Company: CODI-PB
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001345126-25-000015
Chunk: 42

Company: Compass Diversified Holdings
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 42
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 sporting goods category and retailers reducing the inventory days on hand. 

95

Gross Profit

Gross profit as a percentage of net sales was 26.2% for the year ended December 31, 2023 as compared to 27.0% in the year December 31, 2022. The decrease in gross profit as a percentage of net sales was primarily attributable to customer and product mix.

Selling general and administrative expense

Selling, general and administrative expense for the year ended December 31, 2023 was $36.3 million, or 21.1% of net sales compared to $33.9 million, or 14.6% of net sales, for the year ended December 31, 2022. The increase in selling, general and administrative expense was primarily driven by reduced revenue and marketing investments associated with the King's acquisition.

Impairment expense

Velocity performed an interim impairment test of their goodwill during the quarter ended September 30, 2023 as a result of operating results that were below forecast amounts that were used in quantitative impairment testing performed in March 2023. The impairment test resulted in Velocity recording impairment expense of $31.6 million in the year ended December 31, 2023.

Segment operating income (loss)

Segment operating loss for the year ended December 31, 2023 was $32.8 million, a decrease of $51.8 million when compared to segment operating income of $19.0 million for the comparable period in 2022. The decrease in segment operating income in the year ended December 31, 2022 reflects the factors noted above.

Industrial Businesses

Altor Solutions

Overview

Founded in 1957 and headquartered in St. Louis, Missouri, Altor Solutions is a designer and manufacturer of custom molded protective foam solutions and OEM components made from EPS and EPP. Altor operates 23 molding and fabricating facilities across North America and provides products to a variety of end-markets, including appliances and electronics, pharmaceuticals, health and wellness, automotive, building products and others.

Results of Operations

Year ended December 31,(in thousands)202420232022Net sales$239,069 100.0 %$238,030 100.0 %$261,338 100.0 %Gross profit$66,268 27.7 %$73,616 30.9 %$58,029 22.2 %Selling, general and