Compass Diversified reduced debt by over $280 million after divesting Sterno’s food service business, improving leverage metrics.
Compass Diversified (NYSE:CODI) reported a 6.3% increase in subsidiary adjusted EBITDA to $83.9 million for Q1, driven by strong consumer brand performance and lower capital spending. Operating cash flow reached $23.9 million, reflecting execution against strategic priorities.
The company used proceeds from the $292 million Sterno food service sale to repay over $280 million in debt, lowering leverage to approximately 5x. Management raised its 2026 outlook, now projecting subsidiary adjusted EBITDA between $320 million and $365 million, citing growth in brands like The Honey Pot and BOA.
CEO Elias Sabo emphasized the company’s focus on debt reduction and operational execution amid macroeconomic uncertainty, noting strong cash flow generation as a key strength of the business model.