Compass Diversified (CODI) Q3 2024 earnings summary

Executive summary

• Achieved double-digit revenue growth in Q3 2024, with net sales up 11.8% to $582.6M, driven by strong branded consumer performance, including Lugano, BOA, and The Honey Pot Co., and stabilization in industrial businesses.

• Adjusted EBITDA reached a record $114M in Q3 2024, up 28% year-over-year, and adjusted earnings rose 65% to $48.7M.

• Net income from continuing operations was $31.5M in Q3 2024, reversing a prior year loss.

• Raised full-year 2024 guidance based on strong performance and positive business momentum.

• Awarded Inc. Magazine's Founder-Friendly Investor Award, highlighting collaborative approach with subsidiaries.

Financial highlights

• Q3 2024 consolidated net sales were $582.6M, up 11.8% year-over-year; pro forma sales grew 6.6%.

• Q3 2024 gross profit margin improved to 47.1% from 43.2% in Q3 2023.

• Q3 2024 net income was $31.5M, compared to a net loss of $3.8M in Q3 2023.

• Adjusted EBITDA for Q3 2024 was $114M, a 28% increase year-over-year.

• Ended Q3 with $71.9M in cash and over $480M available on revolver; total leverage ratio at 3.68x.

Outlook and guidance

• Raised full-year 2024 guidance: consolidated pro forma subsidiary adjusted EBITDA expected between $510M–$525M, including The Honey Pot Co.

• Branded consumer vertical adjusted EBITDA expected at $390M–$400M; industrial vertical at $120M–$125M.

• Consolidated adjusted EBITDA expected between $420M–$435M; adjusted earnings between $155M–$165M.

• Guidance includes The Honey Pot Company for the full year 2024 and excludes impact of future acquisitions or divestitures.