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 2021)
41 slides from D/b/a Compass Diversified Holdings Shares Of Beneficial Interest's investor day presentation, Dec 9, 2021
Slide 1: CODI Investor Day Presentation
CODI Investor Day Presentation December 9, 2021
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: CODI Presenters
CODI Presenters ELIAS SABO RYAN FAULKINGHAM PATRICK MACIARIELLO Founding Partner & CEO EVP & CFO Chief Operating Officer Responsible for directing CODI’s Responsible for capital raising, Managing Partner strategy accounting and reporting, financial Investment Committee Member controls, as well as ri
Slide 4: Agenda
Agenda 1 Introduction — Elias Sabo 2 Marucci Sports Presentation — Kurt Ainsworth 3 Marucci Sports Q&A — Kurt Ainsworth 4 CODI Remarks — Elias Sabo 5 CODI Subsidiary Update — Pat Maciariello 6 CODI Financial Review — Ryan Faulkingham 7 CODI Q&A — Elias Sabo, Ryan Faulkingham & Pat Maciariello 8 Clos
Slide 5: Compass Diversified (NYSE: CODI) Overview
Compass Diversified (NYSE: CODI) Overview 5 6
Slide 6: CODI Offers Shareholders a Unique Opportunity to Own Diverse Middle-Market Businesses
Compass Diversified Holdings (NYSE: CODI) Offers CODI BY THE NUMBERS As of 9/30/2021 Shareholders a Unique Opportunity To Own a Diverse Group of Leading Middle-Market Businesses 1998 FOUNDED IPO in 2006 Founded in 1998, CODI is an experienced acquirer and manager of established North American middle
Slide 7: Company Management Team Successfully Executing on Strategy to Create Value
Company Management Team Successfully Executing on Strategy to Create Value CODI has been executing the same Total return from May 16, 2006 through December 7, 2021(1) strategy for more than 23 years and has consistently generated superior 744.4% results Compensation structure aligns interest of shar
Slide 8: Lower Debt Cost of Capital Enables Greater Shareholder Returns
Lower Debt Cost of Capital Enables Greater Shareholder Returns $28.55 $25.50 $23.15 $19.06 $19.45 $17.24 $13.40 7.89% 7.89% 7.89% 6.37% 5.80% 5.82% 5.44% 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 Debt Cost of Capital CODI Stock Price* Building a competitive advantage and driving long-term shareholde
Slide 9: Kurt Ainsworth
Kurt Ainsworth Co-Founder & CEO, Marucci Sports Co-Founded Marucci Sports in 2009 Brokered a strategic alliance with Baseball Performance Lab Appointed CEO in April 2014 Former MLB pitcher for the San Led Marucci for nearly 13 years, Francisco Giants and overseeing product innovation, Baltimore Orio
Slide 10: Long-Term Strategic Vision for CODI
Long-Term Strategic Vision for CODI 10
Slide 11: Our Goal: $1 Billion of EBITDA in 5–7 Years
Our Goal: $1 Billion of EBITDA in 5 – 7 Years 11 6
Slide 12: Positioning CODI for Long-Term Success and Value Creation
Positioning CODI for Long-Term Success and Value Creation Benefits of Scale Diversification in Larger businesses with Lower weighted average Enhanced ability to companies and industries enhanced systems, cost of capital capitalize on new creating reduced financial capabilities and controls acquisiti
Slide 13: Multipronged Strategy to Growing EBITDA and Reaching CODI's Goal
Business Transformation Capital Allocation Healthcare Vertical Multipronged Strategy to Growing EBITDA and Reaching CODI’s Goal Growth Drivers 1 2 3 Business transformation Capital Allocation Healthcare vertical • Recently focused on premium, • Acquire new Platform businesses • Advantageous demograp
Slide 14: Business Transformation
Business Transformation Capital Allocation Healthcare Vertical 1 Business Transformation February 2019 May 2019 April 2020 October 2020 July 2021 September 2021 (Divestiture) (Divestiture) (Acquisition) (Acquisition) (Divestiture) (Acquisition) Raised awareness, grew Strengthened brand, industry Acq
Slide 15: Capital Allocation — Identifying New Opportunities for Growth
Business Transformation Capital Allocation Healthcare Vertical 2 Capital Allocation — Identifying New Opportunities for Growth Platform Acquisitions Investment in Subsidiaries • Continue the same strategy acquiring leading niche industrial • Strategic Add-Ons – Target 2-3 per year and branded consum
Slide 16: Exploring New Healthcare Vertical
Business Transformation Capital Allocation Healthcare Vertical 3 Exploring New Healthcare Vertical Attractive, high-growth Acyclical industry that will Strong alignment with market with strong industry bring valuable CODI’s existing Subsidiaries tailwinds diversification and stability priorities 16
Slide 17: Driving Financial and Operational Results Over the Last Years
Driving Financial and Operational Results Over the Last 10 Years Proforma Adjusted EBITDA Since 2011(1) $1B 11.2 rate (CAGR), Adj EBITDA over % compound annual growth past 10 years $385 $283 $292 $241 $213 $190 $198 $158 $170 $155 $133 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021* 2028 Tar
Slide 18: CODI's Corporate Values
CODI’s Corporate PA Values . [i
Slide 19: CODI is Committed to Continuing to Advance Corporate Values
CODI is Committed to Continuing to Advance Corporate Values Long-term approach enables subsidiaries to conduct business in a socially responsible and ethical manner SINCE INCEPTION CODI HAS OUR PEOPLE ARE OUR ONGOING ENHANCEMENT TO COMMITMENT TO RESPONSIBLE OPERATED WITH ESG TOP OF MIND GREATEST ASS
Slide 20: CODI Continues to Advance Its Governance Standards
CODI Continues to Advance Its Governance Standards SINCE ITS FORMATION CODI HAS PROVIDED A STRONG FURTHER ENHANCEMENTS TO CODI’S GOVERNANCE MODEL GOVERNANCE FRAMEWORK FOR ITS SHAREHOLDERS Senior leadership and Board of Directors are highly supportive and The majority of the Board of Directors is ind
Slide 21: Subsidiary Update
Subsidiary Update 21 6
Slide 22: Well positioned businesses with attractive attributes
Well positioned businesses with attractive attributes BRANDED CONSUMER NICHE INDUSTRIAL Significant Barriers Aspirational Brands to Entry Significant Market Share Significant Deep Competitive Customer Enthusiasm Moats High Free Cash Flow Conversion 22
Slide 23: CODI's Performance through challenging times
CODI’s Performance through challenging times Strong positioning and exceptional execution by CODI subsidiary management teams have allowed CODI to excel despite macro headwinds 2021 GLOBAL HEADWINDS Rapid Inflation Extremely tight labor supply Covid related factory shutdowns Shipping Disruption CODI
Slide 24: Lugano Diamonds & Jewelry Poised for Growth Amid Macro Trends
Lugano Diamonds & Jewelry Poised for Growth Amid Macro Trends Designer, Manufacturer and Marketer of One-of-a-Kind, High-End Jewelry Founded in 2004 and World-class design Unique event-based Long-lasting client Disrupting high-end competes in the high- capabilities creates marketing strategy connect
Slide 25: Lugano is Ideally Positioned to Benefit From CODI's Resources and Capital
Lugano is Ideally Positioned to Benefit From CODI’s Resources and Capital Well-positioned to emerge as a leading Additional capital flexibility will enable domestic and international luxury brand Lugano to opportunistically procure rare by leveraging CODI’s strong experience stones, expand its inter
Slide 26: Financial Review
Financial Review . Pe ; E
Slide 27: Revenue and EBITDA
Revenue and EBITDA (Figures in all tables below are in Millions) PF REVENUE — QTD PF REVENUE — YTD Three months ended Three months ended Increase Nine months ended Nine months ended Increase ($ % % September 30, 2021 September 30, 2020 (decrease) September 30, 2021 September 30, 2020 (decrease) Nich
Slide 28: Guidance
Guidance Reported Positive YTD Financial Results and Raised Guidance RAISED FULL YEAR GUIDANCE $380 – 390mm 30 – 33% Better than 55% Full Year 2021 Pro Forma Adjusted Implied YOY growth in Pro Forma Payout Ratio expected to improve for EBITDA guidance Adjusted EBITDA full year 2021 28
Slide 29: CODI's Strengthened Capital Structure
CODI’s Strengthened Capital Structure Consistent Financial Policy: Leverage 3.0 to 3.5 times DEC 2011 PURSUIT OF A LOWER WACC SEPT 2021 Since 2018 8.0% Senior Unsecured 8-Year Bond Due 2026 10% 27% $400 million in March 2018 + $200 million May 2020 8.8% 7.785% Preferred Equity Issuances 32% 5.44% Ra
Slide 30: Transformed Business Stands to Benefit from Increased Retained Cash
Transformed Business Stands to Benefit from Increased Retained Cash Significant increase in retained cash since 2017 (Before change in working capital) Strong subsidiary operating Growth in Retained Cash Over Past Five Years in USD (millions) performance leading to record retained cash performance $
Slide 31: Q&A
Q&A 31 6
Slide 32: Appendix
Appendix 32
Slide 33: Adjusted EBITDA YTD September 30, 2021
Adjusted EBITDA(1) YTD September 30, 2021 (In Thousands) Corporate 5.11 BOA Ergobaby Lugano Marucci Velocity Advanced Altor Solutions Arnold Sterno Consolidated Sports Outdoor Circuits Net income (loss) $ 8,028 $ 14,318 $ 16,908 $ 3,071 $ 681 $ 9,485 $ 19,157 $ 10,366 $ 5,892 $ 3,839 $ 1,491 $ 93,23
Slide 34: Adjusted EBITDA YTD September 30, 2020
Adjusted EBITDA(1) YTD ended September 30, 2020 (In Thousands) Corporate 5.11 Ergobaby Marucci Velocity Advanced Altor Solutions Arnold Sterno Consolidated Sports Outdoor Circuits Net income (loss) $ (13,346) $ 5,515 $ 1,837 $ (5,344) $ 4,245 $ 10,980 $ 4,188 $ (1,719) $ 2,131 $ 8,487 Adjusted for:
Slide 35: Adjusted EBITDA Year Ended December 31, 2020
Adjusted EBITDA Year Ended December 31, 2020 (In Thousands) Corporate 5.11 BOA Ergobaby Liberty Marucci Velocity Advanced Arnold Altor Sterno Consolidated Sports Outdoor Circuits 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 $27,19
Slide 36: Adjusted EBITDA Year Ended December 31, 2019
Adjusted EBITDA Year Ended December 31, 2019 (In Thousands) 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: Provisi
Slide 37: Adjusted EBITDA Year Ended December 31, 2018
Adjusted EBITDA Year Ended December 31, 2018 (In Thousands) Advanced Altor Corporate 5.11 Ergobaby Liberty Velocity Outdoor Circuits Arnold Solutions Sterno Consolidated Net income (loss) $ (35,018) $ (12,079) $ 4,937 $ 1,161 $ (4,458) $ 15,029 $ (740) $ 1,103 $ 12,451 $ (17,614) Adjusted for: Provi
Slide 38: CAD Reconciliation
CAD Reconciliation (In Thousands) Year to Date Year Ended Year Ended Year Ended Year Ended Year Ended 9/30/2021 12/31/2020 12/31/2019 12/31/2018 12/31/2017 12/31/2016 Net Income $100,901 $27,197 $307,141 $(1,790) $33,612 $56,530 Adjustment to reconcile net income to cash provided by operating activi
Slide 39: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (In Thousands) Year Ended Year Ended Year Ended Year Ended Year Ended 12/31/2020 12/31/2019 12/31/2018 12/31/2017 12/31/2016 Subsidiary Companies Corporate (13,879) (14,867) (14,267) (11,995) (11,206) 5.11 Tactical 54,660 46,900 32,303 38,544 16,886 BOA Technologies 8,
Slide 40: Retained Cash Reconciliation
Retained Cash Reconciliation (In Millions) Year to Date Year Ended Year Ended Year Ended Year Ended 9/30/2021 12/31/2020 12/31/2019 12/31/2018 12/31/2017 Adjustment to reconcile CAD to retained cash: Cash Available for Distribution or Reinvestment (CAD) $135.3 $110.6 $104.0 $93.7 $92.2 Less: Unused
Slide 41: Thank you
Thank you 41 6
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