Compass Diversified reports non-reliance on financial statements for 2022 and 2023 due to an investigation of subsidiary Lugano.
Quiver AI Summary
Compass Diversified (CODI) announced on June 25, 2025, that it is not relying on its financial statements for fiscal years 2022 and 2023 due to an ongoing investigation into its subsidiary, Lugano Holding, Inc. This follows a previous disclosure regarding the non-reliance on its 2024 financial statements. Preliminary findings of the investigation indicate irregularities in Lugano's financial practices. CODI is working to complete the investigation and finalize necessary financial restatements, emphasizing that the inquiry is limited to Lugano and does not pertain to its other subsidiaries, which are performing well. CEO Elias Sabo expressed confidence in the stability and performance of the remaining subsidiaries and highlighted CODI's strong liquidity and supportive relationships with banking partners. The press release also includes cautionary statements regarding forward-looking information related to the investigation and financial performance.
Potential Positives
- CODI emphasizes that the investigation is solely focused on its subsidiary Lugano, reassuring investors about the stability and performance of its other eight subsidiaries.
- The company maintains strong liquidity and access to capital through its revolving credit facility, suggesting financial resilience during the ongoing investigation.
- CEO Elias Sabo's statement reflects confidence in the long-term value and integrity of CODI’s operations, which could help maintain investor trust despite the current challenges.
Potential Negatives
- Compass Diversified has disclosed non-reliance on its financial statements for two consecutive fiscal years, indicating significant issues with its financial reporting and governance practices.
- The ongoing investigation into its subsidiary Lugano Holding, Inc. suggests deep-rooted problems within the company, including identified irregularities in financing, accounting, and inventory practices.
- The potential for material weaknesses in internal controls over financial reporting raises serious concerns about the overall financial health and integrity of the company.
FAQ
What is the reason for Compass Diversified's non-reliance on financial statements?
Compass Diversified has disclosed non-reliance on its financial statements for fiscal years 2022 and 2023 due to an investigation into its subsidiary, Lugano Holding, Inc.
Is the investigation affecting all Compass Diversified subsidiaries?
No, the investigation is specifically focused on Lugano and does not involve CODI’s other subsidiary companies.
Who is leading the investigation into Lugano Holding?
The investigation is being conducted with the involvement of Grant Thornton, which is assessing the situation concerning Lugano’s financial practices.
What is the status of CODI’s other subsidiary companies during the investigation?
CODI's other subsidiary companies continue to operate normally and maintain strong financial health amidst the ongoing investigation.
How is Compass Diversified responding to the ongoing investigation?
Compass Diversified is focused on completing the investigation, finalizing necessary financial restatements, and maintaining flexibility with banking partners.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$CODI Hedge Fund Activity
We have seen 113 institutional investors add shares of $CODI stock to their portfolio, and 106 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- MANUFACTURERS LIFE INSURANCE COMPANY, THE removed 587,765 shares (-53.3%) from their portfolio in Q1 2025, for an estimated $10,973,572
- ALLSPRING GLOBAL INVESTMENTS HOLDINGS, LLC added 451,731 shares (+10.4%) to their portfolio in Q1 2025, for an estimated $8,433,817
- BANK OF AMERICA CORP /DE/ removed 381,307 shares (-31.7%) from their portfolio in Q1 2025, for an estimated $7,119,001
- VERITION FUND MANAGEMENT LLC added 197,100 shares (+inf%) to their portfolio in Q4 2024, for an estimated $4,549,068
- RENAISSANCE TECHNOLOGIES LLC added 178,300 shares (+inf%) to their portfolio in Q1 2025, for an estimated $3,328,861
- JANE STREET GROUP, LLC added 150,386 shares (+345.5%) to their portfolio in Q1 2025, for an estimated $2,807,706
- D. E. SHAW & CO., INC. added 122,964 shares (+249.0%) to their portfolio in Q1 2025, for an estimated $2,295,737
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
$CODI Analyst Ratings
Wall Street analysts have issued reports on $CODI in the last several months. We have seen 1 firms issue buy ratings on the stock, and 0 firms issue sell ratings.
Here are some recent analyst ratings:
- Wells Fargo issued a "Overweight" rating on 06/10/2025
To track analyst ratings and price targets for $CODI, check out Quiver Quantitative's $CODI forecast page.
Full Release
WESTPORT, Conn., June 25, 2025 (GLOBE NEWSWIRE) -- Compass Diversified (NYSE: CODI) (“CODI”) today disclosed non-reliance on its financial statements for fiscal years 2022 and 2023 amid an ongoing investigation into its subsidiary Lugano Holding, Inc. (“Lugano”). This follows CODI’s May 7 disclosure concerning non-reliance on its 2024 financial statements. As previously disclosed, the investigation has preliminarily identified irregularities in Lugano’s financing, accounting, and inventory practices.
CODI is focused on completing the investigation, which is progressing in line with expectations, and actively working to finalize the necessary financial restatements. Importantly, the investigation is focused on Lugano and does not involve any of CODI’s other subsidiaries.
“We remain confident in the performance and integrity of CODI’s eight other subsidiary companies, all of which continue to operate normally, have strong balance sheets, and collectively generate substantial cash flow,” said Elias Sabo, CEO of CODI. “We have ample liquidity and significant access to capital via our revolving credit facility. We continue to work constructively with our banking partners and bondholders to ensure flexibility and stability as we move forward. Our primary focus remains on maximizing long-term value for all stakeholders.”
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, CODI’s expectations as to the timing and outcome of the Lugano investigation, CODI’s credit availability and future liquidity, actions taken in response to the outcome of the investigation, the future performance of Lugano and CODI’s other subsidiaries, the filing or delay of CODI’s periodic reports, and the amount of any potential misstatements associated with Lugano and the impact any such misstatements may have on CODI’s previously issued financial statements or results of operations. Such forward looking statements may be identified by, among other things, the use of forward-looking terminology such as “believe,” “expect,” “may,” “could,” “would,” “plan,” “intend,” “estimate,” “predict,” “potential,” “continue,” “should” or “anticipate” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. These statements are based on beliefs and assumptions by the Board of Directors and management, and on information currently available to CODI’s Board of Directors and management. These statements involve risk and uncertainties that could cause CODI’s actual results and outcomes to differ, perhaps materially, including but not limited to: the discovery of additional information relevant to the investigation; the conclusions (and timing of those conclusions) concerning matters relating to the investigation; the timing of the review by, and the conclusions of, Grant Thornton regarding the investigation and CODI’s financial statements; a further material delay in CODI’s financial reporting or ability to hold an annual meeting of stockholders; the impacts of restatement reviews; the likelihood that the control deficiencies identified or that may be identified in the future will result in material weaknesses in CODI’s internal control over financial reporting; and commercial litigation relating to the investigation, including CODI’s representations regarding its financial statements, and the possibility of future litigation or investigation relating to CODI’s internal controls, restatement reviews, the investigation, or related matters. Please see CODI’s Annual Report on Form 10-K for the year ended December 31, 2024 for other risk factors that you should consider in connection with such forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date such statements have been made. Except as required by law CODI does not undertake any public obligation to update any forward-looking statements to reflect events, circumstances, or new information after the date of this press release, or to reflect the occurrence of unanticipated events.
Investor Relations
Compass Diversified
[email protected]