Company: CODI-PB
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001345126-25-000015
Chunk: 73

Company: Compass Diversified Holdings
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 73
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 $79,567 $78,211 $67,821 $292,508 

115

Seasonality

The following table presents the net sales by quarter as a percentage of our annual net sales.

Year Ended December 31,Quarter ended202420232022March 31st23.0 %23.5 %22.8 %June 30th23.4 %23.4 %24.0 %September 30th25.5 %25.3 %26.7 %December 31st28.2 %27.7 %26.5 %

Earnings of certain of our operating segments are seasonal in nature due to various recurring events, holidays and seasonal weather patterns, as well as the timing of our acquisitions during a given year. Historically, the third and fourth quarter have produced the highest net sales in our fiscal year.

Related Party Transactions and Certain Transactions Involving our Businesses

We have entered into related party transactions with our Manager, CGM including the following:

•Management Services Agreement

•LLC Agreement

•Integration Services Agreements

•Cost Reimbursement and Fees

Management Services Agreement

We entered into the MSA with CGM effective May 16, 2006. Our Chief Executive Officer is a managing member of CGM. The MSA provides for, among other things, CGM to perform services for us in exchange for a management fee paid quarterly and equal to 0.5% of our adjusted net assets. The management fee is required to be paid prior to the payment of any distributions to shareholders. For the years ended December 31, 2024, 2023, and 2022, we incurred $74.8 million, $67.9 million, and $62.1 million, respectively, in management fees to CGM.

Pursuant to the MSA, CGM is entitled to enter into off-setting management service agreements with each of the operating segments. The amount of the fee is negotiated between CGM and the operating management of each segment and is based upon the value of the services to be provided. The fees paid directly to CGM by the segments offset on a dollar for dollar basis the amount due CGM by the LLC under the MSA. 

At December 31, 2023, CGM entered into a waiver to exclude cash balances held at the LLC from the calculation of the management fee. 

During 2022, CGM entered