Compass Diversified Holdings Files 2023 Annual Report on Form 10-K

TL;DR

<b>Compass Diversified Holdings filed its 2023 10-K, reporting $72.2M in assets and $13.85M in revenue.</b>

AI Summary

Compass Diversified Holdings (CODI-PC) filed a Annual Report (10-K) with the SEC on February 28, 2024. Compass Diversified Holdings reported total assets of $72,203,000 for the fiscal year ending December 31, 2023. The company's revenue for the fiscal year ending December 31, 2023, was $13,851,000. Net income for the fiscal year ending December 31, 2023, was $2,805,000. The company's total debt as of December 31, 2023, was $12,600,000. Compass Diversified Holdings' cash and cash equivalents were $4,000,000 as of December 31, 2023.

Why It Matters

For investors and stakeholders tracking Compass Diversified Holdings, this filing contains several important signals. The filing provides a comprehensive overview of the company's financial performance and position for the fiscal year 2023, including detailed financial statements and risk factors. Investors can use this report to assess the company's profitability, liquidity, and overall financial health, as well as understand potential risks and strategic direction.

Risk Assessment

Risk Level: medium — Compass Diversified Holdings shows moderate risk based on this filing. The company operates in the household furniture and apparel sectors, which can be subject to economic downturns and changing consumer preferences, as indicated by the SIC codes provided.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand Compass Diversified Holdings' performance and outlook for the upcoming fiscal year.

Financial Highlights

revenue

13,851,000

total Assets

72,203,000

total Debt

12,600,000

net Income

2,805,000

cash Position

4,000,000

Key Numbers

• 13,851,000 — Revenue (Fiscal year ending December 31, 2023)
• 17,970,000 — Revenue (Fiscal year ending December 31, 2022)
• 6,589,000 — Net Income (Fiscal year ending December 31, 2023)
• 2,805,000 — Net Income (Fiscal year ending December 31, 2023)
• 72,203,000 — Total Assets (As of December 31, 2023)
• 12,600,000 — Total Debt (As of December 31, 2023)
• 4,000,000 — Cash and Cash Equivalents (As of December 31, 2023)
• 4,600,000 — Other Assets (As of December 31, 2023)

Key Players & Entities

• Compass Diversified Holdings (company) — Filer name
• 2023-12-31 (date) — Conformed period of report
• 2024-02-28 (date) — Filed as of date
• Westport, CT (location) — Business address
• 203-221-1703 (phone) — Business phone
• Compass Group Diversified Holdings LLC (company) — Former company name
• 2510 (sic_code) — Standard Industrial Classification for Household Furniture
• 2300 (sic_code) — Standard Industrial Classification for Apparel & Other Finished Prods

FAQ

Key Financial Figures

• $600 million — evolving Credit Facility" refers to the $600 million in revolving loans, swing line loans an
• $400 million — 027; the "2022 Term Loan" refer to the $400 million term loan provided by the 2022 Credit F
• $408.2 million — ling interest in 5.11 for approximately $408.2 million in August 2016. We currently own 97.2%
• $456.8 million — A on October 16, 2020 for approximately $456.8 million . We currently own 91.8% of the outstan
• $85.2 million — on September 16, 2010 for approximately $85.2 million. We currently own 81.6% of the outstand
• $265.1 million — on September 3, 2021 for approximately $265.1 million. We currently own 59.9% of the outstand
• $541.1 million — oft on July 12, 2022 for approximate ly $541.1 million. PrimaLoft is headquartered in Latham,
• $150.4 million — tdoor on June 2, 2017 for approximately $150.4 million. In September 2018, Velocity acquired R
• $253.4 million — 8 for a purchase price of approximately $253.4 million. We currently own 99.3% of the outstand
• $128.8 million — nold on March 5, 2012 for approximately $128.8 million. We currently own 98.0% of the outstand
• $160.0 million — o on October 10, 2014 for approximately $160.0 million. Sterno offers a broad range of wick an
• $1.00 — ons to our common shareholders totaling $1.00 per share. Preferred shares - For the
• $1.8125 — to our preferred shareholders totaling $1.8125 per share on our Series A Preferred Sha
• $1.96875 — share on our Series A Preferred Shares, $1.96875 per share on our Series B Preferred Sha

Filing Documents

• codi-20231231.htm (10-K) — 4715KB
• a12312023ex211.htm (EX-21.1) — 47KB
• a12312023ex231.htm (EX-23.1) — 2KB
• a12312023ex311.htm (EX-31.1) — 10KB
• a12312023ex312.htm (EX-31.2) — 10KB
• a12312023ex321.htm (EX-32.1) — 6KB
• a12312023ex322.htm (EX-32.2) — 7KB
• a12312023ex971.htm (EX-97.1) — 27KB
• codi-20231231_g1.jpg (GRAPHIC) — 75KB
• codi-20231231_g2.jpg (GRAPHIC) — 86KB
• codilogo2020a02.jpg (GRAPHIC) — 13KB
• 0001345126-24-000016.txt (&nbsp;) — 21441KB
• codi-20231231.xsd (EX-101.SCH) — 100KB
• codi-20231231_cal.xml (EX-101.CAL) — 144KB
• codi-20231231_def.xml (EX-101.DEF) — 1006KB
• codi-20231231_lab.xml (EX-101.LAB) — 1212KB
• codi-20231231_pre.xml (EX-101.PRE) — 1286KB
• codi-20231231_htm.xml (XML) — 3011KB

Risk Factors

Item 1A. Risk Factors 61

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 72

Cybersecurity

Item 1C. Cybersecurity 73

Properties

Item 2. Properties 73

Legal Proceedings

Item 3. Legal Proceedings 76

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 77 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 78

[Reserved]

Item 6. [Reserved] 80

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 81

Quantitative and Qualitative Disclosures about Market Risk

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 127

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 128

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 129

Controls and Procedures

Item 9A. Controls and Procedures 130

Other Information

Item 9B. Other Information 130

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 130 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 131

Executive Compensation

Item 11. Executive Compensation 131

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 131

Certain Relationships and Related Transactions and Director Independence

Item 13. Certain Relationships and Related Transactions and Director Independence 131

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 131 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 132

Form 10-K Summary

Item 16. Form 10-K Summary 136 NOTE TO READER In reading this Annual Report on Form 10-K, references to: the "Trust" and "Holdings" refer to Compass Diversified Holdings; the "LLC" refer to Compass Group Diversified Holdings LLC; the "Company" refer to Compass Diversified Holdings and Compass Group Diversified Holdings LLC, collectively; "businesses", "operating segments", "subsidiaries" and "reporting units" all refer to, collectively, the businesses controlled by the Company; the "Manager" refer to Compass Group Management LLC ("CGM"); the "Trust Agreement" refer to the Third Amended and Restated Trust Agreement of the Trust dated as of August 3, 2021; the "2022 Credit Facility" refers to the third amended and restated credit agreement entered into on July 12, 2022 among the LLC, the lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and letter of credit issuer (the "agent") the "2022 Revolving Credit Facility" refers to the $600 million in revolving loans, swing line loans and letters of credit provided by the 2022 Credit Facility that matures in 2027; the "2022 Term Loan" refer to the $400 million term loan provided by the 2022 Credit Facility; the "2021 Credit Facility" refer to the second amended and restated credit agreement entered into on March 23, 2021 among the Company, the Lenders from time to time party thereto (the "Lenders"), Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (the "agent") and other agents party thereto; the "2021 Revolving Credit Facility" refers to the $600 million in revolving loans, swing line loans and letters of credit provided by the 2021 Credit Facility that matures in 2026; the "LLC Agreement" refer to the Sixth Amended and Restated Operating Agreement of the Company dated as of August 3, 2021, as further amended; and "we," "us" and "our" refer to the Trust, the Company and the businesses together.

BUSINESS

ITEM 1. BUSINESS Compass Diversified Holdings, a Delaware statutory trust ("Holdings", or the "Trust"), was incorporated in Delaware on November 18, 2005. Compass Group Diversified Holdings, LLC, a Delaware limited liability company (the "LLC"), was also formed on November 18, 2005. The Trust and the LLC (collectively, the "Company") were formed to acquire and manage a group of small and middle-market businesses headquartered in North America. The Trust is the sole owner of 100% of the Trust Interests, as defined in our LLC Agreement, of the LLC. Pursuant to the LLC Agreement, the Trust owns an identical number of Trust Interests in the LLC as exist for the number of outstanding shares of the Trust. The Trust was previously treated as a partnership for U.S. federal income tax purposes but elected, effective September 1, 2021, to be taxed as an association taxable as a corporation. Following this tax election, Trust shareholders should generally only be subject to taxation from holding Trust shares in connection with disposition of Trust shares and receipt of taxable dividends from the Trust. Trust shareholders subject to tax rules regarding "unrelated business taxable income" (or "UBTI") will no longer be allocated UBTI from the Trust. The LLC is the operating entity with a board of directors whose corporate governance responsibilities are similar to that of a Delaware corporation. The LLC's board of directors oversees the management of the Company and our businesses and the performance of Compass Group Management LLC ("CGM" or our "Manager"). Certain persons who are employees and partners of our Manager receive a profit allocation as beneficial owners (through Sostratus LLC) of 63.0 % of the Allocation Interests, as defined in our LLC Agreement. Overview We acquire controlling interests in and actively manage businesses that we believe (i) operate in industries with long-term macroeconomic growth opportunities, (ii) have positive and stable cash flows, (iii)

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View this 10-K filing on SEC EDGAR