Company: CODI-PB
Filing Date: 2025-12-08
Form Type: 10-K/A
Source: 0001345126-25-000078
Chunk: 152

Company: Compass Diversified Holdings
Filing Date: 2025-12-08
Form: 10-K/A
Chunk 152
---
2023 as a result of operating results that were below forecast amounts that were used as the basis for the purchase price allocation at acquisition. The impairment test resulted in PrimaLoft recording impairment expense of $57.8 million. Velocity performed an interim impairment test of their goodwill during the third quarter of 2023 as a result of operating results that were below the forecast that we used in the quantitative annual impairment test of Velocity at March 31, 2023. The impairment test resulted in Velocity recording $31.6 million impairment expense in the year ended December 31, 2023.

Lugano performed an interim impairment test of their long-lived assets at December 31, 2023 that resulted in a $1.2 million impairment charge related to the customer relationship intangible, and an interim impairment test of goodwill and long-lived assets at December 31, 2022 that resulted in impairment expense of $28.6 million.

Interest Expense (as restated)

We recorded interest expense totaling $109.9 million for the year ended December 31, 2023 compared to $85.3 million for the comparable period in 2022, an increase of $24.6 million. The increase in interest expense in the current period reflects the higher interest rate environment in the current year versus the comparable period in the prior year, and higher average amounts outstanding on our revolving credit facility in the current year. While the actual timing and extent of any future increases or decreases in interest rates remains unknown, higher long-term interest rates are expected to affect interest expense on the debt outstanding under our 2022 Credit Facility. Additionally, our Lugano business incurred an increase of $2.9 million in interest expense in the year ended December 31, 2023 as compared to the year ended December 31, 2022 related to financing arrangements.

Provision for income Taxes (as restated)

We had income tax expense of $8.2 million during the year ended December 31, 2023 compared to income tax expense of $29.5 million in 2022, a decrease of $21.3 million in 2023 as compared to 2022. Our effective tax rate in the year ended December 31, 2023 was (3.1)%, compared to an effective income tax rate of (25.9)% during the same period in 2022. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those