Compass Diversified Holdings
Investor Relations and Media Contacts:
James J. Bottiglieri
The IGB Group
Chief Financial Officer
Leon Berman / Tyler Wilson
212.477.8438 / 646.673.9701
Compass Diversified Holdings Reports Third Quarter 2008 Financial Results
Cash Flow Available for Distribution and Reinvestment Expands 22.5% to $15.7 million
Third Quarter Cash Distribution Increases 5% to $0.34 per share
Westport, Conn., November 10, 2008
Compass Diversified Holdings (Nasdaq GS: CODI) (CODI or the
Company), a leading acquirer and manager of middle market businesses, announced today its
consolidated operating results for the three and nine months ended September 30, 2008.
2008 Third Quarter Highlights
Generated Cash Flow Available for Distribution and Reinvestment (Cash Flow or CAD)
of $15.7 million, up from $12.8 million in the prior year quarter, a 22.5% increase; and
Increased third quarter cash distribution by 5% to $0.34 per share. Distribution has
now been increased by approximately 30% since May 2006 IPO.
CODI increased its Cash Flow (see note regarding use of Non-GAAP Financial Measures below) to $15.7
million for the quarter ended September 30, 2008, as compared to $12.8 million for the prior year
period. On a trailing twelve month basis, CODIs Cash Flow for
the period ending September 30, 2008 was $57.1 million. CODIs weighted average number of shares
for the quarter ending September 30, 2008, the quarter ending September 30, 2007 and the twelve
months ending September 30, 2008 was approximately 31.5 million for each respective period.
CODIs Cash Flow is calculated after taking into account all interest expense, cash taxes paid and
maintenance capital expenditures, and includes the operating results for each of our subsidiaries
for the periods during which CODI owned them. However, Cash Flow excludes the gains from sales of
businesses which have totaled over $105 million since CODIs initial public offering.
Net income for the quarter ended September 30, 2008 was $5.3 million, as compared to $4.4 million
for the quarter ended September 30, 2007.
As of September 30, 2008, CODI had $89.7 million in cash and cash equivalents and over $280 million
in availability under its revolving credit facility. The Company has no significant debt maturities
On October 9, 2008, CODIs Board of Directors declared an increase in the Companys dividend by 5%
to $0.34 per share. The distribution was paid on October 31, 2008 to all CODI shareholders of
record as of October 24, 2008.
Joe Massoud, CEO of Compass Diversified Holdings, said, During the third quarter, we once again
posted solid results and increased our dividend while positioning the Company for strong operating
performance through economically difficult times. Specifically, we expanded cash available for
distribution 22.5% to $15.7 million. We also declared our third dividend increase since going
public in 2006, based on the successful application of our unique business model and performance of
our portfolio of subsidiary companies. We have now increased our distributions by approximately
30% in the two and a half years since going public.
Mr. Massoud continued, Going forward, with a diverse mix of leading niche businesses and
considerable financial flexibility, we believe CODI remains well positioned over the long term.
While near term macroeconomic conditions are challenging and will impact certain subsidiary
businesses, our overall portfolio remains strong, and will continue to generate Cash Flow that will
allow us to both pay sizeable distributions to our shareholders and reinvest in our business. We
also plan to take advantage of our substantial available capital and extremely healthy liquidity
position. In accomplishing this important objective, we intend to use our financial strength to
enhance the market positions of our subsidiaries and actively pursue attractive new platform
business opportunities that meet our strict valuation and diligence requirements.
Management will host a conference call this morning at 9:00 a.m. ET to discuss the latest corporate
developments and financial results. The dial-in number for callers in the U.S. is
(877) 795-3610 and the dial-in number for international callers is (719) 325-4807. The access code
for all callers is 4411756. A live webcast will also be available on the Companys website at
A replay of the call will be available through November 24, 2008. To access the replay, please dial
(888) 203-1112 in the U.S. and (719) 457-0820 outside the U.S., and then enter the access code
Note Regarding Use of Non-GAAP Financial Measures
CAD or Cash Flow, are non-GAAP measures used by the Company to assess its performance, as well as
its ability to sustain and increase quarterly distributions. A number of CODIs businesses have
seasonal earnings patterns, with the first quarter typically being the slowest of the year.
Accordingly, the Company believes that the most appropriate measure of its performance is over a
trailing or expected 12 month period. We have reconciled CAD, or Cash Flow, to Net Income and Cash
Flow Provided by Operating Activities on the Attached Schedules. We consider Net Income and Cash
Flow Provided by Operating Activities to be the most directly comparable GAAP financial measures to
CAD, or Cash Flow.
About Compass Diversified Holdings (CODI)
CODI was formed to acquire and manage a group of middle market businesses that are headquartered in
North America. CODI provides public investors with an opportunity to participate in the ownership
and growth of companies which have historically been owned by private equity firms, wealthy
individuals or families. CODIs disciplined approach to its target market provides opportunities
to methodically purchase attractive businesses at values that are accretive to its shareholders.
For sellers of businesses, CODIs unique structure allows CODI to acquire businesses efficiently
with no financing contingencies and, following acquisition, to provide its companies with
substantial access to growth capital.
Upon acquisition, CODI works with the executive teams of its subsidiary companies to identify and
capitalize on opportunities to grow those companies earnings and cash flows. These cash flows
support distributions to CODI shareholders.
AFM Holdings Corporation
and its consolidated subsidiaries, referred to as American Furniture,
is a low-cost manufacturer of upholstered stationary and motion furniture with the ability to
ship any product in its line within 48 hours of receiving an order. American Furniture is based
in Ecru, MS.
Anodyne Medical Device, Inc.
and its consolidated subsidiaries, referred to as AMD, is a
manufacturer of medical support surfaces and patient positioning devices,
primarily used for the prevention and treatment of pressure wounds experienced by patients with
limited or no mobility. AMD is based in Coral Springs, FL.
CBS Personnel Holdings, Inc.
and its consolidated subsidiaries, referred to as CBS Personnel,
is a provider of temporary staffing services in the United States. CBS Personnel is
headquartered in Cincinnati, OH and operates 435 branch locations in 35 states.
Compass AC Holdings, Inc.
and its consolidated subsidiaries, referred to as Advanced Circuits,
is a manufacturer of low-volume quick-turn and prototype rigid printed circuit boards (PCBs).
Advanced Circuits is based in Aurora, CO.
Fox Factory Holding Corp.
and its consolidated subsidiaries, referred to as Fox, is a designer,
manufacturer and marketer of high-end suspension products for mountain bikes, all terrain
vehicles, snowmobiles and other off-road vehicles. Fox is based in Watsonville, CA.
Halo Lee Wayne LLC
and its consolidated subsidiaries, referred to as Halo, is a distributor of
customized promotional products and serves more than 30,000 customers as a one-stop-shop
resource for design, sourcing, management and fulfillment across all categories of its
customers promotional products needs. Halo is based in Sterling, IL.
To find out more about Compass Diversified Holdings, please visit
This press release may contain certain forward-looking statements, including statements with regard
to the future performance of the Company. Words such as believes, expects, projects, and
future or similar expressions, are intended to identify forward-looking statements. These
forward-looking statements are subject to the inherent uncertainties in predicting future results
and conditions. Certain factors could cause actual results to differ materially from those
projected in these forward-looking statements, and some of these factors are enumerated in the risk
factor discussion in the Form 10-K filed by CODI with the Securities and Exchange Commission for
the year ended December 31, 2007 and other filings with the Securities and Exchange Commission.
CODI undertakes no obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
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A copy of this press release, and of past press releases, is available on the Compass
Diversified Holdings website located at www.compassdiversifiedholdings.com.