BOA’s Sales Expand 6.7 Percent in Q1
BOA sales in the quarter grew 6.7 percent to $52.1 million from $48.9 million. Gains in BOA’s adult premium performance sales across key industries, including Cycling, Workwear, Outdoor, and Snow Sports, offset a reduced kids-based business in China, according to CODI’s 10Q filing. CODI said, “This continued momentum was primarily a result of market share gains in many of BOA’s key industries.”
Non-GAAP adjusted EBITDA for BOA climbed 10.7 percent to $22 million from $20 million. BOA’s operating earnings rose 17.5 percent to $16.1 million from $13.7 million for the same period in 2025. The increase in operating income was driven by an increase in sales and improved gross profit margins, partially offset by increased SG&A costs.
On an analyst call, Elias Sabo, CODI’s CEO, said, “We believe the performance of the BOA Fit System is unmatched. And that technical edge continues to drive category-leading adoption across snow sports, cycling, workwear and more. The company’s focus on differentiated solutions and operational efficiency supports their category-leading margins. And with continued innovation and expansion into new performance applications, we see meaningful opportunity for growth ahead.”
In the Q&A session, he noted that the reduced kids-based business in China reflects an account BOA exited for “price competitive reasons,” but he said BOA is “well positioned” with overall inventories in the marketplace better balanced. Sabo said about BOA, “This business now, we think, is sort of in a smoother set of waters and should produce the kind of double-digit kind of growth rates that we saw in the first quarter on a continuing basis.”
5.11’s Revenues Slide 4.2 Percent
5.11 brand revenues dipped 4.2 percent to $123.8 million from $129.4 million. The decline was driven primarily by decreases in direct-to-consumer sales of approximately $4.0 million, reflecting a reduction in promotional activity compared to the prior-year period, and international sales of approximately $1.8 million, primarily due to the timing of large contracts. These decreases were partially offset by an increase in domestic wholesale sales of approximately $0.5 million, driven by increased demand from key national accounts during the quarter.
Adjusted EBITDA was off 1.7 percent to $14.6 million from $14.8 million. Segment operating income was $7.7 million, a 10.6 decrease from $8.6 million for the same period in 2025. The decline in operating income primarily reflects lower net sales, which resulted in reduced gross profit dollars, partially offset by an improvement in gross margin rate. These impacts were further offset by lower SG&A expenses, driven by a reduction in payroll as well as lower variable expenses, including marketing and fulfillment, in line with reduced revenue volume.
Sabo said, “5.11 Tactical delivered solid margin performance and strong cash flow in the quarter, despite some modest top-line pressure. The business continues to generate durable cash flow from its core professional customer base, and we are encouraged by the steps the team is taking to expand 5.11’s appeal to the broader adventure-oriented consumer. This includes a recent grand opening of its next-generation retail format in Seattle, which significantly outperformed the chain average on opening weekend. Early customer response has been strong and we are seeing encouraging traction. While this is an early signal, it reinforces our belief that 5.11 has meaningful runway to broaden the brand’s reach over time.”
PrimaLoft Absorbs Goodwill Impairment Charge
PrimaLoft sales declined 7.3 percent to $21.9 million from $$23.6 million in the year-ago quarter. The decrease is primarily attributable to timing effects, with a shift in the timing of seasonal demand to the prior year.
Adjusted EBITDA at PrimaLoft was down 14.8 percent to $8.5 million from $9.9 million. The segment’s operating loss was $17.6 million compared to operating income of $4.2 million for the same period in 2025, largely reflecting a goodwill impairment charge of $20.5 million in the first quarter of 2026, The remainder of the decrease was attributable to lower sales volume, partially offset by higher gross margins in the latest quarter based on sales mix.
CODI said in its 10Q that its annual goodwill impairment test as of March 31, 2026 determined that “the fair value of the PrimaLoft reporting unit was less than its carrying amount.” The test found that the carrying value of its other reporting units exceeded their carrying amount.
PrimaLoft recently underwent a management change. As of February 23, Eric Weis, formerly global chief commercial and marketing officer at BOA, was appointed president of PrimaLoft, succeeding Anne Cavassa. Shawn Neville, BOA’s CEO and a PrimaLoft Board member, assumed the chairman role at PrimaLoft.
Sabo said the “new leadership team is getting up to speed at PrimaLoft. It’s only month three, but we are pleased with management’s progress, laying the groundwork to accelerate future growth while remaining a highly profitable, low working capital business.”
Velocity Outdoor’s Q1 Sales Improve 4.7 Percent
Velocity Outdoor segment sales grew 4.7 percent to $13.8 million from $13.2 million. The increase was primarily driven by increases in King’s Camo apparel sales and incremental increases in net sales of crossbows. The Velocity Outdoor subsidiary includes Ravin crossbows and CenterPoint archery products, and the King’s Camo hunting and casual apparel brand.
Velocity Outdoor showed positive adjusted EBITDA of $273,000 against negative EBITDA of $1.4 million a year ago. The segment’s operating loss shrank to $1.1 million from an operating loss of $2.8 million for the same period in 2025. The profit improvement was driven by higher gross margins in the current quarter, with gross margins of 33.1 percent in the latest quarter as compared to 25.5 percent in the same quarter a year ago.
Companywide Results
On a GAAP basis, CODI’s overall revenues were $426.9 million, down 5.9 percent vs Q1 2025. Among its other businesses, declines were seen in its Lugano and Altor Solutions subsidiary while healthy gains were seen at The Honey Pot and The Honey Pot. Flat growth was delivered by Arnold Magnetics. Total adjusted EBITDA were up 24.2 percent to $56.5 million from $45.5 million the prior year.
The net loss from continuing operations on a GAAP basis was $30.8 million versus $49.8 million in Q1 2025.
On November 16, 2025, CODI de-consolidated Lugano Holding, Inc. (“Lugano”). Accordingly, CODI’s GAAP results for the three months ended March 31, 2026 do not include Lugano’s operating results. Certain non-GAAP results and their associated growth rates are presented excluding Lugano’s 2025 results to facilitate comparisons of year-over-year performance for our remaining subsidiaries.
On a non-GAAP basis (excluding Lugano in the prior year period), net revenues were $426.9 million, flat to Q1 2025. Branded consumer segment revenue was $257.0 million, up 2.3 percent vs Q1 2025. Industrial segment sales amounted to $169.9 million, down 3.3 percent year over year.
Subsidiary adjusted EBITDA was $83.9 million, up 6.3 percent versus the prior year. Branded Consumer segment adjusted EBITDA was $59.4 million, up 11.6 percent vs Q1 2025. Industrial $24.4 million segment adjusted EBITDA declined 4.5 percent.
“The first quarter of 2026 was a quarter of execution, with strong subsidiary performance led by our Consumer vertical, and a meaningful divestiture at an attractive valuation,” said Sabo in a press releease. “We are delivering against the priorities we laid out for shareholders at the beginning of the year.”
Sabo continued, “A single quarter does not make a turnaround. Trust is earned through consistent execution, and that is what we expect to deliver for shareholders going forward.”
Recent Business Update
CODI completed the sale of Sterno’s food service business for an enterprise value of $292.5 million, with net proceeds used to repay outstanding debt. The Sterno transaction generated proceeds to CODI of approximately $280 million, reducing senior secured indebtedness below 1.0x, sufficient to avoid second quarter milestone fees associated with excess leverage under the Company’s senior secured credit arrangements, as of June 30, 2026.
Liquidity and Capital Resources
As of March 31, 2026, CODI had approximately $65.2 million in cash and cash equivalents and approximately $100 million in revolver availability.
2026 Outlook
The company is updating its fiscal 2026 financial guidance to reflect the sale of Sterno’s food service business. The updated guidance is at or above the expectations set at the start of the year, adjusting for the divested business.
