Company: CODI-PB
Filing Date: 2025-12-08
Form Type: 10-K/A
Source: 0001345126-25-000078
Chunk: 142

Company: Compass Diversified Holdings
Filing Date: 2025-12-08
Form: 10-K/A
Chunk 142
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 central banks' targets. While the Federal Reserve has cut interest rates several times in the past year, it continues to quantitatively tighten the money supply to combat inflation. We continue to experience rising labor costs, particularly at our businesses where hourly employees comprise a larger part of the workforce as the labor market remains historically tight. We expect that increasing benefit costs in particular will continue to have an impact on margins at our businesses in 2025. Certain locales that our businesses operate in have also significantly increased the minimum wage over the past two years with more increases scheduled in coming years, which adds additional wage pressure to the rates we pay hourly workers in these locales.

During the latter half of 2024, o ur businesses began to see increases in freight costs, particularly ocean freight, as logistics costs, which had begun to moderate after remaining relatively high post pandemic, were negatively impacted by geopolitical conflicts and higher fuel costs. We do not expect these higher freight costs to moderate in the near term. Accordingly, our liquidity and financial results could be impacted in ways that we are not able to predict today.

Additionally, we expect there to be ongoing uncertainty regarding changes to U.S. trade policy and potential tariffs on imports to the U.S., particularly for goods that flow through China. The effect of these potential changes on our subsidiaries will be influenced by the specific details of any changes in trade policy, length and duration of any implemented tariffs and our effectiveness in responding to them.

Business Outlook

The Company anticipa tes that the areas of focus for 2025, which are generally applicable to each of our businesses, include:

• Pursuing sales growth through a combination of new product development, increasing distribution, new customer acquisitions and selective international expansion;

• Driving free cash flow through increased net income and effective working capital management, enabling continued investment in our businesses;

• Raising prices, when appropriate, on our goods due to rising input costs to preserve operating margins;

• Taking market share, where possible, in each of our niche market leading companies, generally at the expense of less focused or less well capitalized competitors;

• Striving for excellence in supply chain management, manufacturing and technological capabilities;

• Continuing to pursue expense reduction and cost savings in lower margin business lines or in response to lower production volume; and

• Continuing to grow through disciplined, strategic acquisitions and rigorous integration processes.

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#### Results of Operations (As Restated)
The following discussion reflects a comparison of the historical results of operations of our consolidated business for the years ended December 31