pass Diversified LLC(CODI)2024-07-31 20:20Net 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]