Compass Diversified Declares Fourth Quarter 2022 Distributions on Common and Series A, B and C Preferred Shares

Rhea-AI Summary

Compass Diversified (NYSE: CODI) announced a quarterly cash distribution of $0.25 per common share, payable on January 26, 2023. The Board also declared distributions for its preferred shares: $0.453125 for Series A, $0.4921875 for Series B, and $0.4921875 for Series C, all payable on January 30, 2023. The distributions are expected to be classified as qualified dividends for U.S. federal income tax purposes. CODI anticipates cash distributions will exceed earnings and profits for the 2022 taxable year, benefiting certain retirement accounts.

Positive

• Quarterly cash distribution of $0.25 per common share.
• Distributions for preferred shares declared: $0.453125 (Series A), $0.4921875 (Series B), $0.4921875 (Series C).
• Distributions expected to be classified as qualified dividends.
• Anticipated that cash distributions will exceed earnings and profits for 2022.

Negative

• None.

WESTPORT, Conn., Jan. 04, 2023 (GLOBE NEWSWIRE) -- Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market businesses, announced today that its Board of Directors (the “Board”) has declared a quarterly cash distribution of $0.25 per share on the Company’s common shares (the “Common Shares”). The distribution for the three months ended December 31, 2022 is payable on January 26, 2023 to all holders of record of Common Shares as of January 19, 2023.

The Board also declared a quarterly cash distribution of $0.453125 per share on the Company’s 7.250% Series A Preferred Shares (the “Series A Preferred Shares”). The distribution on the Series A Preferred Shares covers the period from, and including, October 30, 2022, up to, but excluding, January 30, 2023. The distribution for such period is payable on January 30, 2023 to all holders of record of Series A Preferred Shares as of January 15, 2023.

The Board also declared a quarterly cash distribution of $0.4921875 per share on the Company’s 7.875% Series B Preferred Shares (the “Series B Preferred Shares”). The distribution on the Series B Preferred Shares covers the period from, and including, October 30, 2022, up to, but excluding, January 30, 2023. The distribution for such period is payable on January 30, 2023 to all holders of record of Series B Preferred Shares as of January 15, 2023.

The Board also declared a quarterly cash distribution of $0.4921875 per share on the Company’s 7.875% Series C Preferred Shares (the “Series C Preferred Shares”). The distribution on the Series C Preferred Shares covers the period from, and including, October 30, 2022, up to, but excluding, January 30, 2023. The distribution for such period is payable on January 30, 2023 to all holders of record of Series C Preferred Shares as of January 15, 2023.

CODI’s common and preferred cash distributions should generally constitute “qualified dividends” for U.S. federal income tax purposes to the extent they are paid from “earnings and profits” (as determined under U.S. federal income tax principles), provided that the requisite holding period is met. To the extent that the amount of the cash distributions exceeds earnings and profits, such distribution will first be treated as a non-taxable return of capital to the extent of the holder’s adjusted tax basis in the shares, and thereafter be treated as a capital gain from the sale or exchange of such shares. CODI expects cash distributions will exceed earnings and profits in the 2022 taxable year. In addition, shareholders subject to tax rules regarding “unrelated business taxable income” (or “UBTI”) will no longer be allocated UBTI from CODI, allowing ownership by certain retirement accounts that previously created tax implications.

About Compass Diversified (“CODI”)

Since its founding in 1998, CODI has consistently executed on its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the niche industrial, branded consumer and healthcare sectors. The Company leverages its permanent capital base, long-term disciplined approach, and actionable expertise to maintain controlling ownership interests in each of its subsidiaries, maximizing its ability to impact long-term cash flow generation and value creation. The Company provides both debt and equity capital for its subsidiaries, contributing to their financial and operating flexibility. CODI utilizes the cash flows generated by its subsidiaries to invest in the long-term growth of the Company and has consistently generated strong returns through its culture of transparency, alignment and accountability. For more information, please visit compassdiversified.com.

Forward Looking Statements
This press release may contain certain forward-looking statements, including statements with regard to the future performance of CODI and its subsidiaries. Words such as "believes," "expects," and "future" or similar expressions, are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in the risk factor discussion in the Form 10-K filed by CODI with the SEC for the year ended December 31, 2021 and in other filings with the SEC. Except as required by law, CODI undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations
Compass Diversified
irinquiry@compassdiversified.com

Gateway Group
Cody Slach
949.574.3860
CODI@gatewayir.com

Media Relations
The IGB Group
Leon Berman
212.477.8438
lberman@igbir.com

FAQ

What is the cash distribution amount for CODI's common shares for Q4 2022?

The cash distribution amount for CODI's common shares for Q4 2022 is $0.25 per share.

When will CODI's cash distributions be paid to shareholders?

CODI's cash distributions will be paid on January 26, 2023 for common shares and on January 30, 2023 for preferred shares.

What is the distribution amount for CODI's Series A Preferred Shares?

The distribution amount for CODI's Series A Preferred Shares is $0.453125 per share.

Will CODI's distributions qualify as dividends for tax purposes?

Yes, CODI's distributions are expected to be classified as qualified dividends for U.S. federal income tax purposes.

What are the expected tax implications for CODI's cash distributions?

CODI expects cash distributions to exceed earnings and profits, impacting the tax treatment for shareholders.