WESTPORT, Conn., Aug. 10 /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 three and six months ended June 30, 2007.
The Trust reported cash flow available for distribution of $9.4 million for the quarter ended June 30, 2007. For the period from its initial public offering on May 16, 2006 through June 30, 2007, the Trust reported cash flow available for distribution of $39.5 million and a coverage ratio of 1.3x on all distributions paid though July 27, 2007.
On July 10, 2007, the Trust's Board of Directors declared a distribution of $0.30 per share, which was paid on July 27, 2007 to all Trust shareholders of record as of July 25, 2007. The Trust intends to continue to declare and pay regular quarterly cash distributions on all outstanding shares.
Commenting on the quarter, Joe Massoud, CEO of Compass Diversified Trust, stated "During the second quarter, Compass Diversified Trust and its subsidiary companies performed within our expectations. Second quarter deal flow also remained robust as we continued to review a number of interesting acquisition candidates. It is worth repeating our belief that a tightening in the debt markets plays to our advantage, given our non-reliance on transaction specific financing and our ability to consummate acquisitions quickly."
As previously announced, the Trust amended its credit facility in the second quarter with a group of lenders led by Madison Capital Funding LLC to increase the revolving loan commitment by $45 million. The expanded credit facility now provides for $300 million in revolving loans, subject to borrowing base restrictions.
During the June quarter, the Trust also completed a follow-on equity offering and concurrent private placement for a combined total of 11,075,000 shares at $16.00 per share, including the exercise of the underwriters' over- allotment option, raising a total of approximately $168.7 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.
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 (800) 289-0533 and the dial-in number for international callers is (913) 981-5525. The access code for all callers is 2097841. 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 August 24, 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 2097841.
About Compass Diversified Trust
CODI was formed to acquire and manage a group of 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.
Cautionary and Forward-Looking Statements
The overview of Compass Diversified Trust's results 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.
This press release may contain certain forward-looking statements, including statements with regard to the future performance of CODI. 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, September 30, 2006 and March 31, 2007 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 Investor Relations Contact: James J. Bottiglieri KCSA Worldwide Chief Financial Officer Jeffrey Goldberger / Garth Russell 203.221.1703 212.896.1249 / 212.896.1250 email@example.com firstname.lastname@example.org / email@example.com Compass Diversified Trust Consolidated Balance Sheet (in thousands) June 30, 2007 (unaudited) Assets Current assets: Cash and cash equivalents $73,228 Accounts receivable, less allowance of $3,426 104,230 Inventories 10,910 Prepaid expenses and other current assets 16,176 Total current assets 204,544 Property, plant and equipment, net 21,838 Goodwill 225,717 Intangible assets, net 177,343 Deferred debt issuance costs, net 5,306 Other non-current assets 17,974 Total assets $652,722 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $78,332 Due to related party 817 Current portion of long-term debt 2,655 Total current liabilities 81,804 Supplemental put obligation 16,993 Deferred income taxes 56,638 Other non-current liabilities 17,838 Total liabilities 173,273 Minority interests 27,883 Total stockholders' equity Trust shares, no par value, 500,000 authorized; 31,525 shares issued and outstanding 443,633 Accumulated earnings 7,933 Total stockholders' equity 451,566 Total liabilities and stockholders' equity $652,722 Compass Diversified Trust Consolidated Statement of Operation (in thousands, except per share data) Three Months Six Months Ended Ended June 30, 2007 June 30, 2007 (unaudited) (unaudited) Net sales $218,219 $394,538 Cost of sales 160,044 293,747 Gross profit 58,175 100,791 Operating expenses: Staffing expense 14,470 28,482 Selling, general and administrative expenses 28,989 46,779 Supplemental put expense 1,024 2,417 Fees to manager 2,601 4,785 Amortization expense 5,582 9,413 Operating income 5,509 8,915 Other income (expense): Interest income 729 1,329 Interest expense (1,583) (3,069) Amortization of debt issuance costs (283) (553) Other income, net 18 30 Income from continuing operations before income taxes and minority interests 4,390 6,652 Provision for income taxes 1,651 2,988 Minority interest 207 249 Income from continuing operations 2,532 3,415 Gain on sale of discontinued operations, net of income taxes - 36,038 Net income $2,532 $39,453 Basic and fully diluted income per share $0.09 $1.67 Weighted average number of shares of trust stock outstanding - basic and fully diluted 26,837 23,661 Cash dividends declared per share $0.30 $0.60 Compass Diversified Trust Consolidated Statement of Cash Flows (in thousands) Six Months Ended June 30, 2007 (unaudited) Cash flows from operating activities: Net income $39,453 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sale of Crosman (36,038) Depreciation and amortization expense 11,540 Amortization of debt issuance costs 549 Supplemental put expense 2,417 Minority interests 249 Stockholder notes and other (117) Deferred taxes (1,156) Changes in operating assets and liabilities, net of acquisition: Increase in accounts receivable (2,666) Increase in inventories (806) Decrease in prepaid expenses and other current assets 522 Decrease in accounts payable and accrued expenses (366) Decrease in supplemental put obligation (7,880) Net cash provided by operating activities 5,701 Cash flows from investing activities: Acquisition of businesses, net of cash acquired (127,937) Crosman disposition 119,856 Purchases of property and equipment (3,835) Net cash used in investing activities (11,916) Cash flows from financing activities: Proceeds from issuance of trust shares, net 168,672 Repayment of revolving lines of credit borrowings (84,964) Debt issuance costs (860) Other 1,911 Distributions paid (12,270) Net cash provided by financing activities 72,489 Net increase in cash and cash equivalents 66,274 Foreign currency adjustment (52) Cash and cash equivalents - beginning of period 7,006 Cash and cash equivalents - end of period $73,228 Compass Diversified Trust Consolidated Table of Cash Flows Available for Distribution ("CAD") (in thousands) Three Months Ended Six Months Ended June 30, 2007 June 30, 2007 (unaudited) (unaudited) Net income $2,532 $39,453 Adjustment to reconcile net income to cash provided by operating activities: Gain on sale of Crosman - (36,038) Depreciation and amortization 6,795 11,540 Amortization of debt issuance costs 283 549 Supplemental put expense 1,024 2,417 Stockholder notes 451 (117) Minority interest 207 249 Deferred taxes (620) (1,156) Other (68) - Changes in operating assets and liabilities (3,420) (11,196) Net cash provided by operating activities 7,184 5,701 Plus: Unused fee on revolving credit facility (1) 563 1,051 Changes in operating assets and liabilities 3,420 11,196 Less: Maintenance capital expenditures (2) 1,787 2,147 Estimated cash flow available for distribution $9,380 $15,801 Distribution paid in April 2007 $6,135 Distribution paid in July 2007 $9,458 $9,458 (1) Represents the 1% 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 $1.2 million and $1.6 million of growth capital expenditures for the three and six months ended June 30, 2007.
Source: Compass Diversified Trust