Compass Diversified (CoDi) highlighted the “explosive” growth of the recently acquired Boa Technology in its second quarter ended June 30, cautioning that the brand’s expansion is likely to slow in the second half of the year.
Boa, which owns the Boa Fit System for shoe fastening, was acquired by CoDi in October 2020. In the second quarter of this year, Boa’s revenues were up to $44.1 million from $24.5 million the year earlier. In the first six months of this year, Boa’s revenues rose to $80.5 million from $51.0 million, while its adjusted Ebitda doubled to $32.2 million from $16.1 million.
Boa experienced strong demand across most of its products and categories, led by clients in the cycling, workwear and snowboard sectors. However, CoDi’s management acknowledged that some of Boa’s growth is likely still due to brand partners ordering ahead of time due to the current shipping constraints.
“We believe the company will perform well and continue to grow in the back of 2021, but we do not expect the same level of explosive growth that we have experienced year-to-date, said the company’s chief operating officer, Patrick Maciariello. “I do think we’ll grow in the second half of the year, I think we’ll have nice growth, we see continued demand.”
Among CoDi’s other consumer brands, Marucci Sports, which makes baseball and softball equipment and was purchased by the group in April 2020, also reported strong results. Second-quarter sales jumped to $24.6 million from $5.5 million the year earlier. Marucci’s revenues in the six months ended June 30 more than doubled, to $61.3 million from $27.8 million, while adjusted Ebitda soared to $17.7 million from $3.2 million.
Besides Boa and Marucci, CoDi’s consumer brands also include 5.11 Tactical, Velocity Outdoor, Ergobaby, Sterno and Liberty Safe, a brand which the group plans to sell in August to a private investment firm, Monomoy Capital Partners. They all reported sales growth in the quarter, and CoDi indicated that it is looking at strategic options for 5.11 Tactical, including a possible public offering.
For CoDi as a whole, second-quarter sales increased to $487.4 million from $333.6 million in the same quarter of 2020. The group’s net loss widened to $11.3 million from $7.4 million, as the holding company recorded a loss of $33.3 million tied to a debt refinancing transaction completed on April 1, 2021. On the other hand, the adjusted Ebitda surged to $94.2 million from $49.5 million.
CoDi said it anticipates full-year adjusted Ebitda of between $350 million and $370 million. Excluding Liberty Safe, it should range between $325 million and $345 million, despite supply chain challenges, labor shortages and elevated inflationary pressures.
