Company: CODI-PB
Filing Date: 2025-12-08
Form Type: 10-K/A
Source: 0001345126-25-000078
Chunk: 184

Company: Compass Diversified Holdings
Filing Date: 2025-12-08
Form: 10-K/A
Chunk 184
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, management has concluded, in applying the going-concern guidance under U.S. GAAP, that these conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements set forth in this Form 10-K/A are issued. The Company is actively negotiating an amendment to the 2022 Credit Facility that would include a waiver of ongoing breaches, such an amendment, however, has not been executed and is not fully within the Company’s control and therefore cannot be considered a probable mitigating plan for purposes of alleviating substantial doubt. If the lenders do not accelerate the Company’s indebtedness before an amendment is executed, and the Company delivers its financial statements for the fiscal quarter ended March 31, 2025 on or before December 26, 2025, the Company expects that it would regain compliance with its senior note indentures; however, neither outcome is assured.

The Company is also taking various operational and financial initiatives to strengthen liquidity and reduce leverage, including evaluating subsidiary divestitures, organic deleveraging actions, potential strategic transactions involving real estate, and actions to maximize recoveries in connection with Lugano’s Chapter 11 proceedings. If successfully executed, these plans (together with expected operating cash flow from the Company’s operating subsidiaries excluding Lugano) could enhance the Company’s ability to continue to operate and meet its obligations; however, because these initiatives are not committed or fully within management’s control, they have not been assumed in the Company’s going concern evaluation and may not be resolved on the timetable necessary to alleviate the substantial doubt described above.

The accompanying consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and satisfy its liabilities in the ordinary course of business. For additional information regarding the impact of the Company’s covenant noncompliance on the classification of the Company’s indebtedness, see “ Note I – Debt ” included in the "Notes to the to the Consolidated Financial Statements" included in this Form 10-K/A.

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#### Cash Flow from Operating Activities
2024

Cash flows used in operating activities totaled approximately $151.1 million for the year ended December 31, 2024, which represents an increase in the use of cash in operating activities of $167.7 million compared to cash flow provided by operating activities of $16.6 million for the year ended December 31, 2023. Cash used in operating activities for working capital for the year