Compass Diversified (CODI) investor relations material

Executive summary

• Q3 continuing-operations income was $23.2 million versus a loss of $86.7 million; comparable Subsidiary Adjusted EBITDA, excluding Lugano and divested Sterno Food Service, was $89.7 million, up 12.9%.

• Management emphasized profitable growth, cash generation for debt reduction and value-focused divestitures; Elias Sabo said this was his final earnings call as CEO, with Zach Sawtelle expected to succeed him in 2027.

Financial highlights

• Q3 GAAP net sales were $422.9 million, down 10.5% YoY; comparable net sales excluding Lugano and Sterno Food Service rose 0.8%.

• Net income attributable to Holdings was $21.5 million, or $0.06 per share, versus a $74.0 million loss, or $1.21 loss per share; Q3 included a $20.1 million Lugano-related tax benefit.

• Q3 gross profit was $198.5 million and gross margin was 46.9%, up from 44.0%; tariff refunds and stronger branded-consumer margins contributed.

• Q3 operating cash flow was $51.6 million versus $10.7 million a year earlier; 9M cash flow was $105.2 million versus cash used of $53.8 million.

Outlook and guidance

• FY 2026 Subsidiary Adjusted EBITDA guidance narrowed to $330 million-$355 million, with the midpoint unchanged; Branded Consumer guidance is $250 million-$270 million and Industrial is $80 million-$85 million.

• Expectations rose for Branded Consumer and fell for Industrial; guidance reflects YTD results, some demand pull-forward and macro uncertainty.

• FY 2026 guidance includes $9 million of Sterno Food Service Adjusted EBITDA through its May 1 sale; capital expenditures are expected to be $30 million-$35 million.

• Outlook assumes no additional acquisitions or divestitures and no significant change in the trade environment; management expects roughly $70 million of excess cash for debt repayment after preferred and interest payments.