EX-99.1 2 exhibit991earningsreleaseq.htm EX-99.1

Exhibit 99.1

Compass Diversified Reports First Quarter 2025 Financial Results

Westport, Conn., December 18, 2025 – 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 March 31, 2025 and filed its Quarterly Report on Form 10-Q for the period. The Company expects to file its Quarterly Reports on Form 10-Q for the second and third quarters of 2025 in the coming weeks.

“Today’s filing represents another important step in our efforts to bring our financial reporting current,” said Elias Sabo, CEO of Compass Diversified. “We remain focused on strengthening our financial flexibility and executing across our subsidiary businesses. Despite a dynamic operating environment, our operating subsidiaries, excluding Lugano, continue to perform well and collectively generate significant cash flow.”

Sabo added, “Looking ahead, we are focused on the key drivers of performance across our subsidiaries—driving operational excellence, disciplined working capital management, and investing in our differentiated products and brands. We’re encouraged by recent strong booking activity at Arnold and PrimaLoft. BOA continues to benefit from its patent-protected performance-enhancing fit solutions, supporting ongoing market share expansion. And 5.11 is navigating macro pressures with duty-smart sourcing and tighter inventory discipline while it continues to invest in its brand.”

Sabo continued, “Our priorities are clear: execute at our subsidiaries, generate cash, and use that cash to reduce leverage while continuing to support growth initiatives across our businesses. Long term, we remain committed to maximizing shareholder value and will continue to explore opportunities for the most efficient return of capital to our shareholders.”

2025 Outlook (Reiterated)

CODI reiterates its expectation for full-year 2025 subsidiary Adjusted EBITDA of $330 million to $360 million, excluding Lugano.

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) provides useful information to investors and reflect important financial measures as each excludes the effects of items which 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

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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 with respect to the timing of its delinquent financial statements, CODI’s expectations regarding its future performance, liquidity and leverage, the future performance of CODI’s subsidiaries, and the filing or delay of CODI’s periodic reports. 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 risk 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 when we’ve executed divestitures agreements; 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 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,

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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

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Compass Diversified Holdings

Condensed Consolidated Balance Sheets

			March 31, 2025						December 31, 2024
(in thousands)			(Unaudited)						(As Restated)
Assets
Current assets
Cash and cash equivalents			$	146,235					$	59,659
Accounts receivable, net			196,422						207,172
Inventories, net			598,847						571,248
Prepaid expenses and other current assets			123,705						126,692
Total current assets			1,065,209						964,771
Property, plant and equipment, net			245,612						244,746
Goodwill			895,420						895,916
Intangible assets, net			960,760						983,396
Other non-current assets			199,947						208,593
Total assets			$	3,366,948					$	3,297,422
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses			$	426,460					$	421,715
Due to related party			17,738						18,036
Current portion, long-term debt			1,860,064						1,774,290
Other current liabilities			233,122						219,382
Total current liabilities			2,537,384						2,433,423
Deferred income taxes			101,521						108,091
Long-term debt			—						—
Other non-current liabilities			214,398						225,334
Total liabilities			2,853,303						2,766,848
Stockholders' equity
Total stockholders' equity attributable to Holdings			680,736						678,620
Noncontrolling interest			(167,091)						(148,046)
Total stockholders' equity			513,645						530,574
Total liabilities and stockholders’ equity			$	3,366,948					$	3,297,422

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Compass Diversified Holdings

Consolidated Statements of Operations

(Unaudited)

									Three Months Ended March 31,
(in thousands, except per share data)															2025						2024
																					(As Restated)
Net sales															$	453,775					$	410,826
Cost of sales															257,743						235,874
Gross profit															196,032						174,952
Operating expenses:
Selling, general and administrative expense															150,377						137,724
Management fees															18,863						17,942
Amortization expense															23,351						23,211
Impairment expense															—						8,182
Operating income (loss)															3,441						(12,107)
Other income (expense):
Interest expense, net															(35,851)						(25,267)
Amortization of debt issuance costs															(1,125)						(1,005)
Other income (expense), net															(13,681)						(47,442)
Net loss from continuing operations before income taxes															(47,216)						(85,821)
Provision for income taxes															2,538						3,110
Loss from continuing operations															(49,754)						(88,931)
Income from discontinued operations, net of income tax															—						317
Gain on sale of discontinued operations															44						3,345
Net loss															(49,710)						(85,269)
Less: Net loss from continuing operations attributable to noncontrolling interest															(19,717)						(28,756)
Less: Net loss from discontinued operations attributable to noncontrolling interest															—						(336)
Net loss attributable to Holdings															$	(29,993)					$	(56,177)
Amounts attributable to Holdings
Loss from continuing operations															$	(30,037)					$	(60,175)
Income from discontinued operations															—						653
Gain on sale of discontinued operations, net of income tax															44						3,345
Net loss attributable to Holdings															$	(29,993)					$	(56,177)
Basic income (loss) per common share attributable to Holdings
Continuing operations															$	(0.59)					$	(1.57)
Discontinued operations															—						0.05
															$	(0.59)					$	(1.52)
Basic weighted average number of common shares outstanding															75,236						75,274
Cash distributions declared per Trust common share															$	0.25					$	0.25

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Compass Diversified Holdings

Net Income (Loss) to Non-GAAP Adjusted Earnings (Loss) and Non-GAAP Adjusted EBITDA

(Unaudited)

									Three Months Ended March 31,
(in thousands, except per share amounts)															2025						2024
																					(As Restated)
Net loss															$	(49,710)					$	(85,269)
Income from discontinued operations, net of tax															—						317
Gain on sale of discontinued operations, net of tax															44						3,345
Net loss from continuing operations															$	(49,754)					$	(88,931)
Less: loss from continuing operations attributable to noncontrolling interest															(19,717)						(28,756)
Net loss attributable to Holdings - continuing operations															$	(30,037)					$	(60,175)
Adjustments:
Distributions paid - preferred shares															(8,434)						(6,045)
Amortization expense - intangibles and inventory step up															23,351						25,879
Impairment expense															—						8,182
Stock compensation															4,012						4,071
Acquisition expenses															—						3,479
Integration services fee															875						—
Other															1,546						274
Adjusted Net Loss															$	(8,687)					$	(24,335)
Plus (less):
Depreciation expense															12,301						10,731
Income tax provision															2,538						3,110
Interest expense															35,581						25,267
Amortization of debt issuance costs															1,125						1,005
Loss from continuing operations attributable to noncontrolling interest															(19,717)						(28,756)
Distributions paid - preferred shares															8,434						6,045
Other (income) expense															13,681						47,442
Adjusted EBITDA															$	45,256					$	40,509

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Compass Diversified Holdings

Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation

Three Months Ended March 31, 2025

(Unaudited)

						Corporate						5.11						BOA						Lugano						PrimaLoft						THP						Velocity Outdoor						Altor						Arnold						Sterno						Consolidated
Income (loss) from continuing operations						$	(8,764)					$	3,906					$	8,243					$	(51,634)					$	(437)					$	1,754					$	(4,167)					$	(228)					$	(1,606)					$	3,179					$	(49,754)
Adjusted for:
Provision (benefit) for income taxes						—						1,144						1,166						(256)						394						419						44						13						(1,383)						997						2,538
Interest expense, net						26,843						1						(1)						8,875						(7)						(2)						(1)						—						143						—						35,851
Intercompany interest						(39,893)						3,344						3,984						15,375						4,129						2,602						1,421						4,854						1,915						2,269						—
Depreciation and amortization						74						5,772						5,248						1,593						5,315						4,160						1,369						7,192						2,578						3,476						36,777
EBITDA						(21,740)						14,167						18,640						(26,047)						9,394						8,933						(1,334)						11,831						1,647						9,921						25,412
Other (income) expense						14						105						63						13,515						1						(3)						(127)						215						(2)						(100)						13,681
Non-controlling shareholder compensation						—						545						1,346						916						549						25						105						245						4						277						4,012
Integration services fee						—						—						—						—						—						875						—						—						—						—						875
Other						—						—						—						—						—						—						—						562						915						69						1,546
Adjusted EBITDA						$	(21,726)					$	14,817					$	20,049					$	(11,616)					$	9,944					$	9,830					$	(1,356)					$	12,853					$	2,564					$	10,167					$	45,526

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Compass Diversified Holdings

Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation

Three Months Ended March 31, 2024

(Unaudited)

						Corporate						5.11						BOA						Lugano						PrimaLoft						THP						Velocity Outdoor						Altor						Arnold						Sterno						Consolidated
																								(As Restated)																																										(As Restated)
Income (loss) from continuing operations						$	(7,394)					$	3,400					$	3,351					$	(70,848)					$	(1,313)					$	(3,490)					$	(15,973)					$	693					$	1,651					$	992					$	(88,931)
Adjusted for:
Provision (benefit) for income taxes						—						1,203						539						158						(80)						(1,167)						580						628						796						453						3,110
Interest expense, net						23,593						(3)						(3)						1,695						(2)						(22)						44						—						(35)						—						25,267
Intercompany interest						(37,815)						3,526						5,492						11,758						4,616						1,996						3,218						2,009						1,700						3,500						—
Depreciation and amortization						280						5,873						5,438						1,110						5,327						5,138						3,276						4,085						2,153						4,935						37,615
EBITDA						(21,336)						13,999						14,817						(56,127)						8,548						2,455						(8,855)						7,415						6,265						9,880						(22,939)
Other (income) expense						(39)						(34)						75						44,639						—						(17)						(297)						3,236						52						(173)						47,442
Non-controlling shareholder compensation						—						534						1,429						504						680						145						194						252						4						329						4,071
Impairment expense						—						—						—						—						—						—						8,182						—						—						—						8,182
Acquisition expenses						—						—						—						—						—						3,479						—						—						—						—						3,479
Other						—						—						—						—						—						90						—						—						—						184						274
Adjusted EBITDA						$	(21,375)					$	14,499					$	16,321					$	(10,984)					$	9,228					$	6,152					$	(776)					$	10,903					$	6,321					$	10,220					$	40,509

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Compass Diversified Holdings

Net Sales to Pro Forma Net Sales Reconciliation

(unaudited)

									Three Months Ended March 31,
(in thousands)															2025						2024
																					(As Restated)
Net Sales															$	453,775					$	410,826
Acquisitions (1)															—						10,671
Pro Forma Net Sales															$	453,775					$	421,497

(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 Holdings

Subsidiary Pro Forma Net Sales

(unaudited)

									Three Months Ended March 31,
(in thousands)															2025						2024
																					(As Restated)
Branded Consumer
5.11															$	129,370					$	124,974
BOA															48,877						42,903
Lugano															26,845						10,793
PrimaLoft															23,645						22,541
The Honey Pot (1)															36,191						30,836
Velocity Outdoor															13,201						29,899
Total Branded Consumer															$	278,129					$	261,946
Niche Industrial
Altor Solutions															76,257						53,404
Arnold Magnetics															34,008						41,287
Sterno															65,381						64,860
Total Niche Industrial															$	175,646					$	159,551
Total Subsidiary Net Sales															$	453,775					$	421,497

(1) Net sales for The Honey Pot Co. are pro forma as if the Company had acquired this business on January 1, 2024.