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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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57-6218917
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(Jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Delaware
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20-3812051
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(Jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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301 Riverside Avenue
Second Floor
Westport, CT
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06880
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Shares representing beneficial interests in Compass Diversified Holdings (“common shares”)
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New York Stock Exchange
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Series A Preferred Shares representing Series A Trust Preferred Interest in Compass Diversified Holdings ("Series A Preferred Shares")
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New York Stock Exchange
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Series B Preferred Shares representing Series B Trust Preferred Interest in Compass Diversified Holdings ("Series B Preferred Shares")
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New York Stock Exchange
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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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•
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the “Trust” and “Holdings” refer to Compass Diversified Holdings;
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•
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the “Company” refer to Compass Group Diversified Holdings LLC;
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•
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“businesses”, “operating segments”, “subsidiaries” and “reporting units” all refer to, collectively, the businesses controlled by the Company;
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•
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the “Manager” refer to Compass Group Management LLC (“CGM”);
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•
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the “Trust Agreement” refer to the Second Amended and Restated Trust Agreement of the Trust dated as of December 6, 2016;
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•
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the "2014 Credit Facility" refer to the credit agreement, as amended, entered into on June 14, 2014 with a group of lenders led by Bank of America N.A. as administrative agent, as amended from time to time, which provides for a Revolving Credit Facility and a Term Loan;
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•
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the "2018 Credit Facility" refer to the amended and restated credit agreement entered into on April 18, 2018 among the Company, the Lenders from time to time party thereto (the "Lenders"), Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (the "agent") and other agents party thereto.
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•
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the "2018 Revolving Credit Facility" refers to the $600 million in revolving loans, swing line loans and letters of credit provided by the 2018 Credit Facility that matures in 2023;
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•
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the "2018 Term Loan" refer to the $500 million term loan provided by the 2018 Credit Facility that matures in June 2021;
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•
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the “LLC Agreement” refer to the fifth amended and restated operating agreement of the Company dated as of December 6, 2016;
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•
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“we”, “us” and “our” refer to the Trust, the Company and the businesses together.
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•
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our ability to successfully operate our businesses on a combined basis, and to effectively integrate and improve any future acquisitions;
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•
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our ability to remove our Manager and our Manager’s right to resign;
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our trust and organizational structure, which may limit our ability to meet our dividend and distribution policy;
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our ability to service and comply with the terms of our indebtedness;
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•
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our cash flow available for distribution and our ability to make distributions in the future to our shareholders;
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•
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our ability to pay the management fee, and profit allocation when due;
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•
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our ability to make and finance future acquisitions;
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•
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our ability to implement our acquisition and management strategies;
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•
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the regulatory environment in which our businesses operate;
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•
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trends in the industries in which our businesses operate;
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•
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changes in general economic or business conditions or economic or demographic trends in the United States and other countries in which we have a presence, including changes in interest rates and inflation;
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•
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environmental risks affecting the business or operations of our businesses;
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•
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our and our Manager’s ability to retain or replace qualified employees of our businesses and our Manager;
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•
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costs and effects of legal and administrative proceedings, settlements, investigations and claims; and
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•
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extraordinary or force majeure events affecting the business or operations of our businesses.
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•
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provide ongoing strategic and financial support for their businesses;
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•
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maintain a long-term outlook as to the ownership of those businesses where such an outlook is required for maximization of our shareholders’ return on investment; and
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•
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consummate transactions efficiently without being dependent on third-party transaction financing.
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1)
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The percentage holdings shown in respect to the trust reflect the ownership of the Trust common shares as of December 31, 2018.
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2)
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Our non-affiliated holders of common shares own approximately 84.0% of the Trust common shares and CGI Maygar Holdings, LLC owns approximately 13.4% of the Trust common shares and is our single largest holder. Path Spirit Limited is the ultimate controlling person of CGI Maygar LLC. Mr. Sabo, our Chief Executive Officer, is not a director, officer or member of CGI or any of its affiliates. The remaining 2.6% of Trust common shares are owned by our Directors and Officers.
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3)
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49.0% beneficially owned by certain persons who are employees and partners of our Manager. C. Sean Day, the Chairman of our Board of Directors, CGI and the former founding partners of the Manager, are non-managing members.
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4)
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Mr. Sabo is a partner of this entity.
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5)
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The Allocation Interests, which carry the right to receive a profit allocation, represent less than 0.1% equity interest in the Company.
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•
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there are fewer potential acquirers for these businesses;
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•
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third-party financing generally is less available for these acquisitions;
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•
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sellers of these businesses frequently consider non-economic factors, such as continuing board membership or the effect of the sale on their employees; and
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•
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these businesses are less frequently sold pursuant to an auction process.
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•
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recruiting and retaining talented managers to operate our businesses using structured incentive compensation programs, including non-controlling equity ownership, tailored to each business;
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•
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regularly monitoring financial and operational performance, instilling consistent financial discipline, and supporting management in the development and implementation of information systems to effectively achieve these goals;
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•
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assisting management in their analysis and pursuit of prudent organic growth strategies;
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•
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identifying and working with management to execute attractive external growth and acquisition opportunities;
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•
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assisting management in controlling and right-sizing overhead costs; and
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•
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forming strong subsidiary level boards of directors to supplement management in their development and implementation of strategic goals and objectives.
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•
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making selective capital investments to expand geographic reach, increase capacity, or reduce manufacturing costs of our businesses;
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•
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investing in product research and development for new products, processes or services for customers;
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•
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improving and expanding existing sales and marketing programs;
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•
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pursuing reductions in operating costs through improved operational efficiency or outsourcing of certain processes and products; and
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•
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consolidating or improving management of certain overhead functions.
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•
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leverage manufacturing and distribution operations;
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•
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leverage branding and marketing programs, as well as customer relationships;
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•
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add experienced management or management expertise;
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•
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increase market share and penetrate new markets; and
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•
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realize cost synergies by allocating the corporate overhead expenses of our businesses across a larger number of businesses and by implementing and coordinating improved management practices.
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•
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is an established North American based company;
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•
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maintains a significant market share in defensible industry niche (i.e., has a “reason to exist”);
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•
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has a solid and proven management team with meaningful incentives;
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•
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has low technological and/or product obsolescence risk; and
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•
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maintains a diversified customer and supplier base.
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•
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engages in a substantial level of internal and third-party due diligence;
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•
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critically evaluates the target management team;
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•
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identifies and assesses any financial and operational strengths and weaknesses of the target business;
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•
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analyzes comparable businesses to assess financial and operational performances relative to industry competitors;
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•
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actively researches and evaluates information on the relevant industry; and
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•
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thoroughly negotiates appropriate terms and conditions of any acquisition.
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•
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discounted cash flow analyses;
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•
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evaluation of trading values of comparable companies;
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•
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expected value matrices; and
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•
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examination of comparable recent transactions.
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Year ended December 31,
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Year ended December 31,
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Year ended December 31,
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||||||||||||||||||
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2018
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2017
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2016
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2018
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2017
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2016
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2018
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2017
|
||||||||
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Net Revenue
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Operating Income
(1)
|
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Total Assets
|
||||||||||||||||||
Branded Consumer:
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||||||||
5.11
|
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20.6
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%
|
|
24.4
|
%
|
|
11.2
|
%
|
|
3.2
|
%
|
|
(10.5
|
)%
|
|
(17.8
|
)%
|
|
19.8
|
%
|
|
26.1
|
%
|
Ergobaby
|
|
5.4
|
%
|
|
8.1
|
%
|
|
10.6
|
%
|
|
9.4
|
%
|
|
36.1
|
%
|
|
30.0
|
%
|
|
7.2
|
%
|
|
9.8
|
%
|
Liberty Safe
|
|
4.9
|
%
|
|
7.2
|
%
|
|
10.6
|
%
|
|
4.8
|
%
|
|
13.9
|
%
|
|
23.2
|
%
|
|
3.0
|
%
|
|
4.0
|
%
|
Manitoba Harvest
|
|
4.0
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%
|
|
4.4
|
%
|
|
6.1
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%
|
|
(1.4
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)%
|
|
(13.7
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)%
|
|
0.6
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%
|
|
5.5
|
%
|
|
7.8
|
%
|
Velocity Outdoor
|
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7.8
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%
|
|
6.2
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%
|
|
n/a
|
|
|
4.0
|
%
|
|
1.9
|
%
|
|
n/a
|
|
|
12.3
|
%
|
|
10.9
|
%
|
|
|
42.6
|
%
|
|
50.3
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%
|
|
38.5
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%
|
|
20.0
|
%
|
|
27.7
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%
|
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36.0
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%
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47.8
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%
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58.6
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%
|
Niche Industrial:
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|
|
|
|
|
|
|
|
|
|
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||||||||
Advanced Circuits
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5.5
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%
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|
6.9
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%
|
|
8.8
|
%
|
|
21.5
|
%
|
|
34.7
|
%
|
|
39.8
|
%
|
|
3.4
|
%
|
|
4.4
|
%
|
Arnold Magnetics
|
|
7.0
|
%
|
|
8.3
|
%
|
|
11.1
|
%
|
|
6.1
|
%
|
|
(8.4
|
)%
|
|
(22.6
|
)%
|
|
4.6
|
%
|
|
6.0
|
%
|
Clean Earth
|
|
15.8
|
%
|
|
16.6
|
%
|
|
19.3
|
%
|
|
11.8
|
%
|
|
17.7
|
%
|
|
13.9
|
%
|
|
17.2
|
%
|
|
19.4
|
%
|
Foam Fabricators
|
|
6.7
|
%
|
|
n/a
|
|
|
n/a
|
|
|
9.0
|
%
|
|
n/a
|
|
|
n/a
|
|
|
10.6
|
%
|
|
n/a
|
|
Sterno
|
|
22.5
|
%
|
|
17.8
|
%
|
|
22.4
|
%
|
|
31.7
|
%
|
|
28.2
|
%
|
|
32.9
|
%
|
|
15.9
|
%
|
|
11.2
|
%
|
|
|
57.4
|
%
|
|
49.7
|
%
|
|
61.5
|
%
|
|
80.0
|
%
|
|
72.3
|
%
|
|
64.0
|
%
|
|
51.8
|
%
|
|
41.0
|
%
|
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
0.4
|
%
|
|
0.5
|
%
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
Pants and Shorts (Men’s and Women’s) - $49.99 to $269.99
|
•
|
Woven Tops (Men’s and Women’s) - $39.99 to $229.99
|
•
|
Outerwear (Men’s and Women’s) - $69.99 to $119.99
|
•
|
Footwear (Men’s and Women’s) - $99.99 to $149.99
|
•
|
Bags and Packs - $59.99 to $249.99
|
•
|
Accessories - $19.99 to $79.99
|
•
|
4 styles of baby carriers - $115 - $180
|
•
|
3 styles of Infant Inserts - $25 - $38
|
•
|
3 styles of baby carriers - $149 - $900
|
•
|
1 style of Infant Inserts - $40
|
•
|
Expand Liberty’s product line into the broader home and office safe market through current customers or new distribution strategies;
|
•
|
Further develop international distribution by entering new countries and expanding current limited presence in Canada, Mexico and Europe;
|
•
|
Enter the residential security market through a strategic partnership with a provider of residential security service solutions to provide a more complete physical and electronic security solution;
|
•
|
Acquire businesses within the premium home and gun safe industry and/or leverage Liberty’s platform into new products or channels; and
|
•
|
Offer additional accessory products to existing distribution networks.
|
◦
|
Airguns
-
Building on the Silencing Barrel Device (SBD) technology, Velocity is introducing a line of multi-shot break-barrel models that feature a 10 shot clip that advances automatically. Velocity is also enjoying success with licensed products under the Remington, DPMS, and Bushmaster brands
.
|
◦
|
Archery
- On the heels of the successful 2016 launch of the CenterPoint crossbow line,Velocity has introduced new crossbow models at higher price point segments of the market, while continuing to build out its archery product line to include accessories and inclusive “ready-to-hunt” kits. Ravin recently introduced two new crossbow models that offer the same speed and accuracy as the current products in a lighter and shorter profile.
|
◦
|
Optics
- In addition to the recently launched three-model CenterPoint Spectrum First Focal Plane series of scopes, the company has plans to expand the CenterPoint optics offering to include binoculars and scope adapters. Additionally, following the launch of the grip activated GripSense lasers in 2017, the company has introduced a universal rail mounted laser featuring the same activation technology
.
|
•
|
Small-run PCBs
— These PCBs are typically manufactured for customers in research and development departments of OEMs, and academic institutions. Small-run PCBs are manufactured to the specifications of the customer, within certain manufacturing guidelines designed to increase speed and reduce production costs. Prototyping is a critical stage in the research and development of new products. These small-runs are used in the design and launch of new electronic equipment and are typically ordered in volumes of 1 to 50 PCBs. Because the small-run is used primarily in the research and development phase of a new electronic product, the life cycle is relatively short and requires accelerated delivery time frames of usually less than five days and very high, error-free quality. Order, production and delivery time, as well as responsiveness with respect to each, are key factors for customers as PCBs are indispensable to their research and development activities.
|
•
|
Quick-Turn Production PCBs
— These PCBs are used for intermediate stages of testing for new products prior to full scale production. After a new product has successfully completed the small-run phase, customers undergo test marketing and other technical testing. This stage requires production of larger quantities of PCBs in a short period of time, generally 10 days or less, while it does not yet require high production volumes. This transition stage between low-volume small-run production and volume production is known as quick-turn production. Manufacturing specifications conform strictly to end product requirements and order quantities are typically in volumes of 10 to 500. Similar to small-run PCBs, response time remains crucial as the delivery of quick-turn PCBs can be a gating item in the development of electronic products. Orders for quick-turn production PCBs conform specifically to the customer’s exact end product requirements.
|
•
|
Volume Production PCBs
— These PCBs, which we sometimes refer to as “long lead” and “sub-contract” are used in the full scale production of electronic equipment and specifications conform strictly to end product requirements. Volume Production PCBs are ordered in large quantities, usually over 100 units, and response time is less important, ranging between 15 days to 10 weeks or more.
|
|
Gross Sales by Products and Services
(1)
|
Year Ended December 31,
|
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|
||||
|
Small-run Production
|
18.9
|
%
|
|
20.4
|
%
|
|
21.8
|
%
|
|
|
Quick-Turn Production
|
33.0
|
%
|
|
33.0
|
%
|
|
31.8
|
%
|
|
|
Volume Production (including assembly)
|
45.4
|
%
|
|
44.8
|
%
|
|
45.2
|
%
|
|
|
Third Party
|
2.7
|
%
|
|
1.8
|
%
|
|
1.2
|
%
|
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(1)
|
As a percentage of gross sales, exclusive of sale discounts.
|
•
|
Numerous Unique Orders Per Day
— Advanced Circuits receives on average over 300 customer orders per day. Due to the large quantity of orders received, Advanced Circuits is able to combine multiple orders in a single panel design prior to production. Through this process, Advanced Circuits is able to reduce the number of costly, labor intensive equipment set-ups required to complete several manufacturing orders. As labor represents the single largest cost of production, management believes this capability gives Advanced Circuits a unique advantage over other industry participants.
|
•
|
Diverse Customer Base
— Advanced Circuits possesses a customer base with little industry or customer concentration exposure. For each of the years ended December 31, 2018, 2017 and 2016, no customer represented more than 2% of net sales.
|
•
|
Highly Responsive Culture and Organization
— A key strength of Advanced Circuits is its ability to quickly respond to customer orders and complete the production process. In contrast to many competitors that require a day or more to offer price quotes on small-run or quick-turn production, Advanced Circuits offers its customers quotes within seconds and the ability to place or track orders any time of day. In addition, Advanced Circuits’ production facility operates three shifts per day and is able to ship a customer’s product within 24 hours of receiving its order.
|
•
|
Proprietary FreeDFM.com
TM
Software
— Advanced Circuits offers its customers unique design verification services through its online FreeDFM.com tool. This tool enables customers to receive a free manufacturability assessment report, within minutes, resolving design problems before customers place their orders. The service is relied upon by many of Advanced Circuits’ customers to reduce design errors and minimize production costs. Beyond improved customer service, FreeDFM.com
TM
has the added benefit of improving the efficiency of Advanced Circuits’ engineers, as many routine design problems, which typically require an engineer’s time and attention to identify, are identified and sent back to customers automatically.
|
•
|
Established Partner Network
— Advanced Circuits has established third party production relationships with PCB manufacturers in North America and Asia. Through these relationships, Advanced Circuits is able to offer its customers a complete suite of products including those outside of its core production capabilities. Additionally, these relationships allow Advanced Circuits to outsource orders for volume production and focus internal capacity on higher margin, short lead time, production and quick-turn manufacturing.
|
|
|
Customer Distribution
|
|
|||||||
|
Industry Sector
|
2018
|
|
2017
|
|
2016
|
|
|||
|
Electrical Equipment and Components
|
25
|
%
|
|
24
|
%
|
|
22
|
%
|
|
|
Measuring Instruments
|
3
|
%
|
|
5
|
%
|
|
4
|
%
|
|
|
Electronics Manufacturing Services
|
21
|
%
|
|
24
|
%
|
|
21
|
%
|
|
|
Engineer Services
|
2
|
%
|
|
3
|
%
|
|
4
|
%
|
|
|
Industrial and Commercial Machinery
|
16
|
%
|
|
15
|
%
|
|
12
|
%
|
|
|
Business Services
|
1
|
%
|
|
1
|
%
|
|
2
|
%
|
|
|
Wholesale Trade-Durable Goods
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
|
Educational Institutions
|
12
|
%
|
|
10
|
%
|
|
17
|
%
|
|
|
Transportation Equipment
|
7
|
%
|
|
8
|
%
|
|
12
|
%
|
|
|
All Other Sectors Combined
|
12
|
%
|
|
9
|
%
|
|
5
|
%
|
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
•
|
PMAG
- Permanent Magnets and Assemblies Group- Arnold’s high performance permanent magnets have a wide variety of applications, mainly used for rotating electrical machinery such as motor and generators. Industries include aerospace and defense, energy exploration, industrial
,
medical and motorsport
.
|
•
|
Precision Thin Metals
- Produces thin and ultra-thin alloys that improve the power density electrical systems such as motors, generators, and transformers along with thin foils for other applications such as electromagnetic shielding, lightweight structures, and implantable structures. Industries include aerospace and defense, energy exploration, industrial, medical, and motorsport
.
|
•
|
Flexmag
™ - The highest quality flexible magnetic sheet and strip, Flexmag products not only are magnetic but their processing capabilities allow for loading of a variety of materials into their flexible sheet products. Industries include industrial, medical, defense, marketing, and automotive.
|
•
|
High precision magnetic rotors for use in electric motors and generators. Typically used in demanding applications such as aerospace and defense, oil and gas exploration, energy recovery systems, power dense medical equipment, and under the hood automotive
|
•
|
Sealed pump couplings
|
•
|
Beam focusing assemblies such as traveling wave tubes
|
•
|
Oil & Gas exploration tools as well as pipeline inspection and down hole power generation
|
•
|
Linear positioning Hall effect sensor systems
|
•
|
Samarium Cobalt (SmCo)
- SmCo magnets are typically used in critical applications that require corrosion resistance or high temperature stability, such as motors, generators, actuators and sensors. Arnold markets its SmCo magnets under the trade name of RECOMA
®
, and is DFARS (Defense Federal Acquisition Regulation) compliant.
|
•
|
Neodymium (Neo)
- Neo magnets offer the highest magnetic energy level of any material in the market. Applications include motors and generators, magnetic resonance imaging, magnetic inspection systems, sensors and loudspeakers.
|
•
|
AlNiCo
- The AlNiCo family of magnets remains a preferred material for many mission critical applications. Its favorable linear temperature characteristics, high magnetic flux density and good corrosion resistance are ideally suited for use in applications requiring magnetic stability. This material is manufactured by Arnold in the United States, making it a DFARS compliant material.
|
•
|
Hard Ferrite
- Hard ferrite (ceramic) magnets were developed as a low cost alternative to metallic magnets (steel and AlNiCo). Although they exhibit lower energy when compared to other materials available today and are relatively brittle, ferrite magnets have gained acceptance due to their low price per magnetic output.
|
•
|
Injection Molded
- Injection molded magnets are a composite of various types of resin and magnetic powders. The physical and magnetic properties of the product depend on the raw materials, but are generally lower in magnetic strength and resemble plastics in their physical properties. However, a major benefit of the injection
|
•
|
Electrical steels for hybrid propulsion systems, electric motors, and micro turbines
|
•
|
Electromagnetic and Radio Frequency Shielding
|
•
|
Lightweight structures for aerospace applications
|
•
|
Irradiation windows
|
•
|
Batteries
|
•
|
Military countermeasures
|
•
|
Extruded and calendared flexible rubber magnets with optional laminated printable substrates
|
•
|
Electromagnetic and Radio Frequency Shielding
|
•
|
Retail displays
|
•
|
Theft detection/ security
|
•
|
Seals and enclosures
|
•
|
Signage for various advertising and promotions
|
•
|
Low Substitution Risk
– Arnold’s solutions are typically specified into its customers’ program designs through a co-development and qualification process that often takes 6-18 months. Arnold’s customers are typically contractors and component manufacturers whose products are integrated into end-customers’ applications. The high cost of failure, relatively low proportionate cost of magnets to the final product, sometimes lengthy
|
•
|
Equipment and Processing
– Arnold’s existing base of production equipment has a significant estimated replacement cost. A new entrant could require as much as 2-3 years of lead time to match the process performance requirements, customization of equipment and material formulations necessary to effectively compete in the specialty magnet industry. Further, given the program nature of a majority Arnold’s sales, management estimates that it could take 5-10 years to build a sufficient book of business and base of institutional knowledge to generate positive cash flow out of a new manufacturing plant.
|
|
|
Customer Distribution
|
|
|||||||
|
Industry Sector
|
2018
|
|
2017
|
|
2016
|
|
|||
|
Aerospace and Defense
|
31
|
%
|
|
25
|
%
|
|
28
|
%
|
|
|
General Industrial
|
26
|
%
|
|
28
|
%
|
|
24
|
%
|
|
|
Advertising specialties
|
12
|
%
|
|
13
|
%
|
|
13
|
%
|
|
|
Motorsport/ automotive
|
11
|
%
|
|
13
|
%
|
|
12
|
%
|
|
|
Reprographic
|
6
|
%
|
|
7
|
%
|
|
11
|
%
|
|
|
Oil and Gas
|
5
|
%
|
|
4
|
%
|
|
2
|
%
|
|
|
Energy
|
4
|
%
|
|
4
|
%
|
|
3
|
%
|
|
|
Medical
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
|
All Other Sectors Combined
|
2
|
%
|
|
3
|
%
|
|
4
|
%
|
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
•
|
Vacuumschmelze Gruner
|
•
|
Dexter Magnetic Technologies
|
•
|
Electron Energy Corp
|
•
|
Magnum Magnetics Corporation
|
•
|
Thomas & Skinner
|
•
|
Thermal Desorption
|
◦
|
Primarily used to treat soil with high levels of volatile contaminants by heating it in a rotating dryer to volatilize and then subsequently destroy the contaminants
|
◦
|
The treated material then enters a soil conditioner (called a pugmill), where it is cooled and rehydrated
|
◦
|
Finally, the cooled soil is stockpiled, sampled, and tested by an independent certified laboratory to ensure effective treatment and fulfillment of reuse standards
|
◦
|
This treatment method is primarily used for soils that contain high levels of contaminants, such as soil from manufactured gas plant sites
|
•
|
Stabilization of Dredged Material
|
◦
|
Dredged sediments are screened to remove large objects and excess water
|
◦
|
The remaining material is fed through a conveyor belt to a pugmill mixing system, where proprietary reagent admixtures are introduced
|
◦
|
The resulting material is valued for its geotechnical properties and is beneficially reused as fill material
|
•
|
Bioremediation
|
◦
|
Used to treat soil that is contaminated with petroleum hydrocarbons
|
◦
|
Involves inoculating the contaminated material with engineered bacteria and nutrients to break down the contaminants
|
◦
|
The bacteria consume and process the nutrients and the hydrocarbons thereby remediating the contaminants
|
•
|
Chemical Fixation
|
◦
|
Used for light to medium hydrocarbon and/or contaminated material impacted by light or heavy metals
|
◦
|
Soil is screened, and paired with chemical additives to formulate a chemically stable and geotechnically desirable material
|
•
|
Physical Treatment/Screening
|
◦
|
Special sizing and segregation processes remove unsuitable materials from inbound materials to meet site-specific geotechnical specifications
|
◦
|
The segregated material, often rock, can be mixed with other material for reuse or crushed to create aggregate material for resale
|
•
|
Permits
- Clean Earth maintains an extensive portfolio of regulatory permits, including approximately 220 active permits and 200 permit modifications. Each facility maintains various local, state, and federal authorizations for the acceptance, treatment, and beneficial reuse of a wide variety of hazardous and nonhazardous materials, as well as all necessary air and water discharge permits required for operation. These permits are extremely difficult to obtain due to the complex navigation of multiple layers of regulation, lengthy and costly public review periods and typical public NIMBY opposition. Clean Earth maintains a large team of environmental, health and safety experts that have developed trusted relationships and credibility with local, state and federal regulatory agencies over the last 25 years.
|
•
|
Extensive Network
-
Clean Eart
h
’s extensive network of permitted facilities is strategically located near major waste generation centers with an abundance of regulations governing waste treatment and disposal. Given transportation costs, the proximity of Clean Earth’s facilities to key markets and convenient access to rail, barge, and trucking transportation are significant competitive advantages that drive profitability. Furthermore, its maintenance of multiple backend beneficial reuse sites provides flexibility to direct volume to the most appropriate facilities based on available processing and placement capacity.
|
•
|
High Customer Switching Costs - The operational risk and disruption associated with switching existing molds to operate on a competitor’s press makes shifting or splitting business between different shape molders difficult and infrequent. In general, most customers pay for their own molds, which are custom built for a specific molders’ presses. The financial cost of retooling is estimated to be $5,000 - $25,000 per mold, making it cost prohibitive to change molders on existing projects.
|
•
|
Favorable Cost-to-value Proposition - The high cost of failure, relatively low proportionate cost of foam to the final product being protected, and sometimes lengthy testing and qualification process represent significant barriers to customers changing solution providers or packaging material choices.
|
•
|
Equipment and Processing Infrastructure - Foam Fabricators’ existing base of production equipment has a significant estimated replacement cost. Management estimates the cost of opening a new shape molding
|
|
|
2018
|
|
2017
|
|
2016
|
|||
|
|
|
|
|
|
|
|||
Appliance
|
|
37.8
|
%
|
|
37.6
|
%
|
|
36.2
|
%
|
Insulated shipping containers
|
|
33.9
|
%
|
|
33.9
|
%
|
|
32.9
|
%
|
Automotive
|
|
4.8
|
%
|
|
6.0
|
%
|
|
6.5
|
%
|
Protective packaging
|
|
7.8
|
%
|
|
7.9
|
%
|
|
9.1
|
%
|
Office furniture
|
|
3.8
|
%
|
|
3.9
|
%
|
|
3.5
|
%
|
Construction
|
|
2.9
|
%
|
|
3.0
|
%
|
|
3.3
|
%
|
Other
|
|
9.0
|
%
|
|
7.7
|
%
|
|
8.5
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
•
|
Sterno Products
- Sterno Products offers a broad range of wick and gel chafing fuels, liquid and traditional wax candles, butane stoves and accessories, and catering equipment and lamps for restaurants, hotel and home entertainment uses, selling both Sterno Brand and private label. As the leading supplier of canned heat to foodservice distributors and foodservice group purchasing organizations, Sterno is always pursuing end-user solutions and innovations to strengthen its position in the marketplace.
|
•
|
Sterno Home
- Sterno Home's product offerings include a full line of innovative patented flameless candles, traditional house and garden lighting including path lights, spotlights, bollards, coach and security lights as well as emerging décor categories of illuminated products such as post caps, deck, patio and fence lighting and other popular novelty products including stick lights, string lights, baskets and lanterns. The flameless candles and novelty lighting are powered by solar or battery power and the more traditional outdoor lighting fixtures are driven via solar power or low voltage technologies.
|
•
|
Rimports
- Rimports is a manufacturer and distributor of branded and private label wickless candle products used for home decor and fragrance systems under the ScentSationals, Better Home & Garden, AmbiEscents, Oak & Rye, Estate and Ador brands. The company offers unique lines of wickless candle products including ceramic wax warmers, scented wax cubes and essential oil and diffusers. Sterno acquired Rimports in February 2018.
|
•
|
Solar - solar panel with rechargeable power source - usually a rechargeable battery
|
•
|
Battery - battery operated
|
•
|
Plug-in - plugs directly into a regular wall socket either with 2 or 3 prong plug and with or without included and attached transformer
|
•
|
Low Voltage - part of a set which includes a stand-alone transformer. Fixtures connect through a stand-alone wire via clip connectors
|
•
|
Line Voltage - hardwired into a home's electrical circuitry
|
•
|
Rechargeable - product is recharged when empty usually through a plug in wire and an onboard rechargeable power source
|
Gross sales by product
(1)
|
|
2018
|
|
2017
|
|
2016
|
|||
Canned Heat
|
|
28
|
%
|
|
46
|
%
|
|
47
|
%
|
Wickless Candle Products
|
|
27
|
%
|
|
—
|
%
|
|
—
|
%
|
Flameless Candle and Outdoor Lighting
|
|
24
|
%
|
|
34
|
%
|
|
35
|
%
|
Diffusers and Essential Oils
|
|
6
|
%
|
|
—
|
%
|
|
—
|
%
|
Table Lighting
|
|
5
|
%
|
|
6
|
%
|
|
6
|
%
|
Other
|
|
10
|
%
|
|
14
|
%
|
|
12
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
•
|
restrictions on the Company’s ability to enter into certain transactions with our major shareholders, with the exception of our Manager, modeled on the limitation contained in Section 203 of the Delaware General Corporation Law, or DGCL;
|
•
|
allowing only the Company’s board of directors to fill newly created directorships, for those directors who are elected by our shareholders, and allowing only our Manager, as holder of a portion of the Allocation Interests, to fill vacancies with respect to the class of directors appointed by our Manager;
|
•
|
requiring that directors elected by our shareholders be removed, with or without cause, only by a vote of 85% of our shareholders;
|
•
|
requiring advance notice for nominations of candidates for election to the Company’s board of directors or for proposing matters that can be acted upon by our shareholders at a shareholders’ meeting;
|
•
|
having a substantial number of additional authorized but unissued shares that may be issued without shareholder action;
|
•
|
providing the Company’s board of directors with certain authority to amend the LLC Agreement and the Trust Agreement, subject to certain voting and consent rights of the holders of trust interests and Allocation Interests;
|
•
|
providing for a staggered board of directors of the Company, the effect of which could be to deter a proxy contest for control of the Company’s board of directors or a hostile takeover; and
|
•
|
limitations regarding calling special meetings and written consents of our shareholders.
|
•
|
significant under performance relative to historical or projected future operating results;
|
•
|
significant changes in the manner of or use of the acquired assets or the strategy for our overall business;
|
•
|
significant negative industry or economic trends;
|
•
|
significant decline in our stock price for a sustained period;
|
•
|
changes in our organization or management reporting structure could result in additional reporting units, which may require alternative methods of estimating fair values or greater desegregation or aggregation in our analysis by reporting unit; and
|
•
|
a decline in our market capitalization below net book value.
|
Location
|
|
Square Feet
|
|
Use
|
|
Irvine, CA
|
|
21,807
|
|
|
Office
|
Irvine, CA
|
|
1,073
|
|
|
Office
|
Irvine, CA
|
|
4,381
|
|
|
Office
|
Manteca, CA
|
|
400,000
|
|
|
Warehouse
|
Penrose Place, CO
|
|
1,100
|
|
|
Office
|
Seattle, WA
|
|
11,340
|
|
|
Office
|
Mexico City, Mexico
|
|
4,628
|
|
|
Office
|
Bankstown, Australia
|
|
10,387
|
|
|
Office
|
Malmo, Sweden
|
|
6,049
|
|
|
Office
|
Kowloon Bay, Hong Kong
|
|
17,759
|
|
|
Office
|
Dubai, UAE
|
|
1,951
|
|
|
Office
|
Sao Paolo, Brazil
|
|
1,798
|
|
|
Office
|
|
|
Location
|
|
Square Feet
|
|
Ergobaby - Corporate
|
|
Los Angeles, CA
|
|
16,378
|
|
Ergobaby - Office
|
|
Los Angeles, CA
|
|
3,292
|
|
Ergobaby - Office
|
|
Salt Lake City, Utah
|
|
3,550
|
|
Ergobaby Europe
|
|
Hamburg, Germany
|
|
2,410
|
|
Ergobaby France
|
|
Paris, France
|
|
4,680
|
|
Ergobaby UK
|
|
Swinden, United Kingdom
|
|
251
|
|
Tula
|
|
San Diego, CA
|
|
4,915
|
|
Tula
|
|
Bialystok, Poland
|
|
9,688
|
|
Location
|
|
Square Feet
|
|
Use
|
|
Marengo, IL
|
|
94,220
|
|
|
Office/Warehouse
|
Marietta, OH
|
|
81,000
|
|
|
Office/Warehouse
|
Marengo, IL
|
|
55,200
|
|
|
Office/Warehouse
|
Norfolk, NE
|
|
109,000
|
|
|
Office/Warehouse
|
Rochester, NY
|
|
73,000
|
|
|
Office/Warehouse
|
Ogallala, NE
|
|
25,000
|
|
|
Office/Warehouse
|
Guangdong Province, China
|
|
154,210
|
|
|
Office/Warehouse
|
Sheffield, England
|
|
25,000
|
|
|
Office/Warehouse
|
Lupfig, Switzerland
|
|
52,937
|
|
|
Office/Warehouse
|
Saint-Martin, France
|
|
1,528
|
|
|
Office
|
Algonquin, IL
|
|
~750
|
|
|
Corporate
|
Madison, WI
|
|
~1277
|
|
|
Research
|
Location (County, State)
|
|
Operation
|
|
Size
|
|
Leased or Owned
|
Montgomery, PA
|
|
Corporate Headquarters
|
|
16,669 sq. ft.
|
|
Leased
|
Butler, PA
|
|
Offices
|
|
7,525 sq. ft.
|
|
Leased
|
Middlesex, NJ
|
|
Fixed Base Remediation
|
|
~ 16 acres
|
|
Leased
|
Hudson, NJ
|
|
Dredged Material Processing and Beneficial Reuse
|
|
~ 7 acres
|
|
Leased
|
Hudson, NJ
|
|
RCRA TSDF
|
|
~ 14.5 acres
|
|
Owned/ Leased
|
Hudson, NJ
|
|
Dredging Services and Beneficial Reuse
|
|
~ 20 acres
|
|
Lease
|
Philadelphia, PA
|
|
Med. Temperature Thermal Desorption
|
|
8.5 acres
|
|
Owned
|
Bucks, PA
|
|
Med. Temperature Thermal Desorption
|
|
7.8 acres
|
|
Owned
|
Lycoming, PA
|
|
Drill Cuttings Stabilization
|
|
~ 2 acres
|
|
Leased
|
New Castle, DE
|
|
Med. Temperature Thermal Desorption
|
|
7.6 acres
|
|
Leased
|
Prince Georges, MD
|
|
Chemical Stabilization
|
|
42.49 acres
|
|
Owned
|
Washington, MD
|
|
Chemical Stabilization
|
|
13.67 acres
|
|
Owned
|
Glades, FL
|
|
Med. Temperature Thermal Desorption
|
|
11.29 acres
|
|
Owned
|
Camden, GA
|
|
Med. Temperature Thermal Desorption
|
|
2.92 acres
|
|
Owned
|
Marshall, KY
|
|
RCRA TSDF
|
|
~ 25.2 acres
|
|
Owned
|
Monongalia, WV
|
|
RCRA TSDF - Aerosol Recycling
|
|
~ 1 acres
|
|
Owned
|
Butler, PA
|
|
Transportation facility
|
|
1,500 sq. ft.
|
|
Leased
|
Newport News, VA
|
|
Office & Warehouse
|
|
3,200 sq. ft.
|
|
Leased
|
Hartford, CT
|
|
Thermal Desorption
|
|
16 acres
|
|
Owned
|
Etowah, AL
|
|
RCRA Part B Permitted Hazardous Waste TSDF
|
|
42 acres
|
|
Owned
|
Allentown, PA
|
|
PADEP Solid Waste permit Handler
|
|
32,000 sq. ft.
|
|
Leased
|
Allentown, PA
|
|
PADEP RCRA Part B Mercury (D009) PCB Capacitors
|
|
32,132 sq. ft.
|
|
Leased
|
Richmond, VA
|
|
Universal waste/Electronic Waste/10-day In-transit Storage
|
|
10,625 sq. ft.
|
|
Leased
|
West Melbourne, FL
|
|
FLDEP U&E Waste Handler
|
|
15,000 sq. ft.
|
|
Leased
|
West Melbourne, FL
|
|
RCRA PART B Mercury/PCB's/10-=day In-transit Storage
|
|
13,000 sq. ft.
|
|
Leased
|
Hayward, CA
|
|
DTSC RCRA Permit For Mercury (D009)
|
|
6,892 sq. ft.
|
|
Leased
|
Modesto, CA
|
|
Registered U & E Waste Handler
|
|
25,992 sq. ft.
|
|
Leased
|
DeKalb, GA
|
|
RCRA Part B Permitted Hazardous Waste TSDF
|
|
~ 1 acres
|
|
Owned
|
DeKalb, GA
|
|
RCRA Part B Permitted Hazardous Waste TSDF, Storage
|
|
~ 1 acres
|
|
Leased
|
Washington, NY
|
|
Thermal Desorption
|
|
16.7 acres
|
|
Owned
|
Merrimack, NH
|
|
Thermal Desorption
|
|
21.6 acres
|
|
Owned
|
Wayne, MI
|
|
Non Hazardous Waste Water Treatment
|
|
2.4 acres
|
|
Owned
|
Mecklenburg, NC
|
|
RCRA PART B Permitted Hazardous Waste TSDF and Waste Water Treatment
|
|
3.3 acres
|
|
Owned
|
Location
|
|
Square Feet
|
|
Leased or Owned
|
|
Anderson, South Carolina
|
|
133,250
|
|
|
Leased
|
Compton, California
|
|
44,000
|
|
|
Leased
|
Erie, Pennsylvania
|
|
199,962
|
|
|
Leased
|
Fort Madison, Iowa
|
|
80,000
|
|
|
Leased
|
Jackson, Tennessee
|
|
55,000
|
|
|
Leased
|
Jefferson, Georgia
|
|
60,000
|
|
|
Leased
|
Keller, Texas
|
|
131,073
|
|
|
Leased
|
Modesto, California
|
|
79,000
|
|
|
Leased
|
El Dorado Springs, Missouri
|
|
38,000
|
|
|
Owned
|
New Albany, Indiana
|
|
65,000
|
|
|
Owned
|
Bloomsburg, Pennsylvania
|
|
54,000
|
|
|
Owned
|
Tijuana, Mexico
|
|
60,000
|
|
|
Leased
|
Queretaro, Mexico
|
|
100,000
|
|
|
Leased
|
Scottsdale, Arizona
|
|
7,000
|
|
|
Leased
|
Louisville, Kentucky
|
|
3,000
|
|
|
Leased
|
Location
|
|
Square Feet
|
|
Use
|
|
Corona, CA
|
|
12,330
|
|
|
Corporate Office
|
Memphis, TN
|
|
103,500
|
|
|
Manufacturing
|
Texarkana, TX
|
|
214,080
|
|
|
Manufacturing
|
Delta, Canada
|
|
45,000
|
|
|
Warehouse
|
La Porte, IN
|
|
15,000
|
|
|
Office
|
Toronto, Canada
|
|
13,867
|
|
|
Office
|
Vancouver, Canada
|
|
50,372
|
|
|
Office
|
Vancouver, Canada
|
|
33,711
|
|
|
Warehouse
|
Montreal, Canada
|
|
2,100
|
|
|
Warehouse
|
Montreal, Canada
|
|
12,500
|
|
|
Office
|
Atlanta, GA
|
|
1,235
|
|
|
Showroom
|
Las Vegas, NV
|
|
342
|
|
|
Showroom
|
Yuyao, China
|
|
2,982
|
|
|
Office
|
Yuyao, China
|
|
323
|
|
|
Office
|
Shunde, China
|
|
343
|
|
|
Office
|
Provo, UT
|
|
171,361
|
|
|
Office/Warehouse
|
Spanish Fork, UT
|
|
313,719
|
|
|
Warehouse
|
Bentonville, AR
|
|
3,000
|
|
|
Office
|
Calgary, Canada
|
|
15,961
|
|
|
Office/Warehouse
|
|
|
|
|
|
|
|
|
||||||||
Data
|
March 31,
2014 |
|
June 30,
2014 |
|
September 30,
2014 |
|
December 31,
2014 |
||||||||
Compass Diversified Holdings
|
$
|
218.56
|
|
|
$
|
212.14
|
|
|
$
|
206.95
|
|
|
$
|
194.20
|
|
NASDAQ Stock Market Index
|
$
|
188.37
|
|
|
$
|
197.75
|
|
|
$
|
201.58
|
|
|
$
|
212.46
|
|
NASDAQ Other Finance Index
|
$
|
115.15
|
|
|
$
|
114.94
|
|
|
$
|
113.84
|
|
|
$
|
117.29
|
|
NYSE Financial Sector Index
|
$
|
73.30
|
|
|
$
|
75.02
|
|
|
$
|
74.39
|
|
|
$
|
77.17
|
|
NYSE Composite Index
|
$
|
125.52
|
|
|
$
|
130.90
|
|
|
$
|
127.60
|
|
|
$
|
129.23
|
|
|
|
|
|
|
|
|
|
||||||||
Data
|
March 31,
2015 |
|
June 30,
2015 |
|
September 30,
2015 |
|
December 31,
2015 |
||||||||
Compass Diversified Holdings
|
$
|
206.87
|
|
|
$
|
200.67
|
|
|
$
|
199.51
|
|
|
$
|
198.94
|
|
NASDAQ Stock Market Index
|
$
|
219.86
|
|
|
$
|
223.71
|
|
|
$
|
207.26
|
|
|
$
|
224.64
|
|
NASDAQ Other Finance Index
|
$
|
121.74
|
|
|
$
|
121.61
|
|
|
$
|
112.03
|
|
|
$
|
115.43
|
|
NYSE Financial Sector Index
|
$
|
75.83
|
|
|
$
|
76.67
|
|
|
$
|
70.13
|
|
|
$
|
72.55
|
|
NYSE Composite Index
|
$
|
129.94
|
|
|
$
|
128.82
|
|
|
$
|
116.84
|
|
|
$
|
120.93
|
|
|
|
|
|
|
|
|
|
||||||||
Data
|
March 31,
2016 |
|
June 30,
2016 |
|
September 30,
2016 |
|
December 31,
2016 |
||||||||
Compass Diversified Holdings
|
$
|
198.47
|
|
|
$
|
212.87
|
|
|
$
|
225.44
|
|
|
$
|
234.50
|
|
NASDAQ Stock Market Index
|
$
|
218.46
|
|
|
$
|
217.24
|
|
|
$
|
238.30
|
|
|
$
|
241.49
|
|
NASDAQ Other Finance Index
|
$
|
114.30
|
|
|
$
|
117.57
|
|
|
$
|
123.62
|
|
|
$
|
133.75
|
|
NYSE Financial Sector Index
|
$
|
68.25
|
|
|
$
|
67.88
|
|
|
$
|
71.76
|
|
|
$
|
80.10
|
|
NYSE Composite Index
|
$
|
121.70
|
|
|
$
|
125.06
|
|
|
$
|
127.83
|
|
|
$
|
131.82
|
|
|
|
|
|
|
|
|
|
||||||||
Data
|
March 31,
2017 |
|
June 30,
2017 |
|
September 30,
2017 |
|
December 31,
2017 |
||||||||
Compass Diversified Holdings
|
$
|
219.71
|
|
|
$
|
233.46
|
|
|
$
|
239.93
|
|
|
$
|
231.39
|
|
NASDAQ Stock Market Index
|
$
|
265.2
|
|
|
$
|
275.46
|
|
|
$
|
291.41
|
|
|
$
|
309.69
|
|
NASDAQ Other Finance Index
|
$
|
138.49
|
|
|
$
|
148.74
|
|
|
$
|
155.32
|
|
|
$
|
164.29
|
|
NYSE Financial Sector Index
|
$
|
83.03
|
|
|
$
|
85.93
|
|
|
$
|
89.52
|
|
|
$
|
94.76
|
|
NYSE Composite Index
|
$
|
137.02
|
|
|
$
|
140.23
|
|
|
$
|
145.56
|
|
|
$
|
152.71
|
|
|
|
|
|
|
|
|
|
||||||||
Data
|
March 31,
2018 |
|
June 30,
2018 |
|
September 30,
2018 |
|
December 31, 2018
|
||||||||
Compass Diversified Holdings
|
$
|
225.63
|
|
|
$
|
238.79
|
|
|
$
|
251
|
|
|
$
|
172.49
|
|
NASDAQ Stock Market Index
|
$
|
316.87
|
|
|
$
|
336.92
|
|
|
$
|
360.96
|
|
|
$
|
297.66
|
|
NASDAQ Other Finance Index
|
$
|
167.07
|
|
|
$
|
169.96
|
|
|
$
|
169.04
|
|
|
$
|
146.99
|
|
NYSE Financial Sector Index
|
$
|
90.71
|
|
|
$
|
89.54
|
|
|
$
|
91.81
|
|
|
$
|
79.68
|
|
NYSE Composite Index
|
$
|
148.46
|
|
|
$
|
149.08
|
|
|
$
|
155.98
|
|
|
$
|
135.61
|
|
|
|
|
|
||
Quarter Ended
|
Declaration Date
|
Payment Date
|
Distribution Per Share
|
||
December 31, 2018
|
January 3, 2019
|
January 24, 2019
|
$
|
0.36
|
|
September 30, 2018
|
October 4, 2018
|
October 25, 2018
|
$
|
0.36
|
|
June 30, 2018
|
July 5, 2018
|
July 26, 2018
|
$
|
0.36
|
|
March 31, 2018
|
April 5, 2018
|
April 26, 2018
|
$
|
0.36
|
|
December 31, 2017
|
January 4, 2018
|
January 25, 2018
|
$
|
0.36
|
|
September 30, 2017
|
October 5, 2017
|
October 26, 2017
|
$
|
0.36
|
|
June 30, 2017
|
July 6, 2017
|
July 27, 2017
|
$
|
0.36
|
|
March 31, 2017
|
April 6, 2017
|
April 27, 2017
|
$
|
0.36
|
|
December 31, 2016
|
January 5, 2017
|
January 26, 2017
|
$
|
0.36
|
|
September 30, 2016
|
October 6, 2016
|
October 27, 2016
|
$
|
0.36
|
|
June 30, 2016
|
July 7, 2016
|
July 28, 2016
|
$
|
0.36
|
|
March 31, 2016
|
April 7, 2016
|
April 28, 2016
|
$
|
0.36
|
|
|
Year ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
2018
(1)
|
|
2017
(1)
|
|
2016
(1)
|
|
2015
(1)
|
|
2014
(1)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,691,673
|
|
|
$
|
1,269,729
|
|
|
$
|
978,309
|
|
|
$
|
727,978
|
|
|
$
|
636,675
|
|
Gross profit
|
574,188
|
|
|
447,709
|
|
|
326,570
|
|
|
240,736
|
|
|
205,017
|
|
|||||
Management fees
|
44,294
|
|
|
32,693
|
|
|
29,406
|
|
|
25,658
|
|
|
21,872
|
|
|||||
Impairment expense/ loss on disposal of assets
|
—
|
|
|
17,325
|
|
|
25,204
|
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
69,318
|
|
|
27,204
|
|
|
19,061
|
|
|
49,918
|
|
|
31,892
|
|
|||||
Gain on deconsolidation of subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
264,325
|
|
|||||
Income (loss) from continuing operations
|
(3,048
|
)
|
|
33,272
|
|
|
53,749
|
|
|
8,991
|
|
|
270,077
|
|
|||||
Income and gain from discontinued operations
|
1,258
|
|
|
340
|
|
|
2,781
|
|
|
156,779
|
|
|
21,078
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
(1,790
|
)
|
|
$
|
33,612
|
|
|
$
|
56,530
|
|
|
$
|
165,770
|
|
|
$
|
291,155
|
|
Net income from continuing operations—noncontrolling interest
|
3,912
|
|
|
5,621
|
|
|
1,961
|
|
|
5,133
|
|
|
11,661
|
|
|||||
Net income (loss) from discontinued operations—noncontrolling interest
|
—
|
|
|
—
|
|
|
(116
|
)
|
|
(1,201
|
)
|
|
659
|
|
|||||
Net income (loss) attributable to Holdings
|
$
|
(5,702
|
)
|
|
$
|
27,991
|
|
|
$
|
54,685
|
|
|
$
|
161,838
|
|
|
$
|
278,835
|
|
Basic and fully diluted income (loss) per share attributable to Holdings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.44
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.46
|
|
|
$
|
(0.30
|
)
|
|
$
|
4.98
|
|
Discontinued operations
|
0.02
|
|
|
0.01
|
|
|
0.05
|
|
|
2.91
|
|
|
0.40
|
|
|||||
Basic and fully diluted income (loss) per share attributable to Holdings
|
$
|
(0.42
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
0.51
|
|
|
$
|
2.61
|
|
|
$
|
5.38
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash distribution declared per common share
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
$
|
120,575
|
|
|
$
|
110,051
|
|
|
$
|
85,608
|
|
|
$
|
53,075
|
|
|
$
|
39,751
|
|
Cash provided by operating activities
|
114,452
|
|
|
81,771
|
|
|
111,372
|
|
|
84,548
|
|
|
70,695
|
|
|||||
Acquisitions of businesses
|
(552,062
|
)
|
|
(164,950
|
)
|
|
(536,175
|
)
|
|
(130,292
|
)
|
|
(474,657
|
)
|
|||||
Cash (used in) provided by investing activities
|
(604,080
|
)
|
|
(77,278
|
)
|
|
(363,021
|
)
|
|
233,880
|
|
|
(424,753
|
)
|
|
Year ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
2018
(1)
|
|
2017
(1)
|
|
2016
(1)
|
|
2015
(1)
|
|
2014
(1)
|
||||||||||
Net amounts borrowed (repaid)
|
121,028
|
|
|
31,915
|
|
|
248,058
|
|
|
(172,975
|
)
|
|
250,725
|
|
|||||
Cash (used in) provided by financing activities
|
500,111
|
|
|
(2,588
|
)
|
|
208,726
|
|
|
(254,357
|
)
|
|
265,487
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
$
|
681,185
|
|
|
$
|
526,818
|
|
|
$
|
452,819
|
|
|
$
|
291,363
|
|
|
$
|
320,799
|
|
Total assets
|
2,372,335
|
|
|
1,820,303
|
|
|
1,777,155
|
|
|
1,421,042
|
|
|
1,547,430
|
|
|||||
Current liabilities
|
259,280
|
|
|
212,193
|
|
|
202,521
|
|
|
116,479
|
|
|
141,231
|
|
|||||
Long-term debt
|
1,098,871
|
|
|
584,347
|
|
|
551,652
|
|
|
308,639
|
|
|
485,547
|
|
|||||
Noncontrolling interests
|
59,970
|
|
|
52,791
|
|
|
38,139
|
|
|
47,135
|
|
|
40,903
|
|
|||||
Shareholders’ equity attributable to Holdings
|
859,372
|
|
|
873,208
|
|
|
856,405
|
|
|
826,084
|
|
|
767,431
|
|
•
|
The year ended December 31, 2018 includes the operating results of Foam Fabricators, acquired on February 15, 2018, and Rimports, acquired by our Sterno subsidiary on February 26, 2018.
|
•
|
The year ended December 31, 2017 includes the operating results of Velocity Outdoor, acquired on June 2, 2017.
|
•
|
The year ended December 31, 2016 includes the operating results of 5.11 Tactical, acquired on August 31, 2016.
|
•
|
The year ended December 31, 2015 includes the operating results of Manitoba Harvest, acquired on July 10, 2015.
|
•
|
The year ended December 31, 2014 includes the operating results of Clean Earth, acquired on August 7, 2014 and Sterno, acquired on October 10, 2014.
|
•
|
North American base of operations;
|
•
|
stable and growing earnings and cash flow;
|
•
|
maintains a significant market share in defensible industry niche (i.e., has a “reason to exist”);
|
•
|
solid and proven management team with meaningful incentives;
|
•
|
low technological and/or product obsolescence risk; and
|
•
|
a diversified customer and supplier base.
|
•
|
utilizing structured incentive compensation programs tailored to each business in order to attract, recruit and retain talented managers to operate our businesses;
|
•
|
regularly monitoring financial and operational performance, instilling consistent financial discipline, and supporting management in the development and implementation of information systems to effectively achieve these goals;
|
•
|
assisting management in their analysis and pursuit of prudent organic cash flow growth strategies (both revenue and cost related);
|
•
|
identifying and working with management to execute attractive external growth and acquisition opportunities; and
|
•
|
forming strong subsidiary level boards of directors, including independent directors, to supplement management in their development and implementation of strategic goals and objectives.
|
|
|
|
|
|
|
Ownership Interest - December 31, 2018
|
||||
Business
|
|
Acquisition Date
|
|
CODI Purchase Price
|
|
Primary
|
|
Diluted
|
||
CBS Holdings (Staffmark)
(1)
|
|
May 16, 2006
|
|
$
|
183,200
|
|
|
N/a
|
|
N/a
|
Crosman
(4)
|
|
May 16, 2006
|
|
$
|
72,600
|
|
|
N/a
|
|
N/a
|
Advanced Circuits
(3)
|
|
May 16, 2006
|
|
$
|
81,000
|
|
|
69.4%
|
|
69.2%
|
Silvue
|
|
May 16, 2006
|
|
$
|
36,000
|
|
|
N/a
|
|
N/a
|
Tridien
(3)
|
|
August 1, 2006
|
|
$
|
31,000
|
|
|
N/a
|
|
N/a
|
Aeroglide
|
|
February 28, 2007
|
|
$
|
58,200
|
|
|
N/a
|
|
N/a
|
Halo
|
|
February 28, 2007
|
|
$
|
62,300
|
|
|
N/a
|
|
N/a
|
American Furniture
|
|
August 31, 2007
|
|
$
|
97,000
|
|
|
N/a
|
|
N/a
|
FOX
(2)
|
|
January 4, 2008
|
|
$
|
80,400
|
|
|
N/a
|
|
N/a
|
Liberty Safe
(3)
|
|
March 31, 2010
|
|
$
|
70,200
|
|
|
88.6%
|
|
85.2%
|
Ergobaby
(3)
|
|
September 16, 2010
|
|
$
|
85,200
|
|
|
81.9%
|
|
76.4%
|
CamelBak
|
|
August 24, 2011
|
|
$
|
251,400
|
|
|
N/a
|
|
N/a
|
Arnold Magnetics
|
|
March 5, 2012
|
|
$
|
128,800
|
|
|
96.7%
|
|
79.4%
|
Clean Earth
(3)
|
|
August 7, 2014
|
|
$
|
251,400
|
|
|
97.5%
|
|
79.8%
|
Sterno
(3) (4)
|
|
October 10, 2014
|
|
$
|
314,400
|
|
|
100.0%
|
|
88.9%
|
Manitoba Harvest
(3)
|
|
July 10, 2015
|
|
$
|
102,700
|
|
|
76.6%
|
|
68.1%
|
5.11
|
|
August 31, 2016
|
|
$
|
408,200
|
|
|
97.5%
|
|
88.7%
|
Velocity Outdoor
(3) (5)
|
|
June 2, 2017
|
|
$
|
150,400
|
|
|
99.2%
|
|
91%
|
Foam Fabricators
|
|
February 15, 2018
|
|
$
|
253,400
|
|
|
100%
|
|
91.5%
|
Business
|
|
Date of Disposition
|
|
Sale Price
|
|
CODI Proceeds from Disposition
(1)
|
|
Gain (loss) recognized
(2)
|
||||||
Crosman
|
|
January 5, 2007
|
|
$
|
143,000
|
|
|
$
|
109,600
|
|
|
$
|
35,800
|
|
Aeroglide
|
|
June 24, 2008
|
|
$
|
95,000
|
|
|
$
|
78,500
|
|
|
$
|
33,700
|
|
Silvue
|
|
June 25, 2008
|
|
$
|
95,000
|
|
|
$
|
63,600
|
|
|
$
|
39,600
|
|
Staffmark
|
|
October 17, 2011
|
|
$
|
295,000
|
|
|
$
|
216,000
|
|
|
$
|
88,500
|
|
Halo
|
|
May 1, 2012
|
|
$
|
76,500
|
|
|
$
|
66,500
|
|
|
$
|
(300
|
)
|
CamelBak
|
|
August 3, 2015
|
|
$
|
412,500
|
|
|
$
|
367,800
|
|
|
$
|
158,300
|
|
American Furniture
|
|
October 5, 2015
|
|
$
|
24,100
|
|
|
$
|
23,500
|
|
|
$
|
(14,100
|
)
|
Tridien
|
|
September 21, 2016
|
|
$
|
25,000
|
|
|
$
|
22,700
|
|
|
$
|
1,700
|
|
FOX
|
|
*
|
|
*
|
|
$
|
526,600
|
|
|
$
|
428,700
|
|
•
|
meet capital expenditure requirements, management fees and corporate overhead charges;
|
•
|
fund distributions from the businesses to the Company; and
|
•
|
be distributed by the Trust to shareholders.
|
•
|
Achieving sales growth through a combination of new product development, increasing distribution and international expansion;
|
•
|
Taking market share, where possible, in each of our niche market leading companies, generally at the expense of less well capitalized competitors;
|
•
|
Striving for excellence in supply chain management, manufacturing and technological capabilities;
|
•
|
Continuing to pursue expense reduction and cost savings in lower margin business lines or in response to lower production volume;
|
•
|
Continuing to grow through disciplined, strategic acquisitions and rigorous integration processes; and
|
•
|
Driving free cash flow through increased net income and effective working capital management, enabling continued investment in our businesses, strategic acquisitions, and distributions to our shareholders.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
1,691,673
|
|
|
$
|
1,269,729
|
|
|
$
|
978,309
|
|
Cost of revenues
|
|
1,117,485
|
|
|
822,020
|
|
|
651,739
|
|
|||
Gross profit
|
|
574,188
|
|
|
447,709
|
|
|
326,570
|
|
|||
Selling, general and administrative expense
|
|
392,501
|
|
|
318,484
|
|
|
217,830
|
|
|||
Management fees
|
|
44,294
|
|
|
32,693
|
|
|
29,406
|
|
|||
Amortization of intangibles
|
|
68,076
|
|
|
52,003
|
|
|
35,069
|
|
|||
Asset impairment / Loss on disposal of assets
|
|
—
|
|
|
17,325
|
|
|
25,204
|
|
|||
Operating income
|
|
69,317
|
|
|
27,204
|
|
|
19,061
|
|
|||
Interest expense
|
|
(55,577
|
)
|
|
(27,623
|
)
|
|
(24,651
|
)
|
|||
Amortization of debt issuance costs
|
|
(3,905
|
)
|
|
(4,002
|
)
|
|
(2,763
|
)
|
|||
Other income (expense)
|
|
(6,335
|
)
|
|
(2,986
|
)
|
|
71,571
|
|
|||
Income (loss) from continuing operations before income taxes
|
|
3,500
|
|
|
(7,407
|
)
|
|
63,218
|
|
|||
Provision (benefit) for income taxes
|
|
6,548
|
|
|
(40,679
|
)
|
|
9,469
|
|
|||
Income (loss) from continuing operations
|
|
$
|
(3,048
|
)
|
|
$
|
33,272
|
|
|
$
|
53,749
|
|
|
|
Year ended December 31,
|
||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Net sales
|
|
$
|
90,566
|
|
100.0
|
%
|
|
$
|
102,969
|
|
100.0
|
%
|
|
$
|
103,348
|
|
100.0
|
%
|
Gross profit
|
|
$
|
59,686
|
|
65.9
|
%
|
|
$
|
68,945
|
|
67.0
|
%
|
|
$
|
63,386
|
|
61.3
|
%
|
Selling, general and administrative expense
|
|
$
|
40,215
|
|
44.4
|
%
|
|
$
|
33,359
|
|
32.4
|
%
|
|
$
|
37,703
|
|
36.5
|
%
|
Income from operations
|
|
$
|
11,522
|
|
12.7
|
%
|
|
$
|
24,503
|
|
23.8
|
%
|
|
$
|
17,151
|
|
16.6
|
%
|
|
|
Year ended December 31,
|
||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Net sales
|
|
$
|
82,658
|
|
100.0
|
%
|
|
$
|
91,956
|
|
100.0
|
%
|
|
$
|
103,812
|
|
100.0
|
%
|
Gross profit
|
|
$
|
19,634
|
|
23.8
|
%
|
|
$
|
25,645
|
|
27.9
|
%
|
|
$
|
29,507
|
|
28.4
|
%
|
Selling, general and administrative expense
|
|
$
|
13,158
|
|
15.9
|
%
|
|
$
|
15,361
|
|
16.7
|
%
|
|
$
|
14,737
|
|
14.2
|
%
|
Income from operations
|
|
$
|
5,906
|
|
7.1
|
%
|
|
$
|
9,475
|
|
10.3
|
%
|
|
$
|
13,234
|
|
12.7
|
%
|
|
|
Year ended December 31,
|
||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Net sales
|
|
$
|
67,437
|
|
100.0
|
%
|
|
$
|
55,699
|
|
100.0
|
%
|
|
$
|
59,323
|
|
100.0
|
%
|
Gross profit
|
|
$
|
28,877
|
|
42.8
|
%
|
|
$
|
25,101
|
|
45.1
|
%
|
|
$
|
26,505
|
|
44.7
|
%
|
Selling, general and administrative expense
|
|
$
|
25,741
|
|
38.2
|
%
|
|
$
|
21,092
|
|
37.9
|
%
|
|
$
|
21,326
|
|
35.9
|
%
|
Income (loss) from operations
|
|
$
|
(1,754
|
)
|
(2.6
|
)%
|
|
$
|
(9,332
|
)
|
(16.8
|
)%
|
|
$
|
321
|
|
0.5
|
%
|
|
|
Year ended December 31,
|
||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
(in thousands)
|
|
|
|
|
(Pro forma)
|
|
|
(Pro forma)
|
|
|||||||||
Net sales
|
|
$
|
131,296
|
|
100.0
|
%
|
|
$
|
120,033
|
|
100.0
|
%
|
|
$
|
118,736
|
|
100.0
|
%
|
Gross profit
(1)
|
|
$
|
34,372
|
|
26.2
|
%
|
|
$
|
27,641
|
|
23.0
|
%
|
|
$
|
31,727
|
|
26.7
|
%
|
Selling, general and administrative expense
(2)
|
|
$
|
22,761
|
|
17.3
|
%
|
|
$
|
18,636
|
|
15.5
|
%
|
|
$
|
15,660
|
|
13.2
|
%
|
Income from operations
|
|
$
|
4,850
|
|
3.7
|
%
|
|
$
|
3,756
|
|
3.1
|
%
|
|
$
|
10,909
|
|
9.2
|
%
|
|
|
Year Ended December 31,
|
||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Net sales
|
|
$
|
92,511
|
|
100.0
|
%
|
|
$
|
87,782
|
|
100.0
|
%
|
|
$
|
86,041
|
|
100.0
|
%
|
Gross profit
|
|
$
|
43,166
|
|
46.7
|
%
|
|
$
|
39,884
|
|
45.4
|
%
|
|
$
|
38,044
|
|
44.2
|
%
|
Selling, general and administrative expense
|
|
$
|
15,108
|
|
16.3
|
%
|
|
$
|
14,565
|
|
16.6
|
%
|
|
$
|
13,579
|
|
15.8
|
%
|
Income from operations
|
|
$
|
26,335
|
|
28.5
|
%
|
|
$
|
23,575
|
|
26.9
|
%
|
|
$
|
22,718
|
|
26.4
|
%
|
|
|
Year ended December 31,
|
||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Net sales
|
|
$
|
117,860
|
|
100.0
|
%
|
|
$
|
105,580
|
|
100.0
|
%
|
|
$
|
108,179
|
|
100.0
|
%
|
Gross profit
|
|
$
|
30,381
|
|
25.8
|
%
|
|
$
|
26,717
|
|
25.3
|
%
|
|
$
|
23,704
|
|
21.9
|
%
|
Selling, general and administrative expense
|
|
$
|
19,036
|
|
16.2
|
%
|
|
$
|
19,583
|
|
18.5
|
%
|
|
$
|
16,602
|
|
15.3
|
%
|
Impairment expense
|
|
$
|
—
|
|
—
|
%
|
|
$
|
8,864
|
|
8.4
|
%
|
|
$
|
16,000
|
|
14.8
|
%
|
Income (loss) from operations
|
|
$
|
7,416
|
|
6.3
|
%
|
|
$
|
(5,693
|
)
|
(5.4
|
)%
|
|
$
|
(12,921
|
)
|
(11.9
|
)%
|
|
|
Year ended December 31,
|
||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Net revenues
|
|
$
|
266,916
|
|
100.0
|
%
|
|
$
|
211,247
|
|
100.0
|
%
|
|
$
|
188,997
|
|
100.0
|
%
|
Gross profit
|
|
$
|
75,470
|
|
28.3
|
%
|
|
$
|
61,219
|
|
29.0
|
%
|
|
$
|
54,330
|
|
28.7
|
%
|
Selling, general and administrative expense
|
|
$
|
46,677
|
|
17.5
|
%
|
|
$
|
35,875
|
|
17.0
|
%
|
|
$
|
30,018
|
|
15.9
|
%
|
Income from operations
|
|
$
|
14,443
|
|
5.4
|
%
|
|
$
|
12,037
|
|
5.7
|
%
|
|
$
|
7,929
|
|
4.2
|
%
|
|
|
Year ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
||||||||
(in thousands)
|
|
(Pro forma)
|
|
|
(Pro forma)
|
|
||||||
Net sales
|
|
$
|
128,465
|
|
100.0
|
%
|
|
$
|
126,389
|
|
100.0
|
%
|
Gross profit
|
|
$
|
34,839
|
|
27.1
|
%
|
|
$
|
38,959
|
|
30.8
|
%
|
Selling, general and administrative expense
|
|
$
|
14,028
|
|
10.9
|
%
|
|
$
|
12,722
|
|
10.1
|
%
|
Income from operations
|
|
$
|
12,196
|
|
9.5
|
%
|
|
$
|
17,457
|
|
13.8
|
%
|
|
|
Year ended December 31,
|
||||||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2017
|
|
2016
|
||||||||||||||||
|
|
Pro Forma
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
$
|
405,870
|
|
100.0
|
%
|
|
$
|
383,401
|
|
100.0
|
%
|
|
$
|
226,110
|
|
100.0
|
%
|
|
$
|
218,817
|
|
100.0
|
%
|
Gross profit
|
|
$
|
97,381
|
|
24.0
|
%
|
|
$
|
99,201
|
|
25.9
|
%
|
|
$
|
55,755
|
|
24.7
|
%
|
|
$
|
60,095
|
|
27.5
|
%
|
Selling, general and administrative expense
|
|
$
|
37,131
|
|
9.1
|
%
|
|
$
|
37,891
|
|
9.9
|
%
|
|
$
|
28,662
|
|
12.7
|
%
|
|
$
|
34,362
|
|
15.7
|
%
|
Income from operations
|
|
$
|
42,500
|
|
10.5
|
%
|
|
$
|
43,797
|
|
11.4
|
%
|
|
$
|
19,194
|
|
8.5
|
%
|
|
$
|
18,799
|
|
8.6
|
%
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Cash provided by operating activities
|
$
|
114,452
|
|
|
$
|
81,771
|
|
|
$
|
111,372
|
|
Cash used in investing activities
|
(604,080
|
)
|
|
(77,278
|
)
|
|
(363,021
|
)
|
|||
Cash provided by (used in) financing activities
|
500,111
|
|
|
(2,588
|
)
|
|
208,726
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
2,958
|
|
|
(1,792
|
)
|
|
(3,174
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
$
|
13,441
|
|
|
$
|
113
|
|
|
$
|
(46,097
|
)
|
•
|
The payments of our shareholder distributions of $86.3 million related to our common shares and $2.5 million related to our Series A Preferred Shares;
|
•
|
Distributions of $39.2 million paid during 2017 to Holders of the allocation interest related to the sale of our FOX shares;
|
•
|
Proceeds of $96.4 million from a preferred stock offering completed in June 2017; and
|
•
|
Net borrowings during the year of $31.9 million under our 2014 Credit Facility.
|
•
|
The payments of our shareholder distributions of $78.2 million in the year ended December 31, 2016;
|
•
|
Distributions of $23.6 million paid during 2016 to noncontrolling shareholders as a result of the Liberty and ACI recapitalizations;
|
•
|
Net borrowings during the year ended December 31, 2016 under our 2014 Credit Facility totaled $248.1 million, including borrowings under our 2016 Incremental Term Loan, which was used to fund the acquisitions of 5.11 during the third quarter, EWS and Baby Tula during the second quarter, and the repurchase of Ergobaby common stock from noncontrolling shareholders during the third quarter;
|
•
|
Distributions of $23.8 million to the Holders of the allocation interest related to Sale Events (March and August Offerings of FOX, and September Disposition of Tridien) and a Holding Event (ACI); and
|
•
|
Issuance of Trust common shares for net proceeds of $99.4 million.
|
(in thousands)
|
|
Intercompany Loans
|
|
Total Liabilities
|
||||
5.11
|
|
$
|
203,702
|
|
|
$
|
265,089
|
|
Ergobaby
|
|
54,780
|
|
|
71,317
|
|
||
Liberty
|
|
46,539
|
|
|
56,750
|
|
||
Manitoba Harvest
|
|
48,062
|
|
|
73,100
|
|
||
Velocity Outdoor
|
|
124,919
|
|
|
163,512
|
|
||
Advanced Circuits
|
|
76,638
|
|
|
96,776
|
|
||
Arnold
|
|
72,830
|
|
|
97,863
|
|
||
Clean Earth
|
|
207,672
|
|
|
286,062
|
|
||
Foam Fabricators
|
|
101,225
|
|
|
110,307
|
|
||
Sterno
|
|
263,498
|
|
|
322,375
|
|
||
Total
|
|
$
|
1,199,865
|
|
|
$
|
1,543,151
|
|
Corporate and eliminations
|
|
(1,199,865
|
)
|
|
(90,158
|
)
|
||
|
|
$
|
—
|
|
|
$
|
1,452,993
|
|
Description of Required Covenant Ratio
|
|
Covenant Ratio Requirement
|
|
Actual Ratio
|
|
|
|
|
|
Fixed Charge Coverage Ratio
|
|
Greater than or equal to 1.50:1.00
|
|
2.81:1.00
|
Total Secured Debt to EBITDA Ratio
|
|
Less than or equal to 3.50:1.00
|
|
2.54:1.00
|
Total Debt to EBITDA Ratio
|
|
Less than or equal to 5.00:1.00
|
|
3.96:1.00
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Interest on credit facilities
|
$
|
32,414
|
|
|
$
|
23,940
|
|
|
$
|
19,861
|
|
Interest on Senior Notes
|
22,489
|
|
|
—
|
|
|
—
|
|
|||
Unused fee on Revolving Credit Facility
|
1,630
|
|
|
2,856
|
|
|
1,947
|
|
|||
Amortization of original issue discount
|
729
|
|
|
1,037
|
|
|
802
|
|
|||
Unrealized (gain) loss on interest rate derivatives
(1)
|
(2,251
|
)
|
|
(648
|
)
|
|
1,539
|
|
|||
Letter of credit fees
|
8
|
|
|
70
|
|
|
108
|
|
|||
Other, net
|
558
|
|
|
368
|
|
|
394
|
|
|||
Interest expense, net
|
$
|
55,577
|
|
|
$
|
27,623
|
|
|
$
|
24,651
|
|
|
|
|
|
|
|
||||||
Average daily balance outstanding - credit facilities
|
$
|
721,643
|
|
|
$
|
597,114
|
|
|
$
|
477,656
|
|
Effective interest rate - credit facilities
|
4.6
|
%
|
|
4.7
|
%
|
|
5.2
|
%
|
|
Year ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
United States Federal Statutory Rate
|
21.0
|
%
|
|
(35.0
|
)%
|
|
35.0
|
%
|
State income taxes (net of Federal benefits)
|
(22.0
|
)
|
|
(6.5
|
)
|
|
0.6
|
|
Foreign income taxes
|
23.0
|
|
|
(18.4
|
)
|
|
1.5
|
|
Expenses of Compass Group Diversified Holdings LLC
representing a pass through to shareholders
(1)
|
84.6
|
|
|
(3.3
|
)
|
|
3.6
|
|
Impairment expense
|
—
|
|
|
69.4
|
|
|
—
|
|
Effect of gain on investment in FOX
|
—
|
|
|
26.6
|
|
|
(41.2
|
)
|
Impact of subsidiary employee stock options
|
1.7
|
|
|
9.9
|
|
|
1.3
|
|
Domestic production activities deduction
|
—
|
|
|
(8.4
|
)
|
|
(0.9
|
)
|
Non-deductible acquisition costs
|
3.1
|
|
|
4.6
|
|
|
1.9
|
|
Effect of undistributed foreign earnings
|
—
|
|
|
(18.7
|
)
|
|
4.2
|
|
Non-recognition of NOL carryforwards at subsidiaries
|
27.9
|
|
|
(18.1
|
)
|
|
3.6
|
|
Adjustments to uncertain tax positions
(2)
|
—
|
|
|
(124.0
|
)
|
|
—
|
|
Utilization of tax credits
|
(15.9
|
)
|
|
(40.1
|
)
|
|
(0.7
|
)
|
Effect of Tax Act - GILTI tax
|
49.5
|
|
|
—
|
|
|
—
|
|
Effect of Tax Act - remeasurement of deferred tax assets and liabilities
(3)
|
0.5
|
|
|
(468.0
|
)
|
|
—
|
|
Effect of Tax Act - transition tax on non-U.S. subsidiaries' earnings
(3)
|
10.0
|
|
|
65.6
|
|
|
—
|
|
Other
|
3.7
|
|
|
15.2
|
|
|
6.1
|
|
Effective income tax rate
|
187.1
|
%
|
|
(549.2
|
)%
|
|
15.0
|
%
|
(1)
|
The effective income tax rate for each of the years presented includes losses at the Company’s parent, which is taxed as a partnership.
|
(2)
|
Represents the effect of the reversal of an uncertain tax position at our 5.11 business that existed as of the acquisition date and was settled during the fourth quarter of 2017, resulting in a tax benefit of $9.2 million in our 2017 tax provision.
|
(3)
|
The effect of the enactment of the Tax Act on our tax provision for the year ended December 31, 2017 was a benefit of
$34.7 million related to the reduction in the U.S. federal corporate income tax rate from 35% to 21%, and tax expense of $4.9 million related to the one-time transition tax liability of our foreign subsidiaries. Our income before income taxes for 2017 was a loss of
$7.4 million
, and as a result, the effect from the Tax Act on the reconciliation in the table above was significant.
|
Adjusted EBITDA
|
||||||||||||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2018
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
Corporate
|
|
5.11
|
|
Ergobaby
|
|
Liberty
|
|
Manitoba Harvest
|
|
Velocity Outdoor
|
|
Advanced
Circuits |
|
Arnold
|
|
Clean Earth
|
|
Foam
|
|
Sterno
|
|
Consolidated
|
||||||||||||||||||||||||
Net income (loss)
|
|
$
|
(12,848
|
)
|
|
$
|
(12,079
|
)
|
|
$
|
4,937
|
|
|
$
|
1,161
|
|
|
$
|
(5,492
|
)
|
|
$
|
(4,458
|
)
|
|
$
|
15,029
|
|
|
$
|
(740
|
)
|
|
$
|
(854
|
)
|
|
$
|
1,103
|
|
|
$
|
12,451
|
|
|
$
|
(1,790
|
)
|
Adjusted for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Provision (benefit) for income taxes
|
|
—
|
|
|
(2,180
|
)
|
|
1,634
|
|
|
409
|
|
|
(1,460
|
)
|
|
(598
|
)
|
|
3,736
|
|
|
1,731
|
|
|
(2,458
|
)
|
|
1,152
|
|
|
4,582
|
|
|
6,548
|
|
||||||||||||
Interest expense, net
|
|
54,994
|
|
|
14
|
|
|
1
|
|
|
—
|
|
|
13
|
|
|
281
|
|
|
(46
|
)
|
|
—
|
|
|
319
|
|
|
—
|
|
|
1
|
|
|
55,577
|
|
||||||||||||
Intercompany interest
|
|
(100,246
|
)
|
|
17,486
|
|
|
4,674
|
|
|
4,233
|
|
|
5,056
|
|
|
9,298
|
|
|
7,402
|
|
|
6,213
|
|
|
16,482
|
|
|
8,228
|
|
|
21,174
|
|
|
—
|
|
||||||||||||
Depreciation and amortization
|
|
2,107
|
|
|
21,898
|
|
|
8,523
|
|
|
1,620
|
|
|
6,301
|
|
|
12,352
|
|
|
3,310
|
|
|
6,384
|
|
|
24,205
|
|
|
10,973
|
|
|
27,385
|
|
|
125,058
|
|
||||||||||||
EBITDA
|
|
(55,993
|
)
|
|
25,139
|
|
|
19,769
|
|
|
7,423
|
|
|
4,418
|
|
|
16,875
|
|
|
29,431
|
|
|
13,588
|
|
|
37,694
|
|
|
21,456
|
|
|
65,593
|
|
|
185,393
|
|
||||||||||||
Gain on sale of business
|
|
(1,258
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,258
|
)
|
||||||||||||
(Gain) loss on sale of fixed assets
|
|
—
|
|
|
(194
|
)
|
|
—
|
|
|
92
|
|
|
15
|
|
|
47
|
|
|
—
|
|
|
55
|
|
|
430
|
|
|
73
|
|
|
19
|
|
|
537
|
|
||||||||||||
Non-controlling shareholder compensation
|
|
—
|
|
|
2,183
|
|
|
869
|
|
|
45
|
|
|
711
|
|
|
1,009
|
|
|
23
|
|
|
(167
|
)
|
|
1,553
|
|
|
848
|
|
|
1,901
|
|
|
8,975
|
|
||||||||||||
Acquisition expenses
|
|
115
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,362
|
|
|
—
|
|
|
|
|
1,682
|
|
|
1,552
|
|
|
632
|
|
|
5,343
|
|
|||||||||||||
Integration services fee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,969
|
|
|
—
|
|
|
2,719
|
|
||||||||||||
Earnout provision adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,800
|
)
|
|
(4,800
|
)
|
||||||||||||
Inventory adjustment
|
|
—
|
|
|
4,175
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,175
|
|
||||||||||||
Loss on foreign currency transaction and other
|
|
4,083
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,083
|
|
||||||||||||
Management fees
|
|
38,786
|
|
|
1,000
|
|
|
500
|
|
|
500
|
|
|
350
|
|
|
500
|
|
|
500
|
|
|
500
|
|
|
500
|
|
|
658
|
|
|
500
|
|
|
44,294
|
|
||||||||||||
Adjusted EBITDA
|
|
$
|
(14,267
|
)
|
|
$
|
32,303
|
|
|
$
|
21,138
|
|
|
$
|
8,060
|
|
|
$
|
5,494
|
|
|
$
|
20,543
|
|
|
$
|
29,954
|
|
|
$
|
13,976
|
|
|
$
|
41,859
|
|
|
$
|
26,556
|
|
|
$
|
63,845
|
|
|
$
|
249,461
|
|
Adjusted EBITDA
|
||||||||||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2017
|
||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
Corporate
|
|
5.11
|
|
Ergobaby
|
|
Liberty
|
|
Manitoba Harvest
|
|
Velocity Outdoor
|
|
ACI
|
|
Arnold
|
|
Clean Earth
|
|
Foam
|
|
Sterno
|
|
Consolidated
|
||||||||||||||||||||||
Net income (loss)
|
|
$
|
(4,577
|
)
|
|
$
|
(9,405
|
)
|
|
$
|
16,674
|
|
|
$
|
4,861
|
|
|
$
|
(12,359
|
)
|
|
$
|
7,634
|
|
|
$
|
17,503
|
|
|
$
|
(10,740
|
)
|
|
$
|
13,309
|
|
|
|
|
$
|
10,712
|
|
|
$
|
33,612
|
|
Adjusted for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Provision (benefit) for income taxes
|
|
—
|
|
|
(12,492
|
)
|
|
917
|
|
|
531
|
|
|
(1,469
|
)
|
|
(11,274
|
)
|
|
(2,518
|
)
|
|
(2,337
|
)
|
|
(15,469
|
)
|
|
|
|
3,432
|
|
|
(40,679
|
)
|
|||||||||||
Interest expense, net
|
|
27,047
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
167
|
|
|
(12
|
)
|
|
—
|
|
|
327
|
|
|
|
|
—
|
|
|
27,623
|
|
|||||||||||
Intercompany interest
|
|
(66,811
|
)
|
|
14,521
|
|
|
5,990
|
|
|
4,029
|
|
|
4,150
|
|
|
4,590
|
|
|
8,171
|
|
|
6,996
|
|
|
13,468
|
|
|
|
|
4,896
|
|
|
—
|
|
|||||||||||
Depreciation and amortization
|
|
2,150
|
|
|
40,393
|
|
|
12,042
|
|
|
1,742
|
|
|
6,458
|
|
|
7,878
|
|
|
3,578
|
|
|
6,821
|
|
|
22,128
|
|
|
|
|
11,868
|
|
|
115,058
|
|
|||||||||||
EBITDA
|
|
(42,191
|
)
|
|
33,070
|
|
|
35,623
|
|
|
11,163
|
|
|
(3,179
|
)
|
|
8,995
|
|
|
26,722
|
|
|
740
|
|
|
33,763
|
|
|
|
|
30,908
|
|
|
135,614
|
|
|||||||||||
Gain on sale of business
|
|
(340
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Not Applicable
|
|
—
|
|
|
(340
|
)
|
|||||||||||
(Gain) loss on sale of fixed assets
|
|
—
|
|
|
(160
|
)
|
|
—
|
|
|
46
|
|
|
(244
|
)
|
|
43
|
|
|
(4
|
)
|
|
(7
|
)
|
|
(40
|
)
|
|
|
216
|
|
|
(150
|
)
|
||||||||||||
Non-controlling shareholder compensation
|
|
—
|
|
|
2,301
|
|
|
698
|
|
|
17
|
|
|
996
|
|
|
508
|
|
|
23
|
|
|
191
|
|
|
1,553
|
|
|
|
|
740
|
|
|
7,027
|
|
|||||||||||
Acquisition expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,836
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
214
|
|
|
2,050
|
|
|||||||||||
Impairment expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,461
|
|
|
—
|
|
|
—
|
|
|
8,864
|
|
|
—
|
|
|
|
|
—
|
|
|
17,325
|
|
|||||||||||
Loss on equity method investment
|
|
5,620
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
5,620
|
|
|||||||||||
Adjustment to earnout provision
|
|
—
|
|
|
—
|
|
|
(3,780
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(956
|
)
|
|
(4,736
|
)
|
|||||||||||
(Gain) loss on foreign currency transaction and other
|
|
(3,137
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(3,137
|
)
|
|||||||||||
Integration services fee
|
|
—
|
|
|
2,333
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
3,083
|
|
|||||||||||
Management fees
|
|
28,053
|
|
|
1,000
|
|
|
500
|
|
|
500
|
|
|
350
|
|
|
290
|
|
|
500
|
|
|
500
|
|
|
500
|
|
|
|
|
500
|
|
|
32,693
|
|
|||||||||||
Adjusted EBITDA
|
|
$
|
(11,995
|
)
|
|
$
|
38,544
|
|
|
$
|
33,041
|
|
|
$
|
11,726
|
|
|
$
|
6,384
|
|
|
$
|
12,422
|
|
|
$
|
27,241
|
|
|
$
|
10,288
|
|
|
$
|
35,776
|
|
|
|
|
$
|
31,622
|
|
|
$
|
195,049
|
|
Adjusted EBITDA
|
||||||||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2016
|
||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Corporate
|
|
5.11
|
|
Ergobaby
|
|
Liberty
|
|
Manitoba Harvest
|
|
Velocity Outdoor
|
|
ACI
|
|
Arnold
|
|
Clean Earth
|
|
Foam
|
|
Sterno
|
|
Consolidated
|
||||||||||||||||||||
Net income (loss)
(1)
|
|
$
|
70,381
|
|
|
$
|
(10,441
|
)
|
|
$
|
5,916
|
|
|
$
|
5,409
|
|
|
$
|
(4,972
|
)
|
|
|
|
$
|
9,294
|
|
|
$
|
(22,782
|
)
|
|
$
|
(3,158
|
)
|
|
|
|
$
|
6,411
|
|
|
$
|
56,058
|
|
Adjusted for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Provision (benefit) for income taxes
|
|
—
|
|
|
(5,190
|
)
|
|
4,440
|
|
|
3,449
|
|
|
(1,682
|
)
|
|
|
|
5,020
|
|
|
2,761
|
|
|
(2,782
|
)
|
|
|
|
3,453
|
|
|
9,469
|
|
||||||||||
Interest expense, net
|
|
24,131
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
|
|
—
|
|
|
—
|
|
|
460
|
|
|
|
|
12
|
|
|
24,652
|
|
||||||||||
Intercompany interest
|
|
(52,609
|
)
|
|
4,847
|
|
|
5,134
|
|
|
4,203
|
|
|
4,065
|
|
|
|
|
7,810
|
|
|
6,721
|
|
|
12,437
|
|
|
|
|
7,392
|
|
|
—
|
|
||||||||||
Depreciation and amortization
|
|
(805
|
)
|
|
23,594
|
|
|
9,350
|
|
|
2,956
|
|
|
6,487
|
|
|
|
|
3,938
|
|
|
9,421
|
|
|
21,640
|
|
|
|
|
12,589
|
|
|
89,170
|
|
||||||||||
EBITDA
|
|
41,098
|
|
|
12,850
|
|
|
24,840
|
|
|
16,017
|
|
|
3,907
|
|
|
|
|
26,062
|
|
|
(3,879
|
)
|
|
28,597
|
|
|
|
|
29,857
|
|
|
179,349
|
|
||||||||||
Gain on sale of businesses
|
|
(2,308
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Not Applicable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Not Applicable
|
|
—
|
|
|
(2,308
|
)
|
||||||||||
(Gain) loss on sale of fixed assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
1,120
|
|
|
|
(10
|
)
|
|
5
|
|
|
484
|
|
|
|
—
|
|
|
1,647
|
|
||||||||||||
Non-controlling shareholder compensation
|
|
—
|
|
|
473
|
|
|
677
|
|
|
342
|
|
|
780
|
|
|
|
|
23
|
|
|
184
|
|
|
1,240
|
|
|
|
|
661
|
|
|
4,380
|
|
||||||||||
Acquisition expenses
|
|
98
|
|
|
2,063
|
|
|
799
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
738
|
|
|
|
|
189
|
|
|
3,887
|
|
||||||||||
Impairment expense/ Loss on disposal of assets
|
|
—
|
|
|
—
|
|
|
5,899
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
16,000
|
|
|
3,305
|
|
|
|
|
—
|
|
|
25,204
|
|
||||||||||
Gain on equity method investment
|
|
(74,490
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(74,490
|
)
|
||||||||||
Adjustment to earnout provision
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
394
|
|
|
394
|
|
||||||||||
(Gain) loss on foreign currency transaction and other
|
|
(1,327
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(1,327
|
)
|
||||||||||
Integration services fee
|
|
—
|
|
|
1,167
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
1,667
|
|
||||||||||
Management fees
|
|
25,723
|
|
|
333
|
|
|
500
|
|
|
500
|
|
|
350
|
|
|
|
|
500
|
|
|
500
|
|
|
500
|
|
|
|
|
500
|
|
|
29,406
|
|
||||||||||
Adjusted EBITDA
(2)
|
|
$
|
(11,206
|
)
|
|
$
|
16,886
|
|
|
$
|
32,715
|
|
|
$
|
16,907
|
|
|
$
|
6,657
|
|
|
|
|
$
|
26,575
|
|
|
$
|
12,810
|
|
|
$
|
34,864
|
|
|
|
|
$
|
31,601
|
|
|
$
|
167,809
|
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
(1,790
|
)
|
|
$
|
33,612
|
|
|
$
|
56,530
|
|
Adjustment to reconcile net income (loss) to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
120,575
|
|
|
110,051
|
|
|
87,405
|
|
|||
Impairment expense/ Loss on disposal of assets
|
—
|
|
|
17,325
|
|
|
25,204
|
|
|||
Gain on sale of businesses
|
(1,258
|
)
|
|
(340
|
)
|
|
(2,308
|
)
|
|||
Amortization of debt issuance costs and original issue discount
|
4,483
|
|
|
5,007
|
|
|
3,565
|
|
|||
Unrealized (gain) loss on interest rate hedges
|
(2,251
|
)
|
|
(648
|
)
|
|
1,539
|
|
|||
Noncontrolling stockholders charges
|
8,975
|
|
|
7,027
|
|
|
4,382
|
|
|||
Loss (gain) on equity method investment
|
—
|
|
|
5,620
|
|
|
(74,490
|
)
|
|||
Excess tax benefit on stock compensation
|
—
|
|
|
(417
|
)
|
|
(1,163
|
)
|
|||
Provision for loss on receivables
|
433
|
|
|
3,964
|
|
|
407
|
|
|||
Deferred taxes
|
(9,472
|
)
|
|
(59,429
|
)
|
|
(9,669
|
)
|
|||
Other
|
1,007
|
|
|
393
|
|
|
1,486
|
|
|||
Changes in operating assets and liabilities
|
(6,250
|
)
|
|
(40,394
|
)
|
|
18,484
|
|
|||
Net cash provided by operating activities
|
114,452
|
|
|
81,771
|
|
|
111,372
|
|
|||
Plus:
|
|
|
|
|
|
||||||
Unused fee on revolving credit facility
|
1,630
|
|
|
2,856
|
|
|
1,947
|
|
|||
Excess tax benefit from subsidiary stock option exercise
|
—
|
|
|
417
|
|
|
1,163
|
|
|||
Successful acquisition expense
|
5,343
|
|
|
2,050
|
|
|
3,888
|
|
|||
Integration services agreement
(1)
|
2,719
|
|
|
3,083
|
|
|
1,667
|
|
|||
Realized loss from foreign currency effect
(2)
|
4,083
|
|
|
—
|
|
|
—
|
|
|||
Earnout provision adjustment
(3)
|
—
|
|
|
—
|
|
|
394
|
|
|||
Other
(4)
|
5,181
|
|
|
—
|
|
|
421
|
|
|||
Changes in operating assets and liabilities
|
6,250
|
|
|
40,394
|
|
|
—
|
|
|||
Less:
|
|
|
|
|
|
||||||
Changes in operating assets and liabilities
|
—
|
|
|
—
|
|
|
18,484
|
|
|||
Payment on interest rate swap
|
1,783
|
|
|
3,964
|
|
|
4,303
|
|
|||
Earnout provision adjustment
(3)
|
4,800
|
|
|
4,736
|
|
|
—
|
|
|||
Realized gain from foreign currency effect
(2)
|
—
|
|
|
3,315
|
|
|
1,327
|
|
|||
Other
(5)
|
—
|
|
|
3,586
|
|
|
—
|
|
|||
Maintenance capital expenditures:
(6)
|
|
|
|
|
|
||||||
Compass Group Diversified Holdings LLC
|
—
|
|
|
—
|
|
|
—
|
|
|||
5.11
|
2,322
|
|
|
2,934
|
|
|
1,838
|
|
|||
Advanced Circuits
|
1,588
|
|
|
628
|
|
|
2,931
|
|
Arnold
|
4,708
|
|
|
4,851
|
|
|
3,801
|
|
|||
Clean Earth
|
8,023
|
|
|
5,289
|
|
|
6,202
|
|
|||
Ergobaby
|
737
|
|
|
1,041
|
|
|
826
|
|
|||
Foam Fabricators
|
1,795
|
|
|
—
|
|
|
—
|
|
|||
Liberty
|
1,130
|
|
|
706
|
|
|
1,098
|
|
|||
Manitoba Harvest
|
481
|
|
|
647
|
|
|
1,495
|
|
|||
Sterno
|
2,694
|
|
|
2,343
|
|
|
1,787
|
|
|||
Tridien (divested September 2016)
|
—
|
|
|
—
|
|
|
385
|
|
|||
Velocity
|
3,768
|
|
|
1,831
|
|
|
—
|
|
|||
Preferred share distributions
|
12,179
|
|
|
2,457
|
|
|
—
|
|
|||
Estimated cash flow available for distribution and reinvestment
|
$
|
93,650
|
|
|
$
|
92,243
|
|
|
$
|
76,375
|
|
|
|
|
|
|
|
||||||
Distribution paid in April 2018/2017/2016
|
$
|
(21,564
|
)
|
|
$
|
(21,564
|
)
|
|
$
|
(19,548
|
)
|
Distribution paid in July 2018/2017/2016
|
(21,564
|
)
|
|
(21,564
|
)
|
|
(19,548
|
)
|
|||
Distribution paid in October 2018/2017/2016
|
(21,564
|
)
|
|
(21,564
|
)
|
|
(19,548
|
)
|
|||
Distribution paid in January 2019/2018/2017
|
(21,564
|
)
|
|
(21,564
|
)
|
|
(21,564
|
)
|
|||
|
$
|
(86,256
|
)
|
|
$
|
(86,256
|
)
|
|
$
|
(80,208
|
)
|
(1)
|
Represents fees paid by newly acquired companies to the Manager for integration services performed during the first year of ownership, payable quarterly.
|
(2)
|
Represents the foreign currency transaction gain or loss resulting from the Canadian dollar intercompany loans issued to Manitoba Harvest.
|
(3)
|
Earnout provision adjustment related to the change in estimate of contingent consideration that was recorded in the consolidated statement of operations.
|
(4)
|
Includes $4.2 million in additional reserves recorded in the fourth quarter of 2018 for slow moving inventory acquired prior to our ownership of 5.11.
|
(5)
|
Includes amounts for the establishment of accounts receivable reserves related to two retail customers who filed bankruptcy during the first and third quarters of 2017.
|
(6)
|
Represents maintenance capital expenditures that were funded from operating cash flow and excludes growth capital expenditures of approximately $22.5 million, $24.3 million and $3.4 million incurred during the years ended December 31, 2018, 2017 and 2016, respectively.
|
|
|
Year Ended December 31,
|
|||||||
Quarter Ended
|
|
2018
|
|
2017
|
|
2016
|
|||
|
|
|
|
|
|
|
|||
March 31
|
|
21.3
|
%
|
|
22.8
|
%
|
|
19.8
|
%
|
June 30
|
|
25.4
|
%
|
|
24.2
|
%
|
|
21.9
|
%
|
September 30
|
|
26.5
|
%
|
|
25.5
|
%
|
|
25.8
|
%
|
December 31
|
|
26.8
|
%
|
|
27.4
|
%
|
|
32.6
|
%
|
•
|
Management Services Agreement
|
•
|
LLC Agreement
|
•
|
Integration Services Agreement
|
•
|
Cost Reimbursement and Fees
|
|
|
Year ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Balance January 1st
|
|
$
|
141,767
|
|
|
$
|
249,747
|
|
Proceeds from sale of FOX shares, net - March
|
|
(136,147
|
)
|
|
(47,685
|
)
|
||
Proceeds from sale of FOX shares, net - August
|
|
—
|
|
|
(63,000
|
)
|
||
Proceeds from sale of FOX shares, net - November
|
|
—
|
|
|
(71,785
|
)
|
||
Mark-to-market adjustment - investment
(1)
|
|
(5,620
|
)
|
|
74,490
|
|
||
Balance December 31st
|
|
$
|
—
|
|
|
$
|
141,767
|
|
(in thousands)
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt obligations
(1)
|
$
|
1,505,430
|
|
|
$
|
68,129
|
|
|
$
|
122,813
|
|
|
$
|
350,019
|
|
|
$
|
964,469
|
|
Operating lease obligations
(2)
|
153,208
|
|
|
28,069
|
|
|
48,743
|
|
|
32,009
|
|
|
44,387
|
|
|||||
Purchase obligations
(3)
|
862,448
|
|
|
248,537
|
|
|
317,760
|
|
|
296,066
|
|
|
85
|
|
|||||
Total
(4)
|
$
|
2,521,086
|
|
|
$
|
344,735
|
|
|
$
|
489,316
|
|
|
$
|
678,094
|
|
|
$
|
1,008,941
|
|
(1)
|
Reflects commitment fees and letter of credit fees under our Revolving Credit Facility and amounts due, together with interest on our Term Loan Facility and Senior Notes.
|
(2)
|
Reflects various operating leases for office space, manufacturing facilities and equipment from third parties.
|
(3)
|
Reflects non-cancelable commitments as of December 31, 2018, including: (i) shareholder distributions of $101.4 million; (ii) estimated management fees of $46.6 million per year over the next five years; and (iii) other obligations, including amounts due under employment agreements. Distributions to our shareholders are approved by our board of directors each fiscal quarter. The amount approved for future quarters may differ from the amount included in this schedule.
|
(4)
|
The contractual obligation table does not include approximately $1.1 million in liabilities associated with unrecognized tax benefits as of December 31, 2018 as the timing of the recognition of this liability is not certain. The amount of the liability is not expected to significantly change in the next twelve months.
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedule
|
3.
|
Exhibits
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
|
2.2
|
|
|
2.3
|
|
|
2.4
|
|
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
3.5
|
|
|
3.6
|
|
|
3.7
|
|
|
3.8
|
|
|
3.9
|
|
|
3.10
|
|
|
3.11
|
|
|
3.12
|
|
|
3.13
|
|
|
3.14
|
|
Exhibit
Number
|
|
Description
|
3.15
|
|
|
3.16
|
|
|
3.17
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3†
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
Exhibit
Number
|
|
Description
|
10.13
|
|
10.14
|
|
|
10.15†
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
21.1*
|
|
|
23.1*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1*
+
|
|
|
32.2*
+
|
|
|
99.1
|
|
|
99.2
|
|
|
99.3
|
|
|
99.4
|
|
|
99.5
|
|
99.6
|
|
|
99.7
|
|
|
99.8
|
|
|
99.9
|
|
|
99.10
|
|
|
99.11
|
|
|
99.12
|
|
|
99.13
|
|
|
99.14
|
|
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
*
|
|
Filed herewith.
|
†
|
|
Denotes management contracts and compensatory plans or arrangements.
|
+
|
|
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management's Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibit 32.1 and 32.2 hereto are deemed to accompany this Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|
|
COMPASS GROUP DIVERSIFIED HOLDINGS LLC
|
|
|
|
|
Date: 2/27/2019
|
By:
|
/s/ Elias J. Sabo
|
|
|
Elias J. Sabo
|
|
|
Chief Executive Officer
|
Signature
|
Title
|
Date
|
|
|
|
/s/ Elias J. Sabo
|
Chief Executive Officer
|
February 27, 2019
|
Elias J. Sabo
|
(Principal Executive Officer)
and Director
|
|
|
|
|
/s/ Ryan J. Faulkingham
|
Chief Financial Officer
|
February 27, 2019
|
Ryan J. Faulkingham
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
/s/ C. Sean Day
|
Director
|
February 27, 2019
|
C. Sean Day
|
|
|
|
|
|
/s/ D. Eugene Ewing
|
Director
|
February 27, 2019
|
D. Eugene Ewing
|
|
|
|
|
|
/s/ Harold S. Edwards
|
Director
|
February 27, 2019
|
Harold S. Edwards
|
|
|
|
|
|
|
|
|
/s/ Gordon Burns
|
Director
|
February 27, 2019
|
Gordon Burns
|
|
|
|
|
|
/s/ James J. Bottiglieri
|
Director
|
February 27, 2019
|
James J. Bottiglieri
|
|
|
|
|
|
/s/ Sarah G. McCoy
|
Director
|
February 27, 2019
|
Sarah G. McCoy
|
|
|
|
COMPASS DIVERSIFIED HOLDINGS
|
|
|
|
|
Date: 2/27/2019
|
By:
|
/s/ Ryan J. Faulkingham
|
|
|
Ryan J. Faulkingham
|
|
|
Regular Trustee
|
|
Page
|
Historical Financial Statements:
|
|
|
|
Supplemental Financial Data:
|
|
The following supplementary financial data of the registrant and its subsidiaries required to be included in Item 15(a)(2) of Form 10-K are listed below:
|
|
All other schedules not listed above have been omitted as not applicable or because the required information is included in the Consolidated Financial Statements or in the notes thereto.
|
|
|
Year ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenues
|
$
|
1,691,673
|
|
|
$
|
1,269,729
|
|
|
$
|
978,309
|
|
Cost of revenues
|
1,117,485
|
|
|
822,020
|
|
|
651,739
|
|
|||
Gross profit
|
574,188
|
|
|
447,709
|
|
|
326,570
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative expense
|
392,500
|
|
|
318,484
|
|
|
217,830
|
|
|||
Management fees
|
44,294
|
|
|
32,693
|
|
|
29,406
|
|
|||
Amortization expense
|
68,076
|
|
|
52,003
|
|
|
35,069
|
|
|||
Impairment expense
|
—
|
|
|
17,325
|
|
|
16,000
|
|
|||
Loss on disposal of assets
|
—
|
|
|
—
|
|
|
9,204
|
|
|||
Operating income
|
69,318
|
|
|
27,204
|
|
|
19,061
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense, net
|
(55,577
|
)
|
|
(27,623
|
)
|
|
(24,651
|
)
|
|||
Gain (loss) on investment (refer to Note P)
|
—
|
|
|
(5,620
|
)
|
|
74,490
|
|
|||
Amortization of debt issuance costs
|
(3,905
|
)
|
|
(4,002
|
)
|
|
(2,763
|
)
|
|||
Other income (expense), net
|
(6,336
|
)
|
|
2,634
|
|
|
(2,919
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
3,500
|
|
|
(7,407
|
)
|
|
63,218
|
|
|||
Provision (benefit) for income taxes
|
6,548
|
|
|
(40,679
|
)
|
|
9,469
|
|
|||
Income (loss) from continuing operations
|
(3,048
|
)
|
|
33,272
|
|
|
53,749
|
|
|||
Income from discontinued operations, net of income tax
|
—
|
|
|
—
|
|
|
473
|
|
|||
Gain on sale of discontinued operations, net of income tax
|
1,258
|
|
|
340
|
|
|
2,308
|
|
|||
Net income (loss)
|
(1,790
|
)
|
|
33,612
|
|
|
56,530
|
|
|||
Less: Income from continuing operations attributable to noncontrolling interest
|
3,912
|
|
|
5,621
|
|
|
1,961
|
|
|||
Less: Loss from discontinued operations attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(116
|
)
|
|||
Net income (loss) attributable to Holdings
|
$
|
(5,702
|
)
|
|
$
|
27,991
|
|
|
$
|
54,685
|
|
|
|
|
|
|
|
||||||
Amounts attributable to common shares of Holdings:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
(6,960
|
)
|
|
$
|
27,651
|
|
|
$
|
51,788
|
|
Income from discontinued operations, net of income tax
|
—
|
|
|
—
|
|
|
589
|
|
|||
Gain on sale of discontinued operations, net of income tax
|
1,258
|
|
|
340
|
|
|
2,308
|
|
|||
Net income (loss) attributable to Holdings
|
$
|
(5,702
|
)
|
|
$
|
27,991
|
|
|
$
|
54,685
|
|
Basic and fully diluted income (loss) per share attributable to Holdings (refer to Note K)
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(0.44
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.46
|
|
Discontinued operations
|
0.02
|
|
|
0.01
|
|
|
0.05
|
|
|||
|
$
|
(0.42
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
0.51
|
|
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding - basic and fully diluted
|
59,900
|
|
|
59,900
|
|
|
54,591
|
|
|||
Cash distribution declared per share (refer to Note K)
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
(1,790
|
)
|
|
$
|
33,612
|
|
|
$
|
56,530
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(6,630
|
)
|
|
6,533
|
|
|
615
|
|
|||
Pension benefit liability, net
|
427
|
|
|
409
|
|
|
(326
|
)
|
|||
Total comprehensive income (loss), net of tax
|
(7,993
|
)
|
|
40,554
|
|
|
56,819
|
|
|||
Less: Net income attributable to noncontrolling interests
|
3,912
|
|
|
5,621
|
|
|
1,845
|
|
|||
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
(1,247
|
)
|
|
1,223
|
|
|
516
|
|
|||
Total comprehensive income (loss) attributable to Holdings, net of tax
|
$
|
(10,658
|
)
|
|
$
|
33,710
|
|
|
$
|
54,458
|
|
|
Trust Preferred Shares
|
|
Trust Common Shares
|
|
Accumulated
Deficit
|
|
Accumulated Other
Comprehensive
Loss
|
|
Stockholders’
Equity
Attributable to
Holdings
|
|
Non-
Controlling
Interest
|
|
Non-Controlling
Interest of Disc. Ops.
|
|
Total
Stockholders’
Equity
|
||||||||||||||||||||
(in thousands)
|
Series A
|
|
Series B
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance — December 31, 2017
|
96,417
|
|
|
—
|
|
|
924,680
|
|
|
(145,316
|
)
|
|
(2,573
|
)
|
|
873,208
|
|
|
52,791
|
|
|
—
|
|
|
925,999
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,702
|
)
|
|
—
|
|
|
(5,702
|
)
|
|
3,912
|
|
|
—
|
|
|
(1,790
|
)
|
|||||||||
Total comprehensive income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,203
|
)
|
|
(6,203
|
)
|
|
—
|
|
|
—
|
|
|
(6,203
|
)
|
|||||||||
Issuance of Trust preferred shares, net of offering costs
|
—
|
|
|
96,504
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96,504
|
|
|
—
|
|
|
—
|
|
|
96,504
|
|
|||||||||
Option activity attributable to noncontrolling shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,975
|
|
|
—
|
|
|
8,975
|
|
|||||||||
Effect of subsidiary stock option exercise
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
404
|
|
|
—
|
|
|
404
|
|
|||||||||
Purchase of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,112
|
)
|
|
—
|
|
|
(6,112
|
)
|
|||||||||
Distributions paid - Trust Preferred Shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,179
|
)
|
|
—
|
|
|
(12,179
|
)
|
|
—
|
|
|
—
|
|
|
(12,179
|
)
|
|||||||||
Distributions paid - Trust Common Shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(86,256
|
)
|
|
—
|
|
|
(86,256
|
)
|
|
—
|
|
|
—
|
|
|
(86,256
|
)
|
|||||||||
Balance — December 31, 2018
|
$
|
96,417
|
|
|
$
|
96,504
|
|
|
$
|
924,680
|
|
|
$
|
(249,453
|
)
|
|
$
|
(8,776
|
)
|
|
$
|
859,372
|
|
|
$
|
59,970
|
|
|
$
|
—
|
|
|
$
|
919,342
|
|
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(1,790
|
)
|
|
$
|
33,612
|
|
|
$
|
56,530
|
|
Income from discontinued operations
|
|
—
|
|
|
—
|
|
|
473
|
|
|||
Gain on sale of discontinued operations
|
|
1,258
|
|
|
340
|
|
|
2,308
|
|
|||
Net income (loss) from continuing operations
|
|
(3,048
|
)
|
|
33,272
|
|
|
53,749
|
|
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation expense
|
|
42,679
|
|
|
33,041
|
|
|
26,853
|
|
|||
Amortization expense
|
|
77,896
|
|
|
77,010
|
|
|
58,752
|
|
|||
Amortization of debt issuance costs and original issue discount
|
|
4,483
|
|
|
5,007
|
|
|
3,565
|
|
|||
Impairment expense
|
|
—
|
|
|
17,325
|
|
|
16,000
|
|
|||
Loss on disposal of assets
|
|
—
|
|
|
—
|
|
|
9,204
|
|
|||
Unrealized (gain) loss on interest rate swap
|
|
(2,251
|
)
|
|
(648
|
)
|
|
1,539
|
|
|||
Noncontrolling stockholder stock based compensation
|
|
8,975
|
|
|
7,028
|
|
|
4,382
|
|
|||
Excess tax benefit from subsidiary stock options exercised
|
|
—
|
|
|
(417
|
)
|
|
(1,163
|
)
|
|||
Loss (gain) on equity method investment
|
|
—
|
|
|
5,620
|
|
|
(74,490
|
)
|
|||
Provision for loss on receivables
|
|
433
|
|
|
3,964
|
|
|
448
|
|
|||
Deferred taxes
|
|
(9,472
|
)
|
|
(59,429
|
)
|
|
(9,868
|
)
|
|||
Other
|
|
1,007
|
|
|
392
|
|
|
1,420
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
||||||
Increase in accounts receivable
|
|
(875
|
)
|
|
(17,581
|
)
|
|
(15,596
|
)
|
|||
(Increase) decrease in inventories
|
|
(20,948
|
)
|
|
(28,247
|
)
|
|
2,893
|
|
|||
(Increase) decrease in prepaid expenses and other current assets
|
|
(8,348
|
)
|
|
(3,312
|
)
|
|
4,850
|
|
|||
Increase in accounts payable and accrued expenses
|
|
23,921
|
|
|
8,746
|
|
|
25,148
|
|
|||
Net cash provided by operating activities - continuing operations
|
|
114,452
|
|
|
81,771
|
|
|
107,686
|
|
|||
Net cash provided by operating activities - discontinued operations
|
|
—
|
|
|
—
|
|
|
3,686
|
|
|||
Net cash provided by operations
|
|
114,452
|
|
|
81,771
|
|
|
111,372
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Acquisitions, net of cash acquired
|
|
(552,062
|
)
|
|
(164,950
|
)
|
|
(536,175
|
)
|
|||
Purchases of property and equipment
|
|
(50,315
|
)
|
|
(44,767
|
)
|
|
(23,969
|
)
|
|||
Proceeds from FOX stock offerings
|
|
—
|
|
|
136,147
|
|
|
182,470
|
|
|||
Proceeds from sale of businesses
|
|
94
|
|
|
340
|
|
|
11,249
|
|
|||
Purchase of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(1,475
|
)
|
|||
Payment of interest rate swap
|
|
(1,783
|
)
|
|
(3,964
|
)
|
|
(4,303
|
)
|
|||
Other investing activities
|
|
(14
|
)
|
|
(84
|
)
|
|
(10
|
)
|
|||
Net cash used in investing activities - continuing operations
|
|
(604,080
|
)
|
|
(77,278
|
)
|
|
(372,213
|
)
|
|||
Net cash provided by investing activities - discontinued operations
|
|
—
|
|
|
—
|
|
|
9,192
|
|
|||
Net cash used in investing activities
|
|
(604,080
|
)
|
|
(77,278
|
)
|
|
(363,021
|
)
|
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from the issuance of Trust common shares, net
|
|
—
|
|
|
—
|
|
|
99,359
|
|
|||
Proceeds from the issuance of Trust preferred shares, net
|
|
96,504
|
|
|
96,417
|
|
|
—
|
|
|||
Borrowings under credit facility
|
|
1,307,250
|
|
|
260,500
|
|
|
671,298
|
|
|||
Repayments under credit facility
|
|
(1,186,222
|
)
|
|
(228,585
|
)
|
|
(423,240
|
)
|
|||
Issuance of Senior Notes
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|||
Distributions paid - common shares
|
|
(86,256
|
)
|
|
(86,256
|
)
|
|
(78,192
|
)
|
|||
Distributions paid - preferred shares
|
|
(12,179
|
)
|
|
(2,457
|
)
|
|
—
|
|
|||
Net proceeds provided by noncontrolling shareholders
|
|
404
|
|
|
822
|
|
|
8,887
|
|
|||
Distributions paid to noncontrolling shareholders
|
|
—
|
|
|
—
|
|
|
(23,630
|
)
|
|||
Distributions paid - Allocation Interests
|
|
—
|
|
|
(39,188
|
)
|
|
(23,779
|
)
|
|||
Repurchase of subsidiary stock
|
|
(6,112
|
)
|
|
—
|
|
|
(15,407
|
)
|
|||
Debt issuance costs
|
|
(14,887
|
)
|
|
(2,899
|
)
|
|
(5,986
|
)
|
|||
Excess tax benefit on stock-based compensation
|
|
—
|
|
|
417
|
|
|
1,163
|
|
|||
Other
|
|
1,609
|
|
|
(1,359
|
)
|
|
(1,747
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
500,111
|
|
|
(2,588
|
)
|
|
208,726
|
|
|||
Foreign currency impact on cash
|
|
2,958
|
|
|
(1,792
|
)
|
|
(3,174
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
13,441
|
|
|
113
|
|
|
(46,097
|
)
|
|||
Cash and cash equivalents — beginning of period
(1)
|
|
39,885
|
|
|
39,772
|
|
|
85,869
|
|
|||
Cash and cash equivalents — end of period
|
|
$
|
53,326
|
|
|
$
|
39,885
|
|
|
$
|
39,772
|
|
Buildings and improvements
|
6 to 25 years
|
Machinery and equipment
|
2 to 20 years
|
Office furniture, computers and software
|
2 to 8 years
|
Leasehold improvements
|
Shorter of useful life or lease term
|
|
|
Preliminary Purchase Allocation
|
|
Measurement Period Adjustments
|
|
Final Purchase Allocation
|
||||||
(in thousands)
|
|
As of 2/15/18
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Cash
|
|
$
|
6,282
|
|
|
$
|
—
|
|
|
$
|
6,282
|
|
Accounts receivable
(1)
|
|
19,058
|
|
|
—
|
|
|
19,058
|
|
|||
Inventory
(2)
|
|
13,218
|
|
|
(6
|
)
|
|
13,212
|
|
|||
Property, plant and equipment
(3)
|
|
23,485
|
|
|
4,885
|
|
|
28,370
|
|
|||
Intangible assets
|
|
121,392
|
|
|
(3,050
|
)
|
|
118,342
|
|
|||
Goodwill
|
|
71,489
|
|
|
1,219
|
|
|
72,708
|
|
|||
Other current and noncurrent assets
|
|
2,945
|
|
|
—
|
|
|
2,945
|
|
|||
Total assets
|
|
257,869
|
|
|
3,048
|
|
|
260,917
|
|
|||
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
5,968
|
|
|
—
|
|
|
5,968
|
|
|||
Other liabilities
|
|
115,033
|
|
|
|
|
115,033
|
|
||||
Total liabilities
|
|
121,001
|
|
|
—
|
|
|
121,001
|
|
|||
|
|
|
|
|
|
|
||||||
Net assets acquired
|
|
136,868
|
|
|
3,048
|
|
|
139,916
|
|
|||
Intercompany loans to business
|
|
115,033
|
|
|
—
|
|
|
115,033
|
|
|||
|
|
$
|
251,901
|
|
|
$
|
3,048
|
|
|
$
|
254,949
|
|
Acquisition Consideration
|
|
|
|
|
|
|
||||||
Purchase price
|
|
$
|
247,500
|
|
|
$
|
—
|
|
|
$
|
247,500
|
|
Working capital adjustment
|
|
755
|
|
|
615
|
|
|
1,370
|
|
|||
Cash acquired
|
|
3,646
|
|
|
2,433
|
|
|
6,079
|
|
|||
Total purchase consideration
|
|
$
|
251,901
|
|
|
$
|
3,048
|
|
|
$
|
254,949
|
|
Less: Transaction costs
|
|
1,552
|
|
|
—
|
|
|
1,552
|
|
|||
Purchase price, net
|
|
$
|
250,349
|
|
|
$
|
3,048
|
|
|
$
|
253,397
|
|
Intangible assets
|
|
Amount
|
|
Estimated Useful Life
|
||
Tradename
|
|
$
|
4,215
|
|
|
10 years
|
Customer Relationships
|
|
114,127
|
|
|
15 years
|
|
|
|
$
|
118,342
|
|
|
|
|
|
Preliminary Purchase Allocation
|
|
Measurement Period Adjustments
|
|
Final Purchase Allocation
|
||||||
(in thousands)
|
|
As of 2/26/18
|
|
|
|
As of 12/31/18
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Cash
|
|
$
|
10,025
|
|
|
$
|
—
|
|
|
$
|
10,025
|
|
Accounts receivable
(1)
|
|
21,431
|
|
|
—
|
|
|
21,431
|
|
|||
Inventory
(2)
|
|
29,691
|
|
|
4,701
|
|
|
34,392
|
|
|||
Property, plant and equipment
|
|
1,493
|
|
|
1,886
|
|
|
3,379
|
|
|||
Intangible assets
|
|
—
|
|
|
85,700
|
|
|
85,700
|
|
|||
Goodwill
|
|
121,364
|
|
|
(107,846
|
)
|
|
13,518
|
|
|||
Other current and noncurrent assets
|
|
446
|
|
|
—
|
|
|
446
|
|
|||
Total assets
|
|
184,450
|
|
|
(15,559
|
)
|
|
168,891
|
|
|||
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
9,034
|
|
|
—
|
|
|
9,034
|
|
|||
Other liabilities
(3)
|
|
25,000
|
|
|
(20,200
|
)
|
|
4,800
|
|
|||
Total liabilities
|
|
34,034
|
|
|
(20,200
|
)
|
|
13,834
|
|
|||
|
|
|
|
|
|
|
||||||
Net assets acquired
|
|
$
|
150,416
|
|
|
$
|
4,641
|
|
|
$
|
155,057
|
|
Acquisition Consideration
|
|
|
|
|
|
|
||||||
Purchase price
|
|
$
|
145,000
|
|
|
$
|
—
|
|
|
$
|
145,000
|
|
Cash acquired
|
|
9,500
|
|
|
525
|
|
|
10,025
|
|
|||
Working capital adjustment
|
|
(4,084
|
)
|
|
4,116
|
|
|
32
|
|
|||
Total purchase consideration
|
|
150,416
|
|
|
4,641
|
|
|
155,057
|
|
|||
Less: Transaction costs
|
|
632
|
|
|
—
|
|
|
632
|
|
|||
Purchase price, net
|
|
$
|
149,784
|
|
|
$
|
4,641
|
|
|
$
|
154,425
|
|
Intangible assets
|
|
Amount
|
|
Estimated Useful Life
|
||
Tradename
|
|
$
|
6,600
|
|
|
8 years
|
Customer Relationships
|
|
79,100
|
|
|
9 years
|
|
|
|
$
|
85,700
|
|
|
|
|
|
Final Purchase Allocation
|
||
(in thousands)
|
|
As of 12/31/17
|
||
Assets:
|
|
|
||
Cash
|
|
$
|
1,210
|
|
Accounts receivable
(1)
|
|
16,751
|
|
|
Inventory
|
|
28,873
|
|
|
Property, plant and equipment
|
|
15,014
|
|
|
Intangible assets
|
|
84,594
|
|
|
Goodwill
|
|
48,759
|
|
|
Other current and noncurrent assets
|
|
2,348
|
|
|
Total assets
|
|
$
|
197,549
|
|
Acquisition Consideration
|
|
|
||
Purchase price
|
|
$
|
151,800
|
|
Cash acquired
|
|
1,210
|
|
|
Working capital adjustment
|
|
(1,139
|
)
|
|
Total purchase consideration
|
|
$
|
151,871
|
|
Less: Transaction costs
|
|
1,473
|
|
|
Purchase price, net
|
|
$
|
150,398
|
|
Intangible Assets
|
|
Amount
|
|
Estimated Useful Life
|
||
Tradename
|
|
$
|
53,463
|
|
|
20 years
|
Customer relationships
|
|
28,718
|
|
|
15 years
|
|
Technology
|
|
2,413
|
|
|
15 years
|
|
|
|
$
|
84,594
|
|
|
|
5.11 Tactical
|
|
|
||
(in thousands)
|
|
|
||
Assets:
|
|
|
||
Cash
|
|
$
|
12,581
|
|
Accounts receivable
(1)
|
|
38,323
|
|
|
Inventory
(2)
|
|
160,304
|
|
|
Property, plant and equipment
(3)
|
|
22,723
|
|
|
Intangible assets
|
|
127,890
|
|
|
Goodwill
|
|
92,966
|
|
|
Other current and noncurrent assets
|
|
4,884
|
|
|
Total assets
|
|
$
|
459,671
|
|
Liabilities and noncontrolling interest:
|
|
|
||
Current liabilities
|
|
$
|
38,229
|
|
Other liabilities
|
|
180,231
|
|
|
Deferred tax liabilities
|
|
10,163
|
|
|
Noncontrolling interest
|
|
5,568
|
|
|
Total liabilities and noncontrolling interest
|
|
$
|
234,191
|
|
|
|
|
||
Net assets acquired
|
|
$
|
225,480
|
|
Noncontrolling interest
|
|
5,568
|
|
|
Intercompany loans to business
|
|
179,237
|
|
|
|
|
$
|
410,285
|
|
|
|
|
Acquisition Consideration
|
|
|
||
Purchase price
|
|
$
|
400,000
|
|
Working capital adjustment
|
|
(2,296
|
)
|
|
Cash
|
|
12,581
|
|
|
Total purchase consideration
|
|
$
|
410,285
|
|
Less: Transaction costs
|
|
2,063
|
|
|
Purchase price, net
|
|
$
|
408,222
|
|
Intangible assets
|
|
Amount
|
|
Estimated Useful Life
|
||
Trade name
|
|
$
|
48,665
|
|
|
15 years
|
Customer relationships
|
|
75,218
|
|
|
15 years
|
|
Technology
|
|
4,007
|
|
|
10 years
|
|
|
|
$
|
127,890
|
|
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Net revenues
|
$
|
1,731,501
|
|
|
$
|
1,595,055
|
|
Gross profit
|
584,606
|
|
|
541,018
|
|
||
Operating income
|
72,447
|
|
|
63,278
|
|
||
Net income (loss) from continuing operations
|
(4,668
|
)
|
|
49,027
|
|
||
Net income (loss) from continuing operations attributable to Holdings
|
(756
|
)
|
|
43,406
|
|
||
Basic and fully diluted net income (loss) per share attributable to Holdings
|
(0.34
|
)
|
|
(0.18
|
)
|
|
Year ended December 31, 2018
|
||||||||||||||||||||||||||||||||||||||||||
|
5.11
|
|
Ergo
|
|
Liberty
|
|
Manitoba Harvest
|
|
Velocity
|
|
ACI
|
|
Arnold
|
|
Clean Earth
|
|
Foam
|
|
Sterno
|
|
Total
|
||||||||||||||||||||||
United States
|
$
|
265,306
|
|
|
$
|
32,558
|
|
|
$
|
80,334
|
|
|
$
|
46,703
|
|
|
$
|
113,915
|
|
|
$
|
92,511
|
|
|
$
|
70,049
|
|
|
$
|
266,916
|
|
|
$
|
97,118
|
|
|
$
|
365,403
|
|
|
$
|
1,430,813
|
|
Canada
|
7,808
|
|
|
3,076
|
|
|
2,324
|
|
|
18,827
|
|
|
6,162
|
|
|
|
|
1,177
|
|
|
—
|
|
|
—
|
|
|
13,304
|
|
|
52,678
|
|
||||||||||||
Europe
|
31,026
|
|
|
28,482
|
|
|
—
|
|
|
1,072
|
|
|
5,574
|
|
|
—
|
|
|
38,536
|
|
|
—
|
|
|
—
|
|
|
1,218
|
|
|
105,908
|
|
|||||||||||
Asia Pacific
|
16,168
|
|
|
25,488
|
|
|
—
|
|
|
536
|
|
|
1,200
|
|
|
—
|
|
|
5,176
|
|
|
—
|
|
|
—
|
|
|
169
|
|
|
48,737
|
|
|||||||||||
Other international
|
27,614
|
|
|
962
|
|
|
—
|
|
|
299
|
|
|
4,445
|
|
|
—
|
|
|
2,922
|
|
|
—
|
|
|
16,314
|
|
|
981
|
|
|
53,537
|
|
|||||||||||
|
$
|
347,922
|
|
|
$
|
90,566
|
|
|
$
|
82,658
|
|
|
$
|
67,437
|
|
|
$
|
131,296
|
|
|
$
|
92,511
|
|
|
$
|
117,860
|
|
|
$
|
266,916
|
|
|
$
|
113,432
|
|
|
$
|
381,075
|
|
|
$
|
1,691,673
|
|
|
Year ended December 31, 2017
|
||||||||||||||||||||||||||||||||||||||
|
5.11
|
|
Ergo
|
|
Liberty
|
|
Manitoba Harvest
|
|
Velocity
|
|
ACI
|
|
Arnold
|
|
Clean Earth
|
|
Sterno
|
|
Total
|
||||||||||||||||||||
United States
|
$
|
224,141
|
|
|
$
|
40,870
|
|
|
$
|
89,969
|
|
|
$
|
31,169
|
|
|
$
|
68,393
|
|
|
$
|
87,782
|
|
|
$
|
62,667
|
|
|
$
|
211,247
|
|
|
$
|
204,710
|
|
|
$
|
1,020,948
|
|
Canada
|
6,180
|
|
|
3,473
|
|
|
1,987
|
|
|
21,359
|
|
|
4,070
|
|
|
—
|
|
|
1,237
|
|
|
—
|
|
|
17,250
|
|
|
55,556
|
|
||||||||||
Europe
|
24,552
|
|
|
25,973
|
|
|
—
|
|
|
1,647
|
|
|
3,066
|
|
|
—
|
|
|
32,101
|
|
|
—
|
|
|
2,322
|
|
|
89,661
|
|
||||||||||
Asia Pacific
|
14,800
|
|
|
32,617
|
|
|
—
|
|
|
689
|
|
|
756
|
|
|
—
|
|
|
4,976
|
|
|
—
|
|
|
1,244
|
|
|
55,082
|
|
||||||||||
Other international
|
40,326
|
|
|
36
|
|
|
—
|
|
|
835
|
|
|
2,102
|
|
|
—
|
|
|
4,599
|
|
|
—
|
|
|
584
|
|
|
48,482
|
|
||||||||||
|
$
|
309,999
|
|
|
$
|
102,969
|
|
|
$
|
91,956
|
|
|
$
|
55,699
|
|
|
$
|
78,387
|
|
|
$
|
87,782
|
|
|
$
|
105,580
|
|
|
$
|
211,247
|
|
|
$
|
226,110
|
|
|
$
|
1,269,729
|
|
|
Year ended December 31, 2016
|
||||||||||||||||||||||||||||||||||
|
5.11
|
|
Ergo
|
|
Liberty
|
|
Manitoba Harvest
|
|
ACI
|
|
Arnold
|
|
Clean Earth
|
|
Sterno
|
|
Total
|
||||||||||||||||||
United States
|
$
|
79,429
|
|
|
$
|
47,509
|
|
|
$
|
103,812
|
|
|
$
|
27,725
|
|
|
$
|
86,041
|
|
|
$
|
66,161
|
|
|
$
|
188,997
|
|
|
$
|
198,997
|
|
|
$
|
798,671
|
|
Canada
|
1,732
|
|
|
2,436
|
|
|
—
|
|
|
21,344
|
|
|
—
|
|
|
1,235
|
|
|
—
|
|
|
15,494
|
|
|
42,241
|
|
|||||||||
Europe
|
7,816
|
|
|
17,538
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,172
|
|
|
—
|
|
|
2,204
|
|
|
58,730
|
|
|||||||||
Asia Pacific
|
4,400
|
|
|
33,599
|
|
|
—
|
|
|
6,837
|
|
|
—
|
|
|
6,366
|
|
|
—
|
|
|
1,410
|
|
|
52,612
|
|
|||||||||
Other international
|
16,415
|
|
|
2,266
|
|
|
—
|
|
|
3,417
|
|
|
—
|
|
|
3,245
|
|
|
—
|
|
|
712
|
|
|
26,055
|
|
|||||||||
|
$
|
109,792
|
|
|
$
|
103,348
|
|
|
$
|
103,812
|
|
|
$
|
59,323
|
|
|
$
|
86,041
|
|
|
$
|
108,179
|
|
|
$
|
188,997
|
|
|
$
|
218,817
|
|
|
$
|
978,309
|
|
•
|
5.11
is a leading provider of purpose-built tactical apparel and gear for law enforcement, firefighters, EMS, and military special operations as well as outdoor and adventure enthusiasts. 5.11 is a brand known for innovation and authenticity, and works directly with end users to create purpose-built apparel and gear designed to enhance the safety, accuracy, speed and performance of tactical professionals and enthusiasts worldwide. Headquartered in Irvine, California, 5.11 operates sales offices and distribution centers globally, and 5.11 products are widely distributed in uniform stores, military exchanges, outdoor retail stores, its own retail stores and on 511tactical.com.
|
•
|
Ergobaby
, headquartered in Los Angeles, California, is a designer, marketer and distributor of wearable baby carriers and accessories, blankets and swaddlers, nursing pillows, and related products. Ergobaby primarily sells its Ergobaby and Baby Tula branded products through brick-and-mortar retailers, national chain stores, online retailers, its own websites and distributors and derives more than
50%
of its sales from outside of the United States.
|
•
|
Liberty Safe
is a designer, manufacturer and marketer of premium home, office and gun safes in North America. From its over
300,000
square foot manufacturing facility, Liberty produces a wide range of home and gun safe models in a broad assortment of sizes, features and styles. Liberty is headquartered in Payson, Utah.
|
•
|
Manitoba Harvest
is a pioneer and leader in the manufacture and distribution of branded, hemp-based foods and hemp-based ingredients. Manitoba Harvest’s products, which include Hemp Hearts™, Hemp Heart Bites™, and Hemp protein powders, are currently carried in over
13,000
retail stores across the U.S. and Canada. Manitoba Harvest is headquartered in Winnipeg, Manitoba.
|
•
|
Velocity Outdoor
is a leading designer, manufacturer, and marketer of airguns, archery products, laser aiming devices and related accessories. Velocity Outdoor offers its products under the highly recognizable Crosman, Benjamin, Ravin, LaserMax and CenterPoint brands that are available through national retail chains, mass merchants, dealer and distributor networks. Velocity Outdoor is headquartered in Bloomfield, New York.
|
•
|
Advanced Circuits
, an electronic components manufacturing company, is a provider of small-run, quick-turn and volume production rigid printed circuit boards. ACI manufactures and delivers custom printed circuit boards to customers primarily in North America. ACI is headquartered in Aurora, Colorado.
|
•
|
Arnold
is a global manufacturer of engineered magnetic solutions for a wide range of specialty applications and end-markets, including aerospace and defense, motorsport/ automotive, oil and gas, medical, general industrial, energy, reprographics and advertising specialties. Arnold produces high performance permanent magnets (PMAG), precision foil products (Precision Thin Metals or "PTM"), and flexible magnets (Flexmag™) that are mission critical in motors, generators, sensors and other systems and components. Based on its long-term relationships, Arnold has built a diverse and blue-chip customer base totaling more than
2,000
clients worldwide. Arnold is headquartered in Rochester, New York.
|
•
|
Clean Earth
provides environmental services for a variety of contaminated materials including soils, hazardous waste and dredged materials. Clean Earth analyzes, treats, documents and recycles waste streams generated in multiple end markets such as utilities, infrastructure, chemicals, aerospace and defense, non-public/ private development, medical, industrial and dredging. Clean Earth is headquartered in Hatboro, Pennsylvania and operates
27
facilities in the eastern United States.
|
•
|
Foam Fabricators
is a designer and manufacturer of custom molded protective foam solutions and original equipment manufacturer components made from expanded polystyrene and expanded polypropylene. Foam Fabricators provides products to a variety of end markets, including appliances and electronics, pharmaceuticals, health and wellness, automotive, building and other products. Foam Fabricators is headquartered in Scottsdale, Arizona and operates
13
molding and fabricating facilities across North America.
|
•
|
Sterno
is a manufacturer and marketer of portable food warming fuel and creative table lighting solutions for the food service industry and flameless candles, outdoor lighting products, scented wax cubes and warmer products for consumers. Sterno's products include wick and gel chafing fuels, butane stoves and accessories, liquid and traditional wax candles, scented wax cubes and warmer products used for home decor and fragrance systems, catering equipment and outdoor lighting products. Sterno is headquartered in Corona, California.
|
Net Revenues
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
5.11
|
$
|
347,922
|
|
|
$
|
309,999
|
|
|
$
|
109,792
|
|
Ergobaby
|
90,566
|
|
|
102,969
|
|
|
103,348
|
|
|||
Liberty
|
82,658
|
|
|
91,956
|
|
|
103,812
|
|
|||
Manitoba Harvest
|
67,437
|
|
|
55,699
|
|
|
59,323
|
|
|||
Velocity Outdoor
|
131,296
|
|
|
78,387
|
|
|
—
|
|
|||
ACI
|
92,511
|
|
|
87,782
|
|
|
86,041
|
|
|||
Arnold
|
117,860
|
|
|
105,580
|
|
|
108,179
|
|
|||
Clean Earth
|
266,916
|
|
|
211,247
|
|
|
188,997
|
|
|||
Foam Fabricators
|
113,432
|
|
|
—
|
|
|
—
|
|
|||
Sterno
|
381,075
|
|
|
226,110
|
|
|
218,817
|
|
|||
Total
|
1,691,673
|
|
|
1,269,729
|
|
|
978,309
|
|
|||
Reconciliation of segment revenues to consolidated revenues:
|
|
|
|
|
|
||||||
Corporate and other
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total consolidated revenues
|
$
|
1,691,673
|
|
|
$
|
1,269,729
|
|
|
$
|
978,309
|
|
Segment Profit (Loss)
(1)
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
5.11
(2)
|
$
|
3,916
|
|
|
$
|
(7,121
|
)
|
|
$
|
(10,153
|
)
|
Ergobaby
|
11,522
|
|
|
24,503
|
|
|
17,151
|
|
|||
Liberty
|
5,906
|
|
|
9,475
|
|
|
13,234
|
|
|||
Manitoba Harvest
(3)
|
(1,754
|
)
|
|
(9,332
|
)
|
|
321
|
|
|||
Velocity Outdoor
(4)
|
4,850
|
|
|
1,308
|
|
|
—
|
|
|||
ACI
|
26,335
|
|
|
23,575
|
|
|
22,718
|
|
|||
Arnold
(5)
|
7,416
|
|
|
(5,693
|
)
|
|
(12,921
|
)
|
|||
Clean Earth
|
14,443
|
|
|
12,037
|
|
|
7,929
|
|
|||
Foam Fabricators
|
10,998
|
|
|
—
|
|
|
—
|
|
|||
Sterno
|
38,730
|
|
|
19,194
|
|
|
18,799
|
|
|||
Total
|
122,362
|
|
|
67,946
|
|
|
57,078
|
|
|||
Reconciliation of segment profit (loss) to consolidated income from continuing operations before income taxes:
|
|
|
|
|
|
||||||
Interest expense, net
|
(55,577
|
)
|
|
(27,623
|
)
|
|
(24,651
|
)
|
|||
Other income (expense), net
|
(6,336
|
)
|
|
2,634
|
|
|
(2,919
|
)
|
|||
Gain (loss) on equity method investment
|
—
|
|
|
(5,620
|
)
|
|
74,490
|
|
|||
Corporate and other
|
(56,949
|
)
|
|
(44,744
|
)
|
|
(40,780
|
)
|
|||
Total consolidated income from continuing operations before income taxes
|
$
|
3,500
|
|
|
$
|
(7,407
|
)
|
|
$
|
63,218
|
|
(1)
|
Segment profit (loss) represents operating income (loss).
|
(2)
|
5.11 - The year ended December 31, 2017 includes
$21.7 million
cost of goods sold expense related to the amortization of the step-up in inventory basis resulting from the purchase price allocation of 5.11, and
$2.3 million
in integration services fees paid to CGM. The year ended December 31, 2016 includes
$2.1 million
of acquisition related costs incurred in connection with the acquisition of 5.11,
$17.4 million
of cost of goods sold expense related to the amortization of the step-up in inventory basis resulting from the purchase price allocation of 5.11, and
$1.2 million
in integration services fees paid to CGM.
|
(3)
|
Manitoba Harvest - The year ended December 31, 2017 includes
$8.5 million
in impairment expense related to goodwill and the Manitoba Harvest tradename. The year ended December 31, 2016 includes
$0.5 million
in integration services fees paid to CGM.
|
(4)
|
Velocity Outdoor - The year ended December 31, 2017 includes
$1.8 million
in acquisition related costs,
$3.3 million
cost of goods sold expense related to the amortization of the step-up in inventory basis resulting from the purchase price allocation of Velocity, and
$0.75 million
in integration services fees paid to CGM.
|
(5)
|
Arnold - Operating loss from Arnold for the years ended December 31, 2017 and 2016 includes
$8.9 million
and
$16.0 million
, respectively, in goodwill impairment expense related to the PMAG reporting unit. Refer to "
Note G - Goodwill and Intangible Assets
."
|
Depreciation and Amortization Expense
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
5.11 Tactical
|
$
|
21,477
|
|
|
$
|
39,934
|
|
|
$
|
23,414
|
|
Ergobaby
|
8,493
|
|
|
11,419
|
|
|
7,769
|
|
|||
Liberty
|
1,541
|
|
|
1,657
|
|
|
2,758
|
|
|||
Manitoba Harvest
|
6,192
|
|
|
6,344
|
|
|
6,403
|
|
|||
Velocity Outdoor
|
12,119
|
|
|
7,726
|
|
|
—
|
|
|||
ACI
|
3,160
|
|
|
3,323
|
|
|
3,476
|
|
|||
Arnold
|
6,229
|
|
|
6,428
|
|
|
9,079
|
|
|||
Clean Earth
|
23,683
|
|
|
21,647
|
|
|
21,157
|
|
|||
Foam Fabricators
|
10,712
|
|
|
—
|
|
|
—
|
|
|||
Sterno
|
26,969
|
|
|
11,573
|
|
|
11,549
|
|
|||
Total
|
120,575
|
|
|
110,051
|
|
|
85,605
|
|
|||
Reconciliation of segment to consolidated total:
|
|
|
|
|
|
||||||
Amortization of debt issuance costs and original issue discount
|
4,483
|
|
|
5,007
|
|
|
3,565
|
|
|||
Consolidated total
|
$
|
125,058
|
|
|
$
|
115,058
|
|
|
$
|
89,170
|
|
|
Accounts Receivable
|
|
Identifiable Assets
|
||||||||||||
|
December 31,
|
|
December 31
|
||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
(1)
|
|
2017
(1)
|
||||||||
5.11
|
$
|
52,069
|
|
|
$
|
60,481
|
|
|
$
|
319,583
|
|
|
$
|
324,068
|
|
Ergobaby
|
11,361
|
|
|
12,869
|
|
|
100,679
|
|
|
105,672
|
|
||||
Liberty
|
10,416
|
|
|
13,679
|
|
|
27,881
|
|
|
26,715
|
|
||||
Manitoba Harvest
|
7,276
|
|
|
5,663
|
|
|
86,756
|
|
|
95,046
|
|
||||
Velocity
|
21,881
|
|
|
20,396
|
|
|
209,398
|
|
|
129,033
|
|
||||
ACI
|
9,193
|
|
|
6,525
|
|
|
13,407
|
|
|
14,522
|
|
||||
Arnold
|
16,298
|
|
|
14,804
|
|
|
66,744
|
|
|
66,979
|
|
||||
Clean Earth
|
60,317
|
|
|
50,599
|
|
|
204,316
|
|
|
183,508
|
|
||||
Foam Fabricators
|
23,848
|
|
|
—
|
|
|
155,504
|
|
|
—
|
|
||||
Sterno
|
72,361
|
|
|
40,087
|
|
|
253,637
|
|
|
125,937
|
|
||||
Sales allowance accounts
|
(12,617
|
)
|
|
(9,995
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
272,403
|
|
|
215,108
|
|
|
1,437,905
|
|
|
1,071,480
|
|
||||
Reconciliation of segment to consolidated totals:
|
|
|
|
|
|
|
|
||||||||
Corporate and other identifiable assets
|
—
|
|
|
—
|
|
|
8,357
|
|
|
2,026
|
|
||||
Amortization of debt issuance costs and original issue discount
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
272,403
|
|
|
$
|
215,108
|
|
|
$
|
1,446,262
|
|
|
$
|
1,073,506
|
|
(1)
|
Does not include goodwill balances - refer to "
Note G - Goodwill and Intangible Assets
" for a schedule of goodwill by segment.
|
Identifiable Assets
|
December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
United States
|
$
|
1,259,089
|
|
|
$
|
878,322
|
|
Canada
|
125,631
|
|
|
130,033
|
|
||
Europe
|
37,286
|
|
|
47,574
|
|
||
Other international
|
24,256
|
|
|
17,577
|
|
||
Total identifiable assets
|
$
|
1,446,262
|
|
|
$
|
1,073,506
|
|
Inventory
|
December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Raw materials and supplies
|
$
|
64,441
|
|
|
$
|
36,124
|
|
Work-in-process
|
16,048
|
|
|
13,921
|
|
||
Finished goods
|
259,553
|
|
|
205,512
|
|
||
|
340,042
|
|
|
255,557
|
|
||
Less: obsolescence reserve
|
(21,169
|
)
|
|
(8,629
|
)
|
||
Total
|
$
|
318,873
|
|
|
$
|
246,928
|
|
Property, plant and equipment
|
December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Machinery and equipment
|
$
|
245,046
|
|
|
$
|
178,187
|
|
Office furniture, computers and software
|
35,848
|
|
|
28,824
|
|
||
Leasehold improvements
|
36,768
|
|
|
20,630
|
|
||
Construction in process
|
12,715
|
|
|
18,153
|
|
||
Buildings and land
|
47,774
|
|
|
40,015
|
|
||
|
378,151
|
|
|
285,809
|
|
||
Less: accumulated depreciation
|
(151,334
|
)
|
|
(112,728
|
)
|
||
Total
|
$
|
226,817
|
|
|
$
|
173,081
|
|
|
|
Balance at January 1, 2018
|
|
Acquisitions
(1)
|
|
Goodwill Impairment
|
|
Foreign currency translation
|
|
Other
|
|
Balance at December 31, 2018
|
||||||||||||
5.11
|
|
$
|
92,966
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92,966
|
|
Ergobaby
|
|
61,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,031
|
|
||||||
Liberty
|
|
32,828
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,828
|
|
||||||
Manitoba Harvest
|
|
41,024
|
|
|
—
|
|
|
—
|
|
|
(3,247
|
)
|
|
—
|
|
|
37,777
|
|
||||||
Velocity Outdoor
|
|
49,352
|
|
|
13,253
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|
62,675
|
|
||||||
ACI
|
|
58,019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,019
|
|
||||||
Arnold
(2)
|
|
26,903
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,903
|
|
||||||
Clean Earth
|
|
119,099
|
|
|
25,679
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,778
|
|
||||||
Foam Fabricators
|
|
—
|
|
|
72,708
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,708
|
|
||||||
Sterno
|
|
41,818
|
|
|
13,518
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,336
|
|
||||||
Corporate
(3)
|
|
8,649
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,649
|
|
||||||
Total
|
|
$
|
531,689
|
|
|
$
|
125,158
|
|
|
$
|
—
|
|
|
$
|
(3,247
|
)
|
|
$
|
70
|
|
|
$
|
653,670
|
|
(2)
|
Arnold had three reporting units which were combined into one reporting unit effective March 31, 2018.
|
(3)
|
Represents goodwill resulting from purchase accounting adjustments not "pushed down" to the ACI segment. This amount is allocated back to the ACI segment for purposes of goodwill impairment testing.
|
|
|
Balance at January 1, 2017
|
|
Acquisitions
(1)
|
|
Goodwill Impairment
|
|
Foreign currency translation
|
|
Other
(4)
|
|
Balance at December 31, 2017
|
||||||||||||
5.11
|
|
$
|
92,966
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92,966
|
|
Ergobaby
|
|
61,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,031
|
|
||||||
Liberty
|
|
32,828
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,828
|
|
||||||
Manitoba Harvest
|
|
44,171
|
|
|
—
|
|
|
(6,289
|
)
|
|
3,142
|
|
|
—
|
|
|
41,024
|
|
||||||
Velocity Outdoor
|
|
—
|
|
|
49,352
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,352
|
|
||||||
ACI
|
|
58,019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,019
|
|
||||||
Arnold
(2)
|
|
35,767
|
|
|
—
|
|
|
(8,864
|
)
|
|
—
|
|
|
—
|
|
|
26,903
|
|
||||||
Clean Earth
|
|
118,224
|
|
|
875
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
119,099
|
|
||||||
Sterno
|
|
39,982
|
|
|
1,689
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|
41,818
|
|
||||||
Corporate
(3)
|
|
8,649
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,649
|
|
||||||
Total
|
|
$
|
491,637
|
|
|
$
|
51,916
|
|
|
$
|
(15,153
|
)
|
|
$
|
3,142
|
|
|
$
|
147
|
|
|
$
|
531,689
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Goodwill - gross carrying amount
|
|
$
|
684,823
|
|
|
$
|
562,842
|
|
Accumulated impairment losses
|
|
(31,153
|
)
|
|
(31,153
|
)
|
||
Goodwill - net carrying amount
|
|
$
|
653,670
|
|
|
$
|
531,689
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted
Average
Useful Lives
|
||||||||||||
Customer relationships
|
$
|
545,471
|
|
|
$
|
(140,395
|
)
|
|
$
|
405,076
|
|
|
$
|
338,719
|
|
|
$
|
(102,271
|
)
|
|
$
|
236,448
|
|
|
13
|
Technology and patents
|
91,676
|
|
|
(27,454
|
)
|
|
64,222
|
|
|
49,075
|
|
|
(22,492
|
)
|
|
26,583
|
|
|
13
|
||||||
Trade names, subject to amortization
|
209,080
|
|
|
(37,222
|
)
|
|
171,858
|
|
|
182,976
|
|
|
(22,518
|
)
|
|
160,458
|
|
|
15
|
||||||
Licensing and non-compete agreements
|
8,205
|
|
|
(6,972
|
)
|
|
1,233
|
|
|
7,965
|
|
|
(6,488
|
)
|
|
1,477
|
|
|
5
|
||||||
Permits and airspace
(1)
|
127,146
|
|
|
(41,291
|
)
|
|
85,855
|
|
|
115,230
|
|
|
(31,026
|
)
|
|
84,204
|
|
|
13
|
||||||
Distributor relations and other
|
726
|
|
|
(726
|
)
|
|
—
|
|
|
726
|
|
|
(646
|
)
|
|
80
|
|
|
5
|
||||||
|
982,304
|
|
|
(254,060
|
)
|
|
728,244
|
|
|
694,691
|
|
|
(185,441
|
)
|
|
509,250
|
|
|
|
||||||
Trade names, not subject to amortization
|
70,410
|
|
|
—
|
|
|
70,410
|
|
|
71,267
|
|
|
—
|
|
|
71,267
|
|
|
|
||||||
Total intangibles, net
|
$
|
1,052,714
|
|
|
(254,060
|
)
|
|
798,654
|
|
|
$
|
765,958
|
|
|
$
|
(185,441
|
)
|
|
$
|
580,517
|
|
|
|
2019
|
$
|
73,322
|
|
2020
|
72,121
|
|
|
2021
|
71,458
|
|
|
2022
|
69,796
|
|
|
2023
|
69,399
|
|
|
|
$
|
356,096
|
|
|
December 31,
|
||||||
(in thousands):
|
2018
|
|
2017
|
||||
Senior Notes
|
$
|
400,000
|
|
|
$
|
—
|
|
Revolving Credit Facility
|
228,000
|
|
|
42,000
|
|
||
Term Loan Facility
|
496,250
|
|
|
559,973
|
|
||
Less: unamortized discounts and debt issuance costs
|
(20,379
|
)
|
|
(11,941
|
)
|
||
Total debt
|
$
|
1,103,871
|
|
|
$
|
590,032
|
|
Less: Current portion, term loan facilities
|
(5,000
|
)
|
|
(5,685
|
)
|
||
Long-term debt
|
$
|
1,098,871
|
|
|
$
|
584,347
|
|
2019
|
$
|
5,000
|
|
2020
|
5,000
|
|
|
2021
|
5,000
|
|
|
2022
|
5,000
|
|
|
2023
|
233,000
|
|
|
2024 and thereafter
|
867,419
|
|
|
|
$
|
1,120,419
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred debt issuance costs
|
$
|
24,609
|
|
|
$
|
21,491
|
|
Accumulated amortization
|
(2,807
|
)
|
|
(10,250
|
)
|
||
Deferred debt issuance costs, net
|
$
|
21,802
|
|
|
$
|
11,241
|
|
|
|
|
|
||||
Balance sheet classification:
|
|
|
|
||||
Other noncurrent assets
|
$
|
5,254
|
|
|
$
|
2,784
|
|
Long-term debt
|
16,548
|
|
|
8,458
|
|
||
|
$
|
21,802
|
|
|
$
|
11,241
|
|
Description of Required Covenant Ratio
|
|
Covenant Ratio Requirement
|
|
Actual Ratio
|
|
|
|
|
|
Fixed Charge Coverage Ratio
|
|
Greater than or equal to 1.50: 1.00
|
|
2.81:1.00
|
Total Secured Debt to EBITDA Ratio
|
|
Less than or equal to 3.50: 1.00
|
|
2.54:1.00
|
Total Debt to EBITDA Ratio
|
|
Less than or equal to 5.00: 1.00
|
|
3.96:1.00
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Interest on credit facilities
|
$
|
32,414
|
|
|
$
|
23,940
|
|
|
$
|
19,861
|
|
Interest on Senior Notes
|
22,489
|
|
|
—
|
|
|
—
|
|
|||
Unused fee on Revolving Credit Facility
|
1,630
|
|
|
2,856
|
|
|
1,947
|
|
|||
Amortization of original issue discount
|
729
|
|
|
1,037
|
|
|
802
|
|
|||
Unrealized (gains) losses on interest rate derivatives
|
(2,251
|
)
|
|
(648
|
)
|
|
1,539
|
|
|||
Letter of credit fees
|
8
|
|
|
70
|
|
|
108
|
|
|||
Other, net
|
558
|
|
|
368
|
|
|
394
|
|
|||
Interest expense, net
|
$
|
55,577
|
|
|
$
|
27,623
|
|
|
$
|
24,651
|
|
|
|
|
|
|
|
||||||
Average daily balance outstanding - credit facilities
|
$
|
721,643
|
|
|
$
|
597,114
|
|
|
$
|
477,656
|
|
Effective interest rate - credit facilities
|
4.6
|
%
|
|
4.7
|
%
|
|
5.2
|
%
|
|
|
Year ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Other current liabilities
|
|
$
|
582
|
|
|
$
|
2,468
|
|
Other non-current liabilities
|
|
1,490
|
|
|
3,639
|
|
||
Total fair value
|
|
$
|
2,072
|
|
|
$
|
6,107
|
|
|
December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation, beginning of year
|
$
|
14,753
|
|
|
$
|
13,804
|
|
Service cost
|
536
|
|
|
534
|
|
||
Interest cost
|
96
|
|
|
94
|
|
||
Actuarial (gain)/loss
|
(239
|
)
|
|
(59
|
)
|
||
Plan amendment
|
(21
|
)
|
|
—
|
|
||
Employee contributions and transfer
|
365
|
|
|
319
|
|
||
Benefits paid
|
(417
|
)
|
|
(555
|
)
|
||
Foreign currency translation
|
(56
|
)
|
|
616
|
|
||
Benefit obligation
|
$
|
15,017
|
|
|
$
|
14,753
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of assets, beginning of period
|
$
|
11,132
|
|
|
$
|
10,549
|
|
Actual return on plan assets
|
224
|
|
|
348
|
|
||
Company contribution
|
4
|
|
|
7
|
|
||
Employee contributions and transfer
|
365
|
|
|
319
|
|
||
Benefits paid
|
(417
|
)
|
|
(555
|
)
|
||
Foreign currency translation
|
(56
|
)
|
|
464
|
|
||
Fair value of assets
|
11,252
|
|
|
11,132
|
|
||
Funded status
|
$
|
(3,765
|
)
|
|
$
|
(3,621
|
)
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Service cost
|
$
|
536
|
|
|
$
|
534
|
|
|
$
|
409
|
|
Interest cost
|
96
|
|
|
94
|
|
|
130
|
|
|||
Expected return on plan assets
|
(156
|
)
|
|
(155
|
)
|
|
(147
|
)
|
|||
Amortization of unrecognized loss
|
197
|
|
|
250
|
|
|
165
|
|
|||
Net periodic benefit cost
|
$
|
673
|
|
|
$
|
723
|
|
|
$
|
557
|
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||
|
|
|
|
||
Discount rate
|
0.88
|
%
|
|
0.65
|
%
|
Expected return on plan assets
|
1.20
|
%
|
|
1.40
|
%
|
Rate of compensation increase
|
1.00
|
%
|
|
1.00
|
%
|
2019
|
$
|
809
|
|
2020
|
1,323
|
|
|
2021
|
740
|
|
|
2022
|
662
|
|
|
2023
|
538
|
|
|
Thereafter
|
3,905
|
|
|
|
$
|
7,977
|
|
Certificates of deposit and cash and cash equivalents
|
62
|
%
|
Fixed income bonds and securities
|
8
|
%
|
Equities and investment funds
|
12
|
%
|
Real estate
|
17
|
%
|
Other investments
|
1
|
%
|
|
100
|
%
|
•
|
The Company's board of directors approved and declared a profit allocation payment in the fourth quarter of 2016 to the Allocation Interest Holders of
$13.4 million
related to the FOX November Offering (refer to
Note P - "Investment"
). This amount was recorded as "Due to related parties" in the accompanying balance sheet at December 31, 2016, and was paid in the first quarter of 2017.
|
•
|
$25.8 million
paid in the second quarter of 2017 resulting from the sale of FOX shares in March 2017 (refer to
Note P - "Investment"
) which qualified as a Sale Event under the Company's LLC Agreement.
|
•
|
$8.6 million
paid in the second quarter as a result of a Sale Event related to the sale of FOX shares in March 2016 (refer to "
Note P - Investment
");
|
•
|
$8.2 million
paid in the third quarter as a result of the
five
year ownership holding period of our ACI business. The payment is in respect of its positive contribution-based profit during the five years ended June 30, 2016;
|
•
|
$7.0 million
paid in the fourth quarter as a result of a Sale Event related to the sale of FOX shares in August 2016 (refer to "
Note P - Investment
") and the sale of Tridien in September 2016 (refer to "
Note Q - Discontinued Operations
"). Under the terms of the Company's LLC Agreement, the Company offset the profit allocation distribution resulting from the FOX Sale Event by the negative profit allocation amount from the Tridien Sale Event, resulting in a net distribution to the Allocation Member;
|
|
|
Year ended December 31,
|
||||||||||
(
in thousands
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
||||||
Net income (loss) from continuing operations attributable to Holdings
|
|
$
|
(6,960
|
)
|
|
$
|
27,651
|
|
|
$
|
51,788
|
|
|
|
|
|
|
|
|
||||||
Less: Distributions paid - Allocation Interests
|
|
—
|
|
|
39,188
|
|
|
23,779
|
|
|||
Less: Distributions paid - Preferred Shares
|
|
12,179
|
|
|
2,457
|
|
|
—
|
|
|||
Less: Accrued distributions - Preferred Shares
|
|
1,334
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Net income (loss) from continuing operations attributable to common shares of Holdings
|
|
$
|
(20,473
|
)
|
|
$
|
(13,994
|
)
|
|
$
|
28,009
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Income (loss) from continuing operations attributable to common shares of Holdings
|
$
|
(20,473
|
)
|
|
$
|
(13,994
|
)
|
|
$
|
28,009
|
|
Less: Effect of contribution based profit—Holding Event
|
5,893
|
|
|
12,726
|
|
|
2,862
|
|
|||
Income (loss) from Holdings attributable to common shares
|
$
|
(26,366
|
)
|
|
$
|
(26,720
|
)
|
|
$
|
25,147
|
|
|
|
|
|
|
|
||||||
Income from discontinued operations attributable to Holdings
|
$
|
1,258
|
|
|
$
|
340
|
|
|
$
|
2,898
|
|
Less: Effect of contribution based profit
|
—
|
|
|
—
|
|
|
—
|
|
Income from discontinued operations of Holdings attributable to common shares
|
$
|
1,258
|
|
|
$
|
340
|
|
|
$
|
2,898
|
|
|
|
|
|
|
|
||||||
Basic and diluted weighted average common shares of Holdings outstanding
|
59,900
|
|
|
59,900
|
|
|
54,591
|
|
|||
|
|
|
|
|
|
||||||
Basic and fully diluted income (loss) per common share attributable to Holdings
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(0.44
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.46
|
|
Discontinued operations
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
0.05
|
|
|
$
|
(0.42
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
0.51
|
|
Period
|
|
Cash Distribution per Share
|
|
Total Cash Distributions
|
|
Record Date
|
|
Payment Date
|
||||
|
|
|
|
(in thousands)
|
|
|
|
|
||||
Trust Common Shares:
|
|
|
|
|
|
|
|
|
||||
October 1, 2018 - December 31, 2018
(1)
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
January 17, 2019
|
|
January 24, 2019
|
July 1, 2018 - September 30, 2018
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
October 18, 2018
|
|
October 25, 2018
|
April 1, 2018 - June 30, 2018
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
July 19, 2018
|
|
July 26, 2018
|
January 1, 2018 - March 31, 2018
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
April 19, 2018
|
|
April 26, 2018
|
October 1, 2017 - December 31, 2017
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
January 19, 2018
|
|
January 25, 2018
|
July 1, 2017 - September 30, 2017
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
October 19, 2017
|
|
October 26, 2017
|
April 1, 2017 - June 30, 2017
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
July 20, 2017
|
|
July 27, 2017
|
January 1, 2017 - March 31, 2017
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
April 20, 2017
|
|
April 27, 2017
|
October 1, 2016 - December 31, 2016
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
January 19, 2017
|
|
January 26, 2017
|
July 1, 2016 - September 30, 2016
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
October 20, 2016
|
|
October 27, 2016
|
April 1, 2016 - June 30, 2016
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
July 21, 2016
|
|
July 28, 2016
|
January 1, 2016 - March 31, 2016
|
|
$
|
0.36
|
|
|
$
|
21,564
|
|
|
April 22, 2016
|
|
April 28, 2016
|
|
|
|
|
|
|
|
|
|
||||
Series A Preferred Shares:
|
|
|
|
|
|
|
|
|
||||
October 30, 2018 - January 29, 2019
(1)
|
|
$
|
0.453125
|
|
|
$
|
1,813
|
|
|
January 15, 2019
|
|
January 30, 2019
|
July 30, 2018 - October 29, 2018
|
|
$
|
0.453125
|
|
|
$
|
1,813
|
|
|
October 15, 2018
|
|
October 30, 2018
|
April 30, 2018 - July 29, 2018
|
|
$
|
0.453125
|
|
|
$
|
1,813
|
|
|
July 16, 2018
|
|
July 30, 2018
|
January 30, 2018 - April 29, 2018
|
|
$
|
0.453125
|
|
|
$
|
1,813
|
|
|
April 15, 2018
|
|
April 30, 2018
|
October 30, 2017 - January 29, 2017
|
|
$
|
0.453125
|
|
|
$
|
1,813
|
|
|
January 15, 2018
|
|
January 30, 2018
|
June 28, 2017 - October 29, 2017
|
|
$
|
0.61423611
|
|
|
$
|
2,457
|
|
|
October 15, 2017
|
|
October 30, 2017
|
|
|
|
|
|
|
|
|
|
||||
Series B Preferred Shares:
|
|
|
|
|
|
|
|
|
||||
October 30, 2018 - January 29, 2019
(1)
|
|
$
|
0.4921875
|
|
|
$
|
1,969
|
|
|
January 15, 2019
|
|
January 30, 2019
|
July 30, 2018 - October 29, 2018
|
|
$
|
0.4921875
|
|
|
$
|
1,969
|
|
|
October 15, 2018
|
|
October 30, 2018
|
March 13, 2018 - July 29, 2018
|
|
$
|
0.74
|
|
|
$
|
2,960
|
|
|
July 16, 2018
|
|
July 30, 2018
|
|
|
Year ended December 31,
|
||||||||||
(
in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
||||||
Domestic (including U.S. exports)
|
|
$
|
(4,118
|
)
|
|
$
|
(13,276
|
)
|
|
$
|
63,782
|
|
Foreign subsidiaries
|
|
7,618
|
|
|
5,869
|
|
|
(564
|
)
|
|||
|
|
$
|
3,500
|
|
|
$
|
(7,407
|
)
|
|
$
|
63,218
|
|
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
||||||
Current taxes
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
8,501
|
|
|
$
|
10,293
|
|
|
$
|
12,994
|
|
State
|
|
2,684
|
|
|
2,221
|
|
|
2,486
|
|
|||
Foreign
|
|
4,835
|
|
|
6,236
|
|
|
3,857
|
|
|||
Total current taxes
|
|
16,020
|
|
|
18,750
|
|
|
19,337
|
|
|||
Deferred taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
(3,493
|
)
|
|
(55,299
|
)
|
|
(5,816
|
)
|
|||
State
|
|
(3,032
|
)
|
|
(1,712
|
)
|
|
(1,357
|
)
|
|||
Foreign
|
|
(2,947
|
)
|
|
(2,418
|
)
|
|
(2,695
|
)
|
|||
Total deferred taxes
|
|
(9,472
|
)
|
|
(59,429
|
)
|
|
(9,868
|
)
|
|||
Total tax provision
|
|
$
|
6,548
|
|
|
$
|
(40,679
|
)
|
|
$
|
9,469
|
|
|
December 31,
|
||||||
(
in thousands)
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
||||
Tax credits
|
$
|
4,369
|
|
|
$
|
5,035
|
|
Accounts receivable and allowances
|
1,676
|
|
|
1,134
|
|
||
Net operating loss carryforwards
|
33,355
|
|
|
27,631
|
|
||
Accrued expenses
|
7,311
|
|
|
5,789
|
|
||
Interest expense limitation carryforwards
|
6,190
|
|
|
—
|
|
||
Other
|
9,168
|
|
|
5,174
|
|
||
Total deferred tax assets
|
$
|
62,069
|
|
|
$
|
44,763
|
|
Valuation allowance
(1)
|
(6,904
|
)
|
|
(5,912
|
)
|
||
Net deferred tax assets
|
$
|
55,165
|
|
|
$
|
38,851
|
|
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
$
|
(101,539
|
)
|
|
$
|
(102,581
|
)
|
Property and equipment
|
(27,539
|
)
|
|
(17,060
|
)
|
||
Repatriation of foreign earnings
|
(38
|
)
|
|
(68
|
)
|
||
Prepaid and other expenses
|
(1,008
|
)
|
|
(191
|
)
|
||
Total deferred tax liabilities
|
$
|
(130,124
|
)
|
|
$
|
(119,900
|
)
|
Total net deferred tax liability
|
$
|
(74,959
|
)
|
|
$
|
(81,049
|
)
|
(1)
|
Primarily relates to the 5.11 and Arnold operating segments.
|
|
Year ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
United States Federal Statutory Rate
|
21.0
|
%
|
|
(35.0
|
)%
|
|
35.0
|
%
|
State income taxes (net of Federal benefits)
|
(22.0
|
)
|
|
(6.5
|
)
|
|
0.6
|
|
Foreign income taxes
|
23.0
|
|
|
(18.4
|
)
|
|
1.5
|
|
Expenses of Compass Group Diversified Holdings LLC representing a pass through to shareholders
(1)
|
84.6
|
|
|
(3.3
|
)
|
|
3.6
|
|
Effect of (gain) loss on equity method investment
|
—
|
|
|
26.6
|
|
|
(41.2
|
)
|
Impact of subsidiary employee stock options
|
1.7
|
|
|
9.9
|
|
|
1.3
|
|
Domestic production activities deduction
|
—
|
|
|
(8.4
|
)
|
|
(0.9
|
)
|
Non-deductible acquisition costs
|
3.1
|
|
|
4.6
|
|
|
1.9
|
|
Impairment expense
|
—
|
|
|
69.4
|
|
|
—
|
|
Effect of undistributed foreign earnings
|
—
|
|
|
(18.7
|
)
|
|
4.2
|
|
Non-recognition of NOL carryforwards at subsidiaries
|
27.9
|
|
|
(18.1
|
)
|
|
3.6
|
|
Adjustments to uncertain tax positions
(2)
|
—
|
|
|
(124.0
|
)
|
|
—
|
|
Utilization of tax credits
|
(15.9
|
)
|
|
(40.1
|
)
|
|
(0.7
|
)
|
Effect of Tax Act - GILTI tax
|
49.5
|
|
|
—
|
|
|
—
|
|
Effect of Tax Act - remeasurement of deferred tax assets and liabilities
(3)
|
0.5
|
|
|
(468.0
|
)
|
|
—
|
|
Effect of Tax Act - transition tax on non-U.S. subsidiaries' earnings
(3)
|
10.0
|
|
|
65.6
|
|
|
—
|
|
Other
|
3.7
|
|
|
15.2
|
|
|
6.1
|
|
Effective income tax rate
|
187.1
|
%
|
|
(549.2
|
)%
|
|
15.0
|
%
|
(1)
|
The effective income tax rate for each of the years presented includes losses at the Company’s parent, which is taxed as a partnership.
|
(2)
|
Represents the effect of the reversal of an uncertain tax position at our 5.11 business that existed as of the acquisition date and was settled during the fourth quarter of 2017, resulting in a tax benefit of
$9.2 million
in our 2017 tax provision.
|
(3)
|
The effect of the enactment of the Tax Act on our tax provision for the year ended December 31, 2017 was a benefit of
$34.7 million
related to the reduction in the U.S. federal corporate income tax rate from 35% to 21%, and tax expense of
$4.9 million
related to the one-time transition tax liability of our foreign subsidiaries. Our loss before income taxes for 2017 was
$7.4 million
, and as a result, the effect from the Tax Act on the reconciliation in the table above for the year ended December 31, 2017 was significant.
|
Balance at January 1, 2016
|
$
|
389
|
|
Additions for current years’ tax positions
|
64
|
|
|
Additions for prior years’ tax positions
(1)
|
10,150
|
|
|
Reductions for prior years’ tax positions
|
(16
|
)
|
|
Reductions for settlements
|
—
|
|
|
Reductions for expiration of statute of limitations
|
(87
|
)
|
|
Balance at December 31, 2016
|
$
|
10,500
|
|
Additions for current years’ tax positions
|
96
|
|
|
Additions for prior years’ tax positions
|
23
|
|
|
Reductions for prior years’ tax positions
(1)
|
(9,397
|
)
|
|
Reductions for settlements
|
—
|
|
|
Reductions for expiration of statute of limitations
|
(87
|
)
|
|
Balance at December 31, 2017
|
$
|
1,135
|
|
Additions for current years’ tax positions
|
50
|
|
|
Additions for prior years’ tax positions
|
4
|
|
|
Reductions for prior years’ tax positions
|
(18
|
)
|
|
Reductions for settlements
|
—
|
|
|
Reductions for expiration of statute of limitations
|
(99
|
)
|
|
Balance at December 31, 2018
|
$
|
1,072
|
|
|
Fair Value Measurements at December 31, 2018
|
||||||||||||||
|
Carrying
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Put option of noncontrolling shareholders
(1)
|
(173
|
)
|
|
—
|
|
|
—
|
|
|
(173
|
)
|
||||
Contingent consideration - acquisitions
(2)
|
(4,374
|
)
|
|
—
|
|
|
—
|
|
|
(4,374
|
)
|
||||
Interest rate swap
|
(2,072
|
)
|
|
—
|
|
|
(2,072
|
)
|
|
—
|
|
||||
Total recorded at fair value
|
$
|
(6,619
|
)
|
|
$
|
—
|
|
|
$
|
(2,072
|
)
|
|
$
|
(4,547
|
)
|
(1)
|
Represents put options issued to noncontrolling shareholders in connection with the Liberty acquisition in 2010 and the 5.11 acquisition in 2016.
|
(2)
|
Represents potential earn-out payable as additional purchase price consideration by Velocity Outdoor in connection with the acquisition of Ravin.
|
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||
|
Carrying
Value |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Put option of noncontrolling shareholders
(1)
|
(178
|
)
|
|
—
|
|
|
—
|
|
|
(178
|
)
|
||||
Interest rate swap
|
(6,107
|
)
|
|
—
|
|
|
(6,107
|
)
|
|
—
|
|
||||
Total recorded at fair value
|
$
|
(6,285
|
)
|
|
$
|
—
|
|
|
$
|
(6,107
|
)
|
|
$
|
(178
|
)
|
|
|
|
|
|
|
|
|
(1)
|
Represents put options issued to noncontrolling shareholders in connection with the Liberty acquisition in 2010 and the 5.11 acquisition in 2016.
|
|
Year ended December 31,
|
||||||
(
in thousands
)
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Balance at January 1st
|
$
|
(178
|
)
|
|
$
|
(5,010
|
)
|
Contingent consideration - Sterno Home
|
—
|
|
|
(382
|
)
|
||
Contingent consideration - Rimports
|
(4,800
|
)
|
|
—
|
|
||
Contingent consideration - Ravin
|
(4,734
|
)
|
|
—
|
|
||
Payment of contingent consideration - Sterno Home
|
—
|
|
|
475
|
|
||
(Increase) decrease in the fair value of put option of noncontrolling shareholders - Liberty
|
—
|
|
|
8
|
|
||
(Increase) decrease in the fair value of put option of noncontrolling shareholder - 5.11
|
5
|
|
|
(5
|
)
|
||
Adjustment to Ravin contingent consideration
|
360
|
|
|
—
|
|
||
Reversal of contingent consideration - Rimports
|
4,800
|
|
|
—
|
|
||
Reversal of contingent consideration - Baby Tula
|
—
|
|
|
3,780
|
|
||
Reversal of contingent consideration - Sterno Home
|
—
|
|
|
956
|
|
||
Balance at December 31st
|
$
|
(4,547
|
)
|
|
$
|
(178
|
)
|
•
|
Sterno entered into a contingent consideration arrangement in connection with their purchase of Rimports in February 2018. The purchase price of Rimports includes a potential earn-out of up to
$25 million
contingent on the attainment of certain future performance criteria of Rimports for the twelve-month period from May 1, 2017 to April 30, 2018 and the fourteen month period from March 1, 2018 to April 30, 2019. The fair value of the contingent consideration was estimated at
$4.8 million
at acquisition date and was calculated as the present value of a probability adjusted earnout payment based on the expected term of the payment and a risk-adjusted
|
•
|
Velocity Outdoor entered into a contingent consideration arrangement in connection with their purchase of Ravin Crossbows in September 2018. The purchase price of Ravin includes a potential earn-out of up to
$25.0 million
based on gross profit levels for the trailing twelve month period ending December 31, 2018. The fair value of the contingent consideration was estimated at
$4.7 million
at acquisition date and was calculated using a risk-adjusted option pricing model. The earnout was adjusted to
$4.3 million
at December 31, 2018 based on actual results to date. The earn-out is expected to be paid in the second quarter of 2019.
|
•
|
Sterno entered into a contingent consideration arrangement associated with the purchase of Sterno Home (formerly NII) in January 2016. The earnout provision provides for payments up to
$1.8 million
over a
two
year period subsequent to acquisition. Earnings before interest, taxes, depreciation and amortization ("EBITDA") is the performance target defined and measured to determine the earnout payment due, if any, after each defined measurement period. The contingent consideration was valued at
$1.5 million
using probability weighted models. During the quarter ended September 30, 2016, Sterno paid
$0.5 million
of the contingent consideration. At December 31, 2016, Sterno determined that it was more likely than not that the full amount of the contingent consideration would be paid out, and recorded an additional
$0.4 million
in earnout, which was recorded though the statement of operations. Sterno paid an additional
$0.5 million
in the first quarter of 2017 related to an earnout milestone as of December 31, 2016. At December 31, 2017, Sterno determined that the final earnout milestone had not been met, and reversed the remaining contingent consideration liability.
|
•
|
In connection with the acquisition of Baby Tula in May 2016, Ergobaby entered into a contingent consideration arrangement with the sellers. The earnout provision provides for additional consideration of
$8.2 million
if the gross profit for Baby Tula for the 2017 fiscal year exceeds a specified level. No earnout amount will be paid if the specified gross profit level is not met. Ergobaby valued the contingent consideration at a fair value of
$3.8 million
using a probability weighted option pricing model. At December 31, 2017, Ergobaby determined that the earnout provision would not be met and reversed the fair value of the liability.
|
|
|
|
|
|
|
Fair Value Hierarchy Level
|
|
December 31, 2018
|
|||||
|
|
Maturity Date
|
|
Rate
|
|
|
Carrying Value
|
|
Fair Value
|
||||
Senior Notes
|
|
May 1, 2026
|
|
8.000
|
%
|
|
2
|
|
400,000
|
|
|
396,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
|
||||||||||
|
Fair Value Measurements at December 31, 2017
|
|
Year ended
|
||||||||||||||||
(in thousands)
|
Carrying
Value |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
December 31, 2017
|
||||||||||
Goodwill - Arnold
|
$
|
26,903
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,903
|
|
|
$
|
8,864
|
|
Goodwill - Manitoba Harvest
|
41,024
|
|
|
—
|
|
|
—
|
|
|
41,024
|
|
|
6,188
|
|
|||||
Tradename - Manitoba
|
10,834
|
|
|
—
|
|
|
—
|
|
|
11,550
|
|
|
2,273
|
|
|||||
|
|
|
|
|
|
|
|
|
$
|
17,325
|
|
|
|
|
|
|
|
|
|
|
Expense
|
||||||||||
|
Fair Value Measurements at December 31, 2016
|
|
Year ended
|
||||||||||||||||
(in thousands)
|
Carrying
Value |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
December 31, 2016
|
||||||||||
Goodwill - Arnold
|
$
|
35,767
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,767
|
|
|
$
|
16,000
|
|
Property, plant and equipment
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,824
|
|
Tradename
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
317
|
|
Technology
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,460
|
|
Customer relationships
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,426
|
|
Permits
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,177
|
|
|
% Ownership
(1)
December 31, 2018
|
|
% Ownership
(1)
December 31, 2017
|
|
% Ownership
(1)
December 31, 2016
|
||||||
|
Primary
|
|
Fully
Diluted
|
|
Primary
|
|
Fully
Diluted
|
|
Primary
|
|
Fully
Diluted
|
5.11 Tactical
|
97.5
|
|
88.7
|
|
97.5
|
|
85.5
|
|
97.5
|
|
85.1
|
Ergobaby
|
81.9
|
|
76.4
|
|
82.7
|
|
76.6
|
|
83.5
|
|
76.9
|
Liberty
|
88.6
|
|
85.2
|
|
88.6
|
|
84.7
|
|
88.6
|
|
84.7
|
Manitoba Harvest
|
76.6
|
|
68.1
|
|
76.6
|
|
67.0
|
|
76.6
|
|
65.6
|
Velocity
|
99.2
|
|
91.0
|
|
98.8
|
|
89.2
|
|
n/a
|
|
n/a
|
ACI
|
69.4
|
|
69.2
|
|
69.4
|
|
69.2
|
|
69.4
|
|
69.3
|
Arnold
|
96.7
|
|
79.4
|
|
96.7
|
|
84.7
|
|
96.7
|
|
84.7
|
Clean Earth
|
97.5
|
|
79.8
|
|
97.5
|
|
79.8
|
|
97.5
|
|
79.8
|
Foam Fabricators
|
100.0
|
|
91.5
|
|
N/a
|
|
N/a
|
|
N/a
|
|
N/a
|
Sterno
|
100.0
|
|
88.9
|
|
100.0
|
|
89.5
|
|
100.0
|
|
89.5
|
(1)
|
The principal difference between primary and fully diluted percentages of our operating segments is due to stock option issuances of operating segment stock to management of the respective business.
|
Summary of accrued expenses:
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Accrued payroll and fringes
|
$
|
29,368
|
|
|
$
|
23,905
|
|
Accrued taxes
|
6,156
|
|
|
3,441
|
|
||
Income taxes payable
|
5,788
|
|
|
6,873
|
|
||
Accrued interest
|
5,773
|
|
|
221
|
|
||
Accrued rebates
|
11,739
|
|
|
13,516
|
|
||
Warranty payable
|
1,528
|
|
|
2,197
|
|
||
Accrued inventory
|
38,177
|
|
|
32,810
|
|
||
Accrued transportation and disposal costs
|
3,777
|
|
|
4,985
|
|
||
Other accrued expenses
|
25,127
|
|
|
18,925
|
|
||
Total
|
$
|
127,433
|
|
|
$
|
106,873
|
|
Warranty liability
|
Year ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Beginning balance
|
$
|
2,197
|
|
|
$
|
1,258
|
|
Accrual
|
3,531
|
|
|
1,982
|
|
||
Warranty payments
|
(4,258
|
)
|
|
(1,552
|
)
|
||
Other
(1)
|
154
|
|
|
509
|
|
||
Ending balance
|
$
|
1,624
|
|
|
$
|
2,197
|
|
Other income (expense), net
|
Year ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Foreign currency gain (loss)
|
$
|
(5,355
|
)
|
|
$
|
3,268
|
|
|
$
|
(1,386
|
)
|
Gain (loss) on sale of capital assets
|
(605
|
)
|
|
47
|
|
|
(1,249
|
)
|
|||
Other income (expense)
|
(376
|
)
|
|
(681
|
)
|
|
(284
|
)
|
|||
|
$
|
(6,336
|
)
|
|
$
|
2,634
|
|
|
$
|
(2,919
|
)
|
|
Year ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Interest paid
|
$
|
51,697
|
|
|
$
|
27,754
|
|
|
$
|
22,840
|
|
Taxes paid
|
$
|
16,518
|
|
|
$
|
19,326
|
|
|
$
|
15,324
|
|
(in thousands)
|
For the period January 1, 2016 through disposition
|
||
Net sales
|
$
|
45,951
|
|
Gross profit
|
7,917
|
|
|
Operating income
|
437
|
|
|
Income from continuing operations before income taxes
|
488
|
|
|
Provision for income taxes
|
15
|
|
|
Income from discontinued operations
(1)
|
$
|
473
|
|
2019
|
|
$
|
28,070
|
|
2020
|
|
26,090
|
|
|
2021
|
|
22,652
|
|
|
2022
|
|
18,952
|
|
|
2023
|
|
13,058
|
|
|
Thereafter
|
|
44,386
|
|
|
|
|
$
|
153,208
|
|
•
|
Management Services Agreement
|
•
|
LLC Agreement
|
•
|
Integration Services Agreement
|
•
|
Cost reimbursement and fees
|
(in thousands)
|
December 31,
2018 |
|
September 30,
2018 |
|
June 30,
2018 |
|
March 31,
2018 |
||||||||
Total revenues
|
$
|
452,523
|
|
|
$
|
448,700
|
|
|
$
|
429,757
|
|
|
$
|
360,693
|
|
Gross profit
|
147,691
|
|
|
149,704
|
|
|
150,682
|
|
|
126,111
|
|
||||
Operating income
|
20,121
|
|
|
24,254
|
|
|
20,245
|
|
|
4,698
|
|
||||
Income (loss) from continuing operations
|
(6,561
|
)
|
|
5,766
|
|
|
(632
|
)
|
|
(1,621
|
)
|
||||
Gain on sale of discontinued operations, net of tax
|
93
|
|
|
—
|
|
|
1,165
|
|
|
—
|
|
||||
Net income (loss) attributable to Holdings
|
(7,179
|
)
|
|
4,726
|
|
|
(908
|
)
|
|
(2,341
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic and fully diluted income (loss) per share attributable to Holdings:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.25
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.09
|
)
|
Discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Basic and fully diluted income (loss) per share attributable to Holdings
|
(0.25
|
)
|
|
(0.07
|
)
|
|
(0.12
|
)
|
|
(0.09
|
)
|
(in thousands)
|
December 31, 2017
(1)
|
|
September 30,
2017 |
|
June 30,
2017 |
|
March 31, 2017
(2)
|
||||||||
Total revenues
|
$
|
348,199
|
|
|
$
|
323,957
|
|
|
$
|
307,581
|
|
|
$
|
289,992
|
|
Gross profit
|
125,931
|
|
|
117,725
|
|
|
109,720
|
|
|
94,333
|
|
||||
Operating income
|
11,956
|
|
|
14,477
|
|
|
12,183
|
|
|
(11,412
|
)
|
||||
Income (loss) from continuing operations
|
44,131
|
|
|
8,356
|
|
|
2,260
|
|
|
(21,475
|
)
|
||||
Gain on sale of discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
340
|
|
||||
Net income (loss) attributable to Holdings
|
$
|
41,002
|
|
|
$
|
7,706
|
|
|
$
|
888
|
|
|
$
|
(21,605
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and fully diluted income (loss) per share attributable to Holdings:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.53
|
|
|
$
|
0.10
|
|
|
$
|
(0.45
|
)
|
|
$
|
(0.61
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Basic and fully diluted income (loss) per share attributable to Holdings
|
$
|
0.53
|
|
|
$
|
0.10
|
|
|
$
|
(0.45
|
)
|
|
$
|
(0.60
|
)
|
(1)
|
As a result of Tax Act, the Company recognized a tax benefit of
$29.8 million
in the fourth quarter, representing the effect of the reduction in the U.S. federal corporate income tax rate from 35% to 21%, offset by the one-time transition tax liability of our foreign subsidiaries. The Company also recognized impairment expense related to our Manitoba business of
$8.5 million
in the fourth quarter of 2017.
|
(2)
|
The Company recorded goodwill impairment expense of
$8.9 million
related to the Arnold business in the first quarter of 2017.
|
|
|
|
Additions
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
Balance at beginning
of Year
|
|
Charge to costs
and expense
|
|
Other
(1)
|
|
Deductions
|
|
Balance at
end of Year
|
||||||||||
Sales allowance accounts - 2018
|
$
|
9,995
|
|
|
$
|
3,974
|
|
|
$
|
2,965
|
|
|
$
|
4,317
|
|
|
$
|
12,617
|
|
Sales allowance accounts - 2017
|
$
|
5,511
|
|
|
$
|
15,612
|
|
|
$
|
1,164
|
|
|
$
|
12,292
|
|
|
$
|
9,995
|
|
Sales allowance accounts - 2016
|
$
|
3,445
|
|
|
$
|
4,775
|
|
|
$
|
2,105
|
|
|
$
|
4,814
|
|
|
$
|
5,511
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation allowance for deferred tax assets - 2018
|
$
|
5,912
|
|
|
$
|
1,108
|
|
|
$
|
—
|
|
|
$
|
116
|
|
|
$
|
6,904
|
|
Valuation allowance for deferred tax assets - 2017
|
$
|
7,256
|
|
|
$
|
625
|
|
|
$
|
—
|
|
|
$
|
1,969
|
|
|
$
|
5,912
|
|
Valuation allowance for deferred tax assets - 2016
|
$
|
1,308
|
|
|
$
|
2,266
|
|
|
$
|
3,692
|
|
|
$
|
10
|
|
|
$
|
7,256
|
|
(1)
|
Represents opening allowance balances related to acquisitions made during the period indicated.
|
Exhibit
Number
|
|
Description
|
2.1
|
|
|
2.2
|
|
|
2.3
|
|
|
2.4
|
|
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
3.5
|
|
|
3.6
|
|
|
3.7
|
|
|
3.8
|
|
|
3.9
|
|
|
3.10
|
|
|
3.11
|
|
|
3.12
|
|
|
3.13
|
|
|
3.14
|
|
|
3.15
|
|
3.17
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3†
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
|
10.15†
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
21.1*
|
|
|
23.1*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1*
+
|
|
|
32.2*
+
|
|
|
99.1
|
|
|
99.2
|
|
|
99.3
|
|
|
99.4
|
|
|
99.5
|
|
|
99.6
|
|
|
99.7
|
|
|
99.8
|
|
|
99.9
|
|
|
99.10
|
|
99.11
|
|
|
99.12
|
|
|
99.13
|
|
|
99.14
|
|
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
*
|
|
Filed herewith.
|
†
|
|
Denotes management contracts and compensatory plans or arrangements.
|
+
|
|
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management's Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibit 32.1 and 32.2 hereto are deemed to accompany this Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|
List of Subsidiaries at February 12, 2018:
|
State or Country of Organization:
|
|
|
5.11 ABR Corp.
|
Delaware
|
5.11 Acquisition Corp.
|
Delaware
|
5.11 TA, Inc.
|
Delaware
|
5.11, Inc.
|
California
|
5.11 International Coӧperatief U.A.
|
Netherlands
|
5.11 Tactical de Mexico, S. de R.L. de C.V.
|
Mexico
|
5.11 Panama S. de R.L
|
Panama
|
AlphaOne Holdings Ltd.
|
British Virgin Islands
|
5.11 Sourcing, Limited
|
Hong Kong
|
Beyond Clothing, LLC
|
Delaware
|
5.11 Do Brasil Comercio Ltda.
|
Brazil
|
5.11 Germany GmbH
|
Germany
|
|
|
Compass AC Holdings, Inc.
|
Delaware
|
Advanced Circuits, Inc.
|
Colorado
|
Circuit Board Express LLC
|
Delaware
|
Advanced Circuits, Inc.
|
Arizona
|
AC Universal Circuits, LLC
|
Delaware
|
|
|
EBP Lifestyle Brands Holdings, Inc.
|
Delaware
|
Ergobaby Europe GmBH
|
Germany
|
Ergobaby France SARL
|
France
|
ERGO Baby Holding Corporation
|
Delaware
|
ERGO Baby Intermediate Holding Corporation
|
Delaware
|
The ERGO Baby Carrier, Inc.
|
Hawaii
|
Orbit Baby, Inc.
|
Delaware
|
EBP Lifestyle Brands UK Limited
|
United Kingdom
|
EBP Lifestyle Brands Canada, Inc.
|
Canada, British Columbia
|
Baby Tula Poland f/k/a MLV 99SP. Z.O.O
|
Poland
|
New Baby Tula LLC
|
Delaware
|
|
|
Gable 5, Inc.
|
Delaware
|
Liberty Safe Holding Corporation
|
Delaware
|
Liberty Safe & Security Products, Inc.
|
Utah
|
|
|
AMTAC Holdings, LLC
|
Delaware
|
AMT Acquisition Corp.
|
Delaware
|
Arnold Magnetic Technologies Holdings Corporation
|
Delaware
|
Arnold Magnetic Technologies Corporation
|
Delaware
|
Flexmag Industries, Inc.
|
Ohio
|
The Arnold Engineering Co.
|
Illinois
|
Magnetic Technologies Corporation
|
Delaware
|
Precision Magnetics LLC
|
Delaware
|
Arnold Investments, Ltd.
|
Delaware
|
Arnold Magnetic Technologies UK Limited
|
United Kingdom
|
Arnold Magnetic Technologies UK Partnership, LP
|
United Kingdom
|
Arnold Magnetic Technologies UK, LLC
|
Delaware
|
Arnold Magnetic Technologies AG
|
Switzerland
|
Precision Magnetics (Ganzhou) Co. Ltd.
|
China (owns 50%)
|
Arnold Magnetic Technologies Limited
|
United Kingdom (owns one ordinary share)
|
Swift Levick Magnets
|
United Kingdom
|
Arnold Magnetics Asia Ltd.
|
Hong Kong
|
Jade Magnetics Limited
|
British Virgin Islands
|
Arnold Asia LLC
|
Delaware
|
Arnold Magnetics (Shenzhen) Co., Ltd.
|
China
|
|
|
CEHI Acquisition Corporation
|
Delaware
|
Clean Earth Holdings, Inc.
|
Delaware
|
Allied Environmental Group, LLC
|
Delaware
|
CEI Holding Corporation
|
Delaware
|
Clean Earth Dredging Technologies, LLC
|
Delaware
|
Clean Earth of Cateret, LLC
|
Delaware
|
Clean Earth of New Castle, LLC
|
Delaware
|
Clean Earth of North Jersey, Inc.
|
New Jersey
|
Clean Earth of Southeast Pennsylvania, LLC
|
Delaware
|
Clean Earth of Williamsport, LLC
|
Delaware
|
Clean Earth, Inc.
|
Delaware
|
Advanced Remediation & Disposal Technologies Of Delaware, LLC
|
Delaware
|
Clean Earth Environmental Services, Inc.
|
Delaware
|
Clean Earth of Georgia, LLC
|
Delaware
|
Clean Earth of Greater Washington, LLC
|
Delaware
|
Clean Earth of Maryland, LLC
|
Delaware
|
Clean Earth of Philadelphia, LLC
|
Delaware
|
Clean Earth of Southern Florida, LLC
|
Delaware
|
Clean Rock Properties, Ltd.
|
Maryland
|
Clean Earth of West Virginia, Inc.
|
Delaware
|
AES Asset Acquisition Corporation
|
Delaware
|
Clean Earth of Alabama, Inc.
|
Delaware
|
Real Property Acquisition LLC
|
Delaware
|
AERC Acquisition Corporation
|
Delaware
|
MKC Acquisition Corporation
|
Delaware
|
Environmental Soil Management Inc.
|
New Hampshire
|
Environmental Soil Management of New York LLC
|
New York
|
Clean Earth of Michigan, LLC
|
Michigan
|
Gardner Road Oil, LLC
|
Delaware
|
|
|
SternoCandleLamp Holdings, Inc.
|
Delaware
|
The Sterno Group Companies, LLC
|
Delaware
|
Sterno Products, LLC
|
Delaware
|
Sterno Home Inc. f/k/a NII Northern International Inc.
|
Canada, British Columbia
|
NII Northern International Services Inc.
|
Delaware
|
Sterno Home Inc.
|
China
|
Sterno Delivery, LLC, fka SevenOKs, Inc.
|
Delaware
|
Rimports, LLC
|
Delaware
|
Rimports (Canada) LTD
|
Canada
|
Rimports (Shenzen) LLC
|
China
|
|
|
FHF Holdings Ltd.
|
Canada, British Columbia
|
Fresh Hemp Foods Ltd. d/b/a Manitoba Harvest
|
Canada, British Columbia
|
Manitoba Harvest USA, LLC
|
Delaware
|
Manitoba Harvest Japan K.K.
|
Japan
|
|
|
CBCP Products, LLC
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of Compass Diversified Holdings and Compass Group Diversified Holdings LLC;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange act rules 13a-15(f) and 15d -15(f) ) for the registrant and have: for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: 2/27/2019
|
|
/s/ Elias J. Sabo
|
|
|
Elias J. Sabo
|
|
|
Chief Executive Officer
Compass Group Diversified Holdings LLC
|
1.
|
I have reviewed this annual report on Form 10-K of Compass Diversified Holdings and Compass Group Diversified Holdings LLC;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange act rules 13a-15(f) and 15d -15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: 2/27/2019
|
|
/s/ Ryan J. Faulkingham
|
|
|
Ryan J. Faulkingham
|
|
|
Regular Trustee of Compass Diversified Holdings
|
|
|
Chief Financial Officer
|
|
|
Compass Group Diversified Holdings LLC
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: 2/27/2019
|
By:
|
|
/s/ Elias J. Sabo
|
|
|
|
Elias J. Sabo
|
|
|
|
Chief Executive Officer
Compass Group Diversified Holdings LLC
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: 2/27/2019
|
By:
|
|
/s/ Ryan J. Faulkingham
|
|
|
|
Ryan J. Faulkingham
|
|
|
|
Regular Trustee of Compass Diversified Holdings
Chief Financial Officer
Compass Group Diversified Holdings LLC
|