Compass Diversified (CODI), owner of Velocity Outdoor, BOA, Marucci, Primaloft, 5.11, and other businesses in the active lifestyle space, reported that third-quarter net sales were $569.6 million, down 1 percent compared to $575.8 million in the third quarter of 2022.
Strong performance at Lugano and Marucci roughly offset lower sales at BOA due to inventory de-stocking in the footwear industry and lower sales at Velocity Outdoor in the third quarter of 2023. On a pro forma basis, assuming CODI had acquired PrimaLoft on January 1, 2022, net sales were down 1 percent in the third quarter of 2023 as compared to the prior year.
CODI today announced the sale of Marucci Sports to Fox Factory Holding Corp. for an enterprise value of $572 million. Read SGB Media‘s coverage here.
Branded consumer net sales, pro forma for the PrimaLoft acquisition, increased 2 percent in the third quarter of 2023 to $388.3 million, compared to the third quarter of 2022. Niche industrial net sales decreased 8 percent in the third quarter of 2023 to $181.2 million compared to the third quarter of 2022.
Operating income for the third quarter was $28.4 million, compared to $43.8 million in the third quarter of 2022. The decline was said to be due primarily to a $32.6 million non-cash impairment expense associated with the company’s Velocity Outdoor subsidiary in the third quarter of this year.
The net loss in Q3 was $3.8 million, compared to net income of $2.6 million in the third quarter of 2022. The net loss from continuing operations in Q3 was $5.0 million, compared to $3.0 million in the year-ago quarter. The increases in net loss and net loss from continuing operations were said to be due to the non-cash impairment expense, as well as higher interest expense.
Adjusted Earnings for the third quarter was $41.0 million compared to $41.6 million in the year-ago period.
Adjusted EBITDA in Q3 was $103.9 million this year, up 13 percent compared to $91.9 million in the third quarter of 2022. The increase was said to be primarily due to strong results at Lugano, Marucci, Sterno, and Altor. The company no longer adds back management fees in its calculation of Adjusted EBITDA. Management fees incurred during the third quarter of 2023 were $18.6 million.
Photo courtesy Marucci
