EX-99.1 2 exhibit991earningsreleaseq.htm EX-99.1

Exhibit 99.1

Compass Diversified Reports Second Quarter 2025 Financial Results

Westport, Conn., December 29, 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 June 30, 2025 and filed its Quarterly Report on Form 10-Q for the period. The Company expects to file its Quarterly Report on Form 10-Q for the third quarter of 2025 in the coming weeks.

“We continue to make meaningful progress toward bringing our financial reporting up to date,” said Elias Sabo, Chief Executive Officer of Compass Diversified. “While this work is ongoing, our priorities remain unchanged: delivering strong operating performance across our eight subsidiaries and maintaining a disciplined approach to capital allocation as we focus on generating long-term value for our shareholders.”

2025 Outlook (Reiterated)

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

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 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.

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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 Holding, Inc. (“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, 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

			June 30, 2025						December 31, 2024
(in thousands)			(Unaudited)						(As Restated)
Assets
Current assets
Cash and cash equivalents			$	73,757					$	59,659
Accounts receivable, net			216,378						207,172
Inventories, net			605,480						571,248
Prepaid expenses and other current assets			134,004						126,692
Total current assets			1,029,619						964,771
Property, plant and equipment, net			216,587						244,746
Goodwill			895,420						895,916
Intangible assets, net			938,685						983,396
Other non-current assets			194,279						208,593
Total assets			$	3,274,590					$	3,297,422
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses			$	428,640					$	421,715
Due to related party			18,204						18,036
Current portion, long-term debt			1,857,036						1,774,290
Subsidiary financing arrangements			183,959						169,765
Other current liabilities			51,144						49,617
Total current liabilities			2,538,983						2,433,423
Deferred income taxes			111,840						108,091
Long-term debt			—						—
Other non-current liabilities			213,037						225,334
Total liabilities			2,863,860						2,766,848
Stockholders' equity
Total stockholders' equity attributable to Holdings			601,880						678,620
Noncontrolling interest			(191,150)						(148,046)
Total stockholders' equity			410,730						530,574
Total liabilities and stockholders’ equity			$	3,274,590					$	3,297,422

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Compass Diversified Holdings

Consolidated Statements of Operations

(Unaudited)

			Three Months Ended June 30,												Six Months Ended June 30,
			2025						2024						2025						2024
(in thousands, except per share data)									(As Restated)												(As Restated)
Net sales			$	478,690					$	426,705					$	932,465					$	837,531
Cost of sales			270,149						238,520						527,892						474,394
Gross profit			208,541						188,185						404,573						363,137
Operating expenses:
Selling, general and administrative expense			162,112						137,581						312,489						275,305
Management fees			19,035						18,739						37,898						36,681
Amortization expense			23,117						24,385						46,468						47,596
Impairment expense			31,515						—						31,515						8,182
Operating income (loss)			(27,238)						7,480						(23,797)						(4,627)
Other income (expense):
Interest expense, net			(34,096)						(29,596)						(69,947)						(54,863)
Amortization of debt issuance costs			(971)						(1,004)						(2,096)						(2,009)
Loss on debt modification			(2,827)						—						(2,827)
Gain (loss) on sale of Crosman			—						(24,606)						—						(24,606)
Other income (expense), net			1,713						(40,642)						(11,968)						(88,084)
Net loss from continuing operations before income taxes			(63,419)						(88,368)						(110,635)						(174,189)
Provision for income taxes			17,358						15,593						19,896						18,703
Loss from continuing operations			(80,777)						(103,961)						(130,531)						(192,892)
Income from discontinued operations, net of income tax			—						872						—						1,189
Gain on sale of discontinued operations			2,805						—						2,849						3,345
Net loss			(77,972)						(103,089)						(127,682)						(188,358)
Less: Net loss from continuing operations attributable to noncontrolling interest			(26,755)						(29,802)						(46,472)						(58,558)
Less: Net loss from discontinued operations attributable to noncontrolling interest			—						(235)						—						(571)
Net income (loss) attributable to Holdings			$	(51,217)					$	(73,052)					$	(81,210)					$	(129,229)
Amounts attributable to Holdings
Loss from continuing operations			$	(54,022)					$	(74,159)					$	(84,059)					$	(134,334)
Income from discontinued operations			—						1,107						—						1,760
Gain on sale of discontinued operations, net of income tax			2,805						—						2,849						3,345
Net loss attributable to Holdings			$	(51,217)					$	(73,052)					$	(81,210)					$	(129,229)
Basic income (loss) per common share attributable to Holdings
Continuing operations			$	(0.92)					$	(1.13)					$	(1.43)					$	(2.66)
Discontinued operations			0.04						0.01						0.04						0.07
			$	(0.88)					$	(1.12)					$	(1.39)					$	(2.59)
Basic weighted average number of common shares outstanding			75,236						75,389						75,236						75,332
Cash distributions declared per Trust common share			$	0.25					$	0.25					$	0.50					$	0.50

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Compass Diversified Holdings

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

(Unaudited)

			Three Months Ended June 30,												Six Months Ended June 30,
(in thousands, except per share amounts)			2025						2024						2025						2024
									(As Restated)												(As Restated)
Net loss			$	(77,972)					$	(103,089)					$	(127,682)					$	(188,358)
Income from discontinued operations, net of tax			—						872						—						1,189
Gain on sale of discontinued operations, net of tax			2,805						—						2,849						3,345
Net loss from continuing operations			$	(80,777)					$	(103,961)					$	(130,531)					$	(192,892)
Less: loss from continuing operations attributable to noncontrolling interest			(26,755)						(29,802)						(46,472)						(58,558)
Net loss attributable to Holdings - continuing operations			$	(54,022)					$	(74,159)					$	(84,059)					$	(134,334)
Adjustments:
Distributions paid - preferred shares			(9,714)						(6,101)						(18,148)						(12,146)
Amortization expense - intangibles and inventory step up			23,117						25,406						46,468						51,285
Impairment expense			31,515						—						31,515						8,182
(Gain) loss on sale of Crosman			—						24,606						—						24,606
Tax effect - loss on sale of Crosman			—						7,254						—						7,254
Stock compensation			4,189						3,680						8,201						7,751
Acquisition expenses			—						—						—						3,479
Integration services fee			—						875						875						875
Other			3,881						130						5,427						402
Adjusted Earnings			$	(1,034)					$	(18,309)					$	(9,721)					$	(42,646)
Plus (less):
Depreciation expense			11,062						10,337						23,363						21,071
Income tax provision			17,358						15,593						19,896						18,703
Interest expense			34,096						29,596						69,947						54,863
Amortization of debt issuance costs			971						1,004						2,096						2,009
Loss on debt modification			2,827						—						2,827						—
Tax effect - loss on sale of Crosman									(7,254)						—						(7,254)
Income from continuing operations attributable to noncontrolling interest			(26,755)						(29,802)						(46,472)						(58,558)
Distributions paid - preferred shares			9,714						6,101						18,148						12,146
Other (income) expense			(1,714)						40,642						11,968						88,084
Adjusted EBITDA			$	46,525					$	47,908					$	92,052					$	88,418

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Compass Diversified Holdings

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

Three Months Ended June 30, 2025

(Unaudited)

						Corporate						5.11						BOA						Lugano						PrimaLoft						THP						Velocity Outdoor						Altor						Arnold						Sterno						Consolidated
Income (loss) from continuing operations						$	(19,259)					$	4,858					$	9,014					$	(68,808)					$	261					$	835					$	(2,564)					$	1,434					$	(13,335)					$	6,787					$	(80,777)
Adjusted for:
Provision (benefit) for income taxes						—						1,318						1,057						1						534						351						69						629						11,198						2,201						17,358
Interest expense, net						27,083						(3)						(1)						6,887						(6)						(5)						(12)						—						153						—						34,096
Intercompany interest						(41,043)						3,747						3,736						16,430						4,014						2,422						1,675						4,699						2,119						2,201						—
Depreciation and amortization						(106)						5,531						5,248						1,475						5,339						4,159						1,368						5,923						2,703						3,510						35,150
EBITDA						(30,498)						15,451						19,054						(44,015)						10,142						7,762						536						12,685						2,838						14,699						8,654
Other (income) expense						(3)						(242)						42						(1,786)						11						42						(83)						375						23						(93)						(1,714)
Noncontrolling shareholder compensation						—						622						1,368						626						619						419						17						242						4						272						4,189
Impairment expense						—																		31,515																																										31,515
Other (1)						—																																										2,492						1,295						94						3,881
Adjusted EBITDA						$	(30,501)					$	15,831					$	20,464					$	(13,660)					$	10,772					$	8,223					$	470					$	15,794					$	4,160					$	14,972					$	46,525

(1) Other represents non-recurring operating expenses that are included by management in the calculation of Adjusted EBITDA when analyzing monthly operating results of our subsidiaries. In the current year, the calculation of Adjusted EBITDA for Arnold includes the add-back of certain expenses that have been incurred related to the relocation of two of Arnold's facilities in the United States and severance costs related to chief executive officer at Arnold. For Altor, other includes the add-back of certain expenses incurred related to restructuring of their facilities after the acquisition of Lifoam.

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Compass Diversified Holdings

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

Three Months Ended June 30, 2024

(Unaudited)

						Corporate						5.11						BOA						Lugano						PrimaLoft						THP																		Velocity Outdoor						Altor						Arnold						Sterno						Consolidated
																								(As Restated)																																																						(As Restated)
Income (loss) from continuing operations						$	(9,340)					$	5,457					$	8,995					$	(74,582)					$	325					$	(4,114)																	$	(39,226)					$	2,701					$	2,258					$	3,565					$	(103,961)
Adjusted for:
Provision (benefit) for income taxes						—						1,807						1,929						387						664						(1,402)																		8,717						1,098						1,190						1,202						15,592
Interest expense, net						26,448						2						(9)						3,035						(3)						(3)																		10						—						116						—						29,596
Intercompany interest						(38,772)						3,254						5,299						13,579						4,430						2,924																		2,364						1,868						1,797						3,257						—
Depreciation and amortization						203						5,708						5,411						1,290						5,323						5,507																		2,006						4,085						2,261						4,955						36,749
EBITDA						(21,461)						16,228						21,625						(56,291)						10,739						2,912																		(26,129)						9,752						7,622						12,979						(22,024)
Other (income) expense						502						108						57						39,197						3						(13)																		26,195						(572)						(61)						(168)						65,248
Noncontrolling shareholder compensation						—						552						1,419						699						315						472																		176						252						5						(210)						3,680
Integration services fee						—																														875																																										875
Other						(2)																														—																																				131						129
Adjusted EBITDA						$	(20,961)					$	16,888					$	23,101					$	(16,395)					$	11,057					$	4,246																	$	242					$	9,432					$	7,566					$	12,732					$	47,908

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Compass Diversified Holdings

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

Six Months Ended June 30, 2025

(Unaudited)

						Corporate						5.11						BOA						Lugano						PrimaLoft						THP						Velocity Outdoor						Altor						Arnold						Sterno						Consolidated
Income (loss) from continuing operations						$	(28,023)					$	8,764					$	17,257					$	(120,442)					$	(176)					$	2,589					$	(6,731)					$	1,206					$	(14,941)					$	9,966					$	(130,531)
Adjusted for:
Provision (benefit) for income taxes						—						2,462						2,223						(255)						928						770						113						642						9,815						3,198						19,896
Interest expense, net						53,926						(2)						(2)						15,762						(13)						(7)						(13)						—						296						—						69,947
Intercompany interest						(80,936)						7,091						7,720						31,805						8,143						5,024						3,096						9,553						4,034						4,470						—
Depreciation and amortization						(32)						11,303						10,496						3,068						10,654						8,319						2,737						13,115						5,281						6,986						71,927
EBITDA						(52,238)						29,618						37,694						(70,062)						19,536						16,695						(798)						24,516						4,485						24,620						34,066
Other (income) expense						12						(137)						105						11,729						12						39						(210)						590						21						(193)						11,968
Non-controlling shareholder compensation						—						1,167						2,714						1,542						1,168						444						122						487						8						549						8,201
Impairment expense						—						—						—						31,515						—						—						—						—						—						—						31,515
Acquisition expenses						—						—						—						—						—						—						—						—						—						—						—
Integration services fee						—						—						—						—						—						875						—						—						—						—						875
Other (1)						—						—						—						—						—						—						—						3,054						2,210						163						5,427
Adjusted EBITDA						$	(52,226)					$	30,648					$	40,513					$	(25,276)					$	20,716					$	18,053					$	(886)					$	28,647					$	6,724					$	25,139					$	92,052

(1) Other represents non-recurring operating expenses that are included by management in the calculation of Adjusted EBITDA when analyzing monthly operating results of our subsidiaries. In the current year, the calculation of Adjusted EBITDA for Arnold includes the add-back of certain expenses that have been incurred related to the relocation of two of Arnold's facilities in the United States and severance costs related to chief executive officer at Arnold. For Altor, other includes the add-back of certain expenses incurred related to restructuring of their facilities after the acquisition of Lifoam.

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Compass Diversified Holdings

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

Six Months Ended June 30, 2024

(Unaudited)

						Corporate						5.11						BOA						Lugano						PrimaLoft						THP						Velocity Outdoor						Altor						Arnold						Sterno						Consolidated
																								(As Restated)																																										(As Restated)
Income (loss) from continuing operations						$	(16,734)					$	8,857					$	12,346					$	(145,430)					$	(988)					$	(7,604)					$	(55,199)					$	3,394					$	3,909					$	4,557					$	(192,892)
Adjusted for:
Provision (benefit) for income taxes						—						3,010						2,469						545						584						(2,569)						9,297						1,726						1,986						1,655						18,703
Interest expense, net						50,041						(1)						(12)						4,730						(5)						(25)						54						—						81						—						54,863
Intercompany interest						(76,587)						6,780						10,791						25,337						9,046						4,920						5,582						3,877						3,497						6,757						—
Depreciation and amortization						484						11,581						10,849						2,400						10,650						10,645						5,282						8,170						4,414						9,890						74,365
EBITDA						(42,796)						30,227						36,443						(112,418)						19,287						5,367						(34,984)						17,167						13,887						22,859						(44,961)
Other (income) expense						463						74						132						83,836						3						(30)						25,898						2,664						(9)						(341)						112,690
Non-controlling shareholder compensation						—						1,086						2,848						1,203						995						617						370						504						9						119						7,751
Impairment expense						—						—						—						—						—												8,182						—						—						—						8,182
Acquisition expenses						—						—						—						—						—						3,479						—						—						—						—						3,479
Integration services fee						—						—						—						—						—						875						—						—						—						—						875
Other						(3)						—						—						—						—						90						—						—						—						315						402
Adjusted EBITDA						$	(42,336)					$	31,387					$	39,423					$	(27,379)					$	20,285					$	10,398					$	(534)					$	20,335					$	13,887					$	22,952					$	88,418

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Compass Diversified Holdings

Net Sales to Pro Forma Net Sales Reconciliation

(unaudited)

			Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)			2025						2024						2025						2024
									(As Restated)												(As Restated)
Net Sales			$	478,690					$	426,705					$	932,465					$	837,531
Acquisitions (1)			—						—						—						10,671
Pro Forma Net Sales			$	478,690					$	426,705					$	932,465					$	848,202

(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 June 30,												Six Months Ended June 30,
			2025						2024						2025						2024
(in thousands)									(As Restated)												(As Restated)
Branded Consumer
5.11			$	131,442					$	123,201					$	260,812					$	248,175
BOA			48,369						54,160						97,246						97,063
Lugano			26,771						12,025						53,616						22,818
PrimaLoft			24,855						25,291						48,500						47,832
The Honey Pot (1)			32,798						24,182						68,989						55,018
Velocity Outdoor			15,213						18,711						28,414						48,610
Total Branded Consumer			$	279,448					$	257,570					$	557,577					$	519,516
Niche Industrial
Altor Solutions			$	83,305					52,213						$	159,562					$	105,617
Arnold Magnetics			38,432						43,155						72,440						84,442
Sterno			77,505						73,767						142,886						138,627
Total Niche Industrial			$	199,242					$	169,135					$	374,888					$	328,686
Total Subsidiary Net Sales			$	478,690					$	426,705					$	932,465					$	848,202

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