Compass Diversified, which earlier this year suspended reporting its financial results due to major accounting irregularities and fraud discovered at its Lugano Diamonds subsidiary, reported financial results for the first quarter ended March 31, 2025, and plans to file reports for the second and third quarters of 2025 in the coming weeks.

“Today’s filing represents another important step in our efforts to bring our financial reporting current,” said Elias Sabo, CEO of Compass Diversified. “We remain focused on strengthening our financial flexibility and executing across our subsidiary businesses. Despite a dynamic operating environment, our operating subsidiaries, excluding Lugano, continue to perform well and collectively generate significant cash flow.”

Sabo added, “Looking ahead, we are focused on the key drivers of performance across our subsidiaries—driving operational excellence, disciplined working capital management, and investing in our differentiated products and brands. We’re encouraged by recent strong booking activity at Arnold and PrimaLoft. BOA continues to benefit from its patent-protected performance-enhancing fit solutions, supporting ongoing market share expansion. And 5.11 is navigating macro pressures with duty-smart sourcing and tighter inventory discipline while it continues to invest in its brand.”

Sabo continued, “Our priorities are clear: execute at our subsidiaries, generate cash, and use that cash to reduce leverage while continuing to support growth initiatives across our businesses. Long term, we remain committed to maximizing shareholder value and will continue to explore opportunities for the most efficient return of capital to our shareholders.”

First-Quarter Results
CODI’s results in the quarter reflect restated results from the year-ago period at its Lugano subsidiary.

Sales in the quarter grew 10.4 percent to $453.8 million from $410.8 million a year ago.

Operating income was $3.44 million against an operating loss of $12.1 million. The loss from continuing operations was $49.8 million, down from a loss of $88.9 million. After accounting for discounted operations, the net loss was $49.7 million against a net loss of $85.3 million in the prior year.

Among its subsidiaries in its Branded Consumer segment, sales at 5.11 in the first quarter rose 3.5 percent to $129.4 million from $125.0 million. Operating income increased to $3.9 million from $3.4 billion.

Sales at BOA reached $48.8 million, up 13.9 percent from $42.9 million a year ago. Operating earnings at BOA more than doubled to $8.2 million from $3.4 million. PrimaLoft’s sales in the first quarter improved 4.9 percent to $23.6 million from $22.5 million a year ago. Primaloft’s loss shrank to $437,000 from $1.3 million.

Velocity Outdoor’s sales tumbled 55.8 percent to $13.2 million from $29.9 million a year ago, reflecting the sale of Crosman. The segment also includes Ravin crossbows and CenterPoint archery products, and hunting and casual apparel under the King’s Camo brand. The operating loss in the segment declined to $4.2 million from $16.0 million a year earlier.

Lugano’s sales totaled $26.8 million against a restated $10.8 million the prior year. The loss for Lugano was reduced to $51.6 million from the restated $70.8 million last year.

The Honey Pot’s sales rose to $36.2 million from $30.8 million the prior year. Honey Pot’s operating income came to $1.75 million against an operating loss of $3.5 million the prior year.

In its Niche Industrial brands segment, Altor Solutions’ sales rose to $76.3 million from $53.4 million, the operating loss of $228,000 compared with earnings of $693,000 a year ago. Arnold Magnetics’ sales declined to $34.0 million from $41.3 million a year ago. Operating losses at Arnold Magnetics totaled $1.6 million against operating income of $1.65 million the prior year. Sterno’s sales improved slightly to $65.4 million from $64.9 million; the operating loss amounted to $1.6 million against operating earnings of $1.65 million a year ago.

2025 Outlook (Reiterated)
CODI reiterated its expectation for full-year 2025 subsidiary Adjusted EBITDA of $330 million to $360 million, excluding Lugano.

Image courtesy CODI/Boa Technology