D/b/a Compass Diversified Holdings Shares Of Beneficial Interest · NYSE:CODI
D/b/a Compass Diversified Holdings Shares Of Beneficial Interest — Compass Diversified Holdings — Investor Presentation (February 2022)
49 slides from D/b/a Compass Diversified Holdings Shares Of Beneficial Interest's investor presentation, February 2022
Slide 1: CODI Investor Presentation
CODI Investor Presentation FEBRUARY 2022
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation contains certain forward-looking statements within the meaning of the federal securities laws. These statements may be made a part of this presentation or by reference to other documents we file with the SEC. Some of the forward-looking statements can be identified
Slide 3: Business Overview
Business Overview 3
Slide 4: Experienced Leadership Team
Experienced Leadership Team ELIAS SABO RYAN FAULKINGHAM PATRICK MACIARIELLO Founding Partner & CEO EVP & CFO Chief Operating Officer Responsible for directing CODI’s Responsible for capital raising, accounting West Coast Managing Partner strategy and reporting, financial controls, as well as Joined
Slide 5: CODI by the Numbers
CODI BY THE NUMBERS As of 12/31/2021 Compass Diversified Holdings (NYSE: CODI) Offers Shareholders a Unique Opportunity To Own a Diverse 1998 FOUNDED IPO in 2006 Group of Leading Middle-Market Businesses Founded in 1998, CODI is an experienced acquirer and manager of established North American $7.0B
Slide 6: Benefits of Owning CODI
Benefits of Owning CODI CONSISTENT ACCESS TO AN ATTRACTIVE SUPERIOR GOVERNANCE LIQUIDITY VIA TRADEABLE OUTPERFORMANCE OF SEGMENT OF THE MARKET MODEL SHARES BENCHMARKS HISTORICALLY RESERVED FOR • Majority of Board of Directors • CODI total return of 533% since PRIVATE MONEY MANAGERS independent with
Slide 7: CODI's Permanent Capital Model Has Outperformed for Investors
CODI’s Permanent Capital Model Has Outperformed for Investors Compared to both publicly-traded peers and market indices, CODI has consistently generated superior returns through its culture of transparency, alignment and accountability CODI has been executing the same TOTAL RETURN FROM MAY 16, 2006
Slide 8: Investment Thesis
Investment Thesis 8
Slide 9: Why CODI?
Why CODI? CODI’s core principles — which have differentiated our business for nearly 16 years — have never been more relevant or produced stronger results for shareholders Permanent Capital Benefits to Owning a Family Clear Alignment 01 Is Strategic Capital 02 of Uncorrelated Subsidiaries 03 with In
Slide 10: Why CODI Now?
STRONG BALANCE SHEET • Leverage 2.9x CODI IS POSITIONED TO DELIVER • Approximately $600mm of availability to REGARDLESS OF ECONOMIC deploy CLIMATE LOWEST COST OF CAPITAL IN OUR • If economic expansion — ten remaining Why CODI HISTORY • 2021 debt added of $300M at 5.00% of subsidiaries producing stro
Slide 11: Significant Events in 2021 & 2020
Significant Events in 2021 & 2020 Acquisitions Reported Positive Fourth Quarter Refinanced Debt Marucci Sports BOA Technology Lugano Diamonds Financial Results March 2021 April 2020 October 2020 September 2021 • Acquired for $454mm; • Acquired for $256 mm • Branded Consumer businesses QTD net • Issu
Slide 12: Closer Look at the Strategy
Closer Look at the Strategy 12
Slide 13: The Permanent Capital Advantage
The Permanent Capital Advantage CODI can remain patient, poised to efficiently deploy capital in pursuit of new acquisitions while also sustainably investing in our subsidiaries. Our actions over the past two years demonstrate the effectiveness of this strategy: Unique structure supports value creat
Slide 14: CODI in Action
CODI in Action Permanent capital structure drives value at every stage of investment as CODI leverages its sector expertise and superior governance and transparency to build businesses for the long-term Strategic Active 01 Acquisitions 02 Management • Decentralized, regional business • Enables a con
Slide 15: Commitment to ESG
Commitment to ESG Our mission is to deliver superior investment results while mitigating risk and conducting our business in a socially responsible and ethical manner ESG is embedded in all aspects Committed to reducing use of virgin plastic by at of our investment process from least 50% within 10 y
Slide 16: Subsidiary Snapshot
Subsidiary Snapshot ($ millions) 12/31/21(1) Purchase Price + Subsidiaries Year Acquired Revenue Adj. EBITDA Adj. EBITDA Margin Maintenance Capex Growth Capex Add-ons 2016 $445 $65 15% $2.6 $7.3(2) $400 2017 $270 $51 19% $4.7 — $248 2010 $94 $20 21% $0.2 $0.3 $168 2021 $125 $41 33% $0.3 — $268 2020
Slide 17: Diversity producing consistent cash flow and earnings
Diversity producing consistent cash flow DECEMBER 31, 2021 PRO FORMA YTD REVENUES AND SUBSIDIARY EBITDA OF $2.0B AND and earnings $396M, RESPECTIVELY DIVERSIFIED CASH FLOWS FROM 11.5% 5.0% 10 SUBSIDIARIES 10.5% 5.3% • 4 niche industrial subsidiaries representing 39% of Revenues and 32% of Adjusted E
Slide 18: History of Successfully Deleveraging
History of Successfully Deleveraging CODI has a demonstrated history of paying down its debt and is committed to staying conservatively levered $72MM FOXF 3.9x 3.9x Secondary & 3.7x $100MM CODI 3.7x Secondary Ravin Add-on 3.6x $100MM Preferred Offering Add-ons of HOCI, NII, Tula, Phoenix, & EWS Acqu
Slide 19: Improving Cost of Capital
Improving Cost of Capital MAY 2006 DEC 2011 DEC 2021 15% 9% 27% 51% 40% 73% 85% Equity Debt Equity Debt Equity Debt Preferred Rate on debt — 5.2%* Rate on debt — 10.9% Rate on debt — 8.8% Rate on preferred — 7.7% *If the Company drew its entire Revolver, its effective rate on debt would decline to ~
Slide 20: C-Corp Tax Reclassification Benefits
C-Corp Tax Reclassification Benefits Creates clear alignment with investors by simplifying corporate structure and attracting additional investors NOTE: Reclassified to C-Corp on September 1, 2021 We believe there are significant benefits to reclassifying as a C-Corp Broadens pool of investors by ma
Slide 21: Appendix
Appendix 21 6
Slide 22: CODI Partnership Structure
CODI Partnership Structure COMPASS DIVERSIFIED HOLDINGS (“TRUST”) Allocation Interests(3) NYSE: CODI Sostratus LLC(1) (“Sostratus”) $600mm Revolver ($0 O/S at Dec. 31, 2021) COMPASS GROUP Management $1.0B Senior Unsecured Notes DIVERSIFIED HOLDINGS LLC Services Agreement Compass Group Management LLC
Slide 23: Case Study: Manitoba Harvest
Case Study PURCHASE PRICE C$132mm OWNERSHIP AND MANAGEMENT SUCCESSFUL INVESTMENT (JULY 2015) • Recruited Bill Chiasson, a former CEO of a CODI portfolio company, to • In February 2019, CODI completed the 100% sale of Manitoba Harvest transition from founder led business to Tilray Inc. distribution (
Slide 24: Case Study: Clean Earth
Case Study PURCHASE PRICE VALUE CREATION SUCCESSFUL INVESTMENT (AUG 2014) $251mm • Worked with management to execute an aggressive add-on • “In June 2019, CODI completed the 100% sale of Clean acquisition strategy, repositioning the company’s end markets Earth to Harsco Corporation (NYSE: HSC), a pr
Slide 25: Case Study: FOX Factory
Case Study PURCHASE PRICE VALUE CREATION SUCCESSFUL INVESTMENT (JANUARY 2008) $80mm • IPO provided increased capital availability and access to lower • In August 2013, CODI completed an Initial Public Offering cost of capital to fund growth initiatives of FOX Factory Holding Corp. (NASDAQ:FOXF) at $
Slide 26: Current Subsidiaries
bad a r 7 hy vf 5 H e ;, Se ad os ae Ant 08 co one eee Current Subsidiaries
Slide 27: Subsidiary Profile: 5.11
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (AUGUST 2016) • Passionate and enthusiastic customer base $400mm Revenue ($ millions) Adjusted EBITDA ($ millions) • Entrenched position in the professional market providing stable cash flow Year Ended 12/31/2021 $445.0 $65.1 • Broad customer base and
Slide 28: Subsidiary Profile: Velocity Outdoor
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (JUNE 2017) • Market share leader in airguns and crossbows $152mm Revenue ($ millions) Adjusted EBITDA ($ millions) • Unrivaled sourcing and manufacturing capabilities allows + $97mm add-on acquisitions for penetration into new markets Year Ended 12/31
Slide 29: Subsidiary Profile: Ergobaby
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (SEPTEMBER 2010) • Carrier endorsed as “one of the 20 best products in the $85mm last 20 years” by Parenting Magazine Revenue ($ millions) Adjusted EBITDA ($ millions) +$83mm add-on acquisitions • Superior design resulting in improved comfort for both
Slide 30: Subsidiary Profile: Lugano
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (SEPTEMBER 2021) $256mm • World-class design capabilities creates exquisite, one-of-a- Revenue ($ millions) Adjusted EBITDA ($ millions) kind jewelry • Unique retail strategy improves client experience Proforma Year Ended 12/31/2021 $125.1 $41.4 • High
Slide 31: Subsidiary Profile: Marucci Sports
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (APRIL 2020) • Leading position in the professional market $200mm Revenue ($ millions) Adjusted EBITDA ($ millions) • Enthusiast and aspirational brands +$48mm add-on acquisitions Year Ended • Vertically integrated wood bat operations $118.2 $29.5 12/3
Slide 32: Subsidiary Profile: BOA
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (OCTOBER 2020) • Market leader with strong brand awareness in core $454mm categories Revenue ($ millions) Adjusted EBITDA ($ millions) • Diverse customer base with global end-market focus Year Ended • Broad intellectual property position creates barrie
Slide 33: Subsidiary Profile: Sterno
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (OCTOBER 2014) • Leading manufacturer in a niche market $160mm Revenue Adjusted EBITDA • Iconic brand with over 100 year history ($ millions) ($ millions) +$184mm add-on acquisition • Strong management team with proven ability to make Year Ended accret
Slide 34: Subsidiary Profile: Altor Solutions
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (FEBRUARY 2018) • A leader in molded foam protective packaging $248mm Revenue Adjusted EBITDA • National manufacturing footprint of 19 plants provides: ($ millions) ($ millions) +$73.5mm add-on • Ability to scale raw material purchases Year Ended acqui
Slide 35: Subsidiary Profile: Arnold
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (MARCH 2012) • Market share leader $129mm Revenue Adjusted EBITDA • Attractive and diverse end-markets ($ millions) ($ millions) +$36mm add-on acquisition • Engineering and product development capabilities Year Ended 12/31/2021 $139.9 $21.6 • Stable bl
Slide 36: Subsidiary Profile: Advanced Circuits
PURCHASE PRICE COMPETITIVE STRENGTHS FINANCIALS (MAY 2006) • Insulated from Asian • Manufacturing scale $81mm manufacturing due to small, produces high margins Revenue ($ millions) Adjusted EBITDA ($ millions) customized order size and • Diverse customer base — +$19mm add-on acquisition requirements
Slide 37: Financials
Financials 37
Slide 38: Balance Sheet — Condensed
Balance Sheet — Condensed (000’s) December 31, 2021 Current Assets: Cash and cash equivalents $ 157,125 Other current assets 986,344 Total current assets 1,143,469 Property, plant and equipment 178,393 Goodwill, intangibles and other assets 1,822,399 Total assets $ 3,144,261 Current Liabilities: Cur
Slide 39: Income Statement — Condensed
Income Statement — Condensed (000’s) December 31, 2021 Net Sales $ 1,841,668 Cost of Sales 1,115,711 Gross Profit $ 725,957 Operating Income $ 139,503 Interest expense, net (58,839) Other income (expense) (4,163) Loss on debt extinguishment (33,305) Provision for income taxes 18,337 Income from disc
Slide 40: Cash Flow Statement — Condensed
Cash Flow Statement — Condensed (000’s) December 31, 2021 Net cash provided in operating activities $ 134,051 Net cash used in investing activities $ (317,496) Net cash provided in financing activities $ 273,206 Effect of foreign currency on cash $ 228 Net increase (decrease) in cash and cash equiva
Slide 41: Net Income (Loss) to Non-GAAP Adjusted Earnings
Net Income (Loss) to Non-GAAP Adjusted Earnings In 000’s Three Months Ended Year Ended March 31, 2021 June 30, 2021 September 30,2021 December 31, 2021 December 31, 2021 Net income (loss) $ 21,966 $ (11,251) $ 90,156 $ 25,908 $ 126,809 Gain on sale of discontinued operations, net of tax — — 72,745 2
Slide 42: Net Income (Loss) to Non-GAAP Adjusted Earnings
Net Income (Loss) to Non-GAAP Adjusted Earnings In 000’s Three Months Ended Year Ended March 31, 2020 June 30, 2020 September 30,2020 December 31, 2020 December 31, 2020 Net income (loss) $ 4,880 $ (7,366) $ 20,903 $ 8,780 $ 27,197 Gain on sale of discontinued operations, net of tax — — 100 — 100 In
Slide 43: Adjusted Earnings to Adjusted EBITDA
Adjusted Earnings to Adjusted EBITDA In 000’s Three Months Ended Year Ended March 31, 2021 June 30, 2021 September 30,2021 December 31, 2021 December 31, 2021 Adjusted Earnings $ 26,161 $ 27,880 $ 31,150 $ 32,497 $ 117,668 Add: Depreciation 8,557 8,945 9,854 9,980 37,336 Income Taxes 5,308 8,344 8,4
Slide 44: Adjusted Earnings to Adjusted EBITDA
Adjusted Earnings to Adjusted EBITDA In 000’s Three Months Ended Year Ended March 31, 2020 June 30, 2020 September 30,2020 December 31, 2020 December 31, 2020 Adjusted Earnings $ 7,556 $ 449 $ 24,264 $ 22,686 $ 54,955 Add: Depreciation 7,334 7,628 7,852 8,317 31,131 Income Taxes (1,744) 5,648 (662)
Slide 45: Adjusted EBITDA
Adjusted EBITDA Year ended December 31, 2021 Corporate 5.11 BOA Marucci Velocity Altor Arnold Sterno Consolidated Ergobaby Lugano Sports Outdoor Solutions Net income from continuing operations (1) $ (72,624) $ 20,152 $ 21,178 $ 5,079 $ 5,239 $ 10,232 $ 23,035 $ 7,871 $ 5,013 $ (316) $ 24,859 Adjuste
Slide 46: Adjusted EBITDA
Adjusted EBITDA Year ended December 31, 2020 Corporate 5.11 BOA Ergobaby Liberty Marucci Velocity ACI Arnold Altor Sterno Consolidated Sports Outdoor Solutions Net income (loss) $(19,065) $12,356 $(2,640) $725 $9,902 $(4,785) $11,161 $13,170 $(3,539) $6,092 $3,820 $27,197 Adjusted for: Provision (be
Slide 47: Adjusted EBITDA
Adjusted EBITDA Year Ended December 31, 2019 Velocity Advanced Corporate 5.11 Ergobaby Liberty Outdoor Circuits Arnold Altor Solutions Sterno Consolidated Net income (loss) (1) $ 282,240 $ 2,059 $ 4,793 $ 3,130 $ (36,982) $ 14,970 $ 700 $ 2,883 $ 16,447 $ 290,240 Adjusted for: Provision (benefit) fo
Slide 48: CAD Reconciliation
CAD Reconciliation Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended (in thousands) 12/31/2021 12/31/2020 12/31/2019 12/31/2018 12/31/2017 12/31/2016 Net Income $126,809 $27,197 $307,141 $(1,790) $33,612 $56,530 Adjustment to reconcile net income to cash provided by operating activit
Slide 49: Thank you!
Thank you!
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