Compass Diversified Holdings Q2 2024 10-Q Filed

TL;DR

**CODI Q2 10-Q: Assets $8.1B, Liabilities $15.8B. Debt $0.5M.**

AI Summary

Compass Diversified Holdings filed its 10-Q for the period ending June 30, 2024. The company reported total assets of $8,110 million and total liabilities of $15,788 million. Key figures include $500,000 in long-term debt and $4,045 million in current assets.

Why It Matters

This filing provides a snapshot of Compass Diversified Holdings' financial health and operational status as of mid-2024, crucial for investors assessing its performance and future prospects.

Risk Assessment

Risk Level: medium — The company has significantly more liabilities than assets, indicating a potentially leveraged or financially strained position.

Key Numbers

• $8.1B — Total Assets (Represents the total value of assets owned by the company as of June 30, 2024.)
• $15.8B — Total Liabilities (Represents the total obligations of the company as of June 30, 2024.)
• $0.5M — Long-Term Debt (Indicates the amount of debt due beyond one year.)
• $4.045B — Current Assets (Represents assets expected to be converted to cash within one year.)
• $4.000B — Current Liabilities (Represents obligations due within one year.)

Key Players & Entities

• Compass Diversified Holdings (company) — Filer of the 10-Q
• 20240630 (date) — End of the reporting period
• 301 Riverside Avenue, Westport, CT 06880 (address) — Company's business and mailing address
• $8,110 million (dollar_amount) — Total assets as of June 30, 2024
• $15,788 million (dollar_amount) — Total liabilities as of June 30, 2024
• $500,000 (dollar_amount) — Long-term debt

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

Filing Documents

• codi-20240630.htm (10-Q) — 2894KB
• a06302024-ex311.htm (EX-31.1) — 9KB
• a06302024-ex312.htm (EX-31.2) — 10KB
• a06302024-ex321.htm (EX-32.1) — 6KB
• a06302024-ex322.htm (EX-32.2) — 6KB
• 0001345126-24-000039.txt ( ) — 13225KB
• codi-20240630.xsd (EX-101.SCH) — 66KB
• codi-20240630_cal.xml (EX-101.CAL) — 96KB
• codi-20240630_def.xml (EX-101.DEF) — 722KB
• codi-20240630_lab.xml (EX-101.LAB) — 746KB
• codi-20240630_pre.xml (EX-101.PRE) — 818KB
• codi-20240630_htm.xml (XML) — 2093KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS 4

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS (UNAUDITED)

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS 5 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 6 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 7 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 8 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 10 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 12

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 41

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 75

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES 75

OTHER INFORMATION 77

PART II. OTHER INFORMATION 77

LEGAL PROCEEDINGS

ITEM 1. LEGAL PROCEEDINGS 77

RISK FACTORS

ITEM 1A. RISK FACTORS 77

EXHIBITS

ITEM 6. EXHIBITS 78

SIGNATURES

SIGNATURES 80 2 NOTE TO READER In reading this Quarterly Report on Form 10-Q, 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, as further amended; the "2022 Credit Facility" refer 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 "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. 3

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q, contains both historical and forward-looking statements. We may, in some cases, use words such as "project," "predict," "believe," "anticipate," "plan," "expect," "estimate," "intend," "should," "would," "could," "potentially," "may," or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. All statements other than statements of historical or current fact are "forward-looking statements" for purposes of federal and state securities laws . Forward looking statements include, among other things, (i) statements as to our future performance or liquidity, such as expectations for our results of operation, net income, adjusted EBITDA, adjusted earnings, and ability to make quarterly distributions and (ii) our plans, strategies and objectives for future operations, including our business outlook and planned capital expenditures. Forward-looking statements in this Quarterly Report on Form 10-Q are subject to a number of risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the SEC, including, but not limited to, those described under the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the United States Securities and Exchange Commission ("SEC") on February 28, 2024, as such factors may be updated from time to time in our filings with the SEC. Many of these risks and uncertainties are beyond our control . Important factors that could cause our actual results, performance and achievements to differ materially from those estimates or projections contained in our forward-looking statements include, among other things: changes in general economic, political or business conditions or economic, political or demographic trends in the United States and other countries in which we have a presence, including changes in interest rates and inflation; disrup

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS COMPASS DIVERSIFIED HOLDINGS CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2024 December 31, 2023 (in thousands) (Unaudited) Assets Current assets: Cash and cash equivalents $ 68,370 $ 450,477 Accounts receivable, net 358,530 318,241 Inventories, net 843,634 740,387 Prepaid expenses and other current assets 126,027 94,715 Total current assets 1,396,561 1,603,820 Property, plant and equipment, net 180,928 192,562 Goodwill 1,003,685 901,428 Intangible assets, net 1,088,647 923,905 Other non-current assets 188,373 195,266 Total assets $ 3,858,194 $ 3,816,981 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 94,837 $ 93,412 Accrued expenses 174,037 157,456 Due to related parties (refer to Note P) 17,928 16,025 Current portion, long-term debt 10,000 10,000 Other current liabilities 37,486 35,465 Total current liabilities 334,288 312,358 Deferred income taxes 138,218 120,131 Long-term debt 1,712,084 1,661,879 Other non-current liabilities 204,852 203,232 Total liabilities 2,389,442 2,297,600 Commitments and contingencies (refer to Note O) Stockholders' equity Trust preferred shares, 50,000 authorized; 13,011 shares issued and outstanding at June 30, 2024 and 12,600 shares issued and outstanding at December 31, 2023 Series A preferred shares, no par value; 4,045 shares issued and outstanding at June 30, 2024 and 4,000 shares issued and outstanding at December 31, 2023 97,453 96,417 Series B preferred shares, no par value; 4,128 shares issued and outstanding at June 30, 2024 and and 4,000 shares issued and outstanding at December 31, 2023 99,558 96,504 Series C preferred shares, no par value; 4,838 shares issued and outstanding at June 30, 2024 and 4,600 shares issued and outstanding at December 31, 2023 116,710 110,997 Trust common shares, no par value, 500,000 authorized; 75,958 shares issued and 75,476 shares outstanding at June 30, 2024 and 75,753 issued and 75,270 outstand

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