Compass Diversified announces CFO Faulkingham’s exit

Compass Diversified Holdings (NYSE: NYSE:) and Compass Group (LON:) Diversified Holdings LLC reported the departure of Ryan J. Faulkingham as Chief Financial Officer and regular trustee, effective August 30, 2024.

The separation was labeled as a termination without cause under Faulkingham’s Employment Agreement with Compass Group Management, LLC, dated November 30, 2013.

Concurrent with his separation, Faulkingham resigned from all his officer and director positions within the Manager, the Company, the Trust, and their affiliates.

As part of the separation, on September 12, 2024, a Separation Agreement was executed, entitling Faulkingham to his accrued salary and vacation pay up to August 30, 2024, along with unreimbursed business expenses.

Additionally, he will receive a total of $1.075 million, equating to one year’s salary and the discretionary bonus awarded for the year 2023.

In other recent news, Compass Diversified reported company’s Q2 2024 revenue increased by 11%, primarily driven by its branded consumer vertical, despite a net loss of $13.7 million.

However, the adjusted EBITDA rose by 27%, indicating a positive financial outlook. Compass Diversified has also amended its sales agreements for preferred and common shares, enhancing the availability of shares for potential sale.

The company’s subsidiary, Altor Solutions, has acquired Lifoam Industries in a cash transaction valued at $137 million, expected to diversify Altor Solutions’ revenue streams and increase Compass Diversified’s exposure to the healthcare industry.

B.Riley analysts have maintained their Buy rating for Compass Diversified, noting an increase in full-year subsidiary adjusted EBITDA projections, now expected to be between $480 million and $520 million.

Finally, Compass Diversified announced a leadership change with Stephen Keller stepping in as the new Chief Financial Officer, succeeding Ryan J. Faulkingham. Keller’s appointment resulted in amendments to the company’s governing documents, designating him as the “tax matters partner” and “partnership representative” for certain tax purposes.

InvestingPro Insights

Compass Diversified Holdings (NYSE: CODI) has recently seen a change in its executive team with the departure of CFO Ryan J. Faulkingham. As investors consider the implications of this management shift, it’s worthwhile to look at some key financial metrics and analyst insights provided by InvestingPro. The company’s market capitalization stands at approximately $1.61 billion, reflecting its scale in the investment community. Despite a challenging P/E ratio of 134.62, analysts are forecasting a turnaround with expectations of net income growth this year. This optimism is further supported by three analysts revising their earnings estimates upwards for the upcoming period, signaling confidence in the company’s future performance.

Moreover, Compass Diversified Holdings has demonstrated a commitment to shareholder returns, maintaining dividend payments for an impressive 19 consecutive years. The current dividend yield is at a robust 4.76%, which is particularly attractive for income-focused investors. Additionally, the company’s liquid assets are reported to exceed short-term obligations, indicating a solid liquidity position.

Investors should note that while the company was not profitable over the last twelve months, the forecast for profitability this year, as per analyst predictions, could point to a potential recovery in its financial health. For those interested in in-depth analysis and additional insights, there are more InvestingPro Tips available at offering a comprehensive understanding of Compass Diversified Holdings’ financial landscape and investment potential.

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