Compass Diversified (CODI) 2 Aug 232023 Q2 Earnings call transcript

Good afternoon, and welcome to Compass Diversified's Second Quarter 2023 Conference call. Representing the company today are Elias Sabo, CODI's CEO; Ryan Faulkingham, CODI's CFO; and Pat Maciariello, COO of Compass Group Management.

Before we begin, I would like to point out that the Q2 2023 press release including the financial tables and non-GAAP financial measure reconciliations for adjusted EBITDA, adjusted earnings and pro forma net sales are available at the Investor Relations section on the company's website at compassdiversified.com. The company also filed its Form 10-Q with the SEC today after the market closed, which includes reconciliations of certain non-GAAP financial measures discussed on this call and is also available at the Investor Relations section of the company's website.

Please note that references to EBITDA and the following discussions refer to adjusted EBITDA as reconciled to net income or loss from continuing operations in the company's financial filings. without provide earnings, of certain or information not not expected full significant does is adjusted XXXX adjusted available company a its reconciliation year reconciling The efforts. unreasonable EBITDA because the we call, Compass CODI refer Throughout company. this will Diversified to as or

Now following Harbor read statement. the to allow me Safe

factors such During future statements, expected and ESG its statements basis actual a in subsidiaries, plans, December risk as statements impact the some in the as may as and with operational of differ other on regard factor those are to from of as forward-looking ended could enumerated we anticipates, subject identify expressions forward-looking in XXXX, cause this for performance the statements. forward-looking inherent and predicting certain to forward-looking these conditions. uncertainties in of future are CODI and statements, filings. acquisitions, timing as plans, call, material results make such the These expects, well year discussion Words including XX, the future similar in future initiatives. filed to or the SEC to projected these results are intended and SEC believes, with should the projects, XX-K, factors Certain Form and

future required forward-looking global In CODI CODI of statements, on law, impact or labor or disruptions, companies. particular, and rates any update to information, supply by environment, have obligation a our and the significant as whether a inflation result Except all domestic revise otherwise. chain, economic undertakes new and may publicly rising subsidiary as no events interest

call I over time, would turn this like to Elias the Sabo. At to

joining thanks us and everyone, today. afternoon, for Good

months businesses, our headwinds adjusted we X.X%, during that the respectively, the pro pleased subsidiary we results consolidated by by given three quarter to from expectations, forma we quarter, of X.X% EBITDA, these are results. diversified to ago, benefit encouraged are second our strong and a saw declined revenue and We but and as set continued report exceeded

group Last our demographics that in quarter, strong detailed reach a has we how strategy resiliency and diversified our we set underlying each core customer performance. and assembling wide end strategy markets, driven this with a of companies highly rates, growth discussed of of

quarter We macro lasting very up which anticipated. longer face different. is hold This several to Nonetheless, no of same we results challenges, the than continued are our originally well.

our revenue, unit at impacted margins. sales the strong, of impacting while businesses, niche industrial remained but easing pressures inflationary positively Looking negatively

to expectations, year. growth economy, to EBITDA our high macro continue businesses quarter headwinds the industrial growth and remainder the above and and Notwithstanding of of the XX% reporting over slowing year-to-date. adjusted solid to perform produce industrial single-digit Our for global continue EBITDA businesses the growth expect we

further end In impact continue brands continue for well, Regardless, strong our experiencing our overhang, and businesses, brands headwinds are sales have anticipated and our consumer the lasted chain. hold there to to a market performance. large supply we is than not inventory inventory longer destocking down remarkably where up

product reporting for on-trend end suffering spending hangover, still Marucci's demonstrated quarter. not from trend, is growth lineup the consumer an their are in the revenue markets and the to second customer results has quarter. an from the first delivered in in quarter, as they growth that Lugano's example, For XX% in ultra-affluent continues bucked acceleration revenue growth indicate XX% the also spend, XX% inventory that strong products. the has Marucci

growth. well when positioned, from the slowing of with performance and Despite coupled industrial deliver aggressive company give pandemic expect are is that us Fed businesses, and from Lugano tightening global behind cycle distortions confidence our growth, our the to the and us, performance Marucci, we solid

their expect these Primaloft, normalization of XXXX historic the Once best-positioned growth suffering process. and subsides, of are and return destocking we part destocking BOA headwind, businesses. are from two that believe, in believe this growth to we subsidiaries fastest-growing, above-trend could also experience Our rates, we our as and the most businesses we historically to

started we green end giving will quarter, some XXXX. second in the issues to to shoots that see During come emerge, an the us destocking confidence

bookings year. prior for second grew improved in quarter, the marginally Primaloft and Specifically, over

first first to to although double-digit Primaloft. experienced choppy of course compares one past we and course over XX a the in the we year, not months for over This declines sign have this the make in does expect quarter is the and trend, bookings bookings seen quarter be the of the positive

experiencing consumer deeper, including four booking Digging to before months began BOA. businesses, weakness three we Primaloft other know

leaves of As we return and the growth. look inventory other first positive some us to the businesses for bottom positive that provided soon bookings consumer of our cycle, signal has optimistic Primaloft this will

and Given the quarter growth revenue persistence third quarter. similar growth, to on be absolute destocking to second bookings dollar adjusted between the we this basis expect and EBITDA an lag year's and roughly inventory

growth adjusted year full the We compared EBITDA for full year continue to project XXXX XXXX. as to

growth the quarter. in In a anticipating in rebound addition, fourth we are strong

to Pat, all our like turning summarize outlook. over I'd and this Before to performance

pleased with they expect quarter above will our destocking our we Despite adjusted this us EBITDA grow strength positioned committed to the only growth inventory of but our accelerate overall deliver growth came confidence are the and We subsidiaries in leads that dissipate results which year, headwinds, created to of at second headwinds on believe not remain to our once we the our as expectations. gives we us that year strategy, another are CODI. in believe will capitalize XXXX. will these we We opportunities well

turn call now the will I that, over Pat. to With

presentation, XXXX. this it will pro January Thanks, Throughout results, Elias. be forma own we we discuss if XX, as from when PrimaLoft

ease. Yet, we quarter spots, correcting in these levels like to headwind As chain. to inventory Elias mentioned, appear in due face they are headwinds supply starting the the select in areas continue to several in

cell continues Our to and controls to put focused and end fishing place retailers. major velocity tight of its by a subsidiary in through pressure in see reduced due both combination of markets inventory hunting

levels increased as dramatically. benefited activity As during outdoor repeatedly, velocity we the have discussed from pull-forward demand greatly pandemic,

below declined impact now we and trend the this of this is effect see financials. impact been, cost our historically levels. company consolidated what the on The what for as believe in anticipated, As is line short-term having demand outsized whip paying an we and bull significantly is

these headwinds, our forma only in lead and pro revenue declines to Despite EBITDA. subsidiaries significant other consolidated in strengths modest

fact, growth when both velocities in the exclude In as revenue whole CODI a terms quarter, adjusted we show of in performance, and EBITDA.

Now, on niche our begin industrial I'll with results. our to subsidiary businesses.

over ago. revenues and second versus aggregate quarter, For year-to-date businesses XXXX, the XX.X% ending year. industrial the each to adjusted a prior June, increased first of by basis Similar EBITDA versus points margins period, by our and adjusted same X% quarter, in by EBITDA declined year the the period niche margins expanded XXX approximately expanded

markets, of growth and bookings again, which continues EBITDA, to driven solid in by securing revenue for electrification projects had many company quarter. showed demand Arnold The in new traction strong once in across increased were in the the gain economy.

market as levels. in near to has products. we the returned Margins skew talent to technologically in be as in End and spending across expanded continued segments to more due mix remained Arnold, term, and the yet a to pre-pandemic not sales towards advanced sector demand solid positive commercial expect aerospace defence aerospace

as the passed on market-space declined Outdoor's company and year-to-date material June slightly end in raw savings. period the more cyclical revenue headwinds

the broad six period place progress remain in decline the prior predominantly revenue, new measures was a due by to team. the the in encouraged compared there series efficiency as over slight adjusted put to year, by increased month at made in Although We of XX% by EBITDA a outdoor.

able costs, declined was revenue business. as to decline, growth ago, year company X% by to and this from the the EBITDA greater in slight by company's and a driving compared in basis. the wax Sterno, shipping lumpiness period year-to-day on efficiently benefit approximately At Despite a stability year-to-date in driven centred operate

for and to EBITDA by the year-to-day XXXX prior year. as compared June X.X% Turning revenues to our increased consumer businesses, marginally, declined the adjusted period,

decline quarter So, EBITDA half BOA a record of again in platforms XXXX. we XXXX that beyond. drive in should growth versus new in company continued expect first to and the show added partner The adjusted

BOA's closely adjusted be believe to this XXXX a will year-over-year basis on selling in XXXX market levels. the and year continues We improve below the quarter EBITDA significantly comparisons performance third full year percentage of will track to end demand.

launch The this upcoming meaningful technology the them slopes on have track incorporating and presence we continues our expect our of ski season. to in expectations, Boots Alpine to above a

of continued And widespread approximately winner, this adoption technology. competed Vingegaard, Jonas recently shoes of France, BOA-enabled fit also including Tour by cyclists. products completed the in proud BOA De year's are incorporating XX% overall We of competitors,

compared once prior to approximately Marucci the again grew quarter as ago period, for over the year-to-date had and an EBITDA revenue year exceptional respectively XX% XX%, period. and adjusted and by

Sales growth strong channels. across was most

particularly excited well of several large made adjacent the well growth performed Bat, strides with we fielding in significant to its made Japan. date. bat and acquisition Marucci's market in latest in geographically, integration Our as we are maker, quarter, as and categories, are Baum glove of pleased The company has composite the progress the by in primarily

D.C. a the the multiple in again its quarter. EBITDA experienced strong salons, and Washington, strong Newport, once strong saw The salon. had adjusted for compared revenues newly prior company period, XX% including to and in as XX.X%, grew in growth and Lugano the respectively opened Aspen by and Houston sales year-to-date second And year. June quarter

to salon Greenwich, is on progress construction made our in salon we've our Beach. end second by the scheduled Palm ahead, August, in flagship open and Connecticut of the quarter Looking of

late recently just London, a executed which opened are salon. we for that mid- success addition, to ultra-high-end have Lugano's believe will In when in to has XXXX will bespoke jewelry approach as mark it announce domestically. we Lugano's in pleased international first We to a salon lease internationally,

both revenue hold to as continue inventory show PrimaLoft period modest adjusted customers the declines continued EBITDA on year-to-date in to in target and levels.

mentioned, inventory bookings first our we since in somewhat customers' end cycles of seeing As the the we improvement of bottoming have Elias and believe quarter. shown a are end

have quarter a to continue the for and project will continue the in XXXX We to company. at second believe strong be PrimaLoft year wins

revenue growth reduce continued quarter, second year-to-date quarter. of gross looked for adjusted the margins X.XX 'XX close XX% increased And solid in seasonal by second to as to had X.X%, the the and EBITDA as as in EBITDA Despite adjusted and quarter. inventory the all segments a company revenue marginally the grew period, revenue fell profit respectively, business. in June slightly

struggle quarter. to second the in continued Velocity

level point-of-sale positive segment. depleted to end of While in customers regards add company's more signs seeing to activity slow we inventory. been the the airgun with remains to have slightly are segment, The retailers in sluggish archery

While this of demand cost company positive and to will we navigate half stimulation meaningfully both focus have XXXX, adjusted in the continue as to EBITDA period. we we believe continue difficult the controls on second

in headwinds, facing vigilant costs. broader management our a improve, whole, our XXXX Though some remain a companies it the with of that going believe the we teams XXXX. performance anticipate in grow the above believe given and As we as quarter in to headwinds comes starting our we the second pleased our are are expectations. will We in strong

will financial turn call Ryan now his to the on comments for over I our results.

Thank you, Pat.

CODI to largely consolidated limit quarter results will comments our XXXX, today. overall the for the individual the in that June financial to with was subsidiary earlier the are for ended results XX-Q filed Form results Moving since detailed our XX, SEC I my

the was acquisition consolidated period. On compared of This quarter quarter to up million year prior basis, million, the year. last XX, reflects our a during June the year-over-year X% revenue $XXX.X for of XXXX, PrimaLoft for third ended $XXX.X primarily increase

due the financing Consolidated interest result increase million was expense acquisition compared the million a interest of in income in primarily decrease rising an second $XX.X the year. and quarter for The rates. prior PrimaLoft of to was net income as $XX net to

quarter at was the EBITDA benefit The increase Adjusted $XX.X quarter. expectations the the up our earnings of second in was million, the compared a million quarter XXXX. Adjusted The in higher prior decline of due $XX.X second above from quarter million, PrimaLoft result expense. to acquisition. the million of was to $XX.X year $XX.X was down second interest X% in the primarily for

outlook. financial our to on Now

to we range the consolidated million For to EBITDA $XXX million. full continue adjusted and expect subsidiary year between XXXX, $XXX

to is year earnings provided the XXXX, the continue same $XXX between This range had adjusted guidance conference For we and call. to we million. full expect last million $XXX

our Turning to balance sheet.

approximately cash, under we X.X our June our X.XXx, approximately in just XX, million. revolver XXXX, of on leverage was $XX.X million available As $XXX had million and

present million. We With subsidiary and growth our liquidity revolver act with on acquisition and communicated, opportunities previously have and capital, in they provide the liquidity invest capacity able financial they ability the to support upsize additional and $XXX subsidiaries we compelling we opportunities need, by stand substantial to as our have our an as ready themselves.

Turning operations. now provided by cash flow to

year's During we $XX.X flow operating comparable the million million cash of a result This period. second is the operations, prior received from quarter of from of primarily up XXXX, $XX.X performance. strong

second the needed used result in when of used we prior levels supply as to of million a from working the many during inventory support We decrease million $XX.X quarter disruptions. chain $XX.X XXXX, our capital businesses' year of a substantial in

cash For to the million compared period, by the year-to-date $XX.X provided as operations year. increased flow prior

to the continue exception working business as growth objectives. continue we the of capital expect We across Lugano its monetize to to with fund

quarter, the million of and during the management fee the respect $XX note acquisition Baum of of Bat. to manager the company XX% Also add-on Marucci's waived owed in approximately we used fund PrimaLoft, by of

to turning Finally, expenditures. capital

continued quarter During in XXXX, retail build-outs primarily million the increase and their the existing growth. at The expenditures was compared to $XX of timing period. a incurred second Lugano the of at of result we X.XX $XX.X of our prior support million capital year to subsidiaries

$XX between million. year the million total continue of anticipate $XX and of expenditures full XXXX, we For to capital

capital and periods. our on they of have will at continue invested several believe short see We payback strong subsidiaries to growth returns

at Capital at its as retail store as retail to XXX new X.XX primarily and stores XX. for salons expenditures June we in increase XXXX count be continue Lugano its of will from

With will turn that, to the I call Elias. back now over

Ryan. M&A and market Thank our close strategic to would on an providing I update by like the briefly initiatives. you,

remained M&A, time some historic In for suppressed levels activity now. terms deal of has below

quarter However, the of over increased that momentum to we balance year. activity expect gain second to see started some the in the we

continue our and key the ESG we advance strategy. front, execute to our On initiatives

ESG business seeking Our to approach is to important tied ESG becoming model, employees opportunities. to increasingly directly our and new potential is

and and critical and ESG For these that reasons, externally. our philosophy internally consistently communicate both is practices we it clearly

have website. work progress the in our the occurred that the months, has page organization on across we over past the XX updated reflect sustainability To

implemented We how have as be to subsidiaries source our to companies spent this to tell our framework creation our our significant value time working with web and and story. understand will facilitate a overarching ESG page

that for measurable stakeholders. time the our use over us appropriately. benefits values believe to a risk to way with We allow will in create our the reflecting in than and factors many strong we aim and returns environmental, to generate social build align that We our that more financial governance capital deploy framework different marketplace

underlines today up purpose. of stepping like The volatility businesses face we that with the ours importance only

of leading driving are and model to to We the change committed positive industry become choice. the

certification facility the use zero An example from Green discussing which the In of of true achieved is performance. subsidiaries, The June True, stands measure comes for Sterno Texarkana waste. worth leadership industrial niche one X business is Group. our Sterno's efficiency, silver standard manufacturing to XXXX, by resource, certification, and for which administered total, a for facilities waste

is Texas, facility and True-certified proud of Currently, recognition Sterno's Texarkana Sterno's X pursuit the of waste. manufacturer only that of state in are their we is the and

our results of In conclusion, quarter our second highlight proud diversification of which strategy. we're true benefits the

only gives The our this have by a fully grow While year continued subsidiaries confidence these us continued our that snapback not impacted persistent our we're several our of XXXX once businesses but to well inventory headwinds, headwinds businesses to destocking perform in consumer Niche dissipate. to well. be in positioned strength industrial belief of overall year

the hearts mentor Compass, open phones so our with that Sean for acknowledge we the chair of friend, it's former passing of heavy many Before we and to at us Board Day. Q&A,

be Over XX business played will acumen, years, of integral in professionalism, last kindness an our and the the throughout integrity company. our missed His strategy. greatly role Sean formation

our we Day and our entire the on condolences entire express to the deepest of team Board CODI So behalf of Directors, family.

With the Q&A. for open that, please operator, lines

[Operator from line question. first Securities. Larry ask CJS question comes Instructions] Your the of Please from your Solow

evening, one. to much and so of good questions I specific couple a guys. and just I'll then good Great. guess Thanks come general afternoon,

bit guess it was the better like I expected. a than certainly little quarter seems the -- on Just

close I sequentially was it flat EBITDA. or think to basically it

guess, called I drop a think you single-digit of had expected, kind mid-to-high quarter. out I last

really Just reason as good that little not heavier basically running Is you're into sum way a longer are I a little are parse of better, why operations guidance the through persist to inventory but the kind going QX? or kind of, draws it? to just kind is increase of a bit

on I quarter bleed the quarter you've thought, and first call. we longer. headwinds little a is, didn't as did bit the had guidance. than second that on. raise more going little persistent our to our forecasted forward. inventory But are reason than Larry, earnings better think identified, we behind they're Yes, you're We And spot the a in we

we're I As stabilization PrimaLoft. some said, starting to shoots see by of orders at new

We haven't our seen in that other some of consumer-facing businesses.

a think little bit prudent. as I So just being that, result of we're a more

as portfolio positive some there's the in signs Although well.

would better this have performing the I caution right really or So we more conservative being because is anticipated. us than position as business now incredibly

question anything? $XX and the for was any was was good is Sterno, then I explanation there. guys the by a range. of guess color And running brought I on fair -- that on Sterno a you million, question, management what itself for A and was there million that's greater impetus No, on just I just think sort guess EBITDA second the in $XX change,

to I business remember space used know quite it well [indiscernible] to shelf pre-COVID Walmart, itself, doing as during there. you large not do box and in heyday that. -- big close and some COVID know [ph] with losing the nearly customer, not if its probably imports as doing acquired maybe was you're that's I I a correctly, probably But

change But what or give of you imports I what can just the today the guess, is business? candy and what of questions. of doing versus us give is reason The kind an the Can you impetus two for us management imports? -- sort idea there

replacement for Craig people of who retire, just we're is a that. colleague him we we would and decided great to in I say, Jeff, Larry. Hi excited long-term firm the Okay. and at by typical, is ours Carnes, as found retire believe

your breakout. kind the of say that a we off bit of don't breakout, little even It the in below you're numbers the right business its you a bit or off. would you're XX business the tell never As peak fuel are relates was chafing The candy little but conceptually kind even I it of north at -- own got always at its on years. XX. peak to

you read I into also but -- will kind of let go So sorry, that one, the ahead. you're that right

heat those saying you Sterno imports, someone combined would like say. No, before was I Home, the I can bought and

and has a pressures, business as continue say. the faced business, it wax for quite for and performing see it's to it lumpy see periods. very but great I weaker some continue was quarters price The would we We never And and bought that at We attractive high it's it company, a some business. as performing. to the a it some shareholders, we

products Larry, I'll just think with identified And you been of kind on going it's the you've inflation has as -- about point, it's customer where kind just point a channel really large that that one disposable And consumer of impacted a customer. these where of make if targeting are through income. consumer least the generally spending, one other business, that has

kind expect wax was no and as really little scented start that But significant from. our of so real bit to the customer we of be And of inflation to a drag kind that part inflation performing longer kind better would eases company. a and suffering was at at wages earnings company on start the headwind business of that grow, a

few then especially. Lugano over on getting on end And questions last just lots on of to a we're months, positive more note, then, the enough. just -- Fair

much of grow business a the Founder question Some how around them. being around much by it's them can how -- support lead Moti have business Ferder built the sort infrastructure to sounds its

of there. So questions just kind

now been XX% last has year. rapid this The up another was and growth year year-to-date you're -- so

the crystal guess are, in different what years? this other could don't I what So questions be X high-end you so And know this a dealers? special but business from makes I have business ball,

Yes.

good is more of a it's think I that now positive Obviously, it Larry, obviously something question pandemic is Velocity the paid question. temporary, rapid back. when see Like right? of company the growth? like had can kind experienced is it kind growth, And this that that impacts has natural making how a on company getting So long you a sustain this is it

if wonder I think that's to Lugano. a that's natural happening question to

kind I at the underserved. something after that industry been in outlets. of competitors piece major bit of quite of in have market contrary, a hasn't a Actually, the think of the has is that the Lugano and be have same want going may one that they one that the mass sold this versus was lot the is customer unique very of that to players by that And and generally little that a more approach distinct kind sound I much more level the It the that of subset unique same much can is created, know targeted the strange, is a is and industry. but their lot multiple created jewelry throughout one-off which

new customers, limitations different. So was of the available it's salons that, greater room capital for these has much the aspect how the create around our model inventory given lot pieces. is put our to significantly was in that community-type of growth this business capital completely founder built on place, has his available a And the business run much how really in something on opinion, with the to predicated was investment, to

product and we're kind ultimately accelerating we this programs the of around our segment, some fact, of additional what and putting that. of able as so don't you've those have company's some the in right profitability seen the opportunity acceleration we of in it's And don't drive kind solve view being strengthening only And this this seeing capital lot we were of the growth we community now. we're in limited And to view and purchase forward, effect partner of that business. a of of temporary, kind is because that issues. the Moti and of growth as place, the to We business customer when with of an kind tie-ins

model and he's to capital for one put had working is how we its created here, he's that lot that limitation has will business runway that who the Moti, to I've So do much growth. ever be unique pleasure partnered the in facilitate CEOs we want growth most the and that of with, a founder a of of visionary

they And And our as sort in capital we're we until are view has this these of slowdown and fund experiencing we'll to as rates some here, continue been with see high all return of on that. just invested not opportunities growth.

that's know, answer, short think size I what such there's question, to is to and from but it multiple everybody unique can long-winded to a today think in mousetrap a a so it's legs that else and this of it differentiated I So because grow the industry.

The next question ROTH Partners. is ask from from Matt Please Koranda Capital question. your

on and It's the on expectation the to Maybe in Industrial just Matt. the see Last sizable to might looks segment. expansion mentioned quarter, to for businesses. Really continue it have. Mike [ph] for slow margin like encouraging bookings it we industrial an

an come forward? trended industrial should booking the the And going since are a maybe these XX% margin on north specifically have how margins? forward on as environment segment margins Altor, call. in just So of Or just how we bookings sustainable slows? a in last EBITDA be then update pulling bit Should

than So is me, longer-lead the that of general, have in shippings, were bookings saw first as and sort have think or higher between our say, a industrial, those industrial, increase in an large time businesses actually we of one spans through bookings bookings business I we excuse in that on revenue. actually -- bookings. I'd

So over there book-to-bill of rate X. was a

So solid there.

team we'll we think second minimum, that gains management is add sustainable, been This look Altor is very his increases. acquisitions of too. before, can impressed it to sort believe will have then margin on think question was there. your absent We and team continue we Terry see this on sort price efficiency level gains think to good. and margins. of We we've expanding also we should We add I by and if more at efficiency them. a done see

EPS sort the lag, a material we same increases though on prices customers to pound makes if pass raw be our increase, go sense. price a So right? other if Remember, of dollar material we'll margins per with on making the down even raw basis, contribution may sort and of that the

the Got is it. of I top sense. relative Makes line the moving a our to stronger guess of in Marucci to lot bottom both quarter, businesses and expectations. one

maybe baked last on more drove color back year the range? of to the the Are what half in little the the a type we are into bit Should what So then CAD further, And mid-XX% expect still of seeing we something just sell-through? margins guide year? strong for similar outperformance?

expect as of year. it margins to to the strong have what And to would similar growth, we drove on first I half this relates revenue sell-through X. continue the Cat

continue new lot in. a which gloves, also to category big into of We categories. We that getting a is we're mentioned traction expand fielding

and If really strength then you -- have Japan. we were growth just in kind of across segments

growth in softball. have We

looked Marucci home of you the or many at derby, If using bat we're in the bat. Victus hitters run

So there's continues sort a just it's of -- great that brand to gain traction.

the me. Marucci, any for overall trends maybe and performance, quarterly and on Along commentary plans the on the just BAM acquisition, Got it. for in you're Bob. similar on touch process for DC sense. Last one seeing lines just Makes future integration

not as BAM. so proceeds has we us you said use as going think performance. They think grow get million can borrowed, of around can that. think, We're for We financial Sure. $XX far the Ryan sort it -- And I sort to was on touch your purchase I about price. of -- the head the constrained. were specific I'm not of we capacity

driver but -- in DTC, at we're growth. driver company, another the capacity at be growth will don't And biggest we know BAM likely of be XXXX I Marucci will adding be and our both But for the if will that of it for strong. BAM remain

me, it. guys. Thanks. Got it That's for

from Please William Blair. Mark is your from question. question ask Your next Falkman

Kennedy. This is for Mark [ph] on Chris

you know ask on initiatives to talk also you of the and I place turn had then margins to revenue to there? growth line that about Velocity. could wanted it, are any on business back Just mentioned in that the improve but

I we was earnings with experienced think years. just -- should about pretty this of last and people was and think a a an the This a could as do. revenue been you go staying activity pandemic. and Hunting people Velocity, in company Yes, through and have growth And exploded couple home. the that to expect it, Mark, participation you that just dramatic over were all This think out clear we've about I category. really and if

kind purchased. on or are if durable archery that it's these are big side, CapEx And being items the of big really

-- it's And in cases, individual per Some to out. $X,XXX just a it's do to that, you're that buy out go $X,XXX, not for and not year an going year and consumable they're item.

dramatic there enough of not a And so we this was supply with then, uptick the available. course, experienced businesses, in pandemic. And

get banner product a from So had as else as portfolio retail this to we of anything be expect this much our to level the I earnings benefiting this say. were but year, XXXX rushing It for from possible don't we careful company. as is And disproportionately normalized very into think carried over pandemic. in to a having been We to partners. our

it that earnings experience and But was be payback suffering going an tailwind now. and we're fun payback inevitably, like right Now through a to getting nice it's to when you're that, that. there's

we to everything hard say stimulate demand. to it's doing do what stimulate that can we can We're do So demand. to

other products low company our than sell. traffic shelves in And retail is needed The the we inventory market not the end businesses, now. this and partners foot what's for really field, the for coming company the this on that there's growing is right unlike reality out into the is more is where X

strong that performance in a we payback saw the And for so XXXX. really it's

year. some get performance right by no do from growth here? that's going that to would And depletion I chance. I of now, this virtue business next worse think revenue the have just say inventory will, of on level better going and of some Now it's

really much not that done. But can this there's year, be

in pandemic, that coming again. X payback X acquiring rush new being stimulate to into of trying a coming all you just are have marketplace. introduced item want from the a the can't period that or purchase buyers because don't for But X with or an we're customer and coincidentally here. We And going there's And happen if out be purchased great that years, stimulate demand products and to demand they to customers. another item during

all generate very creating management to cutting and efficiencies able should as job is they It our have muted growth. revenue operating team an we doing So to is can. be much XXXX of difficult expectations. is a very year as extraordinary But for where us costs

certain truth financial negative And down leverage of operating leverage of of exists. revenue you it is, because impact amount when your have you're businesses, all background can't there's and results. going to The operating is stimulate that these and though, going in a market to that's just conditions,

it when overall company So XXXX to was couple better a that, expect to with sustainable million snapback that in of pretty we clear poor years some doing of were Velocity a that $XX north a of have level EBITDA had. a XXXX earnings But of performance. the coming I wasn't ago would

take I where first million has EBITDA, otherwise that's low it can normalized more of either right of earnings a million, you revenue do and potential. side has half revenue demand, $X is would somewhere now, action tell cost of caused not to that in the $X we generation, sustainable us But company significance between decline the have. likely produced level the than the is on I think

have sharpen out, of a to outsized and kind teams survival are of cut likely pencils and to the their business going it off you're kind back. deeper But leads when of forward where generally comes profile margin types of this earnings that leaning because is kind of because better mode. times a business trim growth these nonnecessary management really going by And more of revenue all the aspects the in

was that kind market The There's onto some is bouncing you this season when back, products all could hunting half better we of idea bringing coming. and the half. we the Look, are different and retailers back now So about wish give This these first are doubt sold, that. categorically of is when no be year them their the the than will that shelves.

the but the not replicate will will in have we half, expectations year. So be far we should it muted this second for half better, first

back be will a stable business. boom There's could doubt the that my it will it normalization there sense, for revert be and this more will is of some And couple than I'm year. we're company. bounce payback trend and of stronger in kind and And it be probably years normalized this we a to, next of then in pandemic experienced on line. sure back it I year, But back

was been have has very industry the could stable, where of been very pandemic albeit This typically just what effects This beyond kind industry. anticipated. one It's stable. a pretty slow growth anyone exaggerated were typically well

opportunity opportunities then synthetic any Helpful you about talked like I consumer-facing of And initiatives talk and there. additional guys you those there just licensing you've Great. guess of I of there the image the on markets know when then, the PrimaLoft, ThermoPlu down? increasing beyond or PrimaLoft. Can of and additional acquired it, some revenue about since

No. Yes.

initiative, product large forget of are supply is -- right from a that possible the we as to the through of few example. can produced is our we're now our which emissions, hard things chain Pure work create of to very as initiatives our product but significant using believe. reduced pushing and customer kind give using it interest were, as exactly trust is -- end that new One working to I And that what having is they the that customers many emissions has an I end

next The Derek from Instructions] Jefferies. your ask Sommers one question. [Operator is Please from

little Hi. and the input. there of out everyone. on could Good data was been coming how any see wondering portfolio policy your hear decisions to if to We commentary has just I just of international of started at performance companies. a and bit you volatility macroeconomic afternoon, share wanted some

seen been distributor -- slower in our looking we I is any have have can't stimulus is back customers. for anticipated, say China and we trends. there's I that Yes, seen mean, there, And than right? everybody sure. obviously, coming that so huge

we've retail where when And had people in to that seen visiting seen places have have have we We Asia. in we that China. sales

sort stores have seen We that at there. of

muted I'd changes in it's general, quarter. the least this no So America now pretty but are -- and Europe right kind right? of in strong those say end big three sort at North is is last sea -- or of by the consumer,

Howlett B. Riley. is from last your ask Please Matthew from question Your question.

Just on quarter? would the to equal be guidance, second did I hear you right the that EBITDA XQ amount dollar adjusted

in line posted. with Yes, we just amount roughly dollar the

So XXX in sort I XXX G&A, the quarter. your of you're about it fourth like midpoint we quarter corporate $XXX that of about $XXX to third something with how talking gross XXX, should EBITDA? at Is excluding the basically think the million, look than million

to a about I good way think it. that's think

Yes.

snapped intrigued 'XX, how you Okay. you it you Great. And but for of was about last thing by ask I'm had I that trying could know sort so be provide then you, I to not don't the touched there comments on 'XX. back. really in guidance

you historically, that growth companies, for think something of in your about scenario? be said much in possibly I portfolio XX% could we than thinking 'XX better a snapback

Yes.

keep this, all are to if in market the I -- think think right end consumer space you wholesale to what of and for is sales about the highlight what we stronger now are about virtually and end inventory companies But muted destocking. are of Pat our going what's our happening kind we're just and trying or alluded being sales channel through the than market are that the selling. talking

muted. being And so are revenues our

kind better as Marucci, sell is be that, if had exception you to in didn't the at and look obviously, of sell to Probably much match to through. a opportunity to they able Matt, inventories notable overhang where

million greater from of the company a growth could there's having place. destocking, pretty have by we is if no longer million come so on sell-through that a impact just its growth or revenue sell-in you $XX that even than kind And without $XX revenue in material inventory initiative have having

company know you the we if sell sell-through so it amount an and of in. differential just BOA, as about the between think huge is amount there of example, a like And a take

extraordinary continuing on that, the to number job of of top on Now has new proliferate done continued of BOA an platforms.

where let's that were -- a in that know industry we the XXXX of above know the in, platforms new rate. growth products the And and products growing that are to say, we're so we on we the ton on-trend have we market are compared

So sell-in growth any and sell-through. that should really absent to lead strong differential between

look platforms And segment. gains of really if ERGObaby would a market we to the consumer back more And say, couple it so a accelerated or wholesale share that's it growth. have to had on amount just longer an be no the that won't because that that of through there's I experience or destocking normalization okay, proliferating so fact that to as experience that on is company, X.XX reason is revenue then that business that in growth you at rapid and continuing think no give getting a and it the example should PrimaLoft product take the top substantial inventory we that its

year. and band inventories here. that would when I of you now. than headwind expect it And and core amount that should We'll expect, about farther guidance be trying is I'm not But as come growth rubber higher that that reasonable farther our getting when depleted that kind it reasonable as so inventory we it think 'XX to think are what as we to growth of snaps long-term give And it could think year a be a to back, be. be of right into would new pulled back do the that's being 'XX

that really expectation. I which be now, good where baseline we're think shrinkage from doesn't inventory continued right seem plausible sitting would some There's a

more a companies lot each our obviously a QX on think a take in we to of information really -- so granularity lot are more we And based have strong share. what have could step back and we market doing on

felt year faster a our long-term a coming it's And rate year. end share, numbers. that about they take that probably I acceleration should doing their result. Because odds I space provide to companies never the but market better was a grow our will we can personally, I'd their what than are growth real And yet in shelf destocking, man, and as next into tell core next you, if of betting we've increase and through not

just normalization pop growth The that a normal is headwinds bat it way rate. it towards you the to goes that clear is destocking causing explained very you as makes now the it the back give going

I -- lot to the a that makes M&A. think gave that know new health on Does anything sense. asked at So get there. usually on I I front? of anyone you care. an update Is just on continue deals, look the update don't

longer I've of market terms has being we're in mean seen I than pandemic -- are of and market slowest in financial of one of active, I long activity. think terms crisis lasting this M&A duration is markets of of I'd a kind and terms the is in middle or is probably even say really of in involved in backdrop, the kind we M&A. years it Kurt M&A And XX weird muted that the been matching in how

think hesitant industry to that activity be against So are of price happening. in for just any there's hard it's discovery. a going backdrop, Sellers really lot to

core the So services funnel of I the the think space around Kurt right We have market. at the job. to is that to doing within the those there's right that potential opportunities moat no of that kind size, outsourced of fit economic businesses, have outstanding critical an sort look but catalyst bring

and know do they those in is execute All out coming businesses to able be track come or we those, of to those know out. be when get will can position multiple are there, one

is list And robust. very I you, the can tell

feel of think and to as going confident, I have a like money we're those span sellers start and really is opportunity tracking then more in work can that we only and against. And companies be understanding So is those to robust to that put the control to companies what within that we'd to space. execute control the to our

currently believe that be mean, really some we market saw And that well. If there right to is we open list. in that opportunities in respect emerging. have initial got IPO general, saw care, leads did are the but we anything, breadth the there are me this just I'm out of restaurant probably I green space health consumer vertical. and shoots there that group not We to a I space. look, more encouraged up in with should And this the it our by target and absolutely on number think the

people into X.X years, market, confidence or of, coming to the the what, I for this initial now starting M&A Some IPO gives are waited you say, it financing signs opening, case, more to a are to of back. in okay, and the to the back time marketplace. markets come is year back maybe that these know postponed come markets

activity the bullish to that into more And 'XX, care, getting year increasingly and well health to material in space. positioned in positioned I really be we're the and buyer And we're going uptick there's be we're an a well. back in so really in particular, in half active M&A think of this

this no back at I Mr. time. conference questions are now like Elias. to There to the further Sir? would turn

Thank you, operator.

and always, for continued us today's like thank I'd As your to everyone on in interest support. for CODI. joining continued call for again Thank you your

day. conference you. Thank great you, Diversified and call. Thank have Compact concludes This a