On July 31, 2024, Compass Diversified Holdings (NYSE: CODI) released its 8-K filing detailing its financial results for the second quarter of 2024. Compass Diversified Holdings is a diversified business conglomerate based in the United States, operating in two main segments: branded consumer businesses and industrial businesses. The company has a global presence, with operations in the United States, Canada, Europe, Asia Pacific, and other international areas.
Performance Overview
Compass Diversified Holdings (CODI, Financial) reported net sales of $542.6 million for Q2 2024, an 11% increase compared to $486.9 million in Q2 2023. This growth was primarily driven by the branded consumer segment, which saw net sales rise by 11% on a pro forma basis to $373.5 million. However, the industrial segment faced challenges, with net sales declining by 4% to $169.1 million.
Financial Achievements and Challenges
Despite the revenue growth, Compass Diversified Holdings (CODI, Financial) reported a net loss of $13.7 million for Q2 2024, compared to a net income of $17.1 million in the same period last year. This loss was primarily due to a $24.6 million loss from the divestiture of Crosman Corporation, a division of Velocity Outdoor. Adjusted Earnings, a non-GAAP measure, increased by 36% to $39.8 million, while Adjusted EBITDA rose by 27% to $105.4 million.
“I’m pleased to announce another strong quarter with results that exceeded our expectations, driven by continued strength in our consumer businesses,” said Elias Sabo, CEO of Compass Diversified.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $542.6 million | $486.9 million |
| Net Income (Loss) | $(13.7) million | $17.1 million |
| Adjusted Earnings | $39.8 million | $29.2 million |
| Adjusted EBITDA | $105.4 million | $82.9 million |
Balance Sheet and Cash Flow
As of June 30, 2024, Compass Diversified Holdings (CODI, Financial) had $68.4 million in cash and cash equivalents, with $54.0 million outstanding on its revolver and $1.68 billion in long-term debt. The company paid a second-quarter cash distribution of $0.25 per share on its common shares in July 2024.
Analysis and Outlook
Compass Diversified Holdings (CODI, Financial) demonstrated robust revenue growth driven by its branded consumer segment, offsetting weaknesses in its industrial segment. The divestiture of Crosman Corporation significantly impacted net income, resulting in a net loss for the quarter. However, the increase in Adjusted Earnings and Adjusted EBITDA highlights the company's operational strength and strategic focus on high-performing segments.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Compass Diversified Holdings for further details.
