• Revenue: $542.6 million, up 11% from $486.9 million in the prior year period.

• Net Loss: $13.7 million compared to net income of $17.1 million in the prior year.

• Adjusted EBITDA: $105.4 million, up 27% from $82.9 million in the prior year.

• Pro-forma Revenue Growth: 6% for the quarter; 4.9% year-to-date versus June 2023.

• Pro-forma Adjusted EBITDA Growth: 18% for the quarter; 16.6% year-to-date versus June 2023.

• Industrial Segment Revenue Decline: 6.7% year-to-date versus June 2023.

• Industrial Segment Adjusted EBITDA Decline: 8% year-to-date versus June 2023.

• Consumer Segment Pro-forma Revenue Growth: 10.9% year-to-date versus June 2023.

• Consumer Segment Pro-forma Adjusted EBITDA Growth: 27% year-to-date versus June 2023.

• BOA Revenue Growth: 42.1% in Q2 2024 versus Q2 2023.

• BOA Adjusted EBITDA Growth: Almost 60% in Q2 2024 versus Q2 2023.

• PrimaLoft Revenue Growth: 14.1% in Q2 2024 versus Q2 2023.

• PrimaLoft Adjusted EBITDA Growth: 11.1% in Q2 2024 versus Q2 2023.

• Cash Flow from Operations: Used $35 million in Q2 2024.

• Capital Expenditures: $11.2 million in Q2 2024, compared to $13.7 million in the prior year period.

• Leverage Ratio: 3.2 times as of June 30, 2024.

• Warning! GuruFocus has detected 6 Warning Signs with CODI.

Release Date: July 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Compass Diversified Holdings (NYSE:CODI) reported strong performance in its branded consumer vertical, with BOA, PrimaLoft, and Lugano leading the growth.

• The company experienced a 27% increase in adjusted EBITDA for the second quarter, driven by acquisitions and strong growth in key subsidiaries.

• Lugano's international expansion, particularly the new salon in London, exceeded expectations, indicating successful growth strategies.

• CODI maintained its full-year 2024 guidance, expecting to hit the high end of its consolidated guidance ranges, reflecting confidence in its business outlook.

• The company has a strong liquidity position with $68.4 million in cash and $544 million available on its revolver, providing financial flexibility for future investments.

Negative Points

• CODI's industrial vertical faced challenges, with a decline in both revenues and adjusted EBITDA due to a weakening global macro economy.

• The HoneyPot company underperformed slightly, with revenue and EBITDA below expectations due to the loss of non-core SKUs at a large retailer.

• The company reported a consolidated net loss of $13.7 million for the second quarter, impacted by a loss on the sale of Crosman and tax expenses.

• 5.11 faced operational challenges related to inventory fluctuations and the PFAS transition, affecting its financial performance.

• CODI's leverage ratio remains a focus, with plans to reduce it further, but it still poses a risk if significant acquisitions are pursued.