Net income from continuing operations in Compass Diversfied’s (CoDi) branded consumer companies related to sports, outdoor and apparel (5.11 Tactical, Boa, Marucci Sports, PrimaLoft, and Velocity Outdoor) declined by 68 percent to $6.94 million from $21.4 million for the period ended June 30. Total revenues from the five companies fell by 9.2 percent to $261.4 million from $288.0 million. 

While its overall Q2 results exceeded expectations and some “green shoots” were seen at PrimaLoft in the form of increased bookings, CoDi opted to maintain its FY23 outlook that calls for $430 to $460 million in adjusted Ebitda and $110 to $135 million in adjusted earnings. 

Looking at specific Q2 results of the group’s sports, outdoor and apparel companies:

  • Marucci Sports, which acquired bat maker Baum Enterprises in April, reported a 35 percent increase in sales to $37.3 million and a 33 percent improvement in adjusted Ebitda to $7.14 million. Profitability from continuing operations declined by 45 percent to $3.9 million. The team industry is not dealing with an inventory hangover currently, the company said, and the business is building traction in adjacent categories and in Japan.
  • Boa sales declined 36 percent to $38.1 million and adjusted Ebitda slipped 41 percent to $14.5 million. Net income from continuing operations declined by 61 percent to $5.5 million. The company has added some performance platforms, including in alpine ski boots, that should drive growth in 2024. Meanwhile, PrimaLoft sales fell by 18 percent to $22.2 million as net income came in at $620,000. Both businesses were negatively impacted by industry destocking. CoDi executives said they expect both companies to return to historic growth rates once the inventory issues fade. PrimaLoft has reached its bottom already, executives said, since company bookings have begun to show improvement.
  • 5.11 revenues dipped by 5 percent to $126.0 million in Q2 as adjusted Ebitda declined by 2.4 percent to $17.8 million. Net income was off by 45 percent to $3.9 million.
  • Velocity Outdoor continued to struggle with sales down 30 percent to $37.8 million as adjusted Ebitda slid 79 percent to $1.9 million, with archery showing some improvements, but the air gun business remains challenging. The business had a net loss from continuing operations of $3.48 million in Q2.

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