Sales Performance - For the three months ended September 30, 2025, net sales increased by $13.7 million, or 13%, to $120.9 million compared to $107.1 million for the same period in 2024[148]. - Domestic net sales rose by $25.1 million, or 31%, to $105.1 million, driven by higher volumes from new and existing customers[151]. - International net sales decreased by $11.3 million, or 42%, to $15.8 million, impacted by the timing of certain customer orders[152]. - Net sales for the nine months ended September 30, 2025, increased by $24.6 million, or 8%, to $344.3 million compared to $319.7 million in the same period of 2024[159]. - Domestic net sales rose by $40.9 million, or 16%, to $298.9 million, driven by higher volumes from new and existing customers[160]. - International net sales decreased by $16.3 million, or 26%, to $45.4 million, impacted by the timing of certain customer orders[161]. Profitability - Gross profit increased by $15.9 million, or 29%, to $71.3 million, with a gross margin of 59%, up from 52% in the prior year[153]. - Gross profit increased by $28.0 million, or 17%, to $194.7 million, with a gross margin improvement to 57% from 52%[162]. - Income from operations increased by $8.6 million, or 26%, to $41.5 million, with an operating margin of 34%, up from 31%[155]. - Income from operations increased by $9.0 million, or 9%, to $107.7 million, with an operating margin of 31%[164]. - The company reported a net income of $100.3 million for the nine months ended September 30, 2025, compared to $82.1 million in 2024, reflecting a 22% increase[158]. - For the three months ended September 30, 2025, the net income attributable to common stockholders was $(231,000), resulting in a diluted net income per share of $(0.03)[170]. - Fee-Related Earnings for the same period were $1,093,000, translating to Fee-Related Earnings per share of $0.13[170]. Expenses - Operating expenses rose by $7.3 million, or 32%, to $29.9 million, primarily due to increased salaries and equity-based compensation[154]. - Operating expenses rose by $19.0 million, or 28%, to $87.0 million, primarily due to increased salaries and equity-based compensation[163]. - Other expense decreased by $3.0 million to $2.0 million, primarily due to lower interest expense from extinguished Exchangeable Notes[156]. - Other expenses decreased by $10.1 million to $6.5 million, mainly due to lower interest expenses[165]. - The income tax expense for the quarter was $0.1 million, reflecting a change in tax status from a pass-through entity to a corporation[157]. - Income tax expense for the nine months ended September 30, 2025, was $0.9 million compared to $0.0 million in the prior year[166]. Cash Flow and Liquidity - As of September 30, 2025, the company had cash and cash equivalents totaling $98.2 million, with $1.0 million at Resolute Holdings and $97.2 million at CompoSecure Holdings[177]. - The company had short-term investments of $49.7 million, consisting of US treasury bills, with $9.1 million at Resolute Holdings and $40.7 million at CompoSecure Holdings[177]. - Cash provided by operating activities for the nine months ended September 30, 2025, was $126.9 million, an increase of $18.8 million compared to $108.0 million for the same period in 2024[186]. - Cash used in investing activities for the nine months ended September 30, 2025, was $53.2 million, significantly higher than $5.5 million for the same period in 2024[187]. - Cash used in financing activities for the nine months ended September 30, 2025, was $47.0 million, a decrease from $95.9 million in the same period in 2024[188]. - The company believes that cash flows from operations and available cash and cash equivalents are sufficient to meet liquidity needs for at least the next 12 months[178]. Debt and Financing - Total debt principal outstanding at CompoSecure Holdings was $190.0 million as of September 30, 2025[177]. - Resolute Holdings has a $5.0 million revolving credit facility, which had no amounts drawn as of September 30, 2025[182]. - CompoSecure Holdings has a credit facility with a maximum borrowing capacity of $330 million, with $190.0 million of total debt outstanding as of September 30, 2025[183]. - The CompoSecure Holdings Credit Facility requires quarterly principal payments and has a maturity date of August 7, 2029[184]. - The Company has purchase commitments with a supplier of approximately $1.1 million for the remainder of 2025 and $7.7 million for 2026[189]. - CompoSecure Holdings was in compliance with all covenants of the CompoSecure Holdings Credit Facility as of September 30, 2025[185]. Interest Rate Risk - The Company is exposed to interest rate risk on its variable rate debt and related interest rate swap agreements[191]. - An increase or decrease of 100 basis points in the applicable interest rate would result in an annual change in interest expense of approximately $1.9 million[192]. - CompoSecure Holdings entered into an interest rate swap agreement effective December 5, 2023, with a notional amount of $125,000 and a fixed rate of 1.90%[193]. - The fair value of the interest rate swap was determined to be $0.6 million as of September 30, 2025[193]. Management and Consolidation - The company is consolidating CompoSecure Holdings as it is deemed the primary beneficiary of a variable interest entity[134]. - The CompoSecure Management Agreement stipulates a quarterly management fee of 2.5% of CompoSecure Holdings' last 12 months' Adjusted EBITDA[138]. - The company is utilizing non-GAAP financial measures, such as Fee-Related Earnings, to provide additional insights into its financial performance[169].
Resolute Holdings Management Inc(RHLD) - 2025 Q3 - Quarterly Report