CODI (Advanced Circuits) Reports Q1 Financial Results

Author: 911EDA News Desk
May 26, 2015

Compass Diversified Holdings, an owner of leading middle market businesses, announced today its consolidated operating results for the three months ended March 31, 2015.

First Quarter 2015 Highlights

  • Generated Cash Flow Available for Distribution and Reinvestment of $15.5 million for the first quarter of 2015;
  • Reported a net loss of $25.3 million for the first quarter of 2015;
  • Paid a first quarter 2015 cash distribution of $0.36 per share in April 2015, bringing cumulative distributions paid to $12.1152 per share since CODI's IPO in May of 2006.

"During the first quarter, our leading niche industrial and branded consumer businesses generated predictable levels of free cash flow that were consistent with management's expectations," stated Alan Offenberg, CEO of Compass Diversified Holdings. "We are particularly pleased with the performances of our Ergobaby, American Furniture Manufacturing and Arnold Magnetics subsidiaries, with each reporting solid year-over-year revenue increases as well as double-digit operating income growth. Our latest acquisitions, Clean Earth and SternoCandleLamp, also delivered positive contributions to CAD reflecting their healthy and stable cash flows."

Mr. Offenberg added, "Our initiatives over the past year to enhance our liquidity and balance sheet have us well positioned to benefit from potential market opportunities. We will continue to reinvest in our current subsidiaries to drive future performance and complement their growth with attractive add-on acquisitions. Building on our past success, we will remain disciplined in deploying our capital into new platform acquisitions that strengthen our future prospects, while maintaining our commitment to provide cash distributions to our shareholders."

Operating Results

CODI reported Cash Flow (see Note Regarding Use of Non-GAAP Financial Measures below) of $15.5 million for the quarter ended March 31, 2015, as compared to $14.6 million for the prior year's comparable quarter. CODI's weighted average number of shares outstanding for the quarter ended March 31, 2015 was approximately 54.3 million as compared to approximately 48.3 million for the quarter ended March 31, 2014.

Cash Flow for the first quarter of 2015 reflects year-over-year growth in the Company's Ergobaby, American Furniture Manufacturing and Arnold Magnetics businesses, offset by a decline at the Company's Camelbak and Liberty Safe businesses.

CODI's Cash Flow is calculated after taking into account all interest expense, cash taxes paid and maintenance capital expenditures, and includes the operating results of each of our businesses for the periods during which CODI owned them. However, Cash Flow excludes the gains from monetizing interests in CODI's subsidiaries, which have totaled approximately $340 million since going public in 2006.

The net loss for the quarter ended March 31, 2015 was $25.3 million, as compared to net income of $7.4 million for the quarter ended March 31, 2014. During the first quarter ended March 31, 2015, CODI recorded an $8.9 million non-cash impairment charge for the Company's Tridien Medical subsidiary, reflecting a decline in the estimated current fair market value for this subsidiary.  In addition, during the first quarter of 2015, CODI's equity method investment in FOX Factory Holding Corp. ("FOX") declined $13.4 million.  The net income during the quarter ended March 31, 2014 included results of FOX which was deconsolidated from the financial statements in July 2014.

Liquidity and Capital Resources

As of March 31, 2015, CODI had approximately $20.5 million in cash and cash equivalents, $323 million outstanding on its term loan facility and $189 million of borrowings under its revolving credit facility. The Company has no significant debt maturities until 2019 and had borrowing availability of approximately $207 million at March 31, 2015 under its revolving credit facility. In addition, the Company's equity investment in its former subsidiary Fox Factory Holding Corp. is valued at $232 million.

First Quarter 2015 Distribution

On April 9, 2015, CODI's Board of Directors declared a first quarter distribution of $0.36 per share. The cash distribution was paid on April 29, 2015 to all holders of record as of April 22, 2015. Since its IPO in May of 2006, CODI has paid a cumulative distribution of $12.1152 per share.

About Compass Diversified Holdings (CODI)

CODI owns and manages a diverse family of established North American middle market businesses. Each of its current subsidiaries is a leader in its niche market.

CODI maintains controlling ownership interests in each of its subsidiaries in order to maximize its ability to impact long-term cash flow generation and value. The Company provides both debt and equity capital for its subsidiaries, contributing to their financial and operating flexibility. CODI utilizes the cash flows generated by its subsidiaries to invest in the long-term growth of the Company and to make cash distributions to its shareholders.

Our nine majority-owned subsidiaries include Advanced Circuits, manufacture quick-turn, small-run and production rigid printed circuit boards.

 

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