pass Diversified LLC(CODI) - 2025 Q4 - Annual Results

Financial Performance - For Q3 2025, net sales reached $472.6 million, a 3% increase from $456.6 million in Q3 2024, while year-to-date net sales totaled $1.41 billion, up 8.6% from $1.29 billion in the same period last year [15]. - Gross profit for Q3 2025 was $207.7 million, compared to $196.6 million in Q3 2024, reflecting a gross margin improvement [15]. - Operating loss for Q3 2025 was $11.1 million, a decline from an operating income of $8.3 million in Q3 2024 [15]. - The company reported a net loss of $87.2 million for Q3 2025, compared to a net loss of $65.5 million in Q3 2024 [15]. - Adjusted EBITDA for the three months ended September 30, 2025, was $30,299,000, a decrease of 37.5% from $48,595,000 in the same period of 2024 [16]. - The total net loss from continuing operations for the nine months ended September 30, 2025, was $217,251,000, a decrease from $257,350,000 in the same period of 2024, showing a 15.6% improvement [19][20]. - The company reported an EBITDA of $54.794 million for the nine months ended September 30, 2025, compared to a negative EBITDA of $40.123 million in 2024, showing a turnaround in operational performance [19][20]. Assets and Liabilities - Total current assets as of September 30, 2025, were $1.01 billion, an increase from $964.8 million at the end of 2024 [13]. - Total liabilities increased to $2.93 billion as of September 30, 2025, compared to $2.77 billion at the end of 2024 [13]. - Cash and cash equivalents stood at $61.1 million as of September 30, 2025, up from $59.7 million at the end of 2024 [13]. Expenses - Selling, general and administrative expenses rose to $179.3 million in Q3 2025, compared to $146.0 million in Q3 2024, indicating increased operational costs [15]. - Total interest expense for the three months ended September 30, 2025, was $66,721,000, significantly higher than $31,620,000 in the same period of 2024, reflecting a 111% increase [16]. - The company incurred $9,715,000 in distributions paid on preferred shares for the three months ended September 30, 2025, compared to $6,345,000 in 2024, marking a 53% increase [16]. - Corporate expenses for the nine months ended September 30, 2025, were $99.493 million, up from $65.068 million in the same period of 2024, indicating a significant increase in corporate overhead [22]. - Interest expense for the nine months ended September 30, 2025, totaled $136.668 million, compared to $86.483 million in 2024, reflecting increased borrowing costs [19][20]. Impairment and Adjusted Earnings - The impairment expense recorded for the nine months ended September 30, 2025, was $31,515,000, compared to $8,182,000 in the same period of 2024, indicating a significant increase in impairment losses [16]. - The adjusted earnings for the three months ended September 30, 2025, were $(52,725,000), compared to $(12,172,000) in the same period of 2024, reflecting a substantial decline in performance [16]. - The company incurred an impairment expense of $31.515 million in 2025, which was not present in the previous year, impacting overall profitability [19][20]. Segment Performance - The total branded consumer segment reported an Adjusted EBITDA of $128.637 million for the nine months ended September 30, 2025, compared to $113.784 million in 2024, reflecting a 13.1% increase [22]. - The niche industrial segment's Adjusted EBITDA increased to $93.207 million for the nine months ended September 30, 2025, from $88.299 million in 2024, marking a 5.4% growth [22]. - Branded Consumer segment net sales for the nine months ended September 30, 2025, were $839.2 million, up from $732.3 million in 2024, reflecting a year-over-year increase of 14.6% [26]. - The Honey Pot Co. generated pro forma net sales of $34.7 million for the three months ended September 30, 2025, compared to $31.5 million in 2024, indicating a growth of 6.9% [26]. - Niche Industrial segment net sales for the three months ended September 30, 2025, totaled $191.0 million, compared to $183.4 million in 2024, marking a year-over-year increase of 4.3% [26]. - Altor Solutions reported net sales of $79.8 million for the three months ended September 30, 2025, significantly up from $52.1 million in 2024, representing a growth of 52.9% [26]. - Arnold Magnetics experienced a decline in net sales to $37.7 million for the three months ended September 30, 2025, down from $46.1 million in 2024, a decrease of 18.5% [26]. - Sterno's net sales for the three months ended September 30, 2025, were $73.5 million, down from $85.2 million in 2024, reflecting a decrease of 13.5% [26]. Future Outlook - The company is focused on executing strategic priorities to enhance profitability and drive performance across its subsidiaries [2]. - Future outlook remains positive with expectations of continued growth in both branded consumer and niche industrial segments, supported by strategic initiatives and potential acquisitions [26].