Compass Diversified (CODI) investor relations material

Executive summary

• Achieved solid subsidiary-adjusted EBITDA growth in Q1 2026, led by double-digit gains in consumer businesses despite macroeconomic uncertainty.

• Net revenues for Q1 2026 were $426.9 million, down 5.9% year-over-year, primarily due to the deconsolidation of Lugano and lower sales at 5.11 and Altor, partially offset by growth at BOA, The Honey Pot Co., and Arnold.

• Sterno's food service business was sold for $292.5 million enterprise value, with proceeds used to reduce debt.

• Focus remains on deleveraging, operational performance, and aligning management incentives to close the gap to intrinsic value.

• Initiated a review and amendment of the management services agreement to further align incentives and address overpaid management fees.

Financial highlights

• Q1 2026 GAAP net revenues were $426.9 million, down 5.9% year-over-year due to the prior inclusion of Lugano.

• GAAP net loss from continuing operations was $30.8 million, impacted by a $20.5 million goodwill impairment at PrimaLoft.

• Non-GAAP subsidiary adjusted EBITDA was $83.9 million, up 6.3% year-over-year; consumer up 11.6%, industrial down 4.5%.

• Gross profit margin improved to 44.4% from 43.2% year-over-year, driven by higher margins in branded consumer businesses.

• Generated $23.9 million in operating cash flow, with cash and cash equivalents at quarter-end of $65.2 million and nearly full availability on a $100 million revolver.

Outlook and guidance

• Updated 2026 guidance: subsidiary adjusted EBITDA expected between $320 million-$365 million.

• Consumer businesses expected to deliver $225 million-$260 million in adjusted EBITDA; industrial $95 million-$105 million, including some stranded costs.

• CapEx for 2026 projected at $30 million-$40 million; corporate cash management fees expected at $25 million-$30 million.

• Guidance excludes potential future acquisitions/divestitures except for the Sterno sale.

• Focus remains on deleveraging, maintaining liquidity, and executing operational improvements.