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Compass Diversified Holdings

Compass Diversified HoldingsCODI财报

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Compass Diversified Holdings is a publicly traded holding firm that acquires and operates a diverse portfolio of middle-market businesses across sectors including consumer goods, industrial manufacturing, outdoor recreation, and food & beverage. It partners with portfolio company leadership teams to drive long-term operational growth and value creation, primarily serving North American markets.

What changed in Compass Diversified Holdings's 10-K — 2024 vs 2025

Top changes in Compass Diversified Holdings's 2025 10-K

879 paragraphs added · 944 removed · 566 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

257 edited+87 added−221 removed185 unchanged
At-the market program - preferred shares On September 5, 2024, the Company refreshed its at-the-market program for certain preferred shares of the Trust, which was initially established in the first quarter of 2024, by filing a prospectus supplement pursuant to which the Company may, but has no obligation to, issue and sell up to $200 million of the Trust’s 7.250% Series A Preferred Shares (the “Series A Preferred Shares”), 7.875% Series B Preferred Shares (the “Series B Preferred Shares”), and 7.875% Series C Preferred Shares (the “Series C Preferred Shares” and together with the Series A Preferred Shares, the Series B Preferred Shares, and the Series C Preferred Shares, the “Preferred Shares”), each representing beneficial interests in the Trust.
At-the market program - preferred shares On September 5, 2024, the Company refreshed its at-the-market program for certain preferred shares of the Trust, which was initially established in the first quarter of 2024, by filing a prospectus supplement pursuant to which the Company may, but has no obligation to, issue and sell up to $200 million of the Trust’s 7.250% Series A Preferred Shares (the “Series A Preferred Shares”), 7.875% Series B Preferred Shares (the “Series B Preferred Shares”), and 7.875% Series C Preferred Shares (the “Series C Preferred Shares” and together with the Series A Preferred Shares and the Series B Preferred Shares, the “Preferred Shares”), each representing beneficial interests in the Trust.
The Honey Pot Co.’s full body wellness products compete against many established and upstart personal care brands such as Dove, Olay, Aveeno, Native, Lume, among others. Suppliers The Honey Pot Co. utilizes an end-to-end, asset-light global supply chain leveraging multiple co-manufacturers, raw material vendors, and packaging suppliers.
The Honey Pot Co.’s full body wellness products compete against many established and upstart personal care brands such as Dove, Olay, Aveeno, Native and Lume, among others. Suppliers The Honey Pot Co. utilizes an end-to-end, asset-light global supply chain leveraging multiple co-manufacturers, raw material vendors, and packaging suppliers.
The Honey Pot Co.’s outside general counsel and regulatory counsel work with the company’s in-house development and compliance teams to ensure products and the associated product claims and marketing are compliant with the standards set by relevant regulatory bodies, including FDA, MoCRA, and FTC .
The Honey Pot Co.’s outside general counsel and regulatory counsel work with the company’s in-house product development and compliance teams to ensure products and the associated product claims and marketing are compliant with the standards set by relevant regulatory bodies, including FDA, MoCRA, and FTC .
Intellectual Property Arnold currently relies on a deep portfolio of “trade secrets” and proprietary intellectual property. Arnold currently has 2 patents in force in the United States, 2 patent in force in Europe and 1 patent in force in Japan. Arnold currently has 40 trademarks, 12 of which are in the U.S.
Intellectual Property Arnold currently relies on a deep portfolio of “trade secrets” and proprietary intellectual property. Arnold currently has 2 patents in force in the United States, 2 patents in force in Europe and 1 patent in force in Japan. Arnold currently has 40 trademarks, 12 of which are in the U.S.
The most notable trademarked items are the following: “RECOMA”, “PLASTIFORM”, “FLEXMAG” & “ARNOLD”. Application dates for various trademarks date back to as early as 1960. Regulatory Environment Arnold’s domestic manufacturing and assembly operations and its facilities are subject to evolving Federal, state and local environmental and occupational health and safety laws and regulations.
The most notable trademarked items are the following: “RECOMA”, “PLASTIFORM”, “FLEXMAG” and “ARNOLD”. Application dates for various trademarks date back to as early as 1960. Regulatory Environment Arnold’s domestic manufacturing and assembly operations and its facilities are subject to evolving federal, state and local environmental and occupational health and safety laws and regulations.
King's Camo addresses these needs with three distinct product tiers: • Classic Series : Positioned within the "good" segment, the Classic Series offers a value-driven option for budget-conscious hunters seeking functional gear without compromising on quality. 42 • Hunter Series : As part of the "better" segment, the Hunter Series balances performance and price, offering versatility and durability for the everyday hunter. • XKG Series : Positioned in the "best" segment, the XKG Series is designed for serious hunters who demand premium performance, innovative materials, and technical advantages.
King's Camo addresses these needs with three distinct product tiers: • Classic Series : Positioned within the "good" segment, the Classic Series offers a value-driven option for budget-conscious hunters seeking functional gear without compromising on quality. • Hunter Series : As part of the "better" segment, the Hunter Series balances performance and price, offering versatility and durability for the everyday hunter. • XKG Series : Positioned in the "best" segment, the XKG Series is designed for serious hunters who demand premium performance, innovative materials, and technical advantages.
Pursuant to the Amended Common Sales Agreement, the shares may be offered and sold through each Common Sales Agent, acting separately, in ordinary brokers’ transactions, to or through a market maker, on or through the New York Stock Exchange or any other market venue where the securities may be traded, in the over-the-counter market, in privately negotiated transactions, in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act or through a combination of any such methods of sale.
Pursuant to the Amended Common Sales Agreement, the shares may be offered and sold through each Common Sales Agent, acting separately, in ordinary brokers’ transactions, to or through a market maker, on or through the New York Stock Exchange ("NYSE") or any other market venue where the securities may be traded, in the over-the-counter market, in privately negotiated transactions, in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act or through a combination of any such methods of sale.
Finished motors range from under 1kW through 1MW for aerospace and defense, industrial, energy, hybrid electric platforms and energy exploration. • Precision Thin Metals - Arnold's precision thin metals group ("Precision Thing Metals") produces thin and ultra-thin alloys that improve the power density electrical systems such as motors, generators, and transformers along with thin foils for other applications such as electromagnetic shielding, radio frequency shielding, lightweight structures, and implantable structures.
Finished motors range from under 1kW through 1MW for aerospace and defense, industrial, energy, hybrid electric platforms and energy exploration. • Precision Thin Metals - Arnold's precision thin metals group ("Precision Thing Metals") produces thin and ultra-thin alloys that improve the power density electrical systems such as motors, generators, and transformers along with thin foils for other applications such as electromagnetic shielding, radio frequency 42 shielding, lightweight structures, and implantable structures.
Precision Strip and Foil - Precision rolled thin metal foil products are manufactured from a wide range of materials for use in applications such as transformers, motor laminations, lightweight structures, shielding, and composite 48 structures. They have the unique processing capability to roll foils as thin as 2.5 microns while providing critical heat treatment maintaining competitive material properties.
Precision Strip and Foil - Precision rolled thin metal foil products are manufactured from a wide range of materials for use in applications such as transformers, motor laminations, lightweight structures, shielding, and composite structures. They have the unique processing capability to roll foils as thin as 2.5 microns while providing critical heat treatment maintaining competitive material properties.
On existing products, BOA is committed to continuous innovation, including key improvements such as lower installation costs 29 for brand partner factories, thinner and sleeker product profiles for improved aesthetics, in field warranty rate reduction to approximately 0.5%, improved user experience, and the broadening of the platform suite to address key opportunities in alpine skiing, outdoor and helmets.
On existing products, BOA is committed to continuous innovation, including key improvements such as lower installation costs for brand partner factories, thinner and sleeker product profiles for improved aesthetics, in field warranty rate reduction to approximately 0.5%, improved user experience, and the broadening of the platform suite to address key opportunities in alpine skiing, outdoor and helmets.
PrimaLoft maintains highly collaborative relationships with its brand partners, visiting most several times per year to introduce new innovations, generate new product ideas, and assist with integrating the latest PrimaLoft technologies into their outerwear lineups. The process of designing a jacket usually begins about 18 months before the jacket is 34 intended to be sold at retail.
PrimaLoft maintains highly collaborative relationships with its brand partners, visiting most several times per year to introduce new innovations, generate new product ideas, and assist with integrating the latest PrimaLoft technologies into their outerwear lineups. The process of designing a jacket usually begins about 18 months before the jacket is intended to be sold at retail.
We believe ongoing research contributes to consumer loyalty, superior quality, and well-rounded fragrance programs. The wax warmers are made up of quality materials including wood, metal, ceramic, and glass. 54 • Essential Oils and Diffusers - The 100% Pure Essential Oil lines and brands consists of Peppermint, Lavender, Lemon, Eucalyptus, Sweet Orange, Grapefruit, Tea tree, Cinnamon, etc.
We believe ongoing research contributes to consumer loyalty, superior quality, and well-rounded fragrance programs. The wax warmers are made up of quality materials including wood, metal, ceramic, and glass. • Essential Oils and Diffusers - The 100% Pure Essential Oil lines and brands consists of Peppermint, Lavender, Lemon, Eucalyptus, Sweet Orange, Grapefruit, Tea tree, Cinnamon, etc.
The company enables consumers to enjoy better-for-you ingredients without sacrificing product performance and provides consumers with differentiated functional benefits (pH balanced, microbiome friendly, safe for sensitive skin, etc.). 38 Furthermore, the company has rigorous processes in place to ensure product efficacy and safety, including conducting consumer perception tests on the majority of its products.
The company enables consumers to enjoy better-for-you ingredients without sacrificing product performance and provides consumers with differentiated functional benefits (pH balanced, microbiome friendly, safe for sensitive skin, etc.). Furthermore, the company has rigorous processes in place to ensure product efficacy and safety, including conducting consumer perception tests on the majority of its products.
This feedback helps ensure products will meet Arnold’s demanding standards of excellence as well as the constantly changing needs of end users. Arnold’s research and 51 development activities are supported by state-of-the-art engineering software design tools, integrated manufacturing facilities and a performance testing center equipped to ensure product safety, durability and superior performance.
This feedback helps ensure products will meet Arnold’s demanding standards of excellence as well as the constantly changing needs of end users. Arnold’s research and development activities are supported by state-of-the-art engineering software design tools, integrated manufacturing facilities and a performance testing center equipped to ensure product safety, durability and superior performance.
PrimaLoft insulations also offer superior economics 7 to the brand partner and enable better sustainability characteristics through the use of recycled, low-carbon inputs. We made loans to, and purchased a controlling interest in, PrimaLoft on July 12, 2022 for approximate ly $541.1 million. PrimaLoft is headquartered in Latham, New York.
PrimaLoft insulations also offer superior economics to the brand partner and enable better sustainability characteristics through the use of recycled, low-carbon inputs. We made loans to, and purchased a controlling interest in, PrimaLoft on July 12, 2022 for approximate ly $541.1 million. PrimaLoft is headquartered in Latham, New York.
We made loans to, and purchased a controlling interest in, Velocity Outdoor on June 2, 2017 for approximately $150.4 million. Velocity Outdoor is headquartered in Rochester, New York. We currently own 99.4% of the outstanding stock of Velocity Outdoor on a primary basis and 93.3% on a fully diluted basis. Industrial Businesses Altor Solutions FFI Compass, Inc.
We made loans to, and purchased a controlling interest in, Velocity Outdoor on June 2, 2017 for approximately $150.4 million. Velocity Outdoor is headquartered in Rochester, New York. We currently own 99.4% of the outstanding stock of Velocity Outdoor on a primary basis and 93.2% on a fully diluted basis. Industrial Businesses Altor Solutions FFI Compass, Inc.
Frequently, opportunities exist to support and augment existing management at such businesses and improve the performance of these businesses upon their acquisition through active management. We are business builders 11 rather than asset traders. In the past, our management team has acquired businesses that were owned by entrepreneurs or large corporate parents.
Frequently, opportunities exist to support and augment existing management at such businesses and improve the performance of these businesses upon their acquisition through active management. We are business builders rather than asset traders. In the past, our management team has acquired businesses that were owned by entrepreneurs or large corporate parents.
To mitigate supplier concentration risk, 5.11 commercializes its top key items at multiple factories to ensure it can balance geographic 25 risks as well as respond quickly to spikes in business. 5.11 also continuously seeks out additional suppliers and manufacturers to enable contingency plans that minimize disruptions, as well as support its future growth.
To mitigate supplier concentration risk, 5.11 commercializes its top key items at multiple factories to ensure it can balance geographic risks as well as respond quickly to spikes in business. 5.11 also continuously seeks out additional suppliers and manufacturers to enable contingency plans that minimize disruptions, as well as support its future growth.
Gary developed a fit system as an alternative to traditional laces for snowboard boots and partnered with K2 and Vans to launch the first BOA-equipped snowboard boots to consumers in the winter of 2001. After a successful launch, BOA became widely adopted on snowboard boots. BOA’s next phase of growth was largely in the outdoor sporting and recreation markets.
Gary developed a fit system as an alternative to traditional laces for snowboard boots and partnered with K2 and Vans to launch the first BOA-equipped snowboard boots to consumers in the winter of 2001. After a successful launch, BOA became widely adopted on snowboard boots. 24 BOA’s next phase of growth was largely in the outdoor sporting and recreation markets.
Arnold continues to be an industry leader with regard to new product formulations and innovations. As evidence of this, Arnold currently relies on a deep portfolio of “trade secrets” and proprietary intellectual property. Arnold 50 continuously endeavors to introduce electromagnetic solutions that exceed the performance of current offerings and meet customer design specifications.
Arnold continues to be an industry leader with regard to new product formulations and innovations. As evidence of this, Arnold currently relies on a deep portfolio of “trade secrets” and proprietary intellectual property. Arnold continuously endeavors to introduce electromagnetic solutions that exceed the performance of current offerings and meet customer design specifications.
Growth in Arnold’s business is primarily focused in three areas: • Growing market share in existing end-markets and geographies, with a focus on aerospace and defense, niche industrial systems, and oil and gas; • Vertical integration through new products and technologies; and • Completing opportunistic acquisitions and partnerships to reduce product introduction and market penetration time.
Growth in Arnold’s business is primarily focused in three areas: • Growing market share in existing end-markets and geographies, with a focus on aerospace and defense, niche industrial systems, and oil and gas; • Vertical integration through new products and technologies; and 45 • Completing opportunistic acquisitions and partnerships to reduce product introduction and market penetration time.
See Part III, Item 13 “ Certain Relationships and Related Transactions, and Director Independence ” for further descriptions of the management fees and profit allocations. The Company’s Chief Executive Officer and Chief Financial Officer are employees of our Manager and have been seconded to us. Neither the Trust nor the LLC has any other employees.
See Part III, Item 13. “ Certain Relationships and Related Transactions, and Director Independence ” for further descriptions of the management fees and profit allocations. The Company’s Chief Executive Officer and Chief Financial Officer are employees of our Manager and have been seconded to us. Neither the Trust nor the LLC currently has any other employees.
Management will continue to seek acquisitions of regional foam molders and other packaging suppliers where sales and operational efficiencies can be realized, and to diversify into packaging products other than molded foam. Competitive Strengths National Scale and Proximity to Customers - Altor Solutions maintains a national footprint of 23 manufacturing locations across North America.
Management will continue to seek acquisitions of regional foam molders and other packaging suppliers where sales and operational efficiencies can be realized, and to diversify into packaging products other than molded foam. Competitive Strengths National Scale and Proximity to Customers - Altor Solutions maintains a footprint of manufacturing locations across North America.
Motorsport / Transportation - Arnold produces high performance motor components and sub-assemblies for motorsport and transportation applications, such as the Kinetic Energy Recovery System, which includes a composite sleeved RECOMA® SmCo magnet rotor for a high speed, high power system and Electric Turbo Chargers that operate at greater than 100,000 RPM.
Motorsport / Transportation - Arnold produces high performance motor components and sub-assemblies for motorsport and transportation applications, such as the Kinetic Energy Recovery System, which includes a 44 composite sleeved RECOMA® SmCo magnet rotor for a high speed, high power system and Electric Turbo Chargers that operate at greater than 100,000 RPM.
The company has a successful track record of profitably expanding into new channels and significant whitespace exists both domestically and internationally. Accessibility remains a top hurdle for acquiring new customers, so expansion of the company’s distribution network presents an opportunity to further accelerate brand awareness and product adoption.
The company has a successful track record of profitably expanding into new channels and significant opportunity exists both domestically and internationally. Accessibility remains a top hurdle for acquiring new customers, so expansion of the company’s distribution network presents an opportunity to further accelerate brand awareness and product adoption.
General Industrial - Within the industrial sector, Arnold provides electric motors, magnet assemblies as well as magnets for custom made motor systems. These include stepper motors, pick and place robotic systems, and new 49 designs that are increasingly being required by regulation to meet energy efficiency standards.
General Industrial - Within the industrial sector, Arnold provides electric motors, magnet assemblies as well as magnets for custom made motor systems. These include stepper motors, pick and place robotic systems, and new designs that are increasingly being required by regulation to meet energy efficiency standards.
New requirements, more stringent application of existing requirements, or discovery of previously unknown environmental conditions could result in material environmental expenditures in the future. Arnold is a major producer of both Samarium Cobalt permanent magnets under its brand name RECOMA ® and Alnico (in both cast and sintered forms).
New requirements, more stringent application of existing 46 requirements, or discovery of previously unknown environmental conditions could result in material environmental expenditures in the future. Arnold is a major producer of both Samarium Cobalt permanent magnets under its brand name RECOMA ® and Alnico (in both cast and sintered forms).
The company then clinically tests their formulations (for compliance with regulatory standards) to confirm that the products are safe and efficacious. Lastly, the company validates their supply chain to ensure they can properly manufacture each product in the short and long term without disruption or quality compromises.
The company then clinically tests their formulations (to ensure compliance with regulatory standards) to confirm that the products are safe and efficacious. Lastly, the company validates their supply chain to ensure they can properly manufacture each product in the short and long term without disruption or quality compromises.
Thus, Altor is uniquely positioned to provide multi-facility support to its largest customers who often have multiple manufacturing or distribution locations. Engineering and Design Capabilities - Altor Solutions has three coordinated design and testing centers with experienced packaging and mechanical engineers that work closely with customers to support packaging design needs.
Thus, Altor is uniquely positioned to provide multi-facility support to its largest customers who often have multiple manufacturing or distribution locations. Engineering and Design Capabilities - Altor Solutions has three coordinated design and testing centers with experienced packaging and mechanical engineers who work closely with customers to support packaging design needs.
The success in the outdoor lighting of an innovative use of LED technology evolved into the development of patented flameless candle product line. In February 2018, Sterno acquired Rimports, a manufacturer and distributor of branded and private label wickless candle products used for home decor and fragrance systems.
The success in the outdoor lighting of an innovative use of LED technology evolved into the development of 47 patented flameless candle product line. In February 2018, Sterno acquired Rimports, a manufacturer and distributor of branded and private label wickless candle products used for home decor and fragrance systems.
We pay our Manager a quarterly management fee for the services it performs on our behalf. In addition, certain persons who are employees and partners of our Manager receive a profit allocation with respect to its Allocation Interests in us. All of the Allocation Interests in us are owned by Sostratus LLC.
We pay our Manager a quarterly management fee for the services it performs on our behalf. In addition, certain persons who are employees and partners of our Manager receive a profit allocation with respect to the Allocation Interests. All of the Allocation Interests in us are owned by Sostratus LLC.
Through these programs BOA is working to create purposeful connections to their employees, partners, and consumers – bringing their mission, values, and products to the hearts and minds of their audience. Human Capital BOA is an inclusive global team that trusts and cares for each other, their partners, the community, and the environment.
Through these programs BOA is working to create purposeful connections to their employees, partners, and consumers – bringing their mission, values, and products to the hearts and minds of their audience. 27 Human Capital BOA is an inclusive global team that trusts and cares for each other, their partners, the community, and the environment.
Leverage Brand Equity to Continue Developing New Products and Strategically Enter Large Adjacent Product Categories – Continue to strategically grow the product portfolio and bring newness to the category through meaningful innovation in core segments, supported by selective new product development in adjacent segments to grow The Honey Pot Co.’s addressable market.
Leverage Brand Equity to Continue Developing New Products and Strategically Enter Large Adjacent Product Categories – The Honey Pot Co. aims to continue to strategically grow the product portfolio and bring newness to the category through meaningful innovation in core segments, supported by selective new product development in adjacent segments to grow The Honey Pot Co.’s addressable market.
Altor Solutions offers a diverse range of materials, including traditional plastics and sustainable, plant-based and paper-based options. Altor operates molding and fabricating facilities across North America, creating a geographic footprint of strategically located manufacturing plants to efficiently serve national customer accounts.
Altor Solutions offers a diverse range of materials, including traditional plastics and sustainable, plant-based and paper-based options. Altor operates molding and fabricating facilities across North 38 America, creating a geographic footprint of strategically located manufacturing plants to efficiently serve national customer accounts.
Customers are attracted to high quality, 100 percent pure oil products with no additives or fillers. Attractively designed diffusers appeal to consumers in the Aromatherapy Home Fragrance section. • ScentCharms - With various interchangeable high-quality fragrance oils and plug-in designs, consumers enjoy a personalized experience.
Customers are attracted to high quality, 100% pure oil products with no additives or fillers. Attractively designed diffusers appeal to consumers in the Aromatherapy Home Fragrance section. • ScentCharms - With various interchangeable high-quality fragrance oils and plug-in designs, consumers enjoy a personalized experience.
The remainder of BOA’s purchases are for steel and steel coated lace, textile laces and guides, monofilament lace and webbing, which are sourced from China, Korea, Europe, Thailand, and the Philippines. Management believes its manufacturing partners have sufficient capacity to accommodate future growth.
The remainder of BOA’s purchases are for steel and steel coated lace, textile laces and guides, monofilament lace and webbing, which are sourced from China, South Korea, Europe, Thailand, and the Philippines. Management believes its manufacturing partners have sufficient capacity to accommodate future growth.
Business Strategies and Competitive Conditions Business Strategies Continued Innovation in Existing Product Categories - Velocity plans to continue to build on its successful history of bringing new, technically superior products to market through leveraging its stringent product development process and a flexible supply chain.
Business Strategies and Competitive Conditions Business Strategies Continued Innovation in Existing Product Categories - Velocity plans to continue to build on its successful history of bringing new, technically superior products to market through leveraging its stringent product development 36 process and a flexible supply chain.
These products are used across a variety of end markets including appliances, temperature-sensitive pharmaceuticals and food, HVAC, home and office furnishings and building products among others. 44 Protective Packaging - Engineered for mechanical and physical impact protection, including solutions for appliances, furniture, HVAC, and sensitive shipments.
These products are used across a variety of end markets including appliances, temperature-sensitive pharmaceuticals and food, HVAC, home and office furnishings and building products among others. Protective Packaging - Engineered for mechanical and physical impact protection, including solutions for appliances, furniture, HVAC, and sensitive shipments.
Trust Preferred Shares The Trust is authorized to issue up to 50,000,000 million Trust preferred shares and the Company is authorized to issue a corresponding number of Trust Interests. We issued 4,000,000 7.250% Series A Preferred Shares in 2017, 4,000,000 7.875% Series B Preferred Shares in 2018 and 4,600,000 7.875% Series C Preferred Shares in 2019.
Trust Preferred Shares The Trust is authorized to issue up to 50,000,000 Trust preferred shares and the Company is authorized to issue a corresponding number of Trust Interests. We issued 4,000,000 7.250% Series A Preferred Shares in 2017, 4,000,000 7.875% Series B Preferred Shares in 2018 and 4,600,000 7.875% Series C Preferred Shares in 2019.
BOA is focused on providing greater access to careers and the outdoors, and providing BOA talent with opportunities to grow within the organization - providing career exposure programs, learning and development opportunities, targeted individual career plans, and building leadership development across all levels of the 30 organization.
BOA is focused on providing greater access to careers and the outdoors, and providing BOA talent with opportunities to grow within the organization - providing career exposure programs, learning and development opportunities, targeted individual career plans, and building leadership development across all levels of the organization.
Unequaled, game changing performance and accuracy is the industry leading ground Ravin owns and will continue to own well into the future with new product introductions scheduled for 2025 & 2026. • Hunting Apparel - Technically advanced and thoughtfully designed clothing is what makes Kings a fast growing brand in its space. 2024 saw an expansion of offerings in historical categories along with new categories. 2025 & 2026 will see many more offerings including lifestyle, men’s, women’s, children’s, season specific, animal specific and new categories.
Unequaled, game changing performance and accuracy is the industry leading ground Ravin owns and will continue to own well into the future with new product introductions scheduled for 2026 and 2027. • Hunting Apparel - Technically advanced and thoughtfully designed clothing is what makes Kings a fast growing brand in its space. 2024 saw an expansion of offerings in historical categories along with new categories. 2026 and 2027 will see many more offerings including lifestyle, men’s, women’s, children’s, season specific, animal specific and new categories.
Industries served include aerospace and defense, energy exploration, industrial , motorsport and medical. 47 • Electric Motors - Low-to-mid volume AC induction, Switched Reluctance, and Brushless DC stators, rotors, and rotor shaft assemblies.
Industries served include aerospace and defense, energy exploration, industrial , motorsport and medical. • Electric Motors - Low-to-mid volume AC induction, Switched Reluctance, and Brushless DC stators, rotors, and rotor shaft assemblies.
Altor's geographic footprint covers a large portion of the continental U.S. and Mexico. Each plant has a warehouse space for raw materials, supplies and finished goods. Several plants also use third-party warehousing to store excess inventory. Altor uses common carriers to deliver finished product and in certain cases, some customers pick up directly from the plants.
Altor's geographic footprint covers a large portion of the continental U.S. and Mexico. Each plant has a warehouse space for raw materials, supplies and finished goods. Several plants also use third-party warehousing to store stocking inventory. Altor uses common carriers to deliver finished product and in certain cases, some customers pick up directly from the plants.
Human Capital The Honey Pot Co. employs a non-union labor force of 71 employees who primarily work remotely across the United States. The company has an office in Atlanta, Georgia where a small group of employees work on a day-to-day basis, but this space is primarily used as a gathering place to host customers and team meetings.
Human Capital The Honey Pot Co. employs a non-union labor force of 72 employees who primarily work remotely across the United States. The company has an office in Atlanta, Georgia where a small group of employees work on a day-to-day basis, but this space is primarily used as a gathering place to host customers and team meetings.
The Honey Pot Co. has supply agreements in place and renegotiates rates, lead-times, and minimum order quantities w ith partners based on volumes to continually optimize its stock model parameters. Distribution The Honey Pot Co. contracts with a leading logistical provider to operate a dedicated distribution center in Memphis, TN to support its fulfillment needs across North America.
The Honey Pot Co. has supply agreements in place and renegotiates rates, lead-times, and minimum order quantities w ith partners based on volumes to continually optimize its stock model parameters. Distribution The Honey Pot Co. contracts with a leading logistical provider to operate a dedicated distribution center in Memphis, Tennessee to support its fulfillment needs across North America.
Altor also exhibits its commitment to circularity within its 23 plants by recycling its waste and offering post-consumer collection to be remolded into new parts. Services Altor Solutions provides industry-leading services to enhance product integrity, performance validation, and regulatory compliance, many of which are done by our in-house ISTA Standard 20 Certified lab.
Altor also exhibits its commitment to circularity within its 19 plants by recycling its waste and offering post-consumer collection to be remolded into new parts. Services Altor Solutions provides industry-leading services to enhance product integrity, performance validation, and regulatory compliance, many of which are done by our in-house ISTA Standard 20 Certified lab.
Arnold engineers solutions for and produces high performance permanent magnets (PMAG), stators, rotors and full electric motors ("Ramco"), precision foil products (Precision Thin Metals or "PTM"), and flexible magnets (Flexmag™) that are mission critical in motors, generators, sensors and other systems and components. Arnold has expanded globally and built strong relationships with its customers worldwide.
Arnold engineers solutions for and produces high performance permanent magnets (PMAG), stators, rotors and full electric motors (Ramco), precision foil products (Precision Thin Metals), and flexible magnets (Flexmag™) that are mission critical in motors, generators, sensors and other systems and components. Arnold has expanded globally and built strong relationships with its customers worldwide.
The addressable market includes Snowsports (Alpine Ski, Snowboarding, and Cross-Country boots plus Helmets), Athletic (Golf, Court Sports, Running, and Training footwear), Outdoor (Trail, Hiking, Trekking, and Mountaineering boots/shoes), Cycling (Footwear and Helmets), Workwear (Footwear and Helmets), and Bracing. BOA partners with the leading premier brands to 27 integrate their system into their best gear.
The addressable market includes Snowsports (Alpine Ski, Snowboarding, and Cross-Country boots plus Helmets), Athletic (Golf, Court Sports, Running, and Training footwear), Outdoor (Trail, Hiking, Trekking, and Mountaineering boots/shoes), Cycling (Footwear and Helmets), Workwear (Footwear and Helmets), and Performance Bracing. BOA partners with the leading premier brands to integrate their system into their best gear.
We believe that private company operators and corporate parents looking to sell their business units may consider us an attractive purchaser because of our ability to: • provide ongoing strategic and financial support for their businesses, including professionalization of our subsidiaries at scale; • maintain a long-term outlook as to the ownership of those businesses; • sustainably invest in growth capital and/or add-on acquisitions where appropriate; and • consummate transactions efficiently without being dependent on third-party transaction financing.
Private company operators and corporate parents looking to sell their business units may consider us an attractive purchaser because of our ability to: • provide ongoing strategic and financial support for their businesses, including professionalization of our subsidiaries at scale; • maintain a long-term outlook as to the ownership of those businesses; • sustainably invest in growth capital and/or add-on acquisitions where appropriate; and • consummate transactions efficiently without being dependent on third-party transaction financing.
Our Businesses We categorize the current businesses we own into two separate groups of businesses (i) branded consumer businesses, and (ii) industrial businesses. Branded consumer businesses are characterized as those businesses that we believe capitalize on a valuable brand name in their respective market sector. We believe that our branded consumer businesses are leaders in their particular product category.
Our Businesses We categorize the current operating subsidiaries we own into two separate groups of businesses (i) branded consumer businesses, and (ii) industrial businesses. Branded consumer businesses are characterized as those businesses that we believe capitalize on a valuable brand name in their respective market sector. We believe that our branded consumer businesses are leaders in their particular product category.
Industry Velocity Outdoor primarily competes within sub-segments of the broader outdoor recreational products industry, The archery equipment market is estimated by management to constitute approximately $770 million of annual manufacturers sales, of which $500-$550 million is attributable to bows and $200-$250 million is attributable to related archery consumables.
Industry Velocity Outdoor primarily competes within sub-segments of the broader outdoor recreational products industry, The archery equipment market is estimated by management to constitute approximately $770 million of annual manufacturers' sales, of which $500-$550 million is attributable to bows and $200-$250 million is attributable to related archery consumables.
Sterno Products operates out of four locations in the United States, with a majority of their employees located at production facilities in Memphis, Tennessee and Texarkana, Texas. Rimports employees primarily operate out of Rimports' facilities in Provo, Utah. Sterno believes that its relationship with its employees is good. 57
Sterno Products operates out of four locations in the United States, with a majority of their employees located at production facilities in Memphis, Tennessee and Texarkana, Texas. Rimports employees primarily operate out of Rimports' facilities in Provo, Utah. Sterno believes that its relationship with its employees is good. 51
In particular, we believe that our long-term approach and our active management may alleviate the concern that many private company operators and parent companies may have with regard to their businesses going through multiple sale processes in a short period of time.
In particular, our long-term approach and our active management may alleviate the concern that many private company operators and parent companies may have with regard to their businesses going through multiple sale processes in a short period of time.
We believe that our industrial businesses are leaders in their specific market sectors. The following is a brief summary of the businesses in which we own a controlling interest at December 31, 2024: Branded Consumer Businesses 5.11 5.11 ABR Corp.
We believe that our industrial businesses are leaders in their specific market sectors. The following is a brief summary of the businesses in which we own a controlling interest at December 31, 2025: Branded Consumer Businesses 5.11 5.11 ABR Corp.
We acquired Altor on February 15, 2018 for a purchase price of approximately $253.4 million. We currently own 99.3% of the outstanding stock of Altor on a primary basis and 90.2% on a fully diluted basis. Arnold AMT Acquisition Corp.
We acquired Altor on February 15, 2018 for a purchase price of approximately $253.4 million. We currently own 99.3% of the outstanding stock of Altor on a primary basis and 90.5% on a fully diluted basis. Arnold AMT Acquisition Corp.
We believe our Manager is unique in the marketplace in terms of the success and experience of its employees in acquiring and managing diverse businesses of the size and 10 general nature of our businesses. We believe this experience will provide us with an advantage in executing our overall strategy.
We believe our Manager is unique in the marketplace in terms 12 of the success and experience of its employees in acquiring and managing diverse businesses of the size and general nature of our businesses. We believe this experience will provide us with an advantage in executing our overall strategy.
Although our Chief Executive Officer and Chief Financial Officer are employees of our Manager, they report directly to the LLC’s board of directors. The management fee paid to our Manager covers all expenses related to the services performed by our Manager, including the compensation of our Chief Executive Officer and other personnel providing services to us.
Although our Chief Executive Officer and Chief Financial Officer are employees of our Manager, they report directly to the Board. The management fee paid to our Manager covers all expenses related to the services performed by our Manager, including the compensation of our Chief Executive Officer and other personnel providing services to us.
The following table represents the percentage of net revenue and operating income each of our businesses contributed to our consolidated results since the date of acquisition for the years ended December 31, 2024, 2023 and 2022, and the total assets of each of our businesses as a percentage of the consolidated total as of December 31, 2024 and 2023.
The following table represents the percentage of net revenue and operating income each of our businesses contributed to our consolidated results since the date of acquisition for the years ended December 31, 2025, 2024 and 2023, and the total assets of each of our businesses as a percentage of the consolidated total as of December 31, 2025 and 2024.
WHERE YOU CAN FIND ADDITIONAL INFORMATION We file reports with the Securities and Exchange Commission (the "SEC" or the "Commission"), including Forms S-1 and S-3 under the Securities Act of 1933, as amended (the "Securities Act"), and Forms 10-K, 10-Q, and 8-K under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which include exhibits, schedules and amendments to those reports, as well as other filings required by the SEC.
WHERE YOU CAN FIND ADDITIONAL INFORMATION We make filings with the Securities and Exchange Commission (the "SEC" or the "Commission"), including on Forms S-1 and S-3 under the Securities Act of 1933, as amended (the "Securities Act"), and on Forms 10-K, 10-Q, and 8-K under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which include exhibits, schedules and amendments to those reports, as well as other filings required by the SEC.
All platforms share the distinctive characteristics that differentiate BOA from competing offerings: micro-adjustability to achieve the perfect fit, measurable performance benefits validated by the company’s PFL, durability and quality proven in extensive field testing, a lifetime guarantee on the end-product’s dial and laces, and the distinctive BOA sound heard when turning the dial.
All platforms share the distinctive characteristics that differentiate BOA from competing offerings: micro-adjustability to achieve the perfect fit, measurable performance benefits validated by Boa's Performance Fit Lab "(PFL"), durability and quality proven in extensive field testing, a lifetime guarantee on the end-product’s dial and laces, and the distinctive BOA sound heard when turning the dial.
Sterno is a “full-line” supplier offering a broad array of portable chafing fuels, table lighting, outdoor lighting products, wickless candles and fragrance products with approximately 4000 SKUs serving the foodservice and retail markets.
Sterno is a “full-line” supplier offering a broad array of portable chafing fuels, table lighting, outdoor lighting products, wickless candles and fragrance products with approximately 3800 SKUs serving the foodservice and retail markets.
Fixtures connect through a stand-alone wire via clip connectors; 5) Line Voltage - hardwired into a home's electrical circuitry, or 6) Rechargeable - product is recharged when empty usually through a plug-in wire and an onboard rechargeable power source. • Flameless Candles - The flameless candle product line is made up of various types and sizes of candles with all of them sharing the one main attribute: their glow is powered by an artificial power source, most often battery.
Fixtures connect through a stand-alone wire via clip connectors; v) Line Voltage - hardwired into a home's electrical circuitry, or vi) Rechargeable - product is recharged when empty, usually through a plug-in wire and an onboard rechargeable power source. • Flameless Candles - The flameless candle product line is made up of various types and sizes of candles with all of them sharing one main attribute: their glow is powered by an artificial power source, most often battery.
Ravin entered the market in 2017 and management believes it has since become the number one selling brand as measured by retail dollars. Hunting Apparel – The hunting apparel market operates within a "good, better, best" spectrum, where consumers prioritize factors such as performance, durability, pricing, and brand reputation when making purchasing decisions.
Ravin entered the market in 2017 and management believes it has since become a top selling brand as measured by retail dollars. Hunting Apparel – The hunting apparel market operates within a "good, better, best" spectrum, where consumers prioritize factors such as performance, durability, pricing, and brand reputation when making purchasing decisions.
Overview We acquire controlling interests in and actively manage businesses that we believe (i) operate in industries with long-term macroeconomic growth opportunities, (ii) have positive and stable cash flows, (iii) face minimal threats of technological or competitive obsolescence, and (iv) have strong management teams largely in place.
Overview We acquire controlling interests in and actively manage our subsidiaries that we believe (i) operate in industries with long-term macroeconomic growth opportunities, (ii) have positive and stable cash flows, (iii) face minimal threats of technological or competitive obsolescence, and (iv) have strong management teams largely in place.
Through the acquisitions of Lifoam Industries and Rational Packaging, Altor has strengthened its position as a leader in temperature-sensitive and protective packaging, with a broad offering of traditional and sustainable options. Altor Solutions’ custom-engineered solutions fall into six major categories: protective packaging, cold chain solutions, refrigerants, OEM parts and componentry, fabricated solutions and sustainable packaging.
Through the acquisitions of Lifoam Industries and Rational Packaging, Altor has strengthened its leading position in temperature-sensitive and protective packaging, with a broad offering of traditional and sustainable options. Altor Solutions’ custom-engineered solutions fall into six major categories: protective packaging, cold chain solutions, refrigerants, OEM parts and componentry, fabricated solutions and sustainable packaging.
In this respect, we believe that in the future, we may need to pursue additional debt or equity financings, or offer equity 17 in Holdings or target businesses to the sellers of such target businesses, in order to fund multiple future acquisitions.
In this respect, we believe that in the future, we may need to pursue additional debt or equity financings, or offer equity in Holdings or target businesses to the sellers of such target businesses, in order to fund future acquisitions.
The acquisition of Rational Packaging expands Altor’s capabilities in curbside-recyclable, paper-based solutions, replacing traditional plastics while maintaining high performance. Cold Chain Solutions - A core focus for Altor, including insulated shipping containers, gel packs, and the newly introduced Bioffex®, a starchbio-based molded cooler.
The acquisition of Rational Packaging expands Altor’s capabilities in curbside-recyclable, paper-based solutions, replacing traditional plastics while maintaining high performance. Cold Chain Solutions - A core focus for Altor, including insulated shipping containers, gel packs, and the newly introduced Bioffex®, a starch bio-based molded cooler.
Each unique BOA configuration is designed with brand partners to deliver superior fit and performance for athletes, is engineered to perform in the toughest conditions and is backed by The BOA Lifetime Guarantee. BOA is headquartered in Denver, Colorado and has offices in Austria, Greater China, South Korea, and Japan.
Each unique BOA configuration is designed with brand partners to deliver superior fit and performance for athletes, is engineered to perform in the toughest conditions and is backed by The BOA Lifetime Guarantee. BOA is headquartered in Denver, Colorado and has operations in Austria, Greater China, South Korea, Japan and Vietnam.
Preferred shares - For the 2024 fiscal year we declared distributions to our preferred shareholders totaling $1.8125 per share on our Series A Preferred Shares, $1.96875 per share on our Series B Preferred Shares and $1.96875 per share on our Series C Preferred Shares.
Preferred shares - For the 2025 fiscal year we declared distributions to our preferred shareholders totaling $1.8125 per share on our Series A Preferred Shares, $1.96875 per share on our Series B Preferred Shares and $1.96875 per share on our Series C Preferred Shares.
Each unique BOA configuration is designed with brand partners to deliver superior fit and performance for athletes, is engineered to perform in the toughest conditions and is backed by The BOA Lifetime Guarantee. BOA is headquartered in Denver, Colorado and has offices in Austria, China, South Korea, and Japan.
Each unique BOA configuration is designed with brand partners to deliver superior fit and performance for athletes, is engineered to perform in the toughest conditions and is backed by The BOA Lifetime Guarantee. BOA is headquartered in Denver, Colorado and has operations in Austria, China, South Korea, Japan and Vietnam.
Industry BOA participates in the global performance footwear, helmet and bracing markets representing an addressable market of 800+ million units sold annually in over 40 countries.
Industry BOA participates in the global performance footwear, helmet and bracing markets representing an addressable market of 750+ million units sold annually in over 40 countries.
Sterno is a leading manufacturer and marketer of portable food warming systems, creative indoor and outdoor lighting, and home fragrance solutions for the consumer markets. Sterno also manufactures creative indoor and outdoor lighting and home fragrance solutions for consumer markets.
Sterno is a leading manufacturer and marketer of portable food warming systems, creative indoor and outdoor lighting, and home fragrance solutions for the consumer markets.
Altor m aintains 23 manufacturing facilities across North America with 21 located in the U.S. and 2 in Mexi co, as well as one non-manufacturing corporate headquarters. Given the high volume, low density nature of foam, Altor's manufacturing facilities are strategically located near its largest customers’ production locations to minimize freight and logistics costs.
Altor m aintains 19 manufacturing facilities across North America with 17 located in the U.S. and 2 in Mexi co, as well as one non-manufacturing corporate headquarters. Given the high volume, low density nature of foam, Altor's manufacturing facilities are strategically located near its largest customers’ production locations to minimize freight and logistics costs.
This trend has been seen in the feminine care industry in the past years and will likely continue to accelerate as older generations age out of the category and younger consumers, who demand more transparency from their brands, enter the category.
This trend has been seen in the feminine care industry in the past years and may continue to accelerate as older generations age out of the category and younger consumers, who demand more transparency from their brands, enter the category.
The company leverages their contract manufacturing partners for products that require 510(k) FDA notification, and the co-manufacturers are responsible for confirming that products are covered by the filings. Environmental, Social and Governance Inclusion and social impact are key values of the company’s brand and community.
The company leverages their contract manufacturing partners for products that require 510(k) FDA notification, and the co-manufacturers are responsible for confirming that products are covered by the filings. Community Engagement and Social Impact Inclusion and social impact are key values of the company’s brand and community.
The PFL’s purpose is to push the limits of athlete performance through superior fit, performance and user experience by testing, refining and improving products in collaboration with BOA’s brand partners. BOA has conducted thousands of individual performance tests since the lab opening. In 2023, BOA successfully launched alpine downhill ski boots.
The PFL’s purpose is to push the limits of athlete performance through superior fit, performance and user experience by testing, refining and improving products in collaboration with BOA’s brand partners. BOA has conducted thousands of individual performance tests since the lab opening, proving and informing future innovation. In 2023, BOA successfully launched alpine downhill ski boots.
Since their launch in Steamboat Springs, CO in 2001, BOA has maintained a strong and healthy company culture that is rooted in a passion for pioneering, and for making the best gear even better. As the team has expanded over the last 24 years, BOA has placed an emphasis on attracting, developing, and retaining a diverse and talented team.
Since their launch in Steamboat Springs, Colorado in 2001, BOA has maintained a strong and healthy company culture that is rooted in a passion for pioneering, and for making the best gear even better. As the team has expanded over the last 25 years, BOA has placed an emphasis on attracting, developing, and retaining a diverse and talented team.
We believe our management team’s strong relationships with industry executives, accountants, attorneys, business brokers, commercial and investment bankers, and other potential sources of acquisition opportunities offer us substantial opportunities to assess small to middle market businesses available for acquisition.
Our management team’s strong relationships with industry executives, accountants, attorneys, business brokers, commercial and investment bankers, and other potential sources of acquisition opportunities offer us opportunities to assess small to middle market businesses available for acquisition.
Throughout BOA’s history, the company has continually innovated on dial attributes including quick release, durability, manufacturing ease, and micro adjustability, in addition to integrated lace and lace guide designs and configurations critical to imparting precision fit and reduced friction.
Throughout BOA’s history, it has continually innovated on dial attributes including quick release, durability, manufacturing ease, and micro adjustability, in addition to integrated lace and lace guide designs and configurations critical to imparting precision fit and reduced friction.
Army Research Laboratory in Natick, Massachusetts. The U.S. Army was primarily interested in a synthetic insulation that would be comparable to goose down in weight, compressibility, and warmth, while also retaining heat in the presence of moisture. PrimaLoft was awarded its first patent for a “synthetic down” originally branded as PrimaLoft ONE in 1986.
The U.S. Army was primarily interested in a synthetic insulation that would be comparable to goose down in weight, compressibility, and warmth, while also retaining heat in the presence of moisture. PrimaLoft was awarded its first patent for a “synthetic down” originally branded as PrimaLoft ONE in 1986.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Operational interruptions and unplanned events at one or more of our production facilities, such as explosions, fires, inclement weather, natural disasters, accidents, transportation interruptions and supply could cause substantial losses in our production capacity.
Operational interruptions and unplanned events at one or more of our production facilities, such as explosions, fires, inclement weather, natural disasters, accidents, and transportation and supply interruptions could cause substantial losses in our production capacity.
Registering as an investment company could, among other things, materially adversely affect our financial condition, business and results of operations, materially limit our ability to borrow funds or engage in other transactions involving leverage and require us to add directors who are 60 independent of us or our Manager and otherwise will subject us to additional regulation that will be costly and time-consuming.
Registering as an investment company could, among other things, materially adversely affect our financial condition, business and results of operations, materially limit our ability to borrow funds or engage in other transactions involving leverage and require us to add directors who are independent of us or our Manager and otherwise will subject us to additional regulation that will be costly and time-consuming.
While it is difficult to quantify with any certainty the actual amount of any such payments in the future, we do expect that such amounts could be substantial. See the section entitled Part 3, Item 13. “ Certain Relationships and Related Transactions, and Director Independence ” for more information about these payment obligations of the Company.
While it is difficult to quantify with any certainty the actual amount of any such payments in the future, we do expect that such amounts could be substantial. See the section entitled Part 3, Item 13. “ Certain Relationships and Related Transactions, and 61 Director Independence ” for more information about these payment obligations of the Company.
Some of the facilities and operations of our businesses are and may be subject to a variety of federal, state and foreign environmental laws and regulations including laws and regulations pertaining to the handling, storage and transportation of raw materials, products and wastes, which require and will continue to require significant 67 expenditures to remain in compliance with such laws and regulations currently in place and in the future.
Some of the facilities and operations of our businesses are and may be subject to a variety of federal, state and foreign environmental laws and regulations including laws and regulations pertaining to the handling, storage and transportation of raw materials, products and wastes, which require and will continue to require significant expenditures to remain in compliance with such laws and regulations currently in place and in the future.
This circumstance could materially adversely affect our liquidity and ability to make distributions to our shareholders. 64 Risks Specific to Our Subsidiaries Risks Related to Arnold Arnold's operations and the prior operations of predecessor companies expose it to the risk of material environmental liabilities, which could have a negative effect on its financial condition or results of operations.
This circumstance could materially adversely affect our liquidity and ability to make distributions to our shareholders. Risks Specific to Our Subsidiaries Risks Related to Arnold Arnold's operations and the prior operations of predecessor companies expose it to the risk of material environmental liabilities, which could have a negative effect on its financial condition or results of operations.
We will have no obligation to pay distributions for a distribution period if the Board of the Company does not declare such distribution before the scheduled record date for such period, whether or not distributions are declared or paid for any subsequent distribution period with respect to the Series A Preferred Shares, or any other preferred shares we may issue or our common shares.
We will have no obligation to pay distributions for a distribution period if the Board of the Company does not declare such distribution before the scheduled record date for such period, whether or not distributions are declared or paid for any subsequent distribution period with respect to the Series A Preferred 59 Shares, or any other preferred shares we may issue or our common shares.
Any remedial costs or other liabilities related to cybersecurity incidents may not be fully insured or indemnified by other means. In addition, cybersecurity has become a top priority for global lawmakers and regulators, and some jurisdictions have enacted laws requiring companies to notify regulators and individuals of security breaches.
Any remedial costs or other liabilities related to cybersecurity incidents may not be fully insured or indemnified by other means. 63 In addition, cybersecurity has become a top priority for global lawmakers and regulators, and some jurisdictions have enacted laws requiring companies to notify regulators and individuals of security breaches.
Furthermore, because customers may be dependent on planned deliveries from us, customers that have to reschedule their own operations due to our delivery delays may be able to pursue financial claims against us, and we may incur costs to correct such problems in addition to any liability resulting from 66 such claims.
Furthermore, because customers may be dependent on planned deliveries from us, customers that have to reschedule their own operations due to our delivery delays may be able to pursue financial claims against us, and we may incur costs to correct such problems in addition to any liability resulting from such claims.
Future changes to tax laws are uncertain, but any such changes could cause the Trust to fail to realize the anticipated benefits of the Election. If corporate income tax rates are raised, the anticipated advantages of being 61 treated as a corporation for U.S. tax purposes would be diminished.
Future changes to tax laws are uncertain, but any such changes could cause the Trust to fail to realize the anticipated benefits of the Election. If corporate income tax rates are raised, the anticipated advantages of being treated as a corporation for U.S. tax purposes would be diminished.
Risks Related to Sterno Sterno's products operate at high temperatures and use flammable fuels, each of which could subject our business to product liability claims, which could adversely affect its reputation and reduce customer demand. Sterno's products expose it to potential product liability claims typical of fuel based heating products.
Risks Related to Sterno Sterno's products operate at high temperatures and use flammable fuels, each of which could subject our business to product liability claims, which could adversely affect its reputation and reduce customer 62 demand. Sterno's products expose it to potential product liability claims typical of fuel based heating products.
Your recourse, if you disagree, will be limited because our Trust Agreement gives broad authority and discretion to the Board to 58 implement the Conversion as long as the Board determines that it will be in the best interests of the Trust and its shareholders to do so.
Your recourse, if you disagree, will be limited because our Trust Agreement gives broad authority and discretion to the Board to implement the Conversion as long as the Board determines that it will be in the best interests of the Trust and its shareholders to do so.
Our businesses do not have and may not have long-term contracts with their customers and clients and the loss of customers and clients could materially adversely affect their financial condition, business and results of operations. Our businesses are and may be, based primarily upon individual orders and sales with their customers and clients.
Our businesses do not have and may not have long-term contracts with their customers and clients and the loss of customers and clients could materially adversely affect their financial condition, business and results of operations. 58 Our businesses are and may be based primarily upon individual orders and sales with their customers and clients.
We, and our businesses, use a variety of information technology systems in the ordinary course of business, which are potentially vulnerable to cybersecurity attacks, including cybersecurity attacks to our information technology infrastructure and attempts by others to gain access to our proprietary or sensitive information.
We, and our businesses, use a variety of information technology systems in the ordinary course of business, which are potentially vulnerable to cybersecurity attacks, including cybersecurity attacks on our information technology infrastructure and attempts by others to gain access to our proprietary or sensitive information.
The U.S. has recently enacted and proposed to enact significant new tariffs. Additionally further evaluation of key aspects of U.S. trade policy is occurring, along with ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs.
The U.S. has enacted and proposed to enact significant new tariffs. Additionally further evaluation of key aspects of U.S. trade policy is occurring, along with ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs.
If our Manager resigns, we may not be able to contract with a new manager or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 90 days, or at all, in which case our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline.
If our Manager resigns, we may not be able to contract with a new manager or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 180 days, or at all, in which case our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline.
As a result, the management fee may incentivize our Manager to increase the amount of our assets. For example, the acquisition of additional assets or the incurrence of third party debt could be prioritized rather than increasing the performance of our businesses. We cannot determine the amount of the management fee that will be paid over time with any certainty.
As a result, the management fee may incentivize our Manager to increase the amount of our assets. For example, the acquisition of additional assets or the incurrence of third party debt could be prioritized rather than increasing the performance of our businesses. We cannot determine the amount of profit allocation that will be paid over time with any certainty.
These provisions include, among others: • restrictions on the LLC’s ability to enter into certain transactions with our major shareholders, with the exception of our Manager, modeled on the limitation contained in Section 203 of the Delaware General Corporation Law, or DGCL; • allowing only the LLC’s board of directors to fill newly created directorships, for those directors who are elected by our shareholders, and allowing only our Manager, as holder of a portion of the Allocation Interests, to fill vacancies with respect to the class of directors appointed by our Manager; • requiring that directors elected by our shareholders be removed, with or without cause, only by a vote of 85% of our shareholders; • requiring advance notice for nominations of candidates for election to the Company’s Board or for proposing matters that can be acted upon by our shareholders at a shareholders’ meeting; • having a substantial number of additional authorized but unissued shares that may be issued without shareholder action; 59 • providing the Company’s Board with certain authority to amend the LLC Agreement and the Trust Agreement, subject to certain voting and consent rights of the holders of trust interests and Allocation Interests; and • limitations regarding calling special meetings and written consents of our shareholders.
These provisions include, among others: • restrictions on the LLC’s ability to enter into certain transactions with our major shareholders, with the exception of our Manager, modeled on the limitation contained in Section 203 of the Delaware General Corporation Law, or DGCL; • allowing only the Company's Board to fill newly created directorships, for those directors who are elected by our shareholders, and allowing only Sostratus LLC, as Holder of our Allocation Interests (holders of Allocation Interests collectively the “Holders”), to fill vacancies with respect to the class of directors appointed by our Allocation Interest Holder; • requiring that directors elected by our shareholders be removed, with or without cause, only by a vote of 85% of our shareholders; • requiring advance notice for nominations of candidates for election to the Company’s Board or for proposing matters that can be acted upon by our shareholders at a shareholders’ meeting; • having a substantial number of additional authorized but unissued shares that may be issued without shareholder action; • providing the Company’s Board with certain authority to amend the LLC Agreement and the Trust Agreement, subject to certain voting and consent rights of the holders of trust interests and Allocation Interests; and • limitations regarding calling special meetings and written consents of our shareholders.
Risks Related to Taxation The Trust is subject to U.S. corporate income taxes which reduces the earnings and cash available for distributions to holders of Trust common shares in respect of such investments and could adversely affect the value of Trust common shareholders’ investment.
Risks Related to Taxation The Trust is subject to U.S. corporate income taxes which reduce the earnings and cash available for distributions to holders of Trust common shares in respect of such investments and could adversely affect the value of Trust common shareholders’ investment.
Certain risks are inherent in operating or conducting business in foreign jurisdictions, including exposure to local economic conditions; difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; longer payment cycles for foreign customers; adverse currency exchange controls; exposure to risks associated with changes in foreign exchange rates; potential adverse changes in political environments; actual or threatened geopolitical conflict; withholding taxes and restrictions on the withdrawal of foreign investments and earnings; export and import restrictions; difficulties in enforcing intellectual property rights; and required compliance with a variety of 68 foreign laws and regulations.
Certain risks are inherent in operating or conducting business in foreign jurisdictions, including exposure to local economic conditions; difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; longer payment cycles for foreign customers; adverse currency exchange controls; exposure to risks associated with changes in foreign exchange rates; potential adverse changes in political environments; actual or threatened geopolitical conflict; withholding taxes and restrictions on the withdrawal of foreign investments and earnings; export and import restrictions, including with regards to tariffs; difficulties in enforcing intellectual property rights; and 66 required compliance with a variety of foreign laws and regulations.
The use of their intellectual property and other proprietary information by others, and the use by others of their intellectual property and proprietary information, could reduce or eliminate any competitive advantage they have developed, cause them to lose sales or otherwise harm their business.
Their use of others' intellectual property and proprietary information, and the use by others of their intellectual property and proprietary information, could reduce or eliminate any competitive advantage they have developed, cause them to lose sales or otherwise harm their business.
Certain of our businesses are subject to increasingly stringent and complex domestic and foreign product labeling, performance, environmental and safety standards, laws and other regulations, including those pertaining to per-and polyfluoroalkyl substances ("PFAS") a group of chemicals used to make fluoropolymer coatings and products that resist heat, oil, stains, grease, and water.
Certain of our businesses are subject to increasingly stringent and complex domestic and foreign product labeling, performance, environmental and safety standards, laws and other regulations, including those pertaining to PFAS a group of chemicals used to make fluoropolymer coatings and products that resist heat, oil, stains, grease, and water.
Significant or continuing noncompliance with these standards and laws could disrupt our business and harm our reputation. Defects in the products provided by our companies could result in financial or other damages to their customers, which could result in reduced demand for our companies’ products and/or liability claims against our companies.
Significant or continuing non-compliance with these standards and laws could disrupt our business and harm our reputation. Defects in the products provided by our companies could result in financial or other damages to their customers, which could result in reduced demand for our companies’ products and/or liability claims against our companies.
The fact that they do not enter into long-term contracts with their customers and clients means that they have no recourse in the event a customer or client no longer wants to use their services or purchase products from them.
The fact that they do not enter into long-term contracts with their customers and clients means that they have limited contractual protections in the event a customer or client no longer wants to use their services or purchase products from them.
Distributions on the Series A Preferred Shares are discretionary and non-cumulative. Holders of the Series A Preferred Shares will only receive distributions of the Series A Preferred Shares when, as and if declared by the Board of the Company.
Risks Related to the Preferred Shares Distributions on the Series A Preferred Shares are discretionary and non-cumulative. Distributions on the Series A Preferred Shares are discretionary and non-cumulative. Holders of the Series A Preferred Shares will only receive distributions of the Series A Preferred Shares when, as and if declared by the Board of the Company.
Defects in products could also result in financial or other damages to customers, for which our companies may be asked or required to compensate their customers, in the form of substantial monetary judgments or otherwise. There can be no assurance that rapidly changing safety standards will not render unsaleable products that complied with previously-applicable safety standards.
Defects in products could also result in financial or other damages to customers, for which our companies may be asked or required to compensate their customers, in the form of substantial monetary judgments or otherwise. Additionally, rapidly changing safety standards may not render unsaleable products that complied with previously-applicable safety standards.
We cannot remove our Manager solely for poor performance, which could limit our ability to improve our performance and could materially adversely affect the market price of our shares. Under the terms of the Management Services Agreement, our Manager cannot be removed as a result of under-performance.
We cannot remove our Manager solely for poor performance, which could limit our ability to improve our performance and could materially adversely affect the market price of our shares. Under the terms of the Management Services Agreement, our Manager cannot be removed solely as a result of under-performance without approval of our shareholders and at a significant cost.
Cybersecurity threats continue to increase in frequency and sophistication; a successful cybersecurity attack could interrupt or disrupt our information technology systems, or those of our third-party service providers, and may cause us to incur excessive costs or suffer reputational harm.
A successful cybersecurity attack could interrupt or disrupt our information technology systems, or those of our third-party service providers, and may cause us to incur excessive costs or suffer reputational harm.
The Trust’s sole asset is its interest in the LLC, which holds controlling interests in our businesses.
The Trust’s sole asset is its interest in the LLC, which holds controlling interests in our operating subsidiaries.
Our profit allocation may induce our Manager to make suboptimal decisions regarding our operations. Sostratus LLC, as holder of our Allocation Interests, will receive a profit allocation based on ongoing cash flows and capital gains in excess of a hurdle rate. Certain persons who are employees and partners of our Manager are owners of Sostratus LLC.
Sostratus LLC, as Holder of our Allocation Interests, will receive a profit allocation based on ongoing cash flows and capital gains in excess of a hurdle rate. Certain persons who are employees and partners of our Manager are owners of Sostratus LLC.
Velocity's product liability insurance may not be sufficient to cover all liabilities incurred in connection with such claims and the financial consequences of these claims and lawsuits will have a material adverse effect on its business, financial condition, liquidity and results of operations. 65 General Risk Factors We could be negatively impacted by cybersecurity attacks.
Velocity's product liability insurance may not be sufficient to cover all liabilities incurred in connection with such claims and the financial consequences of these claims and lawsuits will have a material adverse effect on its business, financial condition, liquidity and results of operations.
If our businesses are unable to protect their intellectual property, are unable to obtain or retain licenses to use other’s intellectual property, or if they infringe upon or are alleged to have infringed upon others’ intellectual property, it could have a material adverse effect on their financial condition, business and results of operations.
If our businesses are unable to protect their intellectual property, are unable to obtain or retain licenses to use other’s intellectual property, or if they infringe upon or are alleged to have infringed upon others’ intellectual property, we may be subject to costly litigation or lose our competitive advantage which could have a material adverse effect on their financial condition, business and results of operations.
ITEM 1A. RISK FACTORS Our business, operations and financial condition are subject to various risks and uncertainties. The following discussion of risk factors should be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section and the consolidated financial statements and related notes.
ITEM 1A. RISK FACTORS Our business, operations and financial condition are subject to various risks and uncertainties. The following discussion of risk factors should be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in Part II, Item. 7 and the "Consolidated Financial Statements" and related notes of this Form 10-K.
Any proceeds from the sale of a business will be allocated among us and the non-controlling shareholders of the business that is sold. The Company’s Board has the power to change the terms of our shares in its sole discretion in ways with which you may disagree.
Similarly, proceeds from the sale of a subsidiary will be allocated among us and the minority owners of that subsidiary. 56 The Company’s Board has the power to change the terms of our shares in its sole discretion in ways with which you may disagree.
Our businesses may also be held liable for damages caused by environmental and other conditions that existed prior to our acquisition the assets, business or operations involved, whether or not such damages are subject to indemnification from a prior owner. Costs associated with these risks could have a material adverse effect on our financial condition, business and results of operations.
Our businesses may also be held liable for damages caused by environmental and other conditions that existed prior to our acquisition of the assets, business or operations involved, whether or not such damages are subject to indemnification from a prior owner.
The loss of services of one or more members of our management team or the management team at one of our businesses could materially adversely affect our financial condition, business and results of operations. We face risks with respect to the evaluation and management of future acquisitions.
The loss of services of one or more members of our management team or the management team at one of our businesses could materially adversely affect our financial condition, business and results of operations.
Since the timing and size of acquisitions cannot be readily predicted, we may need to be able to obtain funding on short notice to benefit fully from attractive acquisition opportunities. Such funding may not be available on acceptable terms. In addition, the level of our indebtedness may impact our ability to borrow at the Company level.
Since the timing and size of acquisitions cannot be readily predicted, we may need to be able to obtain funding on short notice to benefit fully from attractive acquisition opportunities. Such funding may not be available on acceptable terms, especially in light of the Lugano Investigation.
The Board may, based on their review of our financial condition and results of operations and pending acquisitions or our tax structure, determine to reduce or eliminate distributions, which may have a material adverse effect on the market price of our shares. We rely entirely on receipts from our businesses to make distributions to our shareholders.
The Board may, and in fiscal year 2025 has, based on their review of our financial condition and results of operations and pending acquisitions and our tax structure, determine to reduce or eliminate distributions, which may have a material adverse effect on the market price of our shares.
Compliance with current and future environmental laws is a major consideration for our businesses as any material violations of these laws can lead to substantial liability, revocations of discharge permits, fines or penalties.
These laws and regulations are subject to a changing regulatory environment and the requirements thereunder may substantially change in the future. Compliance with current and future environmental laws is a major consideration for our businesses as any material violations of these laws can lead to substantial liability, revocations of discharge 65 permits, fines or penalties.
As of December 31, 2024, we had identified indefinite lived intangible assets with a carrying value in our financial statements of $30.8 million, and goodwill of $982.3 million. Our businesses are subject to unplanned business interruptions which may adversely affect our performance.
As of December 31, 2025, we had identified indefinite lived intangible assets with a carrying value in our financial statements of $30.8 million, and goodw ill of $895.4 million . Our businesses are subject to unplanned business interruptions which may expose us to costly litigation, harm our reputation, and relationships with our customers, and adversely affect our performance.
Additionally, while our branded consumer businesses devote effort and resources to protecting their intellectual property, if these efforts are not successful the value of those brands may be harmed. Any harm to the brand or reputation of our subsidiaries could have a material adverse effect on our financial condition.
Additionally, the value of our businesses’ brands may be harmed if our businesses fail to protect their intellectual property. Any harm to the brand or reputation of our subsidiaries could have a material adverse effect on our profitability and financial condition.
In addition, we and our subsidiary companies may have difficulty effectively managing or integrating acquisitions. We may experience greater than expected costs or difficulties relating to such acquisition, in which case, we might not achieve the anticipated returns from any particular acquisition, our financial condition, business and results of operations.
In such events, we may experience greater than expected costs or difficulties relating to such acquisition, in which case, we might not achieve our anticipated returns and our financial condition, business, and results of operations may be adversely affected.
Changes in adjusted net assets and in the resulting management fees could be significant, resulting in a material adverse effect on the Company’s results of operations.
Changes in adjusted net assets and in the resulting management fees could be significant, resulting in a material adverse effect on the Company’s results of operations. In addition, if the performance of the Company declines, assuming adjusted net assets remains the same, management fees will increase as a percentage of the Company’s net income.
Under the Trust Agreement, the Company’s Board will have the power to cause the Trust to be converted to a corporation in the future at its sole discretion in ways with which our shareholders may disagree.
These risks may materially adversely affect our ability to pursue our acquisition strategy successfully and our financial condition, business and results of operations. Under the Trust Agreement, the Company’s Board will have the power to cause the Trust to be converted to a corporation in the future at its sole discretion in ways with which our shareholders may disagree.
In addition to the factors affecting our specific operating segments identified in connection with the descriptions of these segments and the financial results of the operations of these operating segments elsewhere in this report, the most significant factors affecting our operations include the following: Risks Related to Our Business and Structure Our future success is dependent on the employees of our Manager and the management teams of our businesses, the loss of any of whom could materially adversely affect our financial condition, business and results of operations.
Risks Related to Our Business and Structure Our future success is dependent on the employees of our Manager and the management teams of our businesses, the loss of any of whom could materially adversely affect our financial condition, business and results of operations.
In this regard, the Management Services Agreement and the obligation to provide management services will not create a mutually exclusive relationship between our Manager and its affiliates, on the one hand, and the Company, on the other. 62 Our Manager need not present an acquisition or disposition opportunity to us if our Manager determines on its own that such acquisition or disposition opportunity does not meet the Company’s acquisition or disposition criteria.
In this regard, the Management Services Agreement and the obligation to provide management services will not create a mutually exclusive relationship between our Manager and its affiliates, on the one hand, and the Company, on the other.
We may engage in a business transaction with one or more target businesses that have relationships with our officers, our directors, or our Manager, which may create potential conflicts of interest. We may decide to acquire one or more businesses with which our officers, our directors, or our Manager have a relationship.
We may decide to acquire one or more businesses with which our officers, our directors, or our Manager have a relationship.
Instead, the Company’s Board can only remove our Manager in certain limited circumstances or upon a vote by the majority of the Company’s Board and the majority of our shareholders to terminate the Management Services Agreement. This limitation could materially adversely affect the market price of our shares.
Instead, the Company’s Board 60 can only remove our Manager in certain limited circumstances or upon a vote by the majority of the Company’s Board and the majority of our shareholders to terminate the Management Services Agreement. Termination of our Manager may also require the Company to incur significant payments and reimbursements to our Manager.
There is no assurance that adverse financial conditions, including bankruptcies of our suppliers, reduced levels of production, natural disasters, staffing shortages, supply chain issues or other problems experienced by our suppliers will not result in shortages or delays in their supply of components to us.
Adverse financial conditions, including bankruptcies of our suppliers, reduced levels of production, natural disasters, staffing shortages, supply chain issues or other problems experienced by our suppliers may result in shortages or delays in their supply of components to us. Any significant production disruption could have a material impact on our operations, operating results and financial condition.
These risks individually and collectively have the potential to negatively impact our financial condition, business and results of operations. The success of our branded consumer businesses depends on our ability to maintain the value and reputation of the brand. The name of our branded consumer businesses is integral to those businesses.
The success of our branded consumer businesses depends on our ability to maintain the value and reputation of the brand and the failure to do so could reduce profits and adversely impact our financial condition. The name of our branded consumer businesses is integral to those businesses.
Certain of our businesses are subject to increased product regulations which may cause an increase to our expenses or result in increased litigation in the event of non-compliance.
Costs associated with these risks could have a material adverse effect on our financial condition, business and results of operations. Certain of our businesses are subject to increased product regulations which may cause an increase to our expenses or result in increased litigation in the event of non-compliance.
In addition, the laws of foreign countries may not protect our businesses’ intellectual property rights effectively or to the same extent as the laws of the United States. Stopping unauthorized use of their proprietary information and intellectual property and defending claims that they have made unauthorized use of others’ proprietary information or intellectual property, may be difficult, time-consuming and costly.
Stopping unauthorized use of their proprietary information and intellectual property and defending claims that they have made unauthorized use of others’ proprietary information or intellectual property, may be difficult, time-consuming and costly for our businesses.
Our distribution policy may be changed at any time at the discretion of the Company’s Board. Future changes to tax laws are uncertain and may result in the Trust paying corporate income tax at rates higher than expected or result in the Trust failing to realize the anticipated benefits of the Election.
Therefore, the amount of cash available for distributions to holders of Trust common shares could be reduced and their investment could be adversely affected. Future changes to tax laws are uncertain and may result in the Trust paying corporate income tax at rates higher than expected or result in the Trust failing to realize the anticipated benefits of the Election.
Therefore, we are dependent upon the ability of our businesses to generate earnings and cash flow and distribute them to us in the form of interest and principal payments on indebtedness and, from time to time, dividends on equity to enable us, first, to satisfy our financial and tax obligations and second to make distributions to our shareholders.
We are therefore dependent upon the ability of our operating subsidiaries to generate earnings and cash flow through dividends, interest and principal payments on intercompany indebtedness, and other permitted distributions, to enable us to satisfy our obligations (including debt service, taxes and management fees) and to make distributions to our shareholders.
A component of our strategy is to continue to acquire additional subsidiaries, as well as add-on acquisitions for our existing subsidiaries. Generally, because such acquisition targets are held privately, we may experience difficulty in evaluating potential target businesses as the information concerning these businesses is not publicly available.
Generally, because such acquisition targets are held privately, we may experience difficulty in evaluating potential target businesses as the information concerning these businesses is not publicly available. In addition, we and our subsidiary companies may have difficulty effectively managing or integrating acquisitions or they may fail to perform as anticipated.
The management fee paid to CGM for the year ended December 31, 2024 was $74.8 million. Going forward, the management fee will consist of a base management fee and, if specified performance measure is met under certain circumstances, an incentive management fee.
Our management fee consists of a base management fee and, if specified performance measure is met under certain circumstances, an incentive management fee.
Our businesses could experience fluctuations in the costs and availability of raw materials, components or whole goods which could result in significant disruptions to supply chains, production disruptions and increased costs for our businesses. Our businesses require access to various raw materials, components and whole goods to manufacture and distribute products.
Disruptions in our supply chain or increases in the cost or reduced availability of raw materials, components, or finished goods could materially adversely affect our businesses’ operations and profitability. Our businesses require a reliable supply of various raw materials, components and, in some cases, finished goods to manufacture and distribute their products.
The future success of our businesses also depends on their respective management teams because we operate our businesses on a stand-alone basis, primarily relying on existing management teams for management of their day-to-day operations.
The demands associated with the Lugano Investigation, the restatement process, and ongoing remediation efforts may increase turnover risk and may make it more difficult to retain and recruit qualified personnel. The future success of our businesses also depends on their respective management teams because we primarily rely on existing management teams for management of their day-to-day operations.
Removed
Another source of capital for us may be the sale of additional shares, subject to market conditions and investor demand for the shares at prices that we consider to be in the interests of our shareholders. These risks may materially adversely affect our ability to pursue our acquisition strategy successfully and our financial condition, business and results of operations.
Added
In addition to the factors affecting our specific operating segments identified in connection with the descriptions of these segments and the financial results of the operations of these operating segments elsewhere in this report, the following discussion sets forth the material risk factors we face which make an investment in us speculative or risky.
Removed
This ability may be subject to limitations under laws of the jurisdictions in which they are incorporated or organized. If, as a consequence of these various restrictions, we are unable to generate sufficient receipts from our businesses, we may not be able to declare, or may have to delay or cancel payment of, distributions to our shareholders.
Added
Risk Factors Relating to the Lugano Investigation and Restatements We have restated certain of our prior consolidated financial statements as a result of the Lugano Investigation, which resulted in unanticipated costs, litigation against Lugano and the Company and stockholder litigation against the Company, and may result in additional stockholder litigation, regulatory consequences and additional liabilities we are currently unaware of, and may adversely affect investor confidence, our stock price, our ability to raise capital in the future, and our reputation.
Removed
We do not own 100% of our businesses.
Added
As previously disclosed, following concerns reported to the Company’s management, the Company commenced the Lugano Investigation. As a result of the Lugano Investigation, the Company determined that the Company’s previously issued financial statements for fiscal years 2022, 2023, 2024, and the first three fiscal quarters of 2025 including other interim and full-year financial information should no longer be relied upon.
Removed
While we receive cash payments from our businesses which are in the form of interest payments, debt repayment and dividends, if any dividends were to be paid by our businesses, they would be shared pro rata with the minority shareholders of our businesses and the amounts of dividends made to minority shareholders would not be available to us for any purpose, including Company debt service or distributions to our shareholders.
Added
The Company corrected these errors in its 2024 Form 10K/A which was filed on December 8, 2025, and its Quarterly Reports on Form 10-Q for the first, second, and third quarters of 2025, which were filed on December 18, 2025, December 29, 2025 and January 14, 2026 respectively.
Removed
Our financing arrangements expose us to additional risks associated with leverage, inhibit our operating flexibility and reduce earnings and cash available for distributions to our shareholders. As of December 31, 2024, we had approximately $1,785 million of consolidated debt outstanding.
Added
We have incurred unanticipated costs for accounting, financing and legal fees in connection with the Lugano Investigation and the restatements, including those associated with our entry into forbearance agreements, amendments, and waivers with respect to our Credit Agreement and senior note indentures due to potential defaults or events of default thereunder.
Removed
This level of consolidated debt could have important consequences, such as (i) limiting our ability to obtain additional financing to fund our potential growth; (ii) increasing the cost of future borrowings; (iii) limiting our ability to use operating cash flow in our other areas of our business because of cash requirements to service our debt; and (iv) increasing our vulnerability to adverse economic conditions.
Added
The restatements may erode investor confidence in our Company, our financial reporting, accounting practices and processes, and may raise reputational issues for our business.
Removed
Our financing arrangements subject the Company to certain customary affirmative and restrictive covenants. If we violate any of these covenants, our lender may accelerate the maturity of any debt outstanding under our 2022 Credit Facility.
Added
The Lugano Investigation and the restatement of our historical financial statements have negatively impacted, and may continue to negatively impact, the trading price of our securities, have made it more difficult for us to comply with our debt covenants and tightened our liquidity, and may make it more difficult for us to raise capital on acceptable terms, or at all, in the future.
Removed
Our ability to meet our debt service obligations may be affected by events beyond our control and will depend primarily upon cash produced by our businesses. Any failure to comply with the terms of our indebtedness could materially adversely affect us.
Added
In light of the Lugano Investigation and related matters, we have taken certain actions to preserve liquidity, including suspending distributions on our common shares, and our ability to access the equity capital markets, including through at-the-market equity offerings, was limited during 2025 in light of the Lugano Investigation and related events.
Removed
Changes in interest rates could materially adversely affect our profitability, ability to service debt, and our business as a whole. Our 2022 Credit Facility bears interest at floating rates which will generally change as interest rates change.
Added
In addition, the Lugano Investigation, the restatements and related material weaknesses in our internal control over financial reporting have resulted in litigation against Lugano and the Company, and stockholder litigation against the Company, and regulatory investigations and inquiries which may result in adverse regulatory consequences. As previously disclosed, there are ongoing investigations initiated by the SEC and the U.S.
Removed
We bear the risk that the rates we are charged by our lender will increase faster than the earnings and cash flow of our businesses, which could reduce profitability, adversely affect our ability to service our debt, cause us to breach covenants contained in our 2022 Credit Facility and reduce earnings and cash available for distribution, any of which could materially adversely affect us.
Added
Department of Justice (“DOJ”), and FINRA conducted a review of trading activity in our securities and referred the matter to the SEC for whatever actions the SEC deemed appropriate, if any.
Removed
Therefore, the amount of cash available for distributions to holders of Trust common shares could be reduced and their investment could be adversely affected. Following the Election, determinations, declarations, and payments of distributions to holders of Trust common shares will continue to be at the sole discretion of the Company’s Board.
Added
These and any future regulatory consequences, litigation, claims or disputes, whether successful or not, could subject us to additional costs or liabilities we are currently unaware of, divert the attention of our management, or impair our reputation. Each of these consequences could have a material adverse effect on our business, results of operations and financial condition.
Removed
In addition, any general changes to tax laws, such as changes to limitations on the deductibility of interest, could result in the Trust or its shareholders paying tax at rates higher than anticipated. Risks Related to the Preferred Shares Distributions on the Series A Preferred Shares are discretionary and non-cumulative.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+5 added−2 removed1 unchanged
We have also established protocols by which certain cybersecurity incidents that meet established reporting thresholds are escalated internally and, where appropriate, reported to the Audit Committee or the Board in a timely manner.
We have also established protocols by which cybersecurity incidents that meet established reporting thresholds are escalated internally and, where appropriate, reported to the Audit Committee or the Board in a timely manner
As part of such reviews, our Board and Audit Committee receive periodic reports and presentations from members of the team responsible for overseeing cybersecurity risk management. These periodic reviews address various topics including evolving regulatory standards, recent developments, vulnerability assessments, third-party reviews, and other information security topics that senior management deems necessary.
As part of such reviews, our Board and Audit Committee receive and consider reports and presentations from members of our management team responsible for overseeing cybersecurity risk management. These periodic reviews address various topics including evolving regulatory standards, recent developments, vulnerability assessments, third-party reviews, and other information security topics that senior management deems necessary.
We have implemented a risk-based, cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.
We have implemented a risk-based, cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt and appropriate escalation of cybersecurity incidents so that decisions regarding the remediation, reporting, and public disclosure of such incidents can be made by management in a timely manner.
Our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
To date, our business strategy, results of operations, and financial condition have not been, and are not reasonably likely to be, materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
For more information on our cybersecurity related risks, see Item 1A Risk Factors of this Annual Report on Form 10-K. Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated oversight of cybersecurity risks to the Audit Committee.
For more information on our cybersecurity-related risks, see Item 1A “Risk Factors” of this Form 10-K. Cybersecurity Governance Board and Audit Committee Oversight Our Board considers cybersecurity risk as part of its overall risk oversight function and has delegated oversight of cybersecurity risks to the Audit Committee.
Our cybersecurity program is designed to leverage people, processes, and technology to identify and respond to cybersecurity threats. We also engage external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes.
We also engage external third-party service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security processes. We are committed to protecting the security and integrity of our systems, networks, databases, and applications.
We assess, identify, and manage risks from cybersecurity threats through various mechanisms, which may include risk assessments using applicable industry specific cybersecurity frameworks, control gap analyses, penetration testing, vulnerability scanning, cyber insurance that aligns with our subsidiaries' risk profiles and internal or third-party assessments. We are committed to protecting the security and integrity of our systems, networks, databases and applications.
To that end, we utilize a variety of mechanisms such as risk assessments using applicable industry-specific cybersecurity frameworks such as the National Institute of Standards and Technology, control gap analyses, penetration testing, vulnerability scanning, cyber insurance that aligns with our subsidiaries’ risk profiles, and other internal assessments.
Senior management regularly discusses cyber risks and trends and, if they should arise, will discuss any material incidents with the Audit Committee. Both the Board and the Audit Committee periodically review the measures we have implemented to identify and mitigate cybersecurity risks.
Where appropriate, the Audit Committee reports any findings and recommendations to the full Board for consideration. 67 Both the Board and the Audit Committee periodically review the measures we have implemented to identify and mitigate cybersecurity risks.
We routinely invest to develop and implement cybersecurity programs and processes, including risk management and assessment programs, security and event monitoring capabilities, and prevention and protection capabilities. Our employees undergo annual security awareness training to enhance their understanding of cybersecurity threats and their ability to identify and escalate potential cybersecurity events.
We routinely invest in our information technology infrastructure and in the development and implementation of stronger cybersecurity programs and processes, including risk management and assessment measures, security and event monitoring capabilities, and prevention and protection capabilities.
Third-party risks are included within our enterprise risk process. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers.
To mitigate such risks, we apply a risk-based approach extending to providers across our supply chain who have access to our customer and employee data and our systems. This is done as part of our overall enterprise risk process. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers.
Removed
We regularly assess cybersecurity risks to identify and enumerate threats to us and vulnerabilities these threats can exploit to adversely impact our business operations. We also apply a risk-based approach to mitigate cybersecurity risks associated with our use of third-party service providers, including those in our supply chain that have access to our customer and employee data or our systems.
Added
Our cybersecurity program is designed to leverage people, processes, and technology to identify cybersecurity threats quickly and respond to them effectively.
Removed
The Audit Committee has oversight responsibility for risks and incidents relating to cybersecurity threats, including compliance with disclosure requirements and related effects on financial and other risks, and it reports any findings and recommendations, as appropriate, to the full Board for consideration.
Added
Our employees also undergo mandatory annual security awareness training to enhance their understanding of cybersecurity threats and to strengthen their ability to identify and escalate potential cybersecurity events. Additionally, in fiscal year 2024, our full Board received training from an outside service provider on cybersecurity and data privacy in addition to the cyber awareness training that the Board regularly receives.
Added
These and other tools allow us to more effectively assess the cybersecurity risks presented by the rapidly evolving technological landscape and to evaluate the potential vulnerabilities that these threats may attempt to generate and exploit. We are also aware of the cybersecurity risks inherent in the use of third-party service providers.
Added
The Audit Committee is responsible for, in part, (i) reviewing and monitoring emerging cybersecurity developments and threats; (ii) evaluating the risks such developments and threats pose to our systems, data, finances, and other components of our business; (iii) ensuring compliance with cyber-related legal, regulatory, and other disclosure requirements; and (iv) assessing the Company’s network security and information security policies and practices, risk mitigation strategies, and related internal controls.
Added
Management’s Cybersecurity Role Our management is responsible for the day-to-day assessment and management of cybersecurity risks. Members of our senior management, comprising our Compliance Committee, regularly monitor and evaluate cybersecurity risks and trends, and report any material developments to the Audit Committee of the Board, including through delivery of periodic reports and presentations as described above.

Item 2. Properties

Properties — owned and leased real estate

10 edited+1 added−3 removed2 unchanged
ITEM 2. PROPERTIES The following is a summary as of December 31, 2024 of the physical properties owned or leased by our businesses that we consider materially important to those businesses. 70 5.11 5.11 is headquartered in Costa Mesa, California and leases offices and warehouse space in locations worldwide. The summary below outlines 5.11's primary leased offices and warehouse space.
ITEM 2. PROPERTIES The following is a summary as of December 31, 2025 of the physical properties owned or leased by our businesses that we consider materially important to those businesses. 5.11 5.11 is headquartered in Costa Mesa, California and leases offices and warehouse space in locations worldwide. The summary below outlines 5.11's primary leased offices and warehouse space.
Sterno owns manufacturing and production facilities in Memphis, Tennessee and Texarkana, Texas. All other p roperties are leased. The summary below outlines Sterno's primary property locations.
Sterno owns manufacturing and production facilities in Memphis, Tennessee, Texarkana, Texas and LaPorte, Indiana. All other p roperties are leased. The summary below outlines Sterno's primary property locations.
The summary below outlines PrimaLoft's primary leased office space. Location Square Feet Use Latham, NY 13,321 Corporate Office Xiamen, China 6,347 Office 71 The Honey Pot Co. The Honey Pot Co. is headquartered in Atlanta, Georgia and leases office space of approximately 10,000 square feet. Velocity Outdoor Velocity's Ravin subsidiary leases an 85,000 square foot manufacturing facility in Superior, Wisconsin.
The summary below outlines PrimaLoft's primary leased office space. Location Square Feet Use Latham, NY 13,208 Corporate Office Xiamen, China 6,347 Office 68 The Honey Pot Co. The Honey Pot Co. is headquartered in Atlanta, Georgia and leases office space of approximately 10,000 square feet. Velocity Outdoor Velocity's Ravin subsidiary leases an 85,000 square foot manufacturing facility in Superior, Wisconsin.
Petersburg, Florida 79,503 Manufacturing/Warehouse Vernon, California 100,545 Manufacturing/Warehouse Waxahachie, Texas 198,450 Manufacturing/Warehouse Rosa Jaurequi, Mexico 100,000 Manufacturing/Warehouse Tijuana, Mexico 60,000 Manufacturing/Warehouse Arnold Arnold is headquartered in Rochester, New York and has eleven manufacturing facilities. Arnold owns the Ogallala, NE and the Greenville, OH locations. All other locations are leased. The summary below outlines Arnold's primary property locations.
Petersburg, Florida 91,588 Manufacturing/Warehouse Vernon, California 91,645 Manufacturing/Warehouse Waxahachie, Texas 198,450 Manufacturing/Warehouse Rosa Jaurequi, Mexico 100,000 Manufacturing/Warehouse Tijuana, Mexico 60,000 Manufacturing/Warehouse Arnold Arnold is headquartered in Rochester, New York and has eleven manufacturing facilities. Arnold owns the Ogallala, NE and the Greenville, OH locations. All other locations are leased. The summary below outlines Arnold's primary property locations.
Location Square Feet Use Costa Mesa, CA 39,650 Office Manteca, CA 400,000 Warehouse Bankstown, Australia 10,387 Office Malmo, Sweden 8,751 Office Kowloon Bay, Hong Kong, China 17,759 Office In addition, at December 31, 2024, 5.11 leased space for 122 retail stores, ranging in size from 3,250 square feet to 10,000 square feet, with an average square footage of 5,000 square feet.
Location Square Feet Use Costa Mesa, CA 39,650 Office Manteca, CA 400,000 Warehouse Bankstown, Australia 10,387 Office Malmo, Sweden 6,049 Office Kowloon Bay, Hong Kong, China 17,759 Office In addition, at December 31, 2025, 5.11 leased space for 123 retail stores, ranging in size from 3,250 square feet to 10,000 square feet, with an average square footage of 5,000 square feet.
Location Square Feet Use Marietta, OH 81,000 Office/Warehouse Norfolk, NE 109,000 Office/Warehouse Rochester, NY 73,000 Office/Warehouse Ogallala, NE 25,000 Office/Warehouse Greenville, OH 70,908 Office/Warehouse Woodstock, IL 124,995 Office/Warehouse 72 Middleton, WI 10,616 Office/Warehouse Sheffield, England 25,000 Office/Warehouse Lupfig, Switzerland 52,937 Office/Warehouse Guangdong Province, China 113,302 Office/Warehouse ChonBuri, Thailand 37,673 Office/Warehouse Sterno Sterno is headquartered in Plano, Texas.
Location Square Feet Use Marietta, OH 81,000 Office/Warehouse Norfolk, NE 109,000 Office/Warehouse Rochester, NY 73,000 Office/Warehouse Ogallala, NE 25,000 Office/Warehouse Greenville, OH 70,908 Office/Warehouse Woodstock, IL 124,995 Office/Warehouse Middleton, WI 10,616 Office/Warehouse Sheffield, England 25,000 Office/Warehouse 69 Lupfig, Switzerland 64,734 Office/Warehouse Guangdong Province, China 113,302 Office/Warehouse ChonBuri, Thailand 37,673 Office/Warehouse Sterno Sterno is headquartered in Texarkana, Texas.
BOA BOA is headquartered in Denver, Colorado and leases offices and warehouse space in locations worldwide. The summary below outlines BOA's primary leased offices and warehouse space. Location Square Feet Use Denver, CO 88,000 Office Mondsee, Austria 15,714 Office Hong Kong, China 10,000 Office/Warehouse Lugano Lugano is headquartered in Newport Beach, California.
BOA BOA is headquartered in Denver, Colorado and leases offices and warehouse space in locations worldwide. The summary below outlines BOA's primary leased offices and warehouse space. Location Square Feet Use Denver, CO 88,000 Office Mondsee, Austria 15,714 Office Hong Kong, China 10,000 Office/Warehouse PrimaLoft PrimaLoft is headquartered in Latham, New York.
Location Square Feet Use Plano, TX 4,356 Corporate Office Memphis, TN 196,200 Manufacturing Texarkana, TX 337,700 Manufacturing La Porte, IN 20,000 Office/ Manufacturing Provo, UT 171,361 Office/Warehouse Spanish Fork, UT 585,904 Warehouse Bentonville, AR 3,000 Office Corporate Our corporate offices are located in Westport, Connecticut and Costa Mesa, California, where we utilize space provided by our Manager.
Location Square Feet Use Memphis, TN 193,390 Office/Manufacturing Texarkana, TX 332,871 Office/Manufacturing La Porte, IN 15,000 Office/ Manufacturing Provo, UT 171,361 Office/Warehouse Spanish Fork, UT 585,904 Warehouse Bentonville, AR 3,000 Office Corporate Our corporate offices are located in Westport, Connecticut and Costa Mesa, California, where we utilize space provided by our Manager.
Location Square Feet Use Anderson, South Carolina 133,250 Manufacturing/Warehouse Belcamp, Maryland 337,865 Manufacturing/Warehouse Bloomsburg, Pennsylvania 54,000 Manufacturing/Warehouse Compton, California 44,000 Manufacturing/Warehouse El Dorado Springs, Missouri 38,000 Manufacturing/Warehouse Fort Madison, Iowa 114,000 Manufacturing/Warehouse Gnadenhutten, Ohio 98,200 Manufacturing/Warehouse Huntington Beach, California 11,000 Manufacturing/Warehouse Jackson, Tennessee 55,000 Manufacturing/Warehouse Jefferson, Georgia 60,000 Manufacturing/Warehouse Keller, Texas 131,073 Manufacturing/Warehouse Modesto, California 53,022 Manufacturing/Warehouse New Albany, Indiana 65,000 Manufacturing/Warehouse North Andover, Massachusetts 248,500 Manufacturing/Warehouse Northbridge, Massachusetts 380,000 Manufacturing/Warehouse Plymouth, Wisconsin 248,000 Manufacturing/Warehouse Rome, Georgia 170,884 Manufacturing/Warehouse Springfield, Tennessee 34,895 Manufacturing/Warehouse St.
Location Square Feet Use Anderson, South Carolina 133,250 Manufacturing/Warehouse Belcamp, Maryland 337,865 Manufacturing/Warehouse Bloomsburg, Pennsylvania 54,000 Manufacturing/Warehouse El Dorado Springs, Missouri 38,000 Manufacturing/Warehouse Fort Madison, Iowa 114,000 Manufacturing/Warehouse Newcomerstown, Ohio 120,000 Manufacturing/Warehouse Huntington Beach, California 11,000 Manufacturing/Warehouse Jackson, Tennessee 55,000 Manufacturing/Warehouse Keller, Texas 131,073 Manufacturing/Warehouse Chesterfield, Missouri 10,397 Corporate Office New Albany, Indiana 65,000 Manufacturing/Warehouse North Andover, Massachusetts 248,500 Manufacturing/Warehouse Plymouth, Wisconsin 248,000 Manufacturing/Warehouse Rome, Georgia 170,884 Manufacturing/Warehouse Springfield, Tennessee 34,895 Manufacturing/Warehouse St.
Its King's Camo subsidiary leases a 14,000 square foot manufacturing facility in Lindon, Utah. Altor Solutions Altor is headquartered in St. Louis, Missouri and operat es 23 moldi ng and fabricating facilities across North America. Altor owns the New Albany, IN, Bloomsburg, PA and El Dorado Springs, MO locations. All other locations are leased.
Its King's Camo subsidiary leases a 14,000 square foot manufacturing facility in Lindon, Utah. Altor Solutions Altor is headquartered in St. Louis, Missouri and operat es 19 moldi ng and fabricating facilities across North America.
Removed
The summary below outlines Lugano's primary leased office space and retail locations.
Added
Altor owned the New Albany, IN, Bloomsburg, PA and El Dorado Springs, MO locations at December 31, 2025 but entered into a sale-leaseback arrangement for these properties subsequent to year-end. All other locations are leased. The summary below outlines Altor's primary property locations.
Removed
Location Square Feet Use Newport Beach, CA 46,170 Corporate office and Retail salon Chicago, IL 15,769 Retail salon London, UK 3,600 Office and Retail salon Palm Beach, FL 4,528 Retail salon Greenwich, CT 3,509 Retail salon Aspen, CO 1,463 Retail salon Ocala, FL 2,014 Retail salon Houston, TX 1,069 Retail salon Washington, DC 2,971 Retail salon PrimaLoft PrimaLoft is headquartered in Latham, New York.
Removed
The summary below outlines Altor's primary property locations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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In June of 2016, the parties entered into a consent order (as amended and restated up and through the date hereof, the “Consent Order”). 300 West, at its expense, connected residents whose drinking water was impacted by the alleged release to the City of Marengo’s public water supply, as required by the Consent Order.
In June of 2016, the parties entered into a consent order (as amended and restated up to and through the date hereof, the “Consent Order”). 300 West, at its expense, connected residents whose drinking water was impacted by the alleged release to the City of Marengo’s public water supply, as required by the Consent Order.
The Consent Order also requires Arnold and 300 West to submit to the Illinois Environmental Protection Agency ("IEPA") a comprehensive plan detailing steps to be taken by 300 West and Arnold to remediate on- and off-site soil and groundwater contamination. Discussions between Arnold and 300 West and the IEPA regarding the remediation plan are ongoing.
The Consent Order also requires Arnold and 300 West to submit to the Illinois Environmental Protection Agency ("IEPA") a comprehensive plan detailing steps to be 70 taken by 300 West and Arnold to remediate on- and off-site soil and groundwater contamination. Discussions between Arnold and 300 West and the IEPA regarding the remediation plan are ongoing.
Since 2008, Arnold and 300 West have been a part of the Illinois Remediation Program with respect to the Site. In the Marengo Litigation, the State of Illinois claimed that 300 West and Arnold discharged Chlorinated volatile organic compounds into the groundwater on-Site, which has since migrated off-Site into private drinking wells.
Since 2008, Arnold and 300 West have been a part of the Illinois Remediation Program with respect to the Site. In the Marengo Litigation, the State of Illinois claimed that 300 West and Arnold discharged chlorinated volatile organic compounds into the groundwater onsite, which has since migrated off-Site into private drinking wells.
In June 2024, Arnold issued a notice to 300 West to terminate its lease for the Marengo site and subsequently moved to a new location in Woodstock, Illinois. Arnold and 300 West are still in discussion regarding maintenance and repair to the Marengo property.
In June 2024, Arnold issued a notice to 300 West to terminate its lease for the Marengo site and subsequently moved to a new location in Woodstock, Illinois. Arnold and 300 West are still in discussion regarding maintenance and repair to the Marengo property. The Marengo lease ended on December 31, 2024.
The Marengo lease ended on December 31, 2024. 73 Certain damages incurred by Arnold in connection with the Marengo Litigation are subject to indemnification pursuant to the Stock Purchase Agreement, among SPS Technologies, LLC (“SPS”), SPS Technologies Limited (“SPS Ltd.”), Precision Castparts Corp.
Certain damages incurred by Arnold in connection with the Marengo Litigation are subject to indemnification pursuant to the Stock Purchase Agreement, among SPS Technologies, LLC (“SPS”), SPS Technologies Limited (“SPS Ltd.”), Precision Castparts Corp.
ITEM 3. LEGAL PROCEEDINGS In the normal course of business, we are involved in various claims and legal proceedings. While the ultimate resolution of these matters has yet to be determined, we do not believe that their outcome will have a material adverse effect on our financial position or results of operations.
ITEM 3. LEGAL PROCEEDINGS In the normal course of business, we are involved in various claims and legal proceedings.
Added
In addition, we are involved in legal proceedings and are subject to requests for information, investigations and inquiries arising from or relating to the Lugano Investigation, the restatement of our previously issued financial statements, our delayed periodic reporting in 2025, and related financing and disclosure matters.
Added
These matters include securities class action lawsuits and derivative actions that were commenced against the Company, as well as litigation and claims involving Lugano. These proceedings, investigations and inquiries are in varying stages and are inherently uncertain.
Added
We may incur substantial costs in connection with the defense, settlement or resolution of these matters, and the outcome of any such matters may adversely affect our business, financial condition, results of operations and cash flows.
Added
Additional information regarding these matters, including the nature of the claims asserted, the relief sought, and, where applicable, our current assessment of reasonably possible losses, is included in “ Note P—Commitments and Contingencies ” to the consolidated financial statements included elsewhere in this Form 10-K.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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COMPARATIVE PERFORMANCE OF SHARES OF TRUST COMMON STOCK The performance graph shown below compares the change in cumulative total shareholder return on common shares of Trust stock with the NYSE Composite Index and the NYSE Financial Sector Index for the previous five years, through the year ended December 31, 2024.
COMPARATIVE PERFORMANCE OF SHARES OF TRUST COMMON STOCK The performance graph shown below compares the change in cumulative total shareholder return on common shares of Trust stock with the NYSE Composite Index and the NYSE Financial Sector Index for the previous five years, through the year ended December 31, 2025.
The common cash distributions should generally constitute “qualified dividends” for U.S. federal income tax purposes to the extent paid from “earnings and profits” (as determined under U.S. federal income tax principles), provided that the requisite holding period is met.
The common cash distributions should generally constitute “qualified dividends” for U.S. federal income tax purposes t o the extent paid from “earnings and profits” (as determined under U.S. federal income tax principles), provided that the requisite holding period is met.
The Company plans to continue to declare and pay quarterly cash distributions on all outstanding shares through fiscal 2025, however, the Board has full authority and discretion to determine whether or not a distribution by the Company should be declared and paid to the Trust and in turn to our shareholders, as well as the amount and timing of any distribution.
The Company expects cash distributions will exceed earnings and profits in the 2025 taxable year. The Board has full authority and discretion to determine whether or not a distribution by the Company should be declared and paid to the Trust and in turn to our shareholders, as well as the amount and timing of any distribution.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common shares of Trust stock has traded on the New York Stock Exchange (the “NYSE”) under the symbol “CODI”. Common Stock Holders On December 31, 2024 there were 15 shareholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common shares of Trust stock have traded on NYSE under the symbol “CODI”.
Year ended December 31, Data 2019 2020 2021 2022 2023 2024 Compass Diversified Holdings $ 100.00 $ 84.50 $ 145.03 $ 90.35 $ 116.99 $ 125.79 NYSE Composite Index $ 100.00 $ 106.99 $ 129.11 $ 117.04 $ 133.16 $ 154.19 NYSE Financial Sector Index $ 100.00 $ 97.82 $ 122.65 $ 107.05 $ 125.46 $ 186.97 75 Distributions During each of the years ended December 31, 2024, December 31, 2023 and December 31, 2022, we declared and paid cash distributions of $1.00 to our common shareholders.
Year ended December 31, Data 2020 2021 2022 2023 2024 2025 Compass Diversified Holdings $ 100.00 $ 171.63 $ 106.92 $ 138.45 $ 148.86 $ 31.79 72 NYSE Composite Index $ 100.00 $ 120.68 $ 109.39 $ 124.46 $ 144.12 $ 169.62 NYSE Financial Sector Index $ 100.00 $ 125.39 $ 109.44 $ 128.26 $ 159.96 $ 194.46 Distributions During the year ended December 31, 2025 we declared and paid cash distributions of $0.50 to our common shareholders.
Removed
The Company expects cash distributions will exceed earnings and profits in the 2024 taxable year.
Added
In January 2026, the NYSE notified the Company that it was not in compliance with certain NYSE corporate governance listing standards due to the Company’s failure to hold an annual meeting during fiscal 2025, and a “.BC” indicator was appended to the Company’s ticker symbols. The Company intends to regain compliance by holding an annual meeting as soon as practicable.
Removed
The Board may, based on their review of our financial condition and results of operations and any future changes to our tax structure, determine to modify future distributions.
Added
During 2025, the Company also received NYSE notices related to the timing of periodic report filings, which was resolved through the filing with the SEC of the Company’s Forms 10-Q for the periods ended March 31, June 30, and September 30, 2025. Common Stock Holders On December 31, 2025 there were 13 shareholders of record of our common stock.
Removed
Recent Sales of Unregistered Securities None Issuer Purchases of Equity Securities The following table presents the total number of shares of common stock purchased during the quarter ended December 31, 2024, the average price paid per share, the number of shares that were purchased as part of a publicly announced repurchase program, if any, and the approximate dollar value of the maximum number of shares that may yet be purchased under the share repurchase program: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1 - October 31, 2024 — N/a N/a N/a November 1 - November 30, 2024 234,290 $ 22.99 234,290 $ 94,600,000 December 1 - December 31, 2024 182,030 $ 23.45 182,030 $ 90,300,000 Total 416,320 $ 23.19 416,320 $ 90,300,000 (1) In October 2024, the Board approved a share repurchase program authorizing the Company to repurchase, through December 31, 2024, up to $100 million of outstanding common shares of the Trust.
Added
The common share distribution was suspended by the Board of Directors of the Company in May 2025 and no common distributions were paid after April 2025. During the year ended December 31, 2024 and December 31, 2023, we declared and paid cash distributions of $1.00 to our common shareholders.
Removed
All common shares repurchased during the fourth quarter of 2024 were repurchased pursuant to this publicly-announced share repurchase program. (2) As of December 31, 2024, the publicly-announced share repurchase program expired. ITEM 6. [Reserved] 76
Added
In light of the Lugano Investigation and related matters, on May 27, 2025, the Company announced that it suspended the quarterly cash distribution historically paid to common shareholders in order to preserve cash and protect long-term value until such time as the Company’s board of directors deems it appropriate to resume such distributions.
Added
Recent Sales of Unregistered Securities None Issuer Purchases of Equity Securities None ITEM 6. [Reserved] 73

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Item 6. [Reserved] 76 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 77 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 121 Item 8. Financial Statements and Supplementary Data 122 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 123 Item 9A. Controls and Procedures 124 Item 9B.
Item 6. [Reserved] 73 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 74 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 119 Item 8. Financial Statements and Supplementary Data 120 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 121 Item 9A. Controls and Procedures 122 Item 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Subsequent to the IPO the Board engaged our Manager to externally manage the day-to-day operations and affairs of the Company, oversee the management and operations of the businesses and to perform those services customarily performed by executive officers of a public company.
Subsequent to the IPO the Board engaged our Manager to externally manage the day-to-day operations and affairs of the Company, oversee the management and operations of the businesses and perform those services customarily performed by executive officers of a public company.
Cash flows coming to the Trust and the Company are the result of interest payments on those loans, amortization of those loans and additional principal payments on those loans. However, on a consolidated basis these items will be eliminated.
Cash flows coming to the Trust and the Company are the result of interest payments on those loans, amortization of those loans and additional principal payments on those loans. However, on a consolidated basis these items will be eliminated.
It is also affected by discrete items that may occur in any given year but are not consistent from year to year.
It is also affected by discrete items that may occur in any given year but are not consistent from year to year.
The results of the qualitative analysis indicated that it was more-likely-than-not that the fair value of each of our reporting units except Velocity exceeded their carrying value.
The results of the qualitative analysis indicated that it was more-likely-than-not that the fair value of each of our reporting units except Velocity exceeded their carrying value.
Adjusted EBITDA is calculated utilizing the same calculation as described in arriving at EBITDA further adjusted by: (i) non-controlling stockholder compensation, which generally consists of non-cash stock option expense; (ii) successful acquisition costs, which consist of transaction costs (legal, accounting, due diligence, etc.) incurred in connection with the successful acquisition of a business expensed during the period in compliance with ASC 805; (iii) impairment charges, which reflect write downs to goodwill or other intangible assets; (iv) changes in the fair value of contingent consideration subsequent to initial purchase accounting, (v) integration service fees, which reflect fees paid by newly acquired companies to the Manager for integration services performed during the first year of ownership; and (vi) items of other income or expense that are material to a subsidiary and non-recurring in nature.
Adjusted EBITDA is calculated utilizing the same calculation as described in arriving at EBITDA further adjusted by: (i) non-controlling stockholder compensation, which generally consists of non-cash stock option expense; (ii) successful acquisition costs, which consist of transaction costs (legal, accounting, due diligence, etc.) incurred in connection with the successful acquisition of a business expensed during the period in compliance with ASC 805 - Business Combinations ; (iii) impairment charges, which reflect write downs to goodwill or other intangible assets; (iv) changes in the fair value of contingent consideration subsequent to initial purchase accounting, (v) integration service fees, which reflect fees historically paid by newly acquired companies to the Manager for integration services performed during the first year of ownership; and (vi) items of other income or expense that are material to a subsidiary and non-recurring in nature.
Accordingly, we are dependent upon the earnings and cash flow of these businesses, which are available for (i) operating expen ses; (ii) payment of interest and principal on our outstanding debt; (iii) payments to CGM due or potentially due pursuant to the MSA and the LLC Agreement; (iv) cash distributio ns to our shareholders; and (v) pursuing future acquisitions.
Accordingly, we are dependent upon the earnings and cash flow of these businesses, which are available for (i) operating expen ses; (ii) payment of interest and principal on our outstanding debt; (iii) payments to CGM and Sostratus due or potentially due pursuant to the MSA and the LLC Agreement; (iv) cash distributio ns to our shareholders; and (v) pursuing future acquisitions.
(3) The total purchase price does not reflect add-on acquisitions made by our businesses subsequent to their purchase by the Company unless indicated. (4) FOX completed an IPO of its common stock in August 2013 in which we sold a 22% interest in FOX, reducing our ownership interest to 53.9%.
(3) The total purchase price does not reflect add-on acquisitions made by our businesses subsequent to their purchase by the Company unless indicated. 75 (4) FOX completed an IPO of its common stock in August 2013 in which we sold a 22% interest in FOX, reducing our ownership interest to 53.9%.
Dispositions Business Date of Disposition Sale Price CODI Proceeds from Disposition (1) Gain (loss) recognized (2) Crosman January 5, 2007 $ 143,000 $ 109,600 $ 35,800 Aeroglide June 24, 2008 $ 95,000 $ 78,500 $ 33,700 Silvue June 25, 2008 $ 95,000 $ 63,600 $ 39,600 Staffmark October 17, 2011 $ 295,000 $ 216,000 $ 88,500 Halo May 1, 2012 $ 76,500 $ 66,500 $ (300) CamelBak August 3, 2015 $ 412,500 $ 367,800 $ 158,300 American Furniture October 5, 2015 $ 24,100 $ 23,500 $ (14,100) Tridien September 21, 2016 $ 25,000 $ 22,700 $ 1,700 FOX * * $ 526,600 $ 428,700 Manitoba Harvest (3) February 28, 2019 $ 294,300 $ 219,700 $ 121,700 Clean Earth June 28, 2019 $ 625,000 $ 560,520 $ 217,900 Liberty August 3, 2021 $ 147,500 $ 129,600 $ 73,700 Advanced Circuits February 14, 2023 $ 220,000 $ 173,000 $ 106,900 Marucci Sports November 14, 2023 $ 572,000 $ 487,320 $ 244,700 Ergobaby December 27, 2024 $ 104,000 $ 99,100 $ 6,100 (1) CODI portion of the net proceeds from disposition includes debt and equity proceeds and reflects the accounting for the redemption of the sold business's minority shareholders and transaction expenses.
Dispositions Business Date of Disposition Sale Price CODI Proceeds from Disposition (1) Gain (loss) recognized (2) Crosman January 5, 2007 $ 143,000 $ 109,600 $ 35,800 Aeroglide June 24, 2008 $ 95,000 $ 78,500 $ 33,700 Silvue June 25, 2008 $ 95,000 $ 63,600 $ 39,600 Staffmark October 17, 2011 $ 295,000 $ 216,000 $ 88,500 Halo May 1, 2012 $ 76,500 $ 66,500 $ (300) CamelBak August 3, 2015 $ 412,500 $ 367,800 $ 158,300 American Furniture October 5, 2015 $ 24,100 $ 23,500 $ (14,100) Tridien September 21, 2016 $ 25,000 $ 22,700 $ 1,700 FOX * * $ 526,600 $ 428,700 Manitoba Harvest (3) February 28, 2019 $ 294,300 $ 219,700 $ 121,700 Clean Earth June 28, 2019 $ 625,000 $ 560,520 $ 217,900 Liberty August 3, 2021 $ 147,500 $ 129,600 $ 73,700 Advanced Circuits February 14, 2023 $ 220,000 $ 173,000 $ 106,900 Marucci Sports November 14, 2023 $ 572,000 $ 487,320 $ 244,700 Ergobaby December 27, 2024 $ 104,000 $ 102,750 $ 6,100 (1) CODI portion of the net proceeds from disposition includes debt and equity proceeds and reflects the accounting for the redemption of the sold business's minority shareholders and transaction expenses.
The discount rate used in the income approach was 11.3%. The results of the quantitative impairment testing indicated that the fair value of the PrimaLoft reporting unit did not exceed its carrying value, resulting in goodwill impairment expense of $57.8 million in the year ended December 31, 2023 at 119 PrimaLoft.
The discount rate used in the income approach was 11.3%. The results of the quantitative impairment testing indicated that the fair value of the PrimaLoft reporting unit did not exceed its carrying value, resulting in goodwill impairment expense of $57.8 million in the year ended December 31, 2023 at PrimaLoft.
The company offers an extensive range of holistic wellness products across the feminine hygiene, menstrual, personal care, and sexual wellness categories. The Honey Pot Co.'s mission is to educate, support, and provide consumers around the world with tools and resources that promote menstrual health and vaginal wellness.
The Honey Pot Co. offers an extensive range of holistic wellness products across the feminine hygiene, menstrual, personal care, and sexual wellness categories. The Honey Pot Co.'s mission is to educate, support, and provide consumers around the world with tools and resources that promote menstrual health and vaginal wellness.
Altor is strategically repositioning itself to adapt to these changes, including with the acquisition of Lifoam in October 2024. 96 Gross profit Gross profit as a percentage of net sales was 27.7% and 30.9%, respectively, for the years ended December 31, 2024 and 2023.
Altor is strategically repositioning itself to adapt to these changes, including with the acquisition of Lifoam in October 2024. Gross profit Gross profit as a percentage of net sales was 27.7% and 30.9%, respectively, for the years ended December 31, 2024 and 2023.
Results of Operations — Our Businesses We categorize the businesses we own into two separate groups of businesses (i) branded consumer businesses, and (ii) industrial businesses. Branded consumer businesses are characterized as those businesses that we believe capitalize on a valuable brand name in their respective market sector.
Results of Operations — Our Businesses We categorize the businesses we own into two separate groups of businesses (i) branded consumer businesses, and (ii) industrial businesses. Branded consumer businesses are characterized as those businesses that we believe 84 capitalize on a valuable brand name in their respective market sector.
Selling, general and administrative expense Selling, general and administrative expense in the year ended December 31, 2024 was $35.6 million as compared to approximately $25.2 million for the year ended December 31, 2023. The increase in selling general and administrative expense was related to non-recurring move related expenses, increased information technology costs and outside service costs.
Selling, general and administrative expense Selling, general and administrative expense in the year ended December 31, 2024 was $35.6 million as compared to approximately $25.2 million for the year ended December 31, 2023. The increase in selling general and 95 administrative expense was related to non-recurring move related expenses, increased information technology costs and outside service costs.
The impairment test resulted in Velocity recording impairment expense of $31.6 million in the year ended December 31, 2023. Segment operating loss Segment operating loss for the year ended December 31, 2024 was $14.2 million, a decreased loss of $18.7 million when compared to segment operating loss of $32.8 million for the comparable period in 2023.
The impairment test resulted in Velocity recording impairment expense of $31.6 million in the year ended December 31, 2023. 92 Segment operating loss Segment operating loss for the year ended December 31, 2024 was $14.2 million, a decreased loss of $18.7 million when compared to segment operating loss of $32.8 million for the comparable period in 2023.
Related Party Transactions and Certain Transactions Involving our Businesses We have entered into related party transactions with our Manager, CGM including the following: • Management Services Agreement • LLC Agreement • Integration Services Agreements • Cost Reimbursement and Fees Management Services Agreement We entered into the MSA with CGM effective May 16, 2006.
Related Party Transactions and Certain Transactions Involving our Businesses We have entered into related party transactions with our Manager, CGM, and Sostratus LLC, including the following: • Management Services Agreement • LLC Agreement • Integration Services Agreements • Cost Reimbursement and Fees Management Services Agreement We entered into the MSA with CGM effective May 16, 2006.
The BOA Credit Agreement was amended to provide for additional term loan borrowings of $165.9 million to fund a distribution to 117 shareholders. The LLC received a distribution of $131.0 million related to their ownership of the outstanding shares of BOA on the date of the distribution.
The BOA Credit Agreement was amended to provide for additional term loan borrowings of $165.9 million to fund a distribution to shareholders. The LLC received a distribution of $131.0 million related to their ownership of the outstanding shares of BOA on the date of the distribution.
Gross profit Gross profit was $119.2 million for the year ended December 31, 2024 as compared to $93.0 million for the year ended December 31, 2023. Gross profit as a percentage of net sales was 62.5% for the year ended December 31, 88 2024 compared to 59.7% for the same period in 2023.
Gross profit Gross profit was $119.2 million for the year ended December 31, 2024 as compared to $93.0 million for the year ended December 31, 2023. Gross profit as a percentage of net sales was 62.5% for the year ended December 31, 2024 compared to 59.7% for the same period in 2023.
In the first quarter of 2024, we amended the PrimaLoft intercompany credit agreement to amend the fixed charge ratio and leverage ratio covenants contained within its intercompany credit agreement. 104 In the second quarter of 2024, we amended the Velocity intercompany credit agreement to reflect the sale of the Crosman division.
In the first quarter of 2024, we amended the PrimaLoft intercompany credit agreement to amend the fixed charge ratio and leverage ratio covenants contained within its intercompany credit agreement. In the second quarter of 2024, we amended the Velocity intercompany credit agreement to reflect the sale of the Crosman division.
This judgment could result in either a higher or lower value assigned to our reporting units and intangible assets. The impact could result in either higher or lower amortization and/or the incurrence of an impairment charge.
This judgment could result in either a higher or lower 117 value assigned to our reporting units and intangible assets. The impact could result in either higher or lower amortization and/or the incurrence of an impairment charge.
Additional risks of which we are not currently aware or which we currently deem immaterial could also cause our actual results to differ, including those discussed in the sections entitled “Forward-Looking Statements” and “Risk Factors” included elsewhere in this Annual Report. Overview Compass Diversified Holdings, a Delaware statutory trust, was incorporated in Delaware on November 18, 2005.
Additional risks of which we are not currently aware or which we currently deem immaterial could also cause our actual results to differ, including those discussed in the sections entitled “Forward-Looking Statements” and “Risk Factors” included elsewhere in this Annual Report. Overview Compass Diversified Holdings, a Delaware statutory trust, was formed in Delaware on November 18, 2005.
Gross profit as a percentage of net sales for the year ended December 31, 2024 was 50.0%, as compared to gross profit as a percentage of sales of 55.8% for the year ended December 31, 2023.
Gross profit as a percentage of net sales for the year ended December 31, 2024 was 50.0%, 90 as compared to gross profit as a percentage of sales of 55.8% for the year ended December 31, 2023.
Selling, general and administrative expense Selling, general and administrative expense for the year ended December 31, 2024 was approximately $38.1 million as compared to $36.7 million in the year ended December 31, 2023, an increase of $1.4 million or 3.8%, reflecting an increase in sales and marketing related salaries and promotional activity for both divisions of the company in the current year.
Selling, general and administrative expense Selling, general and administrative expense for the year ended December 31, 2024 was approximately $38.1 million as compared to $36.7 million in the year ended December 31, 2023, an increase of $1.4 million or 3.8%, reflecting an increase in sales and marketing related salaries and promotional activity for both divisions of Sterno in the current year.
If qualitative factors are not sufficient to determine that the fair value of a reporting unit is more likely 118 than not to exceed its carrying value, we will perform a quantitative test at the reporting unit whereby we estimate the fair value of the reporting unit using an income approach or market approach, or a weighting of the two methods.
If qualitative factors are not sufficient to determine that the fair value of a reporting unit is more likely 115 than not to exceed its carrying value, we will perform a quantitative test at the reporting unit whereby we estimate the fair value of the reporting unit using an income approach or market approach, or a weighting of the two methods.
Adjusted Earnings –– Adjusted earnings is calculated as net income (loss) adjusted to include the cost of the distributions to preferred shareholders, and adjusted to exclude the impact of certain costs, expenses, gains and 108 losses and other specified items the exclusion of which management believes provides insight regarding our ongoing operating performance.
Adjusted Earnings –– Adjusted earnings is calculated as net income (loss) adjusted to include the cost of the distributions to preferred shareholders, and adjusted to exclude the impact of certain costs, expenses, gains and 104 losses and other specified items the exclusion of which management believes provides insight regarding our ongoing operating performance.
Arnold engineers solutions for and produces high performance permanent magnets (PMAG), stators, rotors and full electric motors ("Ramco"), precision foil products (Precision Thin Metals or "PTM"), and flexible magnets (Flexmag™) that are mission critical in motors, generators, sensors and other systems and components.
Arnold engineers solutions for and produces high performance permanent magnets (PMAG), stators, rotors and full electric motors (Ramco), precision foil products (Precision Thin Metals), and flexible magnets (Flexmag™) that are mission critical in motors, generators, sensors and other systems and components.
The increase in gross profit as a percentage of net revenues in the year ended December 31, 2024 as compared to the year ended December 31, 2023 is primarily attributable to the mix of products sold, with increases in net revenue at our higher margin businesses, particularly Lugano .
The increase in gross profit as a percentage of net revenues in the year ended December 31, 2024 as compared to the year ended December 31, 2023 is primarily attributable to the mix of products sold, with increases in net revenue at our higher margin businesses .
The increase in gross profit as a percentage of net revenue during 2024 as compared to 2023 was p rimarily attribut able to favorable direct materials, labor and freight costs across both divisions of the company.
The increase in gross profit as a percentage of net revenue during 2024 as compared to 2023 was p rimarily attribut able to favorable direct materials, labor and freight costs across both divisions of Sterno.
During the year ended December 31, 2024, we saw notable increases in net revenue at BOA ($35.0 million increase), Lugano ($162.3 million increase), PrimaLoft ($7.2 million increase) and Arnold ($5.2 million increase), offset by decreases in net revenue at Velocity ($75.8 million decrease, primarily due to the sale of Crosman, Velocity's airgun division, in April 2024) and Sterno ($5.4 million decrease).
During the year ended December 31, 2024, we saw notable increases in net revenue at BOA ($35.0 million increase), Lugano ($27.2 million increase), PrimaLoft ($7.2 million increase) and Arnold ($5.2 million increase), offset by decreases in net revenue at Velocity ($75.8 million decrease, primarily due to the sale of Crosman, Velocity's airgun division, in April 2024) and Sterno ($5.4 million decrease).
Under the Integration Services Agreement ("ISA"), CGM provides services for new platform acquisitions to, amongst other things, assist the management at the acquired entities in establishing a corporate governance program, implement compliance and reporting requirements of the Sarbanes-Oxley Act of 2002, as amended, and align the acquired entity's policies and procedures with our other subsidiaries.
Under the Integration Services Agreement ("ISA"), CGM provides services for new segment-level acquisitions to, amongst other things, assist the management at the acquired entities in establishing a corporate governance program, implement compliance and reporting requirements of the Sarbanes-Oxley Act of 2002, as amended, and align the acquired entity's policies and procedures with our other subsidiaries.
Segment operating income Segment operating income was $21.7 million for the year ended December 31, 2024 as compared to $34.6 million for the year ended December 31, 2023, an decrease of $12.8 million based on the factors noted above.
Segment operating income Segment operating income was $21.7 million for the year ended December 31, 2024 as compared to $34.6 million for the year ended December 31, 2023, a decrease of $12.8 million based on the factors noted above.
Any incentive management fee paid to the Manager may only be distributed by the Manager among the then-current Employees (as defined in the MSA) of the Manager. Such incentive management fee is 116 subject to approval by the Compensation Committee of the Board.
Any incentive management fee paid to the Manager may only be distributed by the Manager among the then-current Employees (as defined in the MSA) of the Manager. Such incentive management fee is subject to approval by the Compensation Committee of the Company’s Board.
The tables below reflect summarized information relating to our acquisitions and dispositions from the date of our IPO through December 31, 2024 (in thousands): Acquisitions Ownership Interest - December 31, 2024 Business Acquisition Date CODI Purchase Price Primary Diluted CBS Holdings (Staffmark) (1) May 16, 2006 $ 183,200 N/a N/a Crosman (2) May 16, 2006 $ 72,600 N/a N/a Advanced Circuits (3) May 16, 2006 $ 81,000 N/a N/a Silvue May 16, 2006 $ 36,000 N/a N/a Tridien (3) August 1, 2006 $ 31,000 N/a N/a Aeroglide February 28, 2007 $ 58,200 N/a N/a Halo (3) February 28, 2007 $ 62,300 N/a N/a American Furniture August 31, 2007 $ 97,000 N/a N/a FOX (4) January 4, 2008 $ 80,400 N/a N/a Liberty Safe (3) March 31, 2010 $ 70,200 N/a N/a Ergobaby (3) September 16, 2010 $ 85,200 N/a N/a CamelBak August 24, 2011 $ 251,400 N/a N/a Arnold Magnetics (3) March 5, 2012 $ 128,800 98% 85.8% Clean Earth (3) August 7, 2014 $ 251,400 N/a N/a Sterno (3) (5) October 10, 2014 $ 314,400 98.5% 91.6% Manitoba Harvest (3) July 10, 2015 $ 102,700 N/a N/a 5.11 August 31, 2016 $ 408,200 97.6% 86.9% Velocity Outdoor (2) (3) June 2, 2017 $ 150,400 99.4% 93.3% Altor Solutions (3) February 15, 2018 $ 253,400 99.3% 90.2% Marucci Sports (3) April 20, 2020 $ 201,000 N/a N/a BOA October 16, 2020 $ 456,800 91.7% 83% Lugano September 3, 2021 $ 265,100 59.9% 55% PrimaLoft July 12, 2022 $ 541,100 90.7% 84.7% The Honey Pot Co.
The tables below reflect summarized information relating to our acquisitions and dispositions from the date of our IPO through December 31, 2025 (in thousands): Acquisitions Ownership Interest - December 31, 2025 Business Acquisition Date CODI Purchase Price Primary Diluted CBS Holdings (Staffmark) (1) May 16, 2006 $ 183,200 N/a N/a Crosman (2) May 16, 2006 $ 72,600 N/a N/a Advanced Circuits (3) May 16, 2006 $ 81,000 N/a N/a Silvue May 16, 2006 $ 36,000 N/a N/a Tridien (3) August 1, 2006 $ 31,000 N/a N/a Aeroglide February 28, 2007 $ 58,200 N/a N/a Halo (3) February 28, 2007 $ 62,300 N/a N/a American Furniture August 31, 2007 $ 97,000 N/a N/a FOX (4) January 4, 2008 $ 80,400 N/a N/a Liberty Safe (3) March 31, 2010 $ 70,200 N/a N/a Ergobaby (3) September 16, 2010 $ 85,200 N/a N/a CamelBak August 24, 2011 $ 251,400 N/a N/a Arnold Magnetics (3) March 5, 2012 $ 128,800 98% 82.8% Clean Earth (3) August 7, 2014 $ 251,400 N/a N/a Sterno (3) (5) October 10, 2014 $ 314,400 98.4% 92.2% Manitoba Harvest (3) July 10, 2015 $ 102,700 N/a N/a 5.11 August 31, 2016 $ 408,200 97.8% 87.6% Velocity Outdoor (2) (3) June 2, 2017 $ 150,400 99.4% 93.2% Altor Solutions (3) February 15, 2018 $ 253,400 99.3% 90.5% Marucci Sports (3) April 20, 2020 $ 201,000 N/a N/a BOA October 16, 2020 $ 456,800 91.4% 82.8% Lugano September 3, 2021 $ 265,100 * * PrimaLoft July 12, 2022 $ 541,100 90.7% 84.7% The Honey Pot Co.
During the years ended December 31, 2024, 2023 and 2022, 5.11 purchased approximately $1.4 million, $1.7 million, and $2.0 million, respectively, in inventory from the vendor. BOA Recapitalization - In December 2023, we completed a recapitalization at BOA whereby the LLC entered into an amendment to the intercompany loan agreement with BOA (the "BOA Credit Agreement").
During the years ended December 31, 2025, 2024 and 2023, 5.11 purchased approximately $1.0 million, $1.4 million, and $1.7 million, respectively, in inventory from the vendor. BOA Recapitalization - In December 2023, we completed a recapitalization at BOA whereby the LLC entered into an amendment to the intercompany loan agreement with BOA (the "BOA Credit Agreement").
All of our subsidiaries were in compliance with the financial covenants included within their intercompany credit arrangements at December 31, 2024 except Velocity and Arnold. Velocity was issued a waiver for the fourth quarter of 2024 related to the fixed charge coverage ratio in their intercompany credit agreement.
All of our subsidiaries were in compliance with the financial covenants included within their intercompany credit arrangements at December 31, 2025 except Velocity and Arnold. Velocity was issued a waiver for the fourth quarter of 2025 related to the fixed charge coverage ratio and leverage ratio in their intercompany credit agreement.
Altor operates 23 molding and fabricating facilities across North America and provides products to a variety of end-markets, including appliances and electronics, pharmaceuticals, health and wellness, automotive, building products and others.
Altor operates molding and fabricating facilities across North America and provides products to a variety of end-markets, including appliances and electronics, pharmaceuticals, health and wellness, building products and others.
In the following results of operations, we provide (i) our actual Consolidated Results of Operations for the years ended December 31, 2024, 2023 and 2022, which includes the historical results of operations of each of our businesses (operating segments) from the date of acquisition in accordance with generally accepted accounting principles in the United States ("GAAP" or "US GAAP") and (ii) comparative historical components of the results of operations for each of our businesses on a stand-alone basis (“Results of Operations – Our Businesses”), for each of the years ended December 31, 2024, 2023 and 2022, where all years presented include relevant pro-forma adjustments for pre-acquisition periods and explanations where applicable.
In the following results of operations, we provide (i) our actual Consolidated Results of Operations for the years ended December 31, 2025, 2024 and 2023, which includes the historical results of operations of each of our businesses (operating segments) from the date of acquisition in accordance with generally accepted accounting principles in the United States ("GAAP" or "US GAAP") and (ii) comparative historical components of the results of operations for each of our businesses on a standalone basis (“Results of Operations – Our Businesses”), for each of the years ended December 31, 2025, 2024 and 2023, where all years presented include relevant pro-forma adjustments for pre-acquisition periods and explanations where applicable.
The increase in management fees is primarily attributable to our acquisition of The Honey Pot Co. in 2024, and increases in net asset balances at certain of our businesses in the current year.
The increase in management fees is primarily attributable to our acquisition of The Honey Pot Co. in 2024, and increases in net asset balances at certain of our businesses in 2024.
Each unique BOA configuration is designed with brand partners to deliver superior fit and performance for athletes, is engineered to perform in the toughest conditions and is backed by The BOA Lifetime Guarantee. BOA is headquartered in Denver, Colorado and has offices in Austria, China, South Korea, and Japan.
Each unique BOA configuration is designed with brand partners to deliver superior fit and performance for athletes, is engineered to perform in the toughest conditions and is backed by The BOA Lifetime Guarantee. BOA is headquartered in Denver, Colorado and has operations in Austria, China, South Korea, Japan and Vietnam.
Segment operating income (loss) Segment operating income for the year ended December 31, 2024 was $4.0 million compared to segment operating loss of $57.1 million for the same period in 2023, primarily as a result of the goodwill impairment recorded in the fourth quarter of 2023.
Segment operating income (loss) Segment operating income for the year ended December 31, 2024 was $4.0 million compared to segment operating loss of $57.1 million for the same period in 2023, primarily as a result of the goodwill impairment recorded in the fourth quarter of 2023. The Honey Pot Co.
The results of the qualitative analysis indicated that it was more-likely-than-not that the fair value of each of our reporting units exceeded their carrying value.
The results of the qualitative analysis indicated that it was more-likely-than-not that the fair value of each of our reporting units except PrimaLoft exceeded their carrying value.
The LLC agreement gives the holders of Allocation Interests the right to distributions pursuant to a profit allocation formula upon the occurrence of a Sale Event or a Holding Event.
The LLC agreement gives the holder of Allocation Interests the right to distributions pursuant to a profit allocation formula upon the occurrence of a Sale Event or a Holding Event.
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 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 The Honey Pot Co. of $1.3 million for the year ended December 31, 2024 and $16.1 million for the year ended December 31, 2023.
Goodwill and Intangible Assets Goodwill and Indefinite Lived Intangible Assets Goodwill represents the excess amount of the purchase price over the fair value of the assets acquired. Our indefinite-lived intangible assets consist of a trade name with a carrying value of approximately $30.8 million.
Goodwill and Intangible Assets Goodwill and Indefinite Lived Intangible Assets Goodwill represents the excess amount of the purchase price over the fair value of the assets acquired. Our indefinite-lived intangible asset consists of a trade name with a carrying value of approximately $30.8 million.
We saw notable increases in cost of revenues at BOA ($8.8 million increase), Lugano ($49.7 million increase) and Arnold ($8.9 million increase) that correspond to the revenue increases noted above. We also saw a decrease in cost of revenues at Velocity ($57.0 million decrease) and Sterno ($12.1 million decrease) that corresponded to the decrease in revenue noted above.
We saw notable increases in cost of revenues at BOA ($8.8 million increase), Lugano ($6.2 million increase) and Arnold ($8.9 million increase) that correspond to the revenue increases noted above. We also saw a decrease in cost of revenues at Velocity ($57.0 million decrease) and Sterno ($12.1 million decrease) that corresponded to the decrease in revenue noted above.
The 2022 Credit Facility is secured by all of the assets of the Company, including all of its equity interests in, and loans to, its consolidated subsidiaries. At December 31, 2024, we had letters of credit totaling $3.5 million outstanding under the 2022 Revolving Credit Facility.
The 2022 Credit Facility is secured by all of the assets of the Company, including all of its equity interests in, and loans to, its consolidated subsidiaries. At December 31, 2025, we had letters of credit totaling $3.2 million outstanding under the 2022 Revolving Credit Facility.
Cost of revenues On a consolidated basis, cost of revenues increased approximately $65.9 million during the year ended December 31, 2024, compared to the corresponding period in 2023, primarily as a result of the increase in net revenues at certain of our subsidiaries.
Cost of revenues On a consolidated basis, cost of revenues increased approximately $22.4 million during the year ended December 31, 2024, compared to the corresponding period in 2023, primarily as a result of the increase in net revenues at certain of our subsidiaries.
Fees to Manager During the year ended December 31, 2024 and 2023, we paid CGM a quarterly management fee equal to 0.5% (2.0% annually) of our consolidated adjusted net assets. We accrue for the management fee on a quarterly basis.
Fees to Manager During the year ended December 31, 2024 and 2023, we paid CGM a quarterly management fee equal to 0.5% (2.0% annually) of our consolidated adjusted net assets.
Financing activities in 2024 reflects $122.6 million in proceeds from the Trust common and preferred shares issued under our at-the-market share offering programs, and net draws on our 2022 Credit Facility of $100 million.
Financing activities in 2024 reflects $122.6 million in proceeds from the Trust common and preferred shares issued under our at-the-market share equity programs, and net borrowings on our 2022 Credit Facility of $100 million.
For the years ended December 31, 2024, 2023, and 2022, we incurred $74.8 million, $67.9 million, and $62.1 million, respectively, in management fees to CGM. Pursuant to the MSA, CGM is entitled to enter into off-setting management service agreements with each of the operating segments.
For the years ended December 31, 2025, 2024, and 2023, we incurred $17.9 million, $74.8 million, and $67.9 million, respectively, in management fees to CGM. Pursuant to the MSA, CGM is entitled to enter into off-setting management service agreements with each of the operating segments.
We believe that our branded consumer businesses are leaders in their particular category. Industrial businesses are characterized as those businesses that focus on manufacturing and selling particular products or services within a specific market sector. We believe that our industrial businesses are leaders in their specific market sector.
We believe that our branded consumer businesses have leading positions in their particular category. Industrial businesses are characterized as those businesses that focus on manufacturing and selling particular products or services within a specific market sector. We believe that our industrial businesses have leading positions in their specific market sector.
At December 31, 2023, CGM entered into a waiver to exclude cash balances held at the LLC from the calculation of the management fee.
Additionally, CGM had entered into a waiver of the MSA at December 31, 2023 to exclude the cash balances held at the LLC from the calculation of the management fee.
Pursuant to the MSA Amendment, the base management fee will be (i) 2% the Company’s adjusted net assets when the adjusted net assets are less than or equal to $3.5 billion (the “Initial Threshold Fee”), (ii) the Initial Threshold Fee plus 1.25% of the amount of adjusted net assets exceeding $3.5 billion when the adjusted net assets are more than $3.5 billion but less than $10 billion, or (iii) 1.5% of the adjusted net assets when the adjusted net assets are $10 billion or more.
Pursuant to the MSA Amendment, the base management fee will be (i) the Initial Threshold Fee, (ii) the Initial Threshold Fee plus 1.25% of the amount of adjusted net assets exceeding $3.5 billion when the adjusted net assets are more than $3.5 billion but less than $10 billion, or (iii) 1.5% of the adjusted net assets when the adjusted net assets are $10 billion or more.
In pursuing new acquisitions, we seek businesses with the following characteristics: • North American base of operations; • stable and growing earnings and cash flow; • maintains a significant market share in defensible industry niche (i.e., has a “reason to exist”); • solid and proven management team with meaningful incentives; • low technological and/or product obsolescence risk; and • a diversified customer and supplier base.
In pursuing new acquisitions, we seek businesses with the following characteristics: • North American base of operations; • Stable and growing earnings and cashflow; • Significant market share in defensible industry niches (i.e., has a “reason to exist”); • Solid and proven management team with meaningful incentives; • Low technological and/or product obsolescence risk; and • Diversified customer and supplier bases.
Sterno Overview Sterno, headquartered in Plano, Texas, is the parent company of Sterno, LLC ("Sterno Products") and Rimports Inc. ("Rimports"). Sterno is a leading manufacturer and marketer of portable food warming systems. Sterno also produces creative indoor and outdoor lighting and home fragrance solutions for consumer markets.
Sterno Overview Sterno, headquartered in Texarkana, Texas, is the parent company of Sterno and Rimports. Sterno is a leading manufacturer and marketer of portable food warming systems. Sterno also produces creative indoor and outdoor lighting and home fragrance solutions for consumer markets.
Interim Goodwill Impairment Testing 2023 Interim goodwill impairment testing PrimaLoft - As a result of operating results that were below forecast amounts that were used as the basis for the purchase price allocation performed when PrimaLoft was acquired as well as the failure of certain financial covenants in the intercompany credit agreement, we determined that a triggering event had occurred at PrimaLoft in the fourth quarter of 2023 and performed an interim impairment test of goodwill as of December 31, 2023.
The results of the testing indicated that the fair value of Arnold exceeded the carrying value by 77%. 2023 Interim goodwill impairment testing PrimaLoft - As a result of operating results that were below forecast amounts that were used as the basis for the purchase price allocation performed when PrimaLoft was acquired as well as the failure of certain financial covenants in the intercompany credit agreement, we determined that a triggering event had occurred at PrimaLoft in the fourth quarter of 2023 and performed an interim impairment test of goodwill as of December 31, 2023.
Our effective tax rate in the year ended December 31, 2024 was 53.7%, compared to an effective income tax rate of (102.0)% during the same period in 2023. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions.
Our effective tax rate in the year ended December 31, 2024 was (6.0)%, compared to an effective income tax rate of (3.1)% during the same period in 2023. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions.
Cost Reimbursement and Fees We reimbursed CGM approximately $8.8 million, $6.4 million, and $6.5 million, principally for occupancy and staffing costs incurred by CGM on our behalf during the years ended December 31, 2024, 2023 and 2022, respectively.
Cost Reimbursement and Fees We reimbursed CGM approximately $7.0 million, $8.8 million, and $6.4 million, principally for occupancy and staffing costs incurred by CGM on our behalf during the years ended December 31, 2025, 2024 and 2023, respectively.
The Honey Pot Co., which we acquired on January 31, 2024, contributed $104.6 million in net revenues in 2024 post-acquisition. 82 Refer to "Part 2, Item 7 Management’ Discussion and Analysis of Financial Condition and Results of Operations, "Results of Operations - Our Businesses" for a more detailed analysis of net revenue by operating segment.
The Honey Pot Co., which we acquired on January 31, 2024, contributed $104.6 million in net revenues in 2024 post-acquisition. Refer to "Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" under the heading "Results of Operations - Our Businesses" for a more detailed analysis of net revenue by operating segment.
Year Ended December 31, Quarter ended 2024 2023 2022 March 31st 23.0 % 23.5 % 22.8 % June 30th 23.4 % 23.4 % 24.0 % September 30th 25.5 % 25.3 % 26.7 % December 31st 28.2 % 27.7 % 26.5 % Earnings of certain of our operating segments are seasonal in nature due to various recurring events, holidays and seasonal weather patterns, as well as the timing of our acquisitions during a given year.
Year Ended December 31, Quarter ended 2025 2024 2023 March 31st 24.2 % 23.0 % 24.0 % June 30th 25.5 % 23.9 % 24.0 % September 30th 25.2 % 25.5 % 25.3 % December 31st 25.0 % 27.6 % 26.7 % Earnings of certain of our operating segments are seasonal in nature due to various recurring events, holidays and seasonal weather patterns, as well as the timing of our acquisitions during a given year.
In addition to state income taxes, the items with the most significant impact on the difference between our statutory U.S. federal income tax rate of 21% and our effective income tax rate in 2024 was the limitations on the net operating loss carryforwards and utilization of tax credits at our subsidiaries, the impairment expense recognized at Velocity in the first quarter of 2024 and the third quarter of 2023, and the loss on the sale of Crosman in the second quarter of 2024.
In addition to state income taxes, the items with the most significant impact on the difference between our statutory U.S. federal income tax rate of 21% and our effective income tax rate in 2024 was the limitations on the net operating loss carryforwards and utilization of tax credits at our subsidiaries, and the loss on the sale of Crosman in the second quarter of 2024.
Selling, genera l and administrative expense represented 12.0% of net sales for the year ended December 31, 2024 and 11.3% for the year ended December 31, 2023. 99 Segment operating income Segment operating income for the year ended December 31, 2024 was approximately $31.4 million, an increase of $6.6 million when compared to the same period in 2023, based on the factors noted above.
Selling, genera l and administrative expense represented 12.4% of net sales for the year ended December 31, 2025 and 12.0% for the year ended December 31, 2024. 96 Segment operating income Segment operating income for the year ended December 31, 2025 was approximately $42.6 million, an increase of $11.2 million when compared to the same period in 2024, based on the factors noted above.
Year ended December 31, 2024 2023 (in thousands) Pro forma Pro forma Net 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.
Year ended December 31, 2025 2024 2023 (in thousands) Pro forma Pro forma Net sales $ 139,689 100.0 % $ 115,260 100.0 % 107,311 100.0 % Gross profit $ 77,159 55.2 % $ 57,588 50.0 % 59,867 55.8 % Selling, general and administrative expense $ 44,757 32.0 % $ 40,456 35.1 % 38,939 36.3 % Amortization expense $ 16,062 11.5 % $ 16,062 13.9 % 16,062 15.0 % Segment operating income $ 15,340 11.0 % $ 70 0.1 % 3,866 3.6 % 89 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.
Segment operating income Segment operating income for the year ended December 31, 2023 was approximately $24.9 million, an increase of $5.1 million when compared to the same period in 2022, based on the factors noted above. 100 Liquidity and Capital Resources We generate cash primarily from the operations of our subsidiaries, and we have the ability to borrow under our 2022 Credit Facility to fund our operating, investing and financing activities.
Segment operating income Segment operating income for the year ended December 31, 2024 was approximately $31.4 million, an increase of $6.6 million when compared to the same period in 2023, based on the factors noted above. 97 Liquidity and Capital Resources We generate cash primarily from the operations of our subsidiaries, and we have the ability to borrow under our 2022 Credit Facility to fund our operating, investing and financing activities.
Arnold received a waiver for the fourth quarter of 2024 related to the fixed charge ratio and capital expenditures covenant in their intercompany credit agreement. Our primary source of cash is from the receipt of interest and principal on our outstanding loans to our businesses.
Arnold received a waiver for the fourth quarter of 2025 related to the fixed charge ratio and leverage ratio in their intercompany credit agreement. Our primary source of cash is from the receipt of interest and principal on our outstanding loans to our businesses.
The Honey Pot Co. had cost of revenues of $53.3 million in 2024 post-acquisition. Gross profit as a percentage of net revenues was approximately 45.5% in the year ended December 31, 2024 compared to 42.4% in the year ended December 31, 2023.
The Honey Pot Co. had cost of revenues of $53.3 million in 2024 post-acquisition. Gross profit as a percentage of net revenues was approximately 42.0% in the year ended December 31, 2024 compared to 39.9% in the year ended December 31, 2023.
Cash Flow from Investing Activities 2024 Cash flows used in investing activities totaled approximately $422.5 million for the year ended December 31, 2024, compared to $570.5 million provided by investing activities during the year ended December 31, 2023.
Cash Flow from Investing Activities 2025 Cash flows used in investing activities totaled approximately $42.6 million for the year ended December 31, 2025, compared to $422.5 million provided by investing activities during the year ended December 31, 2024.
Our Chief Executive Officer is a managing member of CGM. The MSA provides for, among other things, CGM to perform services for us in exchange for a management fee paid quarterly and equal to 0.5% of our adjusted net assets. The management fee is required to be paid prior to the payment of any distributions to shareholders.
Our Chief Executive Officer is a managing member of CGM. The MSA provides for, among other things, CGM to perform services for us in exchange for a management fee paid quarterly. The management fee is required to be paid prior to the payment of any distributions to shareholders.
Arnold exceeded the capital expenditure spend that was permitted under the amendment and was granted a waiver at December 31, 2024.
Arnold exceeded the capital expenditure spend that was permitted under the amendment and was granted a waiver at December 31, 2024, March 31, 2025 and June 30, 2025.
We previously announced our desire to acquire businesses in the healthcare sector, with a focus on outsourced pharma, medical manufacturing services and provider services.
We previously announced our desire to acquire businesses in the healthcare sector, with a focus on outsourced pharma, medical manufacturing services and provider services. We have not yet acquired a business in the healthcare sector.
In January 2025, we entered into an amendment of the 2022 Credit Facility to provide for (a) an additional advance of the term loan in the aggregate amount of $200 million on the date of the amendment, and (b) delayed draw term loan commitments in the aggregate amount of $100 million, which may be reduced or terminated by the Company upon five business days’ notice and pursuant to which the Company may make no more than two draws by July 9, 2025.
The Amendment modified the LLC’s Credit Agreement, to provide for (a) an additional advance of the 2022 Term Loan in the aggregate amount of $200 million on the date of the Amendment, and (b) delayed draw term loan commitments in the aggregate amount of $100 million which was able to be reduced or terminated by the LLC upon five business days’ notice and pursuant to which the Company may make no more than two draws by July 9, 2025.
During the years ended December 31, 2024, 2023 and 2022, CGM receiv ed $2.6 million, $2.4 million, and $4.1 million, respectively, in total integration service fees.
During the years ended December 31, 2025, 2024 and 2023, CGM receiv ed $0.9 million, $2.6 million, and $2.4 million, respectively, in total integration service fees.
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. • Management fees that would have been payable to the Manager during each period. The Honey Pot Co. pays a management fee of $1.0 million per year ($0.25 million per quarter) to CGM. This amount reduces segment operating income.
The Honey Pot Co., which was acquired in January 2024, entered into an ISA with CGM whereby The Honey Pot Co. will pay CGM a total integration services fee of $3.5 million, payable quarterly over a twelve-month period beginning June 30, 2024.
The Honey Pot Co., which was acquired in January 2024, entered into an ISA with CGM whereby The Honey Pot Co. will pay CGM a total integration services fee of $3.5 million, payable quarterly over a twelve-month period beginning June 30, 2024. 113 PrimaLoft, which was acquired in July 2022, entered into an ISA with CGM whereby PrimaLoft paid CGM a total integration services fee of $4.8 million, paid quarterly over a twelve-month period ended June 30, 2023.
Our effective tax rate in the year ended December 31, 2023 was (102.0)%, compared to an effective income tax rate of 71.8% during the same period in 2022. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions.
Our effective tax rate in the year ended December 31, 2025 was 0.3%, compared to an effective income tax rate of (6.0)% during the same period in 2024. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions.
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 .
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 .
PrimaLoft insulations also offer superior economics to the brand partner and enable better sustainability characteristics through the use of recycled, low-carbon inputs. PrimaLoft is headquartered in Latham, New York.
PrimaLoft insulations also offer superior economics to the brand partner and enable better sustainability characteristics through the use of recycled, low-carbon inputs.
For a summary of our significant accounting policies, including those policies discussed below, refer to " Note B - Summary of Significant Accounting Policies " to our consolidated financial statements. Business Combinations The acquisitions of our businesses are accounted for under the acquisition method of accounting.
For a summary of our significant accounting policies, including those policies discussed below, refer to " Note B - Summary of Significant Accounting Policies " included in the "Notes to the Consolidated Financial Statements" in this Form 10-K . 114 Business Combinations The acquisitions of our businesses are accounted for under the acquisition method of accounting.
Segment operating income Segment operating income for the year ended December 31, 2023 was $46.7 million, an increase of $3.2 million when compared to the same period in 2022, based on the factors described above. BOA Overview BOA, creator of the revolutionary, award-winning, patented BOA Fit System, partners with market-leading brands to make the best gear even better.
Segment operating income Segment operating income for the year ended December 31, 2024 was $38.8 million, a decrease of $7.9 million when compared to the same period in 2023, based on the factors described above. BOA Overview BOA, creator of the award-winning, patented BOA Fit System, partners with market-leading brands to make the best gear even better.
Investing activities in the year ended December 31, 2023 reflect the proceeds received from our sale of Advanced Circuits in February 2023 and Marucci in November 2023 (total proceeds of $500.3 million).
Investing activities in the year ended December 31, 2023 reflect the proceeds received from our sale of Advanced Circuits in February 2023 and Marucci in November 2023 (total proceeds of $500.3 million). Our spending on capital expenditures during the year ended December 31, 2023 was $55.0 million.
For the year ended December 31, 2024, we incurred approximately $74.8 million in management fees as compared to $67.9 million in fees in the year ended December 31, 2023.
We accrue for the management fee on a quarterly basis. 83 For the year ended December 31, 2024, we incurred approximately $74.8 million in management fees as compared to $67.9 million in fees in the year ended December 31, 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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We expect to have additional borrowings under our Credit Facility in the future in order to finance our short term working capital needs and future acquisitions. These borrowings will be subject to variable interest rates.
We expect to have additional borrowings under our 2022 Credit Facility in the future in order to finance our short term working capital needs and future acquisitions. These borrowings will be subject to variable interest rates.
ITEM 7A. – Quantitative and Qualitative Disclosures about Market Risk Interest Rate Sensitivity At December 31, 2024, our debt includes both fixed rate and variable rate instruments. We are exposed to interest rate risk primarily through borrowings under our 2022 Credit Facility because borrowings under this agreement are subject to variable interest rates based on SOFR.
ITEM 7A. – Quantitative and Qualitative Disclosures about Market Risk Interest Rate Sensitivity At December 31, 2025, our debt includes both fixed rate and variable rate instruments. We are exposed to interest rate risk primarily through borrowings under our 2022 Credit Facility because borrowings under this agreement are subject to variable interest rates based on SOFR.
We currently estimate that a 100 basis point increase in SOFR would not have a material impact on our results of operations, cash flows or financial condition. The effect of a 100 basis point increase on the outstanding borrowings subject to variable interest rates at December 31, 2024 would be approximately $4.8 million additional annual interest expense.
We currently estimate that a 100 basis point increase in SOFR would not have a material impact on our results of operations, cash flows or financial condition. The effect of a 100 basis point increase on the outstanding borrowings subject to variable interest rates at December 31, 2025 would be approximately $5.5 million additional annual interest expense.
We had $375 million outstanding under the 2022 Term Loan and $110 million outstanding under our 2022 Revolving Credit Facility at December 31, 2024. The one-month SOFR was at an average of 453 basis points at December 31, 2024, and the three-month SOFR was at an average of 469 basis points at December 31, 2024.
We had $552.5 million outstanding under the 2022 Term Loan and no amount outstanding under our 2022 Revolving Credit Facility at December 31, 2025. The one-month SOFR was at an average of 369 basis points at December 31, 2025, and the three-month SOFR was at an average of 365 basis points at December 31, 2025.
Our cash and cash equivalents at December 31, 2024 consists principally of (i) treasury backed securities, (ii) insured prime money market funds, and (iii) cash balances in several non-interest bearing checking accounts. Substantially all trade receivable balances of our businesses are unsecured.
In addition, the Company manages its exposure by limiting the notional amount of instruments entered into with any single counterparty. Cash and cash equivalents at December 31, 2025 consisted primarily of (i) treasury‑backed securities, (ii) insured prime money market funds, and (iii) cash balances held in several non‑interest‑bearing checking accounts. Substantially all trade receivables are unsecured.
Credit Risk We are exposed to credit risk associated with cash equivalents, investments, and trade receivables. We do not believe that our cash equivalents or investments present significant credit risks because the counterparties to the instruments consist of major financial institutions and we manage the notional amount of contracts entered into with any one counterparty.
Credit Risk The Company is exposed to credit risk primarily through its cash and cash equivalents, investments, trade receivables, and other receivables. The Company does not believe that its cash equivalents or investments present significant credit risk, as the counterparties consist of major financial institutions.
Although we have a large number of customers who are dispersed across different industries and geographic areas, a prolonged economic downturn could increase our exposure to credit risk on our trade receivables. We perform ongoing credit evaluations of our customers and maintain an allowance for potential credit losses. 121
The concentration of credit risk related to trade receivables is limited due to the large number of customers and their dispersion across various industries and geographic regions. However, a prolonged economic downturn could increase the Company’s exposure to credit losses. The Company performs ongoing credit evaluations of its customers and maintains an allowance for expected credit losses.
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The concentration of credit risk with respect to trade receivables is limited by the large number of customers in our customer base and their dispersion across various industries and geographic areas.
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In addition, the Company has recorded a recovery receivable related to amounts expected to be recoverable under its senior secured loan associated with the Lugano Chapter 11 bankruptcy proceedings. The recovery receivable is subject to credit risk and significant uncertainty, as the ultimate amount and timing of recovery are dependent on the outcome of the bankruptcy proceedings.
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The Company’s estimate of the recovery receivable reflects management’s assessment of expected distributions based on information available as of the reporting date and may change as the proceedings progress. 119

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