Compass Diversified Focuses on Stabilizing Operations, Reducing Debt

Company outlines plans to sell subsidiaries, rebuild investor confidence after 'difficult' 2025

Published on Mar. 2, 2026

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Compass Diversified (NYSE:CODI) executives emphasized a renewed focus on stabilizing operations, reducing leverage, and rebuilding investor confidence as they reviewed fiscal 2025 fourth-quarter results and outlined expectations for 2026. CEO Elias Sabo described 2025 as a 'painful' and 'humbling' year for the company, but maintained that CODI's operating model remains intact. The company is pursuing operational execution, strong cash conversion, and leverage reduction 'organically and inorganically,' with urgency and discipline after what Sabo called 'the hardest year in CODI's history.'

Why it matters

Compass Diversified is a publicly traded private equity firm that specializes in acquiring and managing middle-market businesses across a variety of industries. The company's performance and strategic decisions have implications for its portfolio companies, investors, and the broader private equity landscape.

The details

Sabo said that excluding Lugano, CODI generated mid-single-digit revenue growth in 2025 and achieved operating leverage that contributed to high-single-digit growth in subsidiary adjusted EBITDA. The company's consumer businesses grew adjusted EBITDA despite a challenging consumer backdrop, while industrial results were modestly higher for the year. CODI is focused on selling one or more subsidiaries to accelerate deleveraging, with Sabo describing 'really strong' buyer interest. The company reported a GAAP net loss of $293.7 million for the full year, including $60 million in investigation and restatement-related expenses. Excluding Lugano, CODI provided 2026 guidance for subsidiary adjusted EBITDA of $345 million to $395 million, with a wider range due to macro uncertainty.

  • In the fourth quarter of 2025, CODI reported GAAP net revenue of $468.6 million, down 5.1% year over year.
  • For the full year 2025, CODI reported net revenues of $1.9 billion, up 4.8%.
  • CODI ended 2025 with $68 million in cash and cash equivalents and about $96 million available on its revolver.
  • In January 2026, CODI completed a sale-leaseback transaction for some Altor facilities that freed more than $11 million in cash.

The players

Elias Sabo

Chief Executive Officer of Compass Diversified.

Stephen Keller

Chief Financial Officer of Compass Diversified.

Compass Diversified Holdings (NYSE:CODI)

A publicly traded private equity company headquartered in Bethesda, Maryland that specializes in acquiring and managing middle-market businesses across a variety of industries.

Lugano

A subsidiary of Compass Diversified that entered Chapter 11 bankruptcy in November 2025.

Eric Weis

The new leader of PrimaLoft, a Compass Diversified subsidiary.

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What they’re saying

“2025 was 'painful' and 'humbling,' but maintained that CODI's operating model remains intact.”

— Elias Sabo, Chief Executive Officer

“Leverage reduction is the company's top financial priority.”

— Elias Sabo, Chief Executive Officer

“We are pursuing operational execution, strong cash conversion, and leverage reduction 'organically and inorganically,' with urgency and discipline after what Sabo called 'the hardest year in CODI's history.'”

— Elias Sabo, Chief Executive Officer

What’s next

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The takeaway

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