WESTPORT, Conn., May 14 /PRNewswire-FirstCall/ -- Compass Diversified Trust (NASDAQ:CODI) and Compass Group Diversified Holdings LLC (collectively, the "Trust" or "CODI" or the "Company") announced today the consolidated results of operations for the quarter ended March 31, 2007. These results for the first quarter are summarized in the following paragraphs. However, the limited information that follows in this press release may not be adequate for making an informed investment judgment. Investors are urged to read CODI's 10-Q, which will be posted at www.compassdiversifiedtrust.com, as well as to take into consideration the seasonal nature of certain of the Company's subsidiary businesses and their results.
For the quarter ended March 31, 2007, the Trust reported cash flow available for distribution of $6.4 million. For the period from its initial public offering on May 16, 2006 through March 31, 2007, the Trust reported cash flow available for distribution of $30.1 million and a coverage ratio of 1.5x on all distributions paid though April 24, 2007.
On April 5, 2007, the Trust's Board of Directors declared a distribution of $0.30 per share which was paid on April 24, 2007 to all Trust shareholders of record as of April 20, 2007. The Trust intends to continue to declare and pay regular quarterly cash distributions on all outstanding shares.
On March 1, 2007, the Trust announced definitive agreements to acquire controlling interests in two new subsidiary companies, Halo Branded Solutions, Inc. and Aeroglide Corporation. The total combined consideration for both purchases was based on an aggregate total enterprise value of approximately $119 million. Results for the quarter reflect only 31 days of operations for these businesses.
On May 2, 2007 the Trust priced a follow-on offering and concurrent private placement for a combined total of 9,875,000 shares at $16.00 per share raising a total of approximately $149 million in net proceeds. The Trust utilized the proceeds from the offering to pay down debt under its revolving credit facility and intends to use the remaining proceeds to fund future acquisitions of both platform and add-on's to existing subsidiary businesses. Citigroup Global Markets Inc. acted as sole bookrunning manager of the offering. Ferris Baker Watts, Incorporated acted as co-lead manager of the offering, and A.G. Edwards; BB&T Capital Markets, a division of Scott & Stringfellow, Inc.; Morgan Keegan & Company, Inc.; and SMH CAPITAL Inc. acted as co-managers of the offering.
Commenting on the quarter, Joe Massoud, CEO of Compass Diversified Trust, stated, "We are extremely pleased with our start in 2007. During the first quarter, our businesses met our expectations. In addition, we successfully sold our interest in Crosman at a substantial gain to our shareholders and closed on the acquisition of two new platform businesses, Halo Branded Solutions, Inc. and Aeroglide Corporation. For the remainder of the year, we will continue to focus on working with our management teams to improve the operations and profitability of each of our subsidiary businesses, as well as identifying and consummating accretive add-on and platform acquisitions. I would also like to welcome our new shareholders who participated in our follow-on offering earlier this month. We are confident this offering will provide us with additional financial flexibility and capacity as we continue to grow our company."
Management will host a conference call this morning at 9:00 a.m. ET to discuss the latest corporate developments and financial results. The dial-in number for callers in the U.S. is (866) 290-0882 and the dial-in number for international callers is (913) 312-6672. The access code for all callers is 9317478. A live webcast will also be available on the Trust's website at www.compassdiversifiedtrust.com.
A replay of the call will be available through May 28, 2007. To access the replay, please dial (888) 203-1112 in the U.S. and (719) 457-0820 outside the U.S., and then enter the access code 9317478.
About Compass Diversified Trust
CODI was formed to acquire and manage a group of profitable middle market businesses that are headquartered in North America. CODI provides public investors with an opportunity to participate in the ownership and growth of companies which have historically been owned by private equity firms or wealthy individuals or families. CODI's disciplined approach to its target market provides opportunities to methodically purchase attractive businesses at values that are accretive to its shareholders. For sellers of businesses, CODI's unique structure allows CODI to acquire businesses efficiently with no financing contingencies and, following acquisition, to provide its companies with substantial access to growth capital.
Upon acquisition, CODI works with the executive teams of its subsidiary companies to identify and capitalize on opportunities to grow those companies' earnings and cash flows. These cash flows support distributions to CODI shareholders, which are intended to be steady and growing over the long term.
Aeroglide Holdings, Inc. and its consolidated subsidiaries, referred to as Aeroglide, is a designer and manufacturer of industrial drying and cooling equipment, primarily used in the production of a variety of human foods, animal and pet feeds, and industrial products. Aeroglide is based in Cary, NC and was founded in 1940.
Anodyne Medical Device, Inc. and its consolidated subsidiaries, referred to as AMD, is a manufacturer of medical support surfaces and patient positioning devices, primarily used for the prevention and treatment of pressure wounds experienced by patients with limited or no mobility. AMD is based in Los Angeles, CA and was founded in 2005.
CBS Personnel Holdings, Inc. and its consolidated subsidiaries, referred to as CBS Personnel, is a provider of temporary staffing services in the United States. CBS Personnel is headquartered in Cincinnati, OH, operates 144 branch locations in 18 states and was founded in 1970.
Compass AC Holdings, Inc. and its consolidated subsidiary, referred to as Advanced Circuits, is a manufacturer of low-volume quick-turn and prototype rigid printed circuit boards ("PCBs"). Advanced Circuits is based in Aurora, CO and was founded in 1989.
Halo Lee Wayne LLC and its consolidated subsidiaries, referred to as Halo, is a distributor of customized promotional products and serves more than 30,000 customers as a one-stop-shop resource for design, sourcing, management and fulfillment across all categories of its customers' promotional products needs. Halo is based in Sterling, IL and was founded in 1952.
Silvue Technologies Group, Inc. and its consolidated subsidiaries, referred to as Silvue, is a developer and manufacturer of proprietary, high- performance coating systems for polycarbonate, glass, acrylic, metals and other substrate materials used in the premium eyewear, aerospace, automotive and industrial markets. Silvue is based in Anaheim, CA and was founded in 1986.
To find out more about Compass Diversified Trust, please visit www.compassdiversifiedtrust.com.
This press release may contain certain forward-looking statements, including statements with regard to the future performance of the Trust. Words such as "believes," "expects," "projects," and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in the risk factor discussion in the Form 10K filed by CODI with the Securities and Exchange Commission for the year ended December 31, 2006 and the Form 10Qs filed by CODI for the quarters ended March 31, 2006 June 30, 2006 and September 30, 2006 and other filings with the Securities and Exchange Commission. CODI undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Compass Diversified Trust Consolidated Balance Sheet (in thousands) March 31, 2007 Assets Current assets: Cash and cash equivalents $8,692 Accounts receivable, less allowances of $3,411 98,484 Inventories 9,216 Prepaid expenses and other current assets 17,050 Total current assets 133,442 Property, plant and equipment, net 19,710 Goodwill 218,652 Intangible assets, net 180,311 Deferred debt issuance costs, less accumulated amortization of $114 5,041 Other non-current assets 17,181 Total assets $574,337 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $74,102 Due to related party 509 Revolving credit facility 98,351 Total current liabilities 172,962 Supplemental put obligation 15,969 Deferred income taxes 56,946 Other non-current liabilities 17,103 Total liabilities 262,980 Minority interests 24,860 Total stockholders' equity Trust shares, no par value, 500,000 authorized; 20,450 shares issued and outstanding 268,826 Accumulated earnings 17,671 Total stockholders' equity 286,497 Total liabilities and stockholders' equity $574,337 Compass Diversified Trust Consolidated Statement of Operation (in thousands, except per share data) Three Months Ended March 31, 2007 Net sales $176,319 Cost of sales 133,703 Gross profit 42,616 Operating expenses: Staffing expense 14,012 Selling, general and administrative expenses 17,790 Supplemental put expense 1,393 Fees to Manager 2,184 Amortization expense 3,831 Operating income 3,406 Other income (expense): Interest income 600 Interest expense (1,486) Amortization of debt issuance costs (270) Other income, net 12 Income from continuing operations before income taxes and minority interests 2,262 Provision for income taxes 1,337 Minority interest 42 Income from continuing operations 883 Gain on sale of discontinued operations, net of income taxes 36,038 Net income $36,921 Basic and fully diluted income per share $1.81 Weighted average number of shares of Trust stock outstanding - basic and fully diluted 20,450 Cash dividends paid per share $0.30 Compass Diversified Trust Consolidated Statement of Cash Flows (in thousands) Year Ended March 31, 2007 Cash flows from operating activities: Net income $36,921 Adjustments to reconcile net loss to net cash provided by operating activities: Gain on sale of Crosman (36,038) Depreciation and amortization expense 4,745 Amortization of debt issuance costs 255 Supplemental put expense 1,393 Minority interests 42 Stockholder notes (568) Deferred taxes (536) Other 79 Changes in operating assets and liabilities, net of acquisition: Decrease in accounts receivable 3,829 Decrease in inventories 409 Decrease in prepaid expenses and other current assets 793 Decrease in accounts payable and accrued expenses (4,927) Decrease in supplemental put obligation (7,880) Net cash used in operating activities (1,483) Cash flows from investing activities: Acquisition of businesses, net of cash acquired (120,045) Crosman disposition 119,856 Purchases of property and equipment (823) Net cash used in investing activities (1,012) Cash flows from financing activities: Proceeds from revolving lines of credit borrowings 10,740 Debt issuance costs (277) Distributions paid (6,135) Net cash provided by financing activities 4,328 Net increase in cash and cash equivalents 1,833 Foreign currency adjustment (147) Cash and cash equivalents - beginning of period 7,006 Cash and cash equivalents - end of period $8,692 Compass Diversified Trust Consolidated Table of Cash Flows Available for Distribution ("CAD") (in thousands) Quarter Ended March 31, 2007 Net income $36,921 Adjustment to reconcile net income to cash provided by operating activities: Gain on sale of Crosman (36,038) Depreciation and amortization 5,000 Supplemental put expense 1,393 Stockholder notes (568) Minority interest 42 Deferred taxes (536) Other 79 Changes in operating assets and liabilities (7,776) Net cash provided by operating activities (1,483) Plus: Unused fee on revolving credit facilitity (1) 488 Changes in operating assets and liabilities 7,776 Less: Maintenance capital expenditures (2) 360 Estimated cash flow available for distribution $6,421 Distribution declared in April 2007 $6,135 (1) Represents the commitment fee on the unused portion of the Revolving Credit Facility. (2) Represents maintenance capital expenditures that were funded from operating cash flow and excludes approximately $0.5 million of growth capital expenditures for the three months ended March 31, 2007. Compass Diversified Trust James J. Bottiglieri Chief Financial Officer 203.221.1703 firstname.lastname@example.org Investor Relations Contact: KCSA Worldwide Jeffrey Goldberger / Garth Russell 212.896.1249 / 212.896.1250 email@example.com / firstname.lastname@example.org
Source: Compass Diversified Trust