increase after adjustments[27] - Consolidated Adjusted EBITDA for the six months ended June 30, 2023, was $157.06 million, with significant contributions from Lugano ($42.36 million) and BOA ($28.73 million)[28] - Total Branded Consumer Adjusted EBITDA for the six months ended June 30, 2023, was $133.66 million, with Lugano contributing $42.36 million and 5.11 contributing $32.13 million[29] Financial Position and Cash Flow - As of June 30, 2024, CODI had $68.4 million in cash and cash equivalents, with net borrowing availability of $543.6 million under its revolving credit facility[6] - Cash and cash equivalents decreased from $450.477 million in December 2023 to $68.370 million in June 2024, a decline of 84.8%[19] - Accounts receivable increased from $318.241 million in December 2023 to $358.530 million in June 2024, a growth of 12.7%[19] - Inventories increased from $740.387 million in December 2023 to $843.634 million in June 2024, a growth of 13.9%[19] - Long-term debt increased from $1.661879 billion in December 2023 to $1.712084 billion in June 2024, a growth of 3.0%[20] - Total stockholders' equity decreased from $1.519381 billion in December 2023 to $1.468752 billion in June 2024, a decline of 3.3%[20] - Net cash used in operating activities for the six months ended June 30, 2023, was $48.38 million, while net cash used in investing activities was $336.07 million[33] - Cash and cash equivalents at the end of the period for the six months ended June 30, 2023, were $67.35 million, down from $450.48 million at the beginning of the period[33] - Changes in operating assets and liabilities for the six months ended June 30, 2023, resulted in a net outflow of $92.11 million[34] - Distributions paid to common shares for the six months ended June 30, 2023, totaled $36.04 million, while distributions paid to preferred shares were $12.09 million[34] - Purchases of property and equipment for the six months ended June 30, 2023, amounted to $28.60 million[34] Profitability and Income - Gross profit for the six months ended June 30, 2024, was $500.941 million, compared to $421.705 million in the same period in 2023, an increase of 18.8%[22] - Operating income for the six months ended June 30, 2024, was $99.919 million, compared to $76.670 million in the same period in 2023, an increase of 30.3%[22] - Net income (loss) attributable to Holdings for the six months ended June 30, 2024, was $(21.177) million, compared to $119.003 million in the same period in 2023[22] - Velocity Outdoor reported a significant loss of $(39.23) million in Q2 2024, compared to $(3.48) million in Q2 2023, indicating a 1027.3% increase in losses[25][26] - Lugano's income from continuing operations increased to $14.78 million in Q2 2024 from $6.92 million in Q2 2023, a 113.6% growth[25][26] - Corporate income from continuing operations improved to $(7.19) million in Q2 2024 from $(12.95) million in Q2 2023, a 44.5% reduction in losses[25][26] Expenses and Taxes - Depreciation and amortization expenses for Q2 2024 totaled $40.15 million, up from $37.11 million in Q2 2023, an 8.2% increase[25][26] - Interest expense, net, for Q2 2024 was $26.56 million, slightly lower than $26.61 million in Q2 2023, a 0.2% decrease[25][26] - Provision for income taxes in Q2 2024 was $21.52 million, compared to $4.32 million in Q2 2023, a 398.1% increase[25][26] - Noncontrolling shareholder compensation in Q2 2024 was $3.93 million, up from $3.21 million in Q2 2023, a 22.4% increase[25][26] - Integration services fee in Q2 2024 was $875,000, compared to $1.19 million in Q2 2023, a 26.5% decrease[25][26] Divestitures and Acquisitions - The company divested Crosman Corporation, resulting in a $24.6 million loss, contributing to a net loss of $(13.7) million[1][4] - The company acquired The Honey Pot Co. in January 2024, contributing to strong sales growth and Adjusted EBITDA performance[3][5] Distributions and Shareholder Payments - CODI paid a Q2 2024 cash distribution of $0.25 per share on common shares and declared quarterly distributions on Series A, B, and C Preferred Shares[7][8]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20%28UNAUDITED%29) Presents unaudited condensed consolidated financial statements for Compass Diversified Holdings as of June 30, 2024, with notes [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Condensed consolidated financial statements show increased assets, a net loss for H1 2024, and cash used in operations Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$3,858,194** | **$3,816,981** | | Cash and cash equivalents | $68,370 | $450,477 | | Goodwill | $1,003,685 | $901,428 | | **Total Liabilities** | **$2,389,442** | **$2,297,600** | | Long-term debt | $1,712,084 | $1,661,879 | | **Total Stockholders' Equity** | **$1,468,752** | **$1,519,381** | Condensed Consolidated Statement of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | **$542,595** | **$486,889** | **$1,066,885** | **$970,822** | | Gross Profit | $259,114 | $216,641 | $500,941 | $421,705 | | Operating Income | $61,343 | $42,113 | $99,919 | $76,670 | | **Net Income (Loss)** | **($13,723)** | **$17,123** | **($7,942)** | **$126,724** | | Net Income (Loss) Attributable to Holdings | ($19,529) | $13,606 | ($21,177) | $119,003 | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Cash from Operating Activities** | **($48,383)** | **$37,239** | | **Cash from Investing Activities** | **($336,073)** | **$117,829** | | Acquisitions, net of cash acquired | ($379,524) | $0 | | Proceeds from sale of businesses | $64,828 | $105,123 | | **Cash from Financing Activities** | **$3,366** | **($149,619)** | | **Net (Decrease) Increase in Cash** | **($382,107)** | **$6,083** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail significant corporate actions, including acquisitions, dispositions, segment performance, goodwill impairment, and debt - On January 31, 2024, the company acquired The Honey Pot Co. (THP) for a total preliminary purchase price of approximately **$376.8 million**, funded with cash on hand. The acquisition added a feminine care brand to the company's branded consumer portfolio[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - On April 30, 2024, Velocity Outdoor sold its Crosman airgun division for an enterprise value of approximately **$63 million**, resulting in a recorded loss of **$24.6 million** for the quarter ended June 30, 2024[47](index=47&type=chunk) - The company performed its annual goodwill impairment test as of March 31, 2024, which resulted in an impairment charge of **$8.2 million** for the Velocity reporting unit. This followed a **$31.6 million** impairment for Velocity and a **$57.8 million** impairment for PrimaLoft in 2023[77](index=77&type=chunk)[81](index=81&type=chunk) Total Debt Outstanding (in thousands) | Debt Instrument | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | 2029 Senior Notes (5.25%) | $1,000,000 | $1,000,000 | | 2032 Senior Notes (5.00%) | $300,000 | $300,000 | | 2022 Term Loan | $380,000 | $385,000 | | 2022 Revolving Credit Facility | $54,000 | $0 | | Less: Unamortized debt issuance costs | ($11,916) | ($13,121) | | **Total Debt** | **$1,722,084** | **$1,671,879** | - The company declared and paid quarterly cash distributions of **$0.25 per common share** for each quarter in 2023 and the first two quarters of 2024[123](index=123&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=41&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Q2 2024 revenue growth, gross margin improvement, and liquidity, highlighting impacts from acquisitions, divestitures, and impairments [Overview and Business Outlook](index=43&type=section&id=Overview%20and%20Business%20Outlook) The company operates ten businesses across branded consumer and industrial sectors, with a new healthcare focus, outlining 2024 growth and acquisition strategies - The company operates ten businesses categorized into Branded Consumer and Industrial groups, and recently announced a new strategic focus on the healthcare vertical[153](index=153&type=chunk)[154](index=154&type=chunk) - Recent significant events include the acquisition of The Honey Pot Co. on January 31, 2024, for an enterprise value of **$380 million**, and the sale of Velocity Outdoor's Crosman division on April 30, 2024, for approximately **$63 million**[172](index=172&type=chunk)[173](index=173&type=chunk) - The business outlook for 2024 prioritizes sales growth through new products and distribution, driving free cash flow, managing pricing amidst inflation, gaining market share, and pursuing strategic acquisitions[171](index=171&type=chunk) [Results of Operations - Consolidated](index=47&type=section&id=Results%20of%20Operations%20-%20Consolidated) Consolidated net revenues increased **11.4%** in Q2 2024 to **$542.6 million**, with improved gross margin, but a net loss due to divestiture losses and impairment charges Consolidated Results of Operations (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenues | $542,595 | $486,889 | 11.4% | | Gross Profit | $259,114 | $216,641 | 19.6% | | Operating Income | $61,343 | $42,113 | 45.7% | | Net (Loss) from Continuing Ops | ($13,723) | $10,051 | NM | - The increase in Q2 2024 gross profit margin to **47.8%** from **44.5%** in Q2 2023 was driven by a sales mix shift towards higher-margin businesses, particularly Lugano[181](index=181&type=chunk) - A loss of **$24.6 million** was recorded in Q2 2024 from the sale of Velocity Outdoor's Crosman division[187](index=187&type=chunk) - For the first six months of 2024, the company recorded an **$8.2 million** goodwill impairment expense related to the Velocity reporting unit[197](index=197&type=chunk) [Results of Operations - Business Segments](index=51&type=section&id=Results%20of%20Operations%20-%20Business%20Segments) Q2 2024 saw strong growth in Branded Consumer segments like Lugano and BOA, boosted by The Honey Pot Co., offsetting declines in Velocity Outdoor and some Industrial businesses Q2 2024 vs Q2 2023 Net Sales Change by Segment | Segment | Q2 2024 Net Sales (M) | Q2 2023 Net Sales (M) | YoY Change (%) | | :--- | :--- | :--- | :--- | | **Branded Consumer** | | | | | 5.11 | $123.2 | $126.0 | (2.2)% | | BOA | $54.2 | $38.1 | 42.1% | | Ergobaby | $28.6 | $26.1 | 9.2% | | Lugano | $99.4 | $60.9 | 63.0% | | PrimaLoft | $25.3 | $22.2 | 14.0% | | The Honey Pot Co. | $24.2 | N/A | N/A | | Velocity Outdoor | $18.7 | $37.8 | (50.6)% | | **Industrial** | | | | | Altor Solutions | $52.2 | $60.9 | (14.2)% | | Arnold | $43.2 | $40.1 | 7.5% | | Sterno | $73.8 | $74.6 | (1.1)% | - Lugano's operating income nearly doubled to **$33.2 million** in Q2 2024 from **$17.1 million** in Q2 2023, driven by a **63.0%** sales surge and improved gross margins[228](index=228&type=chunk)[232](index=232&type=chunk) - BOA's operating income more than doubled to **$16.5 million** in Q2 2024 from **$8.1 million** in Q2 2023, fueled by a **42.1%** sales increase as end-market inventory levels improved[209](index=209&type=chunk)[210](index=210&type=chunk)[214](index=214&type=chunk) - Velocity Outdoor's net sales fell **50.6%** in Q2 2024, primarily due to the divestiture of its Crosman division. The segment recorded an operating loss of **$1.9 million**[261](index=261&type=chunk)[262](index=262&type=chunk)[266](index=266&type=chunk) [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2024, liquidity is strong with **$68.4 million** cash and **$543.6 million** credit availability, despite a cash decrease due to acquisitions and working capital needs - As of June 30, 2024, the company had **$68.4 million** in cash and cash equivalents and **$543.6 million** available under its 2022 Revolving Credit Facility[304](index=304&type=chunk)[316](index=316&type=chunk) - Cash decreased by **$382.1 million** in H1 2024, largely because cash from the 2023 Marucci sale was used to acquire The Honey Pot Co. in January 2024[304](index=304&type=chunk) - Cash used in operating activities was **$48.4 million** in H1 2024, a significant shift from **$37.2 million** provided in H1 2023, mainly due to increased working capital usage, including a **$138.9 million** inventory build at Lugano[306](index=306&type=chunk)[307](index=307&type=chunk) Total Intercompany Debt from Subsidiaries (in thousands) | Subsidiary | Intercompany Loan Balance | | :--- | :--- | | Lugano | $524,927 | | BOA | $189,141 | | PrimaLoft | $153,400 | | 5.11 | $121,751 | | The Honey Pot Co. | $105,500 | | Sterno | $98,856 | | Ergobaby | $82,475 | | Velocity Outdoor | $69,899 | | Arnold | $68,947 | | Altor | $64,884 | | **Total** | **$1,479,780** | [Reconciliation of Non-GAAP Financial Measures](index=69&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles non-GAAP measures, Adjusted EBITDA and Adjusted Earnings, to GAAP counterparts, providing management's view of ongoing performance - The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Earnings to assess performance, believing they provide a better view of ongoing operations by excluding items like non-cash expenses, acquisition costs, and impairments[326](index=326&type=chunk)[329](index=329&type=chunk) Reconciliation to Adjusted EBITDA and Adjusted Earnings (in thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net Income (Loss) | ($7,942) | $126,724 | | Net (Loss) from Continuing Operations | ($11,287) | $11,663 | | **Adjusted Earnings** | **$74,145** | **$49,031** | | **Adjusted EBITDA** | **$200,268** | **$157,060** | [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=75&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes to the company's market risk exposure have occurred since December 31, 2023 - There have been no material changes to the company's market risk since December 31, 2023[358](index=358&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=75&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2024[359](index=359&type=chunk)[360](index=360&type=chunk) - No material changes to internal control over financial reporting were identified during the most recent fiscal quarter[360](index=360&type=chunk) [PART II. OTHER INFORMATION](index=77&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=77&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) No material changes to legal proceedings have occurred since the last Annual Report on Form 10-K - There have been no material changes to legal proceedings since the last Annual Report on Form 10-K[362](index=362&type=chunk) [ITEM 1A. RISK FACTORS](index=77&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to the company's risk factors have occurred since the 2023 Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K[363](index=363&type=chunk) [ITEM 6. EXHIBITS](index=78&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and required CEO/CFO certifications - The report includes various exhibits, such as amendments to the Trust Agreement and Operating Agreement, share designations for preferred stock, and CEO/CFO certifications[365](index=365&type=chunk)

Group 1 - CODI has consistently executed its strategy of owning and managing a diverse set of middle-market businesses across industrial, branded consumer, and healthcare sectors since its IPO in 2006 [1] - The company leverages its permanent capital base and long-term disciplined approach to maintain controlling ownership interests in its subsidiaries, maximizing long-term cash flow generation and value creation [1] - CODI provides both debt and equity capital for its subsidiaries, contributing to their financial and operational flexibility [1] Group 2 - CODI plans to release its financial results for the second quarter ended June 30, 2024, on July 31, 2024, after market close [2] - A conference call to discuss the results is scheduled for July 31, 2024, at 5:00 p.m. ET, featuring key executives from the company [4]

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2024 was $524.3 million, an increase of 8% compared to $483.9 million in the prior year period [58] - Adjusted EBITDA for Q1 2024 was $94.8 million, up 28% from $74.1 million in the prior year [80] - Net income for Q1 2024 was $5.8 million, a significant decrease from $109.6 million in the prior year, which included a $98 million gain from the sale of Advanced Circuits [33][58] Business Line Data and Key Metrics Changes - Branded consumer vertical saw pro forma revenues increase by 11% and pro forma adjusted EBITDA increase by 22% compared to Q1 2023 [7] - Industrial vertical revenues decreased by 10% and adjusted EBITDA decreased by 3% versus Q1 2023 [30] - BOA grew revenues and adjusted EBITDA by 13% and 15%, respectively, in Q1 2024 [31] - PrimaLoft experienced continued revenue and adjusted EBITDA declines, but saw solid double-digit bookings growth [31][53] Market Data and Key Metrics Changes - The Honey Pot Company, acquired in Q1 2024, performed in line with expectations, with revenues approximately flat and adjusted EBITDA slightly declining [78] - The company reported strong consumer demand across its portfolio, particularly in the branded consumer segment, which is expected to continue [18][54] Company Strategy and Development Direction - The company is focused on international expansion, as evidenced by the opening of a new London salon, which is expected to drive growth [4][95] - The strategic repositioning aims to manage a diversified group of companies with a growing share of disruptive, high-growth businesses [5][27] - The company plans to continue identifying, acquiring, and managing innovative companies to enhance shareholder returns [37][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positioning of its industrial businesses despite a slight decline in revenues and adjusted EBITDA [5] - The company raised its full-year adjusted earnings outlook due to strong Q1 performance and positive expectations for the remainder of the year [10][29] - Management noted that the macroeconomic environment remains challenging, but consumer demand in the branded vertical remains strong and resilient [18][54] Other Important Information - The company incurred $7.7 million in capital expenditures in Q1 2024, down from $14.9 million in the prior year, with expectations for total CapEx of $50 million to $60 million for the full year [12] - The company has approximately $64.7 million in cash and $552 million available on its revolver, with a total leverage ratio of 3.84 times [11][60] Q&A Session Summary Question: What is the company's appetite for acquisitions given current leverage levels? - Management indicated comfort with increasing leverage temporarily to fund acquisitions, citing strong operational performance and growth expectations [16][100] Question: Can you elaborate on the performance of the industrial segment? - Management noted that the revenue decline in the industrial segment was due to both price and quantity factors, with some operational efficiencies helping to maintain EBITDA margins [92] Question: What are the growth drivers for Lugano moving forward? - Management highlighted low market penetration, significant investments in inventory, and the opening of the London salon as key growth drivers for Lugano [102][104] Question: How is the company addressing inventory destocking challenges? - Management acknowledged the challenges but expressed confidence that the headwinds are dissipating and that the company is well-positioned for growth [46][140] Question: What is the outlook for The Honey Pot Company? - Management reported gains in shelf space with key retailers and expressed optimism about the growth potential in 2025 and 2026 [134][117]