Compass Diversified Reports Third Quarter 2020 Financial Results

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Compass Diversified, an owner of leading middle market businesses, announced its consolidated operating results for the three months ended September 30, 2020. Among its 10 subsidiaries, Compass owns Advanced Circuits, a quick-turn, small-run and production rigid printed circuit boards manufacturer.

Third Quarter 2020 Highlights

• Reported net sales of $418.9 million
• Reported net income of $20.9 million
• Reported non-GAAP Adjusted EBITDA of $73.9 million
• Reported Cash Provided by Operating Activities of $24.5 million and non-GAAP Cash Flow Available for Distribution and Reinvestment ("CAD") of $43.5 million
• Announced platform acquisition of BOA Technology Inc., which closed in October
• Appointed Katie Melzer as Managing Director and Head of Business Development
• Completed the accretive add-on acquisition of Polyfoam Corp by CODI’s subsidiary Foam Fabricators
• Paid a third quarter 2020 cash distribution of $0.36 per share on CODI's common shares in October 2020, bringing cumulative distributions paid to $20.0352 per common share since CODI's IPO in May of 2006
• Declared a quarterly cash distribution of $0.453125 per share on the Company's 7.250% Series A Preferred Shares, $0.4921875 per share on the Company's 7.875% Series B Preferred Shares, and $0.4921875 per share on the Company's 7.875% Series C Preferred Shares payable on October 30, 2020

"The competitive advantage gained through our permanent capital structure has never been more apparent,” said Elias Sabo, CEO of Compass Diversified. “CODI’s strong performance in the third quarter is a testament to our differentiated model and the outperformance of our branded consumer businesses. Our team continues to execute on our acquisition strategy amid heightened uncertainty, and we are pleased to have completed the acquisition of another growing and aspirational brand, BOA Technology. As we continue to transform our portfolio, BOA joins a strong lineup of branded consumer business, including Marucci, 5.11, Velocity Outdoor and Liberty Safe. As a whole, our branded consumer businesses exceeded expectations again this quarter, benefiting from ongoing consumer demand in outdoor categories.”

Mr. Sabo continued, “CODI’s unique model has proven resilient and looking ahead, we are poised to continue creating long-term shareholder value by executing on our strategy and returning substantial capital with our $1.44 per common share annual distribution. We are pleased to have achieved an important milestone in the third quarter, as our cumulative distributions increased to more than $20 per share, representing our strong track record of paying consistent and sizeable distributions since CODI's IPO in May of 2006.”

Mr. Sabo concluded, “As we approach year end, we remain incredibly proud of all that our team has accomplished in managing the uncertainty of the pandemic. We have positioned our diverse set of subsidiary companies for continued long-term success and we are eager to build upon this momentum in the quarters and years to come.”

Operating Results
Net sales for the quarter ended September 30, 2020 were $418.9 million, as compared to $388.3 million for the quarter ended September 30, 2019.

Net income for the quarter ended September 30, 2020 was $20.9 million, as compared to net loss of $26.5 million for the quarter ended September 30, 2019. CODI recorded a $33.4 million impairment at its Velocity Outdoor subsidiary during the quarter ended September 30, 2019.