Company: CODI-PB
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001345126-25-000015
Chunk: 38

Company: Compass Diversified Holdings
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 38
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2023. The results of operations that follow include relevant pro-forma adjustments for pre-acquisition periods and explanations where applicable. The operating results for The Honey Pot Co. have been included in the consolidated results of operation from the date of acquisition in January 2024.

Year ended December 31,20242023(in thousands)Pro formaPro formaNet sales$115,260 100.0 %$107,311 100.0 %Gross profit$57,588 50.0 %$59,867 55.8 %Selling, general and administrative expense$40,456 35.1 %$38,939 36.3 %Amortization expense$16,062 13.9 %$16,062 15.0 %Segment operating income $70 0.1 %$3,866 3.6 %

Pro forma results of operations include the following pro forma adjustments as if we had acquired The Honey Pot Co. on January 1, 2023:

•Incremental stock compensation expense of $0.3 million for the year ended December 31, 2024 and $0.8 million for the year ended December 31, 2023. This amount is included in SG&A above and reduces segment operating income.

•Amortization expense associated with the intangible assets recorded in connection with the purchase price allocation for THP of $1.3 million for the year ended December 31, 2024 and $16.1 million for the year ended December 31, 2023. This amount reduces segment operating income.

•Management fees that would have been payable to the Manager during each period. THP will pay a management fee of $1.0 million per year ($0.25 million per quarter) to CGM. This amount reduces segment operating income.

93

 Pro forma Year ended December 31, 2024 compared to the Pro Forma Year ended December 31, 2023

Net sales

Net sales for the year ended December 31, 2024 were $115.3 million, an increase of $7.9 million or 7.4% from net sales of $107.3 million for the year ended December 31, 2023. The increase in net sales is primarily due to strong volume growth related to market share gains in our Period Care product category.

Gross profit

Gross profit for the year ended December 31, 202