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 Day (December 2020)
49 slides from D/b/a Compass Diversified Holdings Shares Of Beneficial Interest's investor day presentation, Dec 10, 2020
Slide 1: CODI Investor Day Presentation December 2020
CODI Investor Day Presentation December 2020
Slide 2: Welcome
2 Welcome Elias Sabo
Slide 3: Today's Presenters
3 Today’s Presenters ELIAS SABO Founding Partner & CEO Responsible for directing CODI’s strategy Investment Committee Member Joined The Compass Group in 1998 as one of its founding partners Graduate of Rensselaer Polytechnic Institute RYAN FAULKINGHAM EVP & CFO Responsible for capital raising, accou
Slide 4: Legal Disclaimer
4 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 identifi
Slide 5: Today's Agenda
5 Today’s Agenda 1 CODI Prepared Remarks — Elias Sabo 2 Subsidiary Update — Pat Maciariello Disciplined Approach and Structural Advantage 3 BOA Technology Presentation — Shawn Neville Transforming CODI’s Portfolio 4 BOA Technology Q&A — Shawn Neville and Elias Sabo Competitive Advantages 5 CODI Fina
Slide 6: Prepared Remarks
6 Prepared Remarks 6 Elias Sabo
Slide 7: CODI By The Numbers
7 CODI BY THE NUMBERS As of 9/30/2020 Provides access to a strategy typically reserved for private equity investors without the barriers to entry CODI is an experienced acquirer, manager and opportunistic divestor of established North American middle-market businesses; currently the portfolio is mad
Slide 8: Disciplined Approach and Structural Advantage in Action
8 Disciplined Approach and Structural Advantage in Action CODI’s permanent capital structure provides a competitive advantage throughout the entire lifecycle of an asset from sourcing to exit and through various economic cycles Our actions over the past two years demonstrate the effectiveness of thi
Slide 9: Transforming CODI's Portfolio
9 Transforming CODI’s Portfolio THE COMPOSITION OF CODI’S PORTFOLIO HAS CHANGED SIGNIFICANTLY OVER THE PAST TWO YEARS • Capitalized on market conditions in 2019 to divest two companies at strong valuations • Leveraged current market dislocation to acquire two best-in-class consumer businesses in 202
Slide 10: CODI Capital Allocation
10 CODI Capital Allocation Clean Earth (LTM 6/30/19) Manitoba Harvest (FY 2018) Total Divested BOA (estimated FY 2019) Marucci (estimated FY 2019) BOA + Marucci (estimated FY 2019) EBITDA $42 $5 $47 $30 $14 $44 CapEx $11 $0 $11 $4 $1 $5 Cash Taxes $1 $0 $1 $5 $0 $5 Cash Flow to CODI1 $30 $5 $35 $21
Slide 11: Clear Alignment with Investors
11 Clear Alignment with Investors Benefits to Owning a Family of Uncorrelated Subsidiaries Permanent Capital is Strategic Capital Actively Manage Subsidiaries for the Long Term • Opportunistic in capital deployment • Enables long-term approach • “Eliminates” traditional PE investment horizon pressur
Slide 12: The Permanent Capital Advantage
12 The Permanent Capital Advantage Certainty of financing and speed of closure Enables a conservative, low leverage approach Invest in businesses to drive long term value creation Ability to hold subsidiaries until divestiture optimizes outcome for shareholders Traditional private equity players are
Slide 13: Strategic Acquisitions, Active Management, Opportunistic Divestitures
13 Strategic Acquisitions Active Management Opportunistic Divestitures1 2 3 • Decentralized, regional business development efforts • Balance sheet provides certainty of financing and speed of closure • Permanent capital avoids “moral hazard” faced by private equity managers operating under a fixed f
Slide 14: Management Team Alignment
14 Management Team Alignment Compared to both publicly-traded peers and market indices, CODI has consistently generated superior returns through its culture of transparency, alignment and accountability TOTAL RETURN FROM MAY 16, 2006 THROUGH DECEMBER 3, 2020 381.3% 259.4% 214.2% 46.9% CODI S&P 500 R
Slide 15: Diversity producing consistent cash flow and earnings
15 Diversity producing consistent cash flow and earnings Note: References to Adjusted EBITDA includes Pro Forma information for Marucci and BOA. SEPTEMBER 30, 2020 TTM REVENUES AND SUBSIDIARY PRO FORMA ADJUSTED EBITDA OF $1.6B AND $284M, RESPECTIVELY Subsidiary Pro Forma Adjusted EBITDA DIVERSIFIED
Slide 16: Pillars of Our Strategy: Commitment to ESG
16 PILLARS OF OUR STRATEGY Commitment to ESG Our mission is to deliver superior investment results while mitigating risk and conducting our business in a socially responsible and ethical manner ESG is embedded in all aspects of our investment process from the original investment selection, to the su
Slide 17: Subsidiary Update
17 Subsidiary Update Pat Maciariello
Slide 18: Subsidiary Snapshot
18 Subsidiary Snapshot ($ millions) Subsidiaries Year Acquired TTM 09/30/20(1) Revenue Adj. EBITDA Adj. EBITDA Margin 2006 $91 $28 31% 2012 $106 $12 11% 2018 $117 $27 23% 2014 $364 $57 16% Total Niche Industrial: $678 $124 18% 2020 $106 $31 29% 2010 $81 $17 21% 2010 $109 $17 16% 2020 $67 $12 18% 201
Slide 19: BOA Technology Acquisition
19 ACQUIRED $454mm COMPETITIVE STRENGTHS • Disruptive, innovative and high-quality products • Large addressable market • Broad intellectual property position PURCHASE PRICE October 16, 2020 INDUSTRY Designer and marketer of dial-based closure systems that deliver performance fit across footwear, hea
Slide 20: Financial Review
20 Financial Review Ryan Faulkingham
Slide 21: Pro-Forma Balance Sheet — Summary Items
21 Pro-Forma Balance Sheet — Summary Items (000,000’s) September 30, 2020 Summary of BOA Acquisition Pro-Forma September 30, 2020 Current Assets: Cash and cash equivalents $177 ($100) $77 Other current assets $624 — $624 Total current assets $801 (100) $701 Property, plant and equipment $155 — $155
Slide 22: History of Successfully Deleveraging
22 History of Successfully Deleveraging CODI has a demonstrated history of paying down its debt and is committed to staying conservatively levered 3.2x 3.0x 2.1x 1.8x 2.4x 2.9x 2.5x 2.6x 2.8x 3x 3.5x 3.5x 3.9x 3.9x 3.6x 1.9x 1.9x 1.4x 1.75x 1.9x 1.83 ~3.2x Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 S
Slide 23: Revenue and EBITDA
23 Revenue and EBITDA * As if Marucci was acquired 1/1/19, see appendix for reconciliation GUIDANCE FULL YEAR 2020 Range PF Adj. EBITDA $270,000 – $280,000 Payout Ratio 100% – 90% PF REVENUE — Q3 PF REVENUE — YTD PF ADJ. EBITDA — Q3 PF ADJ. EBITDA — YTD Three months ended September 30, 2020 Three mo
Slide 24: Improving Cost of Capital
24 Improving Cost of Capital MAY 2006 DEC 2011 SEPT 2020 PRO FORMA FOR BOA Rate on debt — 6.0%* Rate on preferred — 7.7% Rate on debt — 8.8%Rate on debt — 10.9% 85% 15% Equity Debt 73% 27% Equity Debt 49% 38% 13% Equity Debt Preferred *If we drew our entire Revolver, our effective rate on debt would
Slide 25: Closing Remarks
25 Closing Remarks Elias Sabo
Slide 26: Strategy for 2021 and Beyond
26 Strategy for 2021 and Beyond COMPELLING OPPORTUNITIES FOR CODI TO GENERATE LONG TERM SHAREHOLDER VALUE DURING MARKET DISLOCATIONS LIKE WE ARE CURRENTLY EXPERIENCING Executing on proven and disciplined acquisition strategy Improving the operating performance of our companies Opportunistically dive
Slide 27: Appendix
Appendix
Slide 28: Current Subsidiaries
itt tlecked Current Subsidiaries
Slide 29: 5.11 Subsidiary Profile
29 PURCHASE PRICE (AUGUST 2016) $400mm Revenue($ millions) Adjusted EBITDA($ millions) Nine Months Ended 9/30/2020 $281.8 $36.3 Nine Months Ended 9/30/2019 $279.0 $31.6 Year Ended 12/31/2019 $388.6 $46.9 Year Ended 12/31/2018 $347.9 $32.3 Year Ended 12/31/2017 $310.0 $38.5 FINANCIALSCOMPETITIVE STRE
Slide 30: Velocity Outdoor Subsidiary Profile
30 PURCHASE PRICE (JUNE 2017) $152mm + $97mm add-on acquisitions (1) Includes revenue of $33.5 and adjusted EBITDA of $10.8 related to Ravin add-on acquisition (2) Includes revenue of $30.0 and adjusted EBITDA of $7.5 related to Ravin add-on acquisition Revenue ($ millions) Adjusted EBITDA ($ millio
Slide 31: Ergobaby Subsidiary Profile
31 PURCHASE PRICE (SEPTEMBER 2010) $85mm +$83mm add-on acquisitions Revenue ($ millions) Adjusted EBITDA ($ millions) Nine Months Ended 9/30/2020 $59.2 $13.8 Nine Months Ended 9/30/2019 $68.7 $16.7 Year Ended 12/31/2019 $90.0 $20.3 Year Ended 12/31/2018 $90.6 $21.1 Year Ended 12/31/2017 $103.0 $33.0
Slide 32: Liberty Safe Subsidiary Profile
32 PURCHASE PRICE (MARCH 2010) $70mm +$1mm add-on acquisition Revenue ($ millions) Adjusted EBITDA ($ millions) Nine Months Ended 9/30/2020 $80.6 $13.9 Nine Months Ended 9/30/2019 $67.6 $7.6 Year Ended 12/31/2019 $96.2 $10.9 Year Ended 12/31/2018 $82.7 $8.1 Year Ended 12/31/2017 $92.0 $11.7 FINANCIA
Slide 33: Marucci Sports Subsidiary Profile
33 PURCHASE PRICE (APRIL 2020) $200mm Revenue ($ millions) Adjusted EBITDA ($ millions) Proforma Nine Months Ended 9/30/2020 $47.3 $8.6 Proforma Nine Months Ended 9/30/2019 $50.0 $11.0 Proforma Year Ended 12/31/2019 $69.6 $14.2 FINANCIALSCOMPETITIVE STRENGTHS • Leading position in the professional m
Slide 34: BOA Technology Subsidiary Profile
34 PURCHASE PRICE (OCTOBER 2020) $454mm Revenue($ millions) Adjusted EBITDA($ millions) Proforma Nine Months Ended 9/30/2020 $77.2 $24.2 Proforma Nine Months Ended 9/30/2019 $77.8 $23.1 Proforma Year Ended 12/31/2019 $106.3 $29.9 FINANCIALSCOMPETITIVE STRENGTHS • Market leader with strong brand awar
Slide 35: Sterno Subsidiary Profile
35 PURCHASE PRICE (OCTOBER 2014) $160mm +$184mm add-on acquisition Revenue ($ millions) Adjusted EBITDA ($ millions) Nine Months Ended 9/30/2020 $258.1 $34.8 Nine Months Ended 9/30/2019 $289.1 $46.5 Year Ended 12/31/2019 $395.4 $68.5 Proforma Year Ended 12/31/2018 (1) $405.9 $69.3 Proforma Year Ende
Slide 36: Foam Fabricators Subsidiary Profile
36 PURCHASE PRICE (FEBRUARY 2018) $248mm +$13mm add-on acquisition Revenue ($ millions) Adjusted EBITDA ($ millions) Nine Months Ended 9/30/2020 $89.3 $22.0 Nine Months Ended 9/30/2019 $93.6 $22.7 Year Ended 12/31/2019 $121.4 $28.5 Pro forma Year Ended 12/31/2018 $128.5 $29.4 Pro forma Year Ended 12
Slide 37: Arnold Magnetic Technologies Subsidiary Profile
37 PURCHASE PRICE (MARCH 2012) $129mm Revenue($ millions) Adjusted EBITDA($ millions) Nine Months Ended 9/30/2020 $76.4 $8.0 Nine Months Ended 9/30/2019 $90.4 $11.6 Year Ended 12/31/2019 $120.0 $15.4 Year Ended 12/31/2018 $117.9 $14.0 Year Ended 12/31/2017 $105.6 $10.3 FINANCIALSCOMPETITIVE STRENGTH
Slide 38: Advanced Circuits Subsidiary Profile
38 PURCHASE PRICE (MAY 2006) $81mm +$19mm add-on acquisition Revenue ($ millions) Adjusted EBITDA ($ millions) Nine Months Ended 9/30/2020 $67.4 $20.9 Nine Months Ended 9/30/2019 $67.4 $21.4 Year Ended 12/31/2019 $90.8 $28.9 Year Ended 12/31/2018 $92.5 $30.0 Year Ended 12/31/2017 $87.8 $27.2 FINANCI
Slide 39: Financials
39 Financials
Slide 40: Balance Sheet — Condensed
40 Balance Sheet — Condensed (000’s) September 30, 2020 Current Assets: Cash and cash equivalents $ 176,819 Other current assets 623,856 Total current assets 800,675 Property, plant and equipment 155,601 Goodwill, intangibles and other assets 1,235,708 Total assets $ 2,191,984 Current Liabilities: C
Slide 41: Income Statement — Condensed
41 Income Statement — Condensed (000’s) YTD September 30, 2020 Net Sales $ 1,085,979 Cost of Sales 695,304 Gross Profit $ 390,675 Operating Income $ 62,883 Interest expense, net (32,122) Other income (expense) (3,967) Provision (benefit) for income taxes 8,477 Income from discontinued operations, ne
Slide 42: Cash Flow Statement — Condensed
42 Cash Flow Statement — Condensed (000’s) YTD September 30, 2020 Net cash provided in operating activities $ 112,872 Net cash used in investing activities $ (236,502) Net cash provided by financing activities $ 200,395 Effect of foreign currency on cash $ (260) Net increase in cash and cash equival
Slide 43: Adjusted EBITDA Nine months ended September 30, 2020
43 Adjusted EBITDA Nine months ended September 30, 2020 Corporate 5.11 Ergobaby Liberty Marucci Sports Velocity Outdoor ACI Arnold Foam Sterno Consolidated Net income (loss) $(10,535) $5,515 $1,837 $7,119 $(5,334) $4,245 $10,980 $(1,719) $4,188 $2,131 $18,417 Adjusted for: Provision (benefit) for in
Slide 44: Adjusted EBITDA Nine months ended September 30, 2019
44 Adjusted EBITDA Nine months ended September 30, 2019 (1) Net income (loss) does not include loss from discontinued operations for the nine months ended September 30, 2019. Corporate 5.11 Ergobaby Liberty Marucci Sports Velocity Outdoor ACI Arnold Foam Sterno Consolidated Net income (loss) (1) $29
Slide 45: Adjusted EBITDA Year Ended December 31, 2019
45 Adjusted EBITDA Year Ended December 31, 2019 Note: Excludes adjusted EBITDA information from Clean Earth and Manitoba Harvest Corporate 5.11 Ergobaby Liberty Velocity Outdoor Advanced Circuits Arnold Foam Fabricators Sterno Consolidated Net income (loss) (1) $ 282,240 $ 2,059 $ 4,793 $ 3,130 $ (3
Slide 46: Adjusted EBITDA Year Ended December 31, 2018
46 Adjusted EBITDA Year Ended December 31, 2018 Note: Excludes adjusted EBITDA information from Clean Earth and Manitoba Harvest Corporate 5.11 Ergobaby Liberty Velocity Outdoor AdvancedCircuits Arnold Foam Sterno Consolidated Net income (loss) $ (35,018) $ (12,079) $ 4,937 $ 1,161 $ (4,458) $ 15,02
Slide 47: Adjusted EBITDA Year Ended December 31, 2017
47 Adjusted EBITDA Year Ended December 31, 2017 Note: Excludes adjusted EBITDA information from Clean Earth and Manitoba Harvest Corporate 5.11 Velocity Outdoor Ergobaby Liberty Advanced Circuits Arnold Sterno Consolidated Net income (loss) $ (22,790) $ (9,405) $ 7,634 $ 16,674 $ 4,861 $ 17,503 $ (1
Slide 48: CAD Reconciliation
48 CAD Reconciliation Year to Date Year to Date Year Ended Year Ended Year Ended Year Ended Year Ended (in thousands) 9/30/2020 9/30/2019 12/31/2019 12/31/2018 12/31/2017 12/31/2016 12/31/2015 Net Income $18,417 $301,788 $307,141 $(1,790) $33,612 $56,530 $165,770 Adjustment to reconcile net income t
Slide 49: Thank you!
Thank you!
Compass Diversified Holdings — Investor Day (December 2020) on 6ix