Company: CODI-PB
Filing Date: 2025-12-08
Form Type: 10-K/A
Source: 0001345126-25-000078
Chunk: 161

Company: Compass Diversified Holdings
Filing Date: 2025-12-08
Form: 10-K/A
Chunk 161
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Segment operating loss (as restated)

Segment operating loss increased $7.5 million during the year ended December 31, 2024 to $61.8 million compared to segment operating loss of $54.4 million during the same period in 2023.

<div align='center'>Year ended December 31, 2023 compared to the Year ended December 31, 2022</div>

Net sales (as restated)

Net sales for the year ended December 31, 2023 decreased approximately $4.4 million or 11.7%, to $33.2 million, compared to the corresponding year ended December 31, 2022. Lugano sells high-end jewelry primarily through retail salons in California, Florida, Texas, Washington D.C., Colorado and Connecticut, and via pop-up showrooms

<div align='center'>99</div>

at multiple equestrian, social and charitable functions each year. Lugano opened its Washington D.C. location in March 2023, its Greenwich, Connecticut location in September 2023, and its Palm Beach, Florida flagship location in November 2023.

Gross profit (as restated)

Gross profit as a percentage of net sales totaled approximately 45.9% in the year ended December 31, 2023 compared to 51.6% in the year ended December 31, 2022. Lugano has an extensive network of suppliers through which they procure diamonds and gemstones, which make up a significant percentage of the cost of sales. The uniqueness of the Lugano jewelry can lead to fluctuations in margins from period to period based on what designs are sold during the period.

Selling, general and administrative expense

Selling, general and administrative expense for the year ended December 31, 2023 increased to approximately $67.5 million or 203.3% of net sales compared to $40.0 million or 106.2% of net sales for the same period of 2022. The increase in selling, general and administrative expense is attributable to increased marketing spend and personnel costs in support of Lugano’s expansion into new markets as well as rent and operating costs for its new locations.

Impairment expense (as restated)

Lugano recognized impairment expense of $1.2 million in 2023 related to its customer relationship intangible asset, and impairment expense of $28.6 million in 2022 related to goodwill ($26.2 million) and customer relationship ($2.