Good morning and welcome to the Compass Diversified Holdings 2016 Fourth Quarter and Full Year Conference Call. Today’s call is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Scott Eckstein of the IGB Group for introduction and the reading of the Safe Harbor statement. Please go ahead, sir.

Thank you and welcome to Compass Diversified Holdings fourth quarter and full year 2016 conference call. Representing the company today are Alan Offenberg, Chief Executive Officer; Ryan Faulkingham, Chief Financial Officer; and Elias Sabo, Founding Partner of Compass Group Management. Before we begin, I would like to point out that the Q4 press release including the financial tables and non-GAAP financial measure reconciliations are available on the company’s website at www.compassdiversifiedholdings.com. The company also filed its Form 10-K with the SEC this morning, which includes reconciliations of non-GAAP financial measures discussed on this call. Please note that throughout this call, we’ll refer to Compass Diversified Holdings as CODI or the company. Now allow me to read the following Safe Harbor statement. During this conference call, we may make certain forward-looking statements, including statements with regard to the future performance of CODI. Words such as believes, expects, project 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 on a material basis 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 as filed with the Securities and Exchange Commission for the year ended December 31, 2016 as well as in other SEC filings. In particular, the domestic and global economic environment has a significant impact in our subsidiary companies. Except as required by law, CODI undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of information, future events or otherwise. At this time, I would like to turn the call over to Alan Offenberg.

Good morning. Thank you all for your time and welcome to our fourth quarter and full year 2016 earnings conference call. In the fourth quarter and full year 2016, our leading middle-market businesses continued to generate solid levels of cash flow. During this time, we also capitalized on market opportunities to complete platform and add-on acquisitions. Additionally, we strengthened our balance sheet by partially monetizing our interest in FOX, and completing a public offering that raised additional proceeds. Before talking about our subsidiary’s performance in 2016, I will review our acquisition highlights and success in using our financial strength to create even greater value for our shareholders. A major achievement in 2016 was the platform acquisition of 5.11 Tactical. A leading designer and marketer of purpose-built tactical apparel and gear serving a wide range of global customers, including law enforcement, military special operations and firefighters as well as outdoor enthusiasts. 5.11 was a very attractive transaction for CODI, considering the company’s recognized industry leadership, broad customer base and extensive product line. In addition, this acquisition was accretive to our shareholders. CODI acquired a substantial tax asset as part of this transaction, which will have positive effect on CODI’s annual cash flow. Since acquiring 5.11, the company’s performance has met our initial expectations. We are very excited about 5.11’s growth prospects as it continues to serve tactical professionals and expanded consumer penetration worldwide. During this period, we also reinvested in our current subsidiaries by completing four accretive add-on acquisitions. In January 2016, our subsidiary, Sterno Products acquired Northern International, an industry leader in flameless candles and outdoor lighting products with the retail segment. The addition of Northern International has expanded Sterno’s product offering into complementary categories and channels serving Sterno’s primary markets, while continuing to build on the strength of the…

Thank you, Alan. I will begin by reviewing our niche industrial businesses, which included Advanced Circuits, Arnold Magnetic, Cleaner and Sterno Products. Our niche industrial businesses continued to generate stable free cash flow in the fourth quarter. We reported a combined revenue increase of 15.7% during the fourth quarter of 2016, as compared to the year earlier period, while EBITDA declined by 4.1% compared to the prior year. The combined EBITDA margin declined to 16.8% for the quarter ended December 31, 2016 from 20.3% in the prior year quarter, primarily due to investments made in our Arnold subsidiary, which temporarily depressed EBITDA margin and Sterno’s acquisition of NII, which has historically carried lower EBITDA margin. Advanced Circuits reported fourth quarter 2016 revenue that was consistent with the fourth quarter of 2015, while EBITDA increased 3.4% year-over-year, reflecting growth in assembly and subcontract sales, which was partially offset by lower sales in long lead time PCBs and quick turn PCBs, mainly due to the macroeconomic environment. Fourth quarter EBITDA margins were higher by 60 basis points compared to the year ago period. Based on ACI’s 2016 results, we believe 2017 revenue and earnings will be consistent with 2016. Arnold Magnetic’s fourth quarter 2016 results were down from the fourth quarter of 2015. Revenue decreased 5.5% year-over-year, primarily due to lower sales in PMAG, Precision Thin Metals and FlexMag. EBITDA decreased by 52% year-over-year. As we mentioned on our previous calls, we have hired an entirely new senior management team under the leadership of Dan Miller. Dan is making the necessary investments in lean manufacturing and engineering and sales talent, which were the contributing factor to the lower results for the quarter as compared to the prior year. Arnold continues to maintain a competitive advantage in the marketplace and we believe the…

Thank you, Elias. Today, I will discuss our consolidated results for the quarter and year ended December 31, 2016. I will limit my comments largely to the overall results for our company, since the individual subsidiary results are detailed in our Form 10-K that was filed with the SEC this morning. At the end of my remarks, I will comment on CAD for 2017. On a consolidated basis, revenue for the quarter ended December 31, 2016 was $318.6 million, up approximately 60%, as compared to $199.5 million for the prior year period. This year-over-year increase reflects notable revenue growth in our ERGObaby, Manitoba Harvest and Sterno subsidiaries due primarily to contributions from our add-on acquisitions as well as the revenue contribution from 5.11. Revenue for the year ended December 31, 2016 increased to $978.3 million, an increase of $250.3 million or 34.4% compared to approximately $728 million for the prior year. The increase in revenue year-over-year is primarily the result of the contributions from our add-on acquisitions and 5.11. Net income for the fourth quarter was $2 million compared to a net loss of $1.5 million in the year earlier period. During the fourth quarter, as a result of lower operating results in Arnold, we recorded a $16 million impairment of goodwill. This impairment expense is preliminary and will be finalized in the first quarter of 2017. For the year ended December 31, 2016, net income was $56.5 million, primarily as a result of a $74.5 million gain on CODI’s investment in FOX. Net income for the year ended December 31, 2015 was $165.8 million primarily due to the gain on the sale of CamelBak completed in ‘15. Cash flow available for distribution or reinvestment, which we refer to as CAD for the quarter ended December 31, 2016, was $24.6…

Thanks, Ryan. In closing, 2016 was an exciting year for CODI as we continued to take advantage of market opportunities by completing both platform and add-on acquisitions that were accretive to CAD. Additionally, we continue to strengthen our balance sheet by partially monetizing our interest in FOX and accessing the capital markets. I will close by commenting briefly on M&A activity. Middle-market deal flow was steady and competitive in 2016. This was due to high valuation levels driven by the availability of debt capital with favorable terms and financial and strategic buyers seeking to deploy available equity capital. Our team remains focused on marketing CODI’s beneficial ownership and management aspects to pursue attractive platform acquisitions, while maintaining our disciplined approach in deploying capital. In addition, we will continue to reinvest in our current subsidiaries through complementary add-on acquisitions. Looking ahead, CODI is in an excellent position to keep executing on this strategy, which should support our ability to provide cash distributions to and create long-term value for our shareholders. This concludes our opening remarks and we will be happy to take any questions you may have. Operator, please open the phone lines.

[Operator Instructions] And our first question comes from Larry Solow with CJS Securities. Your line is open.

Hi, good morning. Thank you.

Good morning.

Good morning, guys. I was wondering, if you could just maybe just give us my usual question to sort of since you guys are in sort of multiple industries out there, so your review from the retail perspective, maybe the industrial perspective, you get a little bit what you are seeing in trends and obviously who knows what’s going to happen on new present to resume, what’s going to happen there, but just sort of the tone you are seeing any change in tones or anything will be great?

Sure. And Larry, I will ask Elias and Ryan to comment, but I will give it a try to start. I think that if we are looking simply through the lens of our companies, the economy feels very similar to what it’s felt like for the last few years, meaning kind of slow and steady, modest growth type economy. So, I haven’t seen any real dramatic shift there. I think that as you alluded to with respect to the new administration, broadly defined, I’d say it feels as though there is positive thoughts around changes particularly with respect to corporate tax rates, which you could be interesting, however, offset somewhat by concerns about potential border adjustment taxes and how that might impact certain companies. So, I don’t really have clarity on that, nor do I think anyone else does yet at this point, but these are certainly things we are talking about at a subsidiary level all the way up through the CODI Board level. With respect to the individual segments, on the industrial side, I don’t know any particular changes or tones as it relates to the comments I just made on the macro side. And on the consumer side, I’d say that our companies, again, are not seeing anything dramatically different. But I think some long-term trends just based on what we’ve seen in the news in the last year is that bricks and mortar retail is becoming challenging. We have seen some very prominent retailers that have been around forever closing stores, some of them closing their entire group of bricks and mortar stores. So that long-term trend, we are not sure how it will shake out, but one thing for sure is that online, retailing is becoming obviously a big issue and for some of our companies that participate in that segment making sure that they develop a comprehensive omni-channel strategy to distribute their products is definitely a very important strategic consideration that they are all working on actively and have been for some time. But just to give you some broad perspectives, I think I will take a breath right there and ask Elias or Ryan, if there is anything they would like to add to that.

No, Alan, I think you covered it well.

Yes.

Actually just a couple of company-specific holding set of questions on some of your more recent acquisitions. On Sterno, I assume the pretty rapid growth obviously on top line was help of the acquisition, not so much in the bottom line. Is that mostly, I guess, because of their raw material costs has come back up? And then just on Sterno, also just in terms of you discussed the 5.11 Tactical, the initiative of direct-to-consumer. How about Sterno? I thought with that such a well-recognized brand over so many years, the efforts of the direct-to-consumer might be something you explore more? Thanks.

Sure, Larry. It’s Elias. No, I would say that Sterno, we look over the course of the year rather than kind of quarter-to-quarter things can shift around a little bit. Clearly, revenue was benefited by the acquisition of Northern International. As we commented, Northern International has significantly lower margins than Sterno. So, it did have an effect to distort revenue growth a little higher and EBITDA growth not as high and it may have looked like there was less bottom line leverage than there actually was. We think Sterno is performing still really well and we believe that 2016 was really a great year, exceeded our expectations both on the core Sterno brand in terms of performance on top and bottom line. And we are really excited about the NII acquisition and some of the things that we are doing. We have integrated that business now fully. We have put in some new management at the top, new general management, and we are adding some processes, I think are starting to bare some initial fruit. So, we still feel pretty positive about that business and think over the course of the year and including the fourth quarter that kind of either met or exceeded our expectations across the board. In terms of direct-to-consumer, I would say, we really look at Sterno more as a – the base and the broad part of the business does go – especially on the Sterno side, Northern International a little bit different, but the Sterno side goes to food service and is more through that channel, but we are trying to expand on the Sterno brand and we are trying to bring out products that will be placed at additional retail and maybe used in camping and other kind of products that are needed for heating food or liquids or the like, while you are portable and you need mobility. So it is something we are trying to capitalize on. I would say, as the Sterno team talks about, we have a lot of products that are out there that we think kind of are achieving singles and doubles. I don’t know that we have many homerun products that have come out, but we do have a focus on broadening out the consumer side of Sterno’s business and it’s something that has been growing as a percentage over the last few years, albeit from a relatively low base.

Got it. Okay, great. I appreciate it. Thanks.

And our next question comes from Kyle Joseph with Jefferies. Your line is open.

Hey, good morning guys. Thanks for taking my questions.

Good morning, Kyle.

I appreciate the color you gave on the companies and sort of their outlook pre and post-election. I am wondering are there any companies that are potentially impacted by the politics of the election? I guess, I am thinking specifically about Liberty Safe in general, and if there has been any change in the demand for their products?

The demand for Liberty’s products has remained fairly consistent and strong. So, from the finish of the year and based on what we have seen this year and we have given you the statement that we believe their revenues will be up slightly this year based on what we know today. And so, it does remain to be seen. We just – it’s been a long time, obviously, since there has been a pro firearms administration. And so we will have to see how the year shapes out, but based on what we see, right now, demand levels remain steady and we are certainly hopeful of that to continue throughout the rest of the year. I would say with respect to some of the other companies, we certainly have heard a very recently about potential meaningful increases in defense spending, which has an opportunity to provide some additional business to Advanced Circuits and Arnold. So that again very difficult to quantify, but again, it’s about more macro level could be possible for those two companies. And I think that the border adjustment tax that we hear a lot about certainly put some challenges on some of our companies, I would say 5.11 could have to navigate that a little bit perhaps ERGObaby to a degree as well. And that’s really – I will stop there and again open it to my team for additional clarification or commentary should they have any.

No, that’s good. Good, Alan.

Yes, that works for me. Thank you for that. And you talked about middle-market deal flow kind of in general for 2016. I mean, given what public market valuations did in late 2016, early 2017, have you seen a similar sort of rally in terms of middle-market deal or – sorry, middle-market company valuations and has that sort of change your thoughts on buying or selling in anyway?

Yes, valuations in middle-market, private M&A have really just been pretty robust for quite some time for the reasons expressed in the prepared remarks. And I would say that we have not seen over the years as much of a correlation as one would expect between public company valuations and private M&A valuations. And so I don’t believe that we have any reason based on what we have seen to really have a change of view or strategy with respect to our own acquisition or opportunistic divestiture decision-making. And we have seen – one thing I should have mentioned in the prepared remarks, but didn’t. At the very beginning of the year, with respect to deal flow, it didn’t seem like there was much change. I would say more recently here in the last few weeks. So, I certainly don’t want to call it a trend, but there certainly seems to be a modest pickup in activity that with high-quality opportunities. So, that’s a good thing. But no, we haven’t really seen any changes to the middle-market M&A valuation landscape. And as I said, it remains robust and has been robust for quite some time.

Got it. That’s great color. Thanks. And I just want to dig into sort of the industrial performance versus consumer. Consumer seems good revenue growth and then EBITDA growth outpacing that revenue growth. Industrial revenue growth has remained pretty strong, but while EBITDA growth has trailed that. And is that just really sort of company-specific developments, maybe Arnold specifically or are you seeing any sort of competitive changes in either of those, call it sectors?

Yes. On the industrial side and on the consumer side, I think it’s all company-specific. Again, broadly characterizing that the segments the consumer side will technically be a higher growth group of companies versus the industrial companies, but it does get on a specific company-by-company level. On the industrial margins, clearly we are as a group impacted by Arnold and some of the things that we have talked about there. Although we are really excited about what we are doing with the business now and where we think it can go this past year certainly was a transition year in many respects and we had to make some pretty meaningful investments into the company, which certainly put pressure on margins in the short-term, but we firmly believe it’s the right long-term strategy. It is referenced earlier on some of our consumer businesses, the acquisition of NII, which Elias mentioned great acquisition. We are super excited about it. Its integration is going really well. But as a business segment, it’s a lower margin business than the core Sterno business. But I would say the acquisition of NII makes Sterno a better company regardless of the fact that there is some mix issue associated with the product margin from each segment of that business. And so beyond that, I don’t really have any other specific comments that are obvious to me, but happy to elaborate if there is any area you want to poke into a little bit more.

No, no, that’s great color and thanks very much for answering my questions.

Anytime, thanks.

Our next question comes from Leslie Vandegrift with Raymond James. Your line is open.

Hi, good morning. Just a quick follow-up on – you are just talking about Arnold and the capital expenditures you had for the year trying to get that up to the, I guess, the new green technology efforts, you have been talking about in the past. I was curious, I mean, those $2.2 million of CapEx for the quarter, so about a third of it – what exactly did that focus in and then how much of that is done. So are we going to see that heightened level in 2017 or at least the beginning of it?

Yes. So Leslie, I will handle that. There was significant maintenance CapEx spend at Arnold in Q4 to the tune of about $2.2 million. Alan mentioned, specifically that we are making some strong investments into machinery that really frankly needs to have it in order to position the business to where normally it needs to be, but where it can go. We do anticipate that to continue in ‘17. So Arnold will have increased maintenance expense – maintenance CapEx year-over-year. So that trend will continue in ‘17.

Okay. And then on 5.11, I know you discussed direct agency orders you are looking at in those new commerce channels, etcetera, direct-to-consumer, etcetera, but what is the CapEx you are looking at early in the year because you discussed that, that would be a large portion of this as well?

Yes. So 5.11’s – in terms of 5.11’s CapEx, a large majority of it will be growth CapEx. Those still have maintenance CapEx. But we highlighted the three main projects. One, being an ERP system, another being significant investment in a new warehouse, which will provide capacity and streamline operations and also investing in the direct-to-consumer efforts as well. So that will be a significant amount of the growth CapEx spend. And I had indicated the range be provided in our comments was $15 million to $20 million. Again a large majority of that will be 5.11.

Okay. And then lastly, you talked about the ERGObaby products expected mid-year, how much of an impact on the way do you think that will be for them, is that so front end loaded a bit on the expenses there and is there going to one new product, is this a whole new line you are coming out with, I know you can’t tell me a lot exactly, but kind of the revenue expectation you see from them?

Yes. And we are not – Leslie we are not going to specifically talk about new products, but I would say Baby Tula has a product that is launching here, as does ERGObaby has a couple of products. And it will be staged kind of second and third quarters as those launches happen. And so, it will have an effect as you know, with consumer products, when you are launching a new product, there is typically some costs that are born in anticipation of new product launches. There is a little bit of clearing of some inventory that happens to make room for some new products on the retail floor. And so this is a normal part of business, especially for a company like ERGO that’s constantly launching new products. But we didn’t want to identify that the calendar has shifted a little bit later in the year, this year for product launches than what it’s been in the prior years. And as a result of that, we would think the kind of revenue and earnings of the business will be lower in the beginning part of the year than it will be in the later part of the year. We are not going to give actual progression, but I would just say if you think about ERGO’s kind of first half is being lower than what we would expect in the second half and really as these new products can of launch getting the benefit of both that revenue growth, but also in the first half kind of absorbing a little bit more costs associated with that. And so kind of that combination, you can model out how that will affect the company. But I also want to mention, we still feel positive about ERGObaby for the year. It’s just the kind of how the year will develop, maybe a little bit more back end loaded in terms of financial performance than the beginning part of the year.

Alright. Thank you. I appreciate it.

Thanks.

Our next question comes from Doug Mewhirter with SunTrust. Your line is open.

Hi, good morning.

Good morning Doug.

Good morning.

Most of my questions have been answered. First, a very minor numbers question, it looks like there is sort of a reverse impairment or a write-up on ERGObaby, I just wondered if you could give me little more details on that or if I interpreted that correctly?

Yes, sure. In Q4, ERGObaby benefited from the ability to sell some of the Orbit Baby assets and therefore took about – we achieved about $1 million in cash and that would be the reversal in Q4.

Okay, that makes sense. Second, you talked about the margin squeeze on Liberty Safe, because the steel costs, which kind of makes sense, I would assume that you are reluctant to pass on those costs as the competitive environment is such that you could not raise prices unilaterally without a significant loss of volume?

Yes. I think historically with respect to Liberty and steel prices, they are typically able to pass along some of that, but in terms of a full recouping of a fluctuation in steel price, that’s usually not been the way it’s gone. And because of their relationship with their customers, because that can work two ways, right. So I think you want to just be mindful of not only your own business, but making sure you are a good partner to your customers. And so they try to walk that line pretty delicately over the years. And I think they have done so successfully. So we would expect to be able to recoup some of it, but certainly not all of it.

Okay. Thanks for that. My last question is a more a regulatory question. And I saw the headlines where, I think they officially classified the HEMP plan as some sort of – they upgraded their controlled substance in the United States and I know it’s really going to Canada, which is why you have Manitoba, do you see any risk of the – there would be tighter regulations on the, I guess the so called manufactured hemp products that you are now going to sell in the U.S., which I am sure that you sell a lot of in the U.S., did you see any risk there from a regulatory perspective?

So we don’t see any risk in terms of the ability to sell product in the United States. And I think there is clear key flaw that has already gone up to the Circuit Court level. This is from over a decade ago, that established that hemp foods should not fall under the Controlled Substance Act in terms of being able to sell it. And it’s a rapidly growing in terms of distribution and it’s becoming more mainstream. Some of the larger grocery chains and some of the larger big-box retailers are starting to pick this product up. And so I think that further just solidifies the position that this is a food product and is not subject to regulatory risk. And so we feel very good about that. On the other side, I would say there has been some movement since our acquisition of Manitoba Harvest in terms of the cultivation of hemp in the United States. And that really was a part of a farm build that was introduced under the prior administration. As part of that, it was really for only research purposes. So today the cultivation of hemp continues to remain within more of the university and research setting and hasn’t moved farther along towards for full legalization for commercial growing of hemp in the United States. So I would say that we are still a ways off from that. I think the other component of that is not only do you need to grow it, but you need the infrastructure and assets to be able to process it. And there is a – it’s not something that just immediately comes up. I think there is a few things; one, crops needs to generally become productive, which takes some time, getting the infrastructure invested in, it takes a little bit of time. So, if legislation was to pass that allowed for the cultivation of hemp in the United States, which has yet to do, I think there is still couple of years lag before you could see any real commercial volumes come on. So based on where we are at, we don’t really see this being a U.S. crop and U.S. competitive crop at least for the next few years now, but laws can change and the regulations can change with respect to that. But right now, we think we have a reasonably strong runway and we continue to build our brand. Last thing I would notice, although we currently get our supply from Canada, if U.S. was to change regulations obviously, we would look at that as a market as well. But in terms of distribution in the U.S., we feel there is – I don’t want to say no risk because that’s hard to say on anything, but there is virtually little risk on any changes to being able to distribute it in the U.S.

Okay. Thanks for that. That’s all my questions.

Thank you.

[Operator Instructions] And our next question comes from Brian Hogan with William Blair. Your line is open.

Good morning.

Good morning.

Good morning.

Kind of follow-up to the Manitoba Harvest, can you elaborate on the elevated inventory and then on the impacts?

Sure. So we were throughout 2016, we had a market in Asia that was growing very, very rapidly for us. And the distributors there ended up and as you know, you generally go through distributors, especially a lot of our companies do when we access international markets. Our distributors were very, very strong. I think it really helped to boost kind of the last half of 2016. Unfortunately, the inventory levels that they have reported back to us are higher and the shelf life of these products, are pretty long. And so we are at a point – a period where we have a glut of supply in that one particular market that needs to work through. And I think that will definitely have a negative impact on the business, especially in the first half as we are going to be comping from selling product into that market last year. We sold for the full year into that market. And in the first half of this year, we see virtually no sales to that market as inventory levels rebalance. Now, we do think that notwithstanding the really material decline that we will experience out of that market that we are having growth in other parts of our business, both in North America and elsewhere that will help to make up for it. But it’s – when you have your fastest growing and largest non-North American market go from being a large purchaser to really purchasing nothing for at least the immediate future here in the first half of the year, that’s going to have an impact on the financial results. And that’s why, we wanted to point that out and let everyone know that, although we still think that Manitoba Harvest will experience some growth this year, it will be negatively impacted. And in the first half we will see the majority of that negative impact.

How much of your sales are to the Asian market?

Yes. We don’t typically disclose that. But I would say, it is a double-digit level of sales - double-digit percentage.

Although double digits are like a third?

Yes. Low double-digits.

Right. And then can you comment on the leadership change there at Manitoba Harvest, why the change – is the Founder still there?

Yes. So the Founder is still there. When we acquired the business, we had always anticipated building out and strengthening the management team. The founder is really great. He is – he actually presented at our investor conference last year and for all those who attended I think you see his enthusiasm and excitement about the product and the opportunities and the benefits of hemp just as a super food. But we were always anticipating upgrading and augmenting the management team and being able to really push on a much more aggressive basis. I think we have said all along, we have kind of viewed this much more like kind of ERGObaby in terms of when we acquired that business and the Founder was still going to stay active with the business. But yes, we wanted to build and augment a team around her in ERGObaby case. Well, the same is true here with Manitoba Harvest. We have got a really strong Founder and for all intent and purpose has kind of invented the industry. He is kind of the grandfather of hemp. But we wanted to augment around him and his understanding of the product and enthusiasm for the product with the management. And we have said that we are really looking to build out kind of the infrastructure. The first step of that is bringing on kind of a CEO, who not only has worked with us, so we know him and feel that his style matches really well. We know what his capabilities are, but also has relevant experience and he is a senior position with Kraft Foods, understand this industry really well. And so we feel really good about bringing Bill on as CEO. We are continuing to look to build out more of the senior management team. And we think that, as we put these senior management assets in place, it’s really sets the company up well for long-term growth.

Alright. And then collectively, I believe 5.11 and Liberty Safe have some exposure to Gander Mountain, which I believe has or will be filing bankruptcy or I guess can you quantify the exposure there?

We are not going to quantify the exposure on a company-by-company basis, but I think it’s fair to say that in the context of our consolidated financial performance as a company that we wouldn’t consider it material. And that each company is doing all of the things that you would expect them to do in the context of their relationship with Gander, given the news of the last several weeks. And we are very comfortable with how each of those companies are managing through that situation. And while it’s not at all something that we are excited about, I think it’s something that both companies are prepared for regardless of what the outcome is at Gander Mountain.

Sure. And then you to took an impairment in Clean Earth as well mentioned to Arnold, nearly the same size, is that…?

No, that was not an impairment, Brian. That was a write-down of assets. We got out of the facility in Williamsport, Pennsylvania that had been focused on the fracking industry. Obviously, that industry has dried up for the past couple of years. But I think importantly to note that we retained those permits and should have come back, we would be in a position to capitalize and get into that again.

Alright. Thanks for the clarification. And then lastly, FOX Factory, obviously still own 14% of it and it’s performed really well and had another strong quarter, recently, I guess what are your plans for your holdings of FOX Factory, given your debt load and leverage and whatnot?

Yes. I think our strategy with respect to our FOX Holdings remain consistent as it’s been since we have taken the company public, which is to say that we are not in the business of owning minority stakes in companies we have been pleased to own these FOX shares, because we still have high regards for the company and its management team and its opportunities. But we view that obviously as an investment while we own it, but view it as a source of liquidity to fund the growth of our business going forward. And as we have over the last several years opportunistically monetized some of those positions, we would expect to continue to do that opportunistically going forward.

Okay. And then I guess one final one, I think Ryan, some of your comments about the first quarter being the seasonally weakest and some of the other by company CapEx spends and whatnot, were you suggesting that the first quarter CAD will be below the dividend, but full year still be comfortably above that, is that what you are suggesting?

Yes. The comments are that yes, Q1 will be weaker, relative to the other quarters. I think it is safe to say, if you consider consensus as well as share offering in Q4, you will see that and that is right that as the year progresses, I would expect that we would exceed it and therefore exceeded on a full year basis.

Okay. Thanks for your time.

Thank you.

And I am showing no further questions. I would now to turn the call back to management for any further remarks.

Thanks everyone for joining us on today’s call and following the CODI story. We look forward to sharing our progress with you in the future.