Good morning, and welcome to the Compass Diversified Holdings 2018 Third Quarter Conference Call. Today's call is being recorded. All lines have been placed on mute. [Operator Instructions] At this time, I would like to turn the conference over to Leon Berman of The IGB Group for introductions and the reading of the safe harbor statement. Please go ahead, sir.

Thank you, and welcome to Compass Diversified Holdings third quarter 2018 conference call. Representing the company today are Elias Sabo, CODI's CEO and Founding Partner of Compass Group Management; and Ryan Faulkingham, CFO. Also joining us today are David Swanson and Pat Maciariello, partners of Compass Group Management, who will review our subsidiaries' performance. Before we begin, I would like to point out that the Q3 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-Q with the SEC last night, which includes reconciliations of non-GAAP financial measures discussed on this call. Please note that reference to EBITDA and the following discussions referred to adjusted EBITDA as reconciled to net income in the company's financial filings. The company does not provide a reconciliation of the ratio of its estimated cash flow available for distribution and reinvestment to its distribution. This is because certain significant information is not available without unreasonable efforts, including, but not limited to, our company's future earnings, current taxes, capital expenditures and the distribution to be paid as approved quarterly by our Board of Directors. Throughout this call, we will 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 will make certain forward-looking statements, including statements with regard to the future performance of CODI. Words such as believes, expects, projects 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, 2017, as well as in other SEC filings. In particular, the domestic and global economic environment has a significant impact on our subsidiary companies. Except as required by law CODI does not undertake an obligation to publicize, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. At this time, I'd like to turn the call over to Elias Sabo.

Good morning. Thank you all for your time and welcome to our third quarter earnings conference call. I will begin by highlighting our continued success, capitalizing on compelling opportunities to reinvest in our leading subsidiaries. During the third quarter, we added Ravin Crossbows to our Velocity Outdoor subsidiary and DART to our Clean Earth subsidiary. With the acquisition of Ravin, we changed the name of our Crosman subsidiary to Velocity Outdoor to emphasize the company's broad portfolio in the hunting, shooting and outdoor categories. We are optimistic about the acquisition of Ravin and the significant intellectual property portfolio Ravin has created in the crossbow category. The addition of Ravin strengthened Velocity Outdoor’s existing offerings in the outdoor recreational market, further expands the company's presence across retail and dealer channels and enhances its overall growth prospects. The addition of DART at Clean Earth continues our strategy of making accretive add-ons to expand our geographic footprint and processing capabilities. Now turning to our quarterly performance, throughout the presentation when we refer to pro forma adjusted results, revenue and EBITDA for Velocity including Ravin, Foam Fabricators and Rimports will be as if the businesses were acquired on January 1, 2017. During the third quarter, revenues increased by 12.4% and EBITDA increased by 4.7% on a pro forma basis from the third quarter of 2017. Our industrial businesses continue to perform above expectations. However, our consumer businesses continued to perform below expectations. Despite the continued weakness in our consumer businesses, we generated increased EBITDA and cash flow for the quarter, highlighting the benefit of owning a diverse set of subsidiaries and uncorrelated industries. Our niche industrial businesses continued to generate strong pro form combined third quarter results, performing well above expectation. Revenues grew 16.4% from the third quarter of 2017, while EBITDA increased 9.6%…

Thanks, Elias. On a pro forma adjusted basis, year-to-date revenues for our niche industrial businesses increased by 13.4% while EBITDA increased by 10.9% compared to the same period in 2017. Starting with Advanced Circuits year-to-date revenue increased by 3.1% and EBITDA increased 5% compared to the same period in 2017 in line with our expectations. Arnold Magnetic’s year-to-date revenue increased 13.9% point nine percent and EBITDA increased 23.5% compared to the same period in 2017 exceeding our expectations. We continue to experience increased demand across our aerospace and defense end markets as well as benefit from operational improvements. We believe Arnold remains well positioned to continue to grow into 2019. Clean Earth year-to-date revenue increased 30.1% and EBITDA increased 29.8% compared to the same period in 2017 exceeding our expectations. Clean Earth continued to experience strong organic growth across each of its service lines and benefited from recent add-on acquisitions. Sterno products year-to-date revenue increased 10.1% and EBITDA increased 5.1% compared to the same period in 2017. Year-to-date Sterno margins have been impacted by integration costs associated with the Rimports acquisition and increased chemical input costs. Sterno continues to perform in line with expectations and is well positioned for continued growth in 2019. Lastly, Foam Fabricators year-to-date revenue increased 2% and EBITDA increased 1% compared to the same period in 2017 in line with our expectations. I will now turn over the call to Pat to review our branded consumer subsidiaries year-to-date performance.

Thanks, Dave. On a pro forma adjusted basis, year-to-date revenues for our branded consumer business increased 9.2% while EBITDA decreased 6.4% compared to the same period in 2017. Beginning with Liberty Safe, year-to-date revenues decreased 6.5% and EBITDA decreased 24.8% compared to the same period in 2017, below our expectations. Liberty is facing a challenging outdoor retail market and rising costs associated with steel tariffs. Liberty is implementing cost containment measures to mitigate these headwinds. However, we expect Liberty’s financial performance to remain challenged in the near-term. Ergobaby’s year-to-date revenue decreased 9.5% and EBITDA decreased 29.9% compared to the same period in 2017, below our expectations. We believe global end market demand for our products remains stable. However, inventory rebalancing and the lingering effects from the loss of a large national retailer of juvenile products have impacted Ergobaby’s results in 2018. Given our belief that these headwinds are transitory, we have chosen to maintain cost structure and invest in this business causing operating margins to drop in 2018. We believe this is the appropriate strategy for generating long-term value creation in this business notwithstanding the financial disruption caused in the short-term. Manitoba Harvest year-to-date revenue increased 24.7% and EBITDA decreased 11.6% compared to the same period in 2017, exceeding our expectations. As we have mentioned on previous calls, we will continue to invest in consumer marketing to raise awareness of Hemp based food products and the domestic market to drive sales growth. Velocity Outdoor’s year-to-date revenue increased 24.6% while EBITDA increased 55.3% compared to the same period in 2017, due primarily to the addition of Ravin. For much of 2017 and early 2019, Ravin products were in allocation to its customers and Ravin customers were stocking inventory. Thus we do not believe this level of revenue growth is sustainable. Importantly, we acquired – when we acquired Ravin, we assumed a normalized level of revenues and EBITDA in valuing the company. For the balance of the year and heading into 2019, we expect Velocity to face a challenging outdoor retail market similar to Liberty. However, for 2019, we expect to offset some of these challenges through product innovation for both Ravin’s and Velocity’s historic product line. Lastly, 5.11’s year-to-date revenue increased 10.3% exceeding our expectations, while EBITDA decreased 16.1% compared to the same period in 2017. With that, I will turn the call over to Ryan to add his comments on our financial results.

Thank you, Pat. Today, I will discuss our consolidated financial results for the quarter ended September 30, 2018. I will limit my comments largely to the overall results for our company since the individual subsidiary results are detailed in our form 10-Q that was filed with the SEC yesterday. On a consolidated basis, revenue for the quarter ended September 30, 2018 was $448.7 million, up 38.5% compared to $324 million for the prior year period. The year-over-year increase reflects growth at our 5.11, Arnold Magnetics, Manitoba Harvest and Sterno subsidiaries as well as at Clean Earth, which improved across each of its service lines and benefited from the three add-on acquisitions in 2018. It also reflects increased revenue contribution from our acquisition of Foam Fabricators and Sterno’s acquisition of Rimports during February of this year. Net income for the quarter ended September 30, 2018 was $5.8 million as compared to net income of $8.4 million for the quarter ended September 30, 2017. Cash flow available for distribution or reinvestment, which we referred to as CAD, for the quarter ended September 30, 2018 was $26. 4 million compared to $26.2 million in the prior year period. During the third quarter, our cash flow results were negatively impacted with certain timing related items. First, Sterno’s cash taxes, which were a sizable benefit in Q1 and Q2, reversed in Q3 and we recorded a higher cash taxes than we had anticipated. Further certain Clean Earth delayed CapEx from the first half of 2018 was spent in the third quarter reducing our cash flow. Based on our 2018 earnings expectations for our underlying subsidiaries and the recent accretive acquisitions we completed, we expect CAD will exceed our distribution for the full year of 2018. Moving to our balance sheet; we had approximately $36.2 million…

Thank you, Ryan. During the third quarter, we generated strong revenue growth and increased cash flows as we continued to provide shareholders stable and sizable distributions. For full year 2018, we expect to generate the lowest payout ratio since 2010. We remain well positioned to continue generating strong results and our leading niche industrial businesses, while taking advantage of investments we've made across our branded consumer businesses to drive long-term profitability. During the quarter, our team continued to draw upon our strong balance sheet to capitalize on accretive market opportunities and we are pleased to have completed a total of six accretive acquisitions year-to-date, including five add-on acquisitions and one platform acquisition. I would like to close by briefly discussing M&A activity and our forward growth strategy. Middle Market M&A activity remains at historically high levels. Debt capital remains robust with favorable terms and strategic and private equity acquirers continue to seek opportunities to deploy available capital. As a result, valuation multiples remain robust. Our acquisition efforts will continue to focus on accretive add-on acquisitions and selective platform opportunities where we can acquire niche market leaders at valuations where we can expect to exceed our weighted average cost of capital. Further, we will continue to consider opportunistic divestitures in this robust market in line with our strategy of creating long-term shareholder value. Going forward, we will maintain an intense focus on executing our proven and disciplined investment strategy. Opportunistically divesting when appropriate, distributing sizable distributions and creating long-term shareholder value. Operator, please open the line for questions.

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

Charlie Strauzer for Larry. Good Morning.

Good morning, Larry. Not, Larry. It’s – what was it?

It’s Charlie.

Charlie, hey, Charlie.

Good morning, Charlie.

Sorry about that. Clearly, there is some puts and takes in the quarter, outside of this have you guys noticed any kind of material change in demand or spending patterns or felt kind of any of the impact from kind of tariffs that kind of thing?

So I would say Charlie, there were some good things that were happening in the quarter. Clearly, our industrial businesses continue to perform at a very strong level and really well above sort of long-term trend kind of growth and expectations. On the consumer side, I would say, in general some of the things we highlighted 5.11 because it is a big driver and we've had to make some operational changes there that we think will enhance the company's prospects over the long term. I would say the one major thing that we did see with – in the outdoor channel; there was a pretty sizeable reduction throughout the quarter in terms of demand. I think it’s really more specific to that industry. We have clearly seen where steel tariffs had gone into effect earlier this year some negative effect, most notably our Liberty Safe subsidiary consumes a significant amount of steel. As you can imagine as that is starting to flow through as soon as tariffs went into effect or where – or even announced most of the domestic providers where we provide – purchased our steel or had already increased significantly what their cost to us where it's just much harder to flow that through to your customers’ mid-year. So there is a timing issue with respect to some of those tariffs that went into effect, where you're absorbing some of the costs. On the other side, you're not able to pass them through as quickly until some resets or maybe even in certain instances until the next year. So, there's definitely some margin squeeze that happen with respect to that. But I would say broadly, as we talk about tariff impact, in general with China for example, we're not seeing a huge issue for amount. I would say, our companies, especially on the industrial side that are mostly manufacturing in the United States, there is some benefit from that, an advanced circuits for example, which is solely a domestic manufacturer, is seeing some benefit of that. We had yet to see really any negative pressure. Now when tariffs step up, if they and in fact due at the end of the year from 10% to 25%, I think that could have some additional disruption. But most of our companies right now are pretty well diversified in terms of their supply base and we would have a little bit of exposure, but we're working very hard to make sure that kind of on a global footprint, we have enough diversification, so that there wouldn't be a material impact.

That's very helpful. Thank you. And then you're going into some of the specific businesses. Clean Earth had another good quarter. Are you starting to see any kind of benefits from dredging activity there? And what's kind of the outlook going forward?

Yeah, I would say there's not much benefit to dredge this year versus last year, maybe a tiny bit. So the strong performance year-to-date is really across the other business lines, contaminated soil and hazardous have been the main drivers of performance year-to-date.

Great and then Sterno is also having a nice quarter. Can you talk about the performance there between the legacy and Rimports? And have you seen any kind of challenges from kind of – any kind of shelf-space challenges at Walmart at all?

This is Pat. To answer your last question first, we haven't seen any challenges around shelf-space. And I'd say if you – a lot of the growth, we definitely had a good quarter at Rimports at the new acquisition, but I'd say if you’d look at some of the older acquisitions, we did the one in Canada, Northern International also performed very well. And I think the – given with the exception of the increase in diethylene glycol prices that we touched on earlier, the core business performed in line with expectations.

Great. And just one last question, if I could sneak in. Just with the Francisco taking the CEO role over at 5.11, wasn't he the founder and did he leave the company for awhile? A little bit more in his background maybe would be helpful. Thank you.

Yeah, he left the company for a couple years under prior ownership and then came back. And yes, he was one of the founders of the businesses. So he's been there with us since well before we acquired the business and we've had a great relationship with him since then.

Excellent, thank you very much.

Your next question comes from the line of [indiscernible]. Your line is open.

Hi, good morning. Thanks for taking my question.

Good morning.

Good morning.

So just first off on Manitoba, I know you've discussed it in the past, but just kind of some color around if any changes to the value of Manitoba or the strategy of that business? Give any of the law changes in Canada?

So no changes to the valuation that we hold it up. And in terms of strategy, I think you're referring to the legalization of marijuana recently in Canada. There is no change with our strategy in respect to that. We have long maintained that. We are on the industrial hemp side where our food is produced. It is completely different plant from that of marijuana and we think that it's really not within our core competency or expertise to change strategies with respect to that. So we are continuing with Manitoba. We think the best opportunity for the company continues to be to raise awareness in the U.S. and we're having really outstanding results in doing that. Most of the growth, in fact all of the growth that we've been experiencing year-to-date has come into the U.S. market and we're very excited. I mean some of our data suggests that we've sort of – kind of increased the household penetration now to upwards of 1% to sort of double from where it was at the start of the year. So we feel really good about our strategy and continuing it. And we think that hemp is obviously in the news a lot right now, which I think is really beneficial to this business and we continue to ride on that kind of wave although on the industrial side.

Okay, perfect, thank you. And then you mentioned Clean Earth on really the big business out there on contaminated soil and hazardous soil. Is that in relation to natural disasters, hurricanes, et cetera? Is that a bit of that jump in the last two quarters?

No, I don't think natural disasters tend to be big drivers to this business. Some of it is kind of just core organic growth of legacy facilities and in addition some of the acquisitions we've done over the last couple of years are performing extremely well under our ownership. So, I wouldn't necessarily attribute much of the performance to natural disasters.

Okay. And then you mentioned that non-cash charge possible in fourth quarter for 5.11. Is there – I know you don't know the exact number yet, but is there a range there that you're expecting?

Thanks, Leslie. No, we don't have a range yet. I think from my standpoint today and I don't think it'll be – I don't believe it will be material, but we did want to give the heads up. We have just started the analysis here. So, we just don't know at this point.

Okay. And then on the 5.11 growth, you talked about – expect some more growth CapEx in the next quarter for them. How much more – in the near term, how much more growth store wise are we thinking for 5.11?

I mean we're going to continue to build stores. The stores are growing and they have a profitable return. We haven't yet sort of finalized our budget for next year. So I don't want to give any indications other than that we're just going to continue to build stores at a responsible pace.

Yeah, but Leslie I would say the main growth CapEx drivers over the past 18 months have been the investment in the ERP and also the warehouse. And those are behind us largely now. There is a little bit of optimization obviously that you're doing in these things that we think will squeeze out some additional margin, but the large investments are behind us there. So now growth CapEx should largely turn towards our store growth. I think this year we'll add plus or minus 20 stores. And so, there's probably – as Pat said we have not yet finalized our plans, but we do think this is a really high return area where we can deploy capital and it's very successful for us. So something we’ll continue to do next year. I would say the growth CapEx expectations for this business are going to dramatically decline though, given that we now are through the large ERP and warehouse projects.

Perfect. Thank you. And then on Liberty, you've mentioned the impact of the steel tariffs and why they’re a bit delayed because of the amount of time it took to change prices there. How much of an impact does that have this quarter do you think on your costs?

Well, steel prices I think from relative to last year are up kind of order of magnitude 40%. And it's by far the largest component of cost of goods sold. So it's hard to isolate specifically because we're doing different things to react to the changes and constantly introducing new products and changing skews. So it's hard to isolate into a specific dollar amount, but I would attribute the majority of the gross margin decline at liberty this year versus last year to steel prices.

Okay, thank you. And then last – just on a few of the business you were talking about maybe some reserved expectations for the rest of the 2018, but expect tailwinds in 2019. Is there some guidance around kind of what 2019 is looking for – looking like so far? Growth, yes, but are we talking about low single-digits across the board or upper in the higher single-digit?

It's a little too early to start to talk about 2019 as all of our companies are going through their budgeting exercises right now. I would say in general, we feel that margins will return. I mean this has been in 2018, I would say an exceptional year in terms of revenue growth. And if we look across our companies, there has been a lot of investments that have been made to facilitate the kind of revenue growth and it is well above what our trend has – growth has been. At the expense of that margins have had some degradation. And there's a variety of things and we could go through company by company specifics to that, some of it has been some inflationary pressures with chemical, costs or with steel prices increasing, but to be very candid, some of it has also been more operational in nature like out of 5.11. And so, we expect next year to have margins across the portfolio look better than they looked this year. It's a little too early to look out and talk about kind of what type of revenue growth we can expect. I would say this year has been an extraordinary year for our industrial businesses and I'm not sure that we have – we don't believe the long term growth rate of our industrial businesses is as strong as what we're posting in 2018. On the flip side, we think our consumer businesses are really under earning their potential and that should revert and show something much better next year. So I think it's a little bit too early to tell, but I would say we feel very strong as we sit right now that margins will look stronger next year than they look today.

Alright, thank you for taking all my questions.

Thank you.

Your next question comes from the line of Kyle Joseph with Jefferies. Your line is open.

Good morning, guys.

Good morning, Kyle.

Good morning, Kyle.

Thanks for taking my questions. Just wanted to be sure I heard your fourth quarter guidance right, if I am not mistaken you kind of said the CAD would be sort of similar to 2Q and 3Q and so like are you guiding towards the range of let’s call it $26 million to $30 million of CAD for the fourth quarter?

Yes.

Okay, fair enough. And then just I wanted to talk about macro, you covered tariffs, but in terms of rising rates, are you seeing any impacts on the deal environment or any changes at your portfolio companies specifically as a result of rising rates?

So, not yet. I would say, let's take the first one. In terms of the M&A environment, it's really still frothy. The – as I've mentioned in some of my written remarks, there's just an abundance of capital out there, Kyle, today if you look at how much capital sits in private equity coppers, all of the capital that strategics have and tax reform allowed a lot of that capital to be repatriated. And so that creates additional competition for transactions in the marketplace. And by and large that is still really cheap compared to historical levels. And it's really abundant in terms of the type of leverage that traditional buyers would be able to bring to bear. So that combination I think with – still generally favorable macro outlook by – most people are creating conditions for very strong multiples and especially middle market private equity, but I just think across pretty much all kind of M&A activity right now. With respect to our companies, we're not seeing anything right now with rising rates. Rates that – areas that are more rate sensitive, think of, for example, housing, we don't really have a lot in there. I mean Foam Fabricators has some of its business and appliances. We've seen that part of the portfolio of Foam Fabricators be a little bit under pressure this year, but that company has broad diversification and has made it up in some of its acyclical areas. But I would just say broadly within kind of our portfolio, we don't see the negative effect of rising rates yet. Now, you know, kind of on a macro level, if rates were to rise so high that it caused the economy to contract then our industrial businesses would likely kind of feel pain from that, but we're just not seeing that yet.

Got it. That's great color. Thanks for answering my questions.

Thank you.

Your next question comes from the line of Brian Hogan with William Blair. Your line is open.

Hey, good morning.

Good Morning, Brian.

Just a few questions here. On Ergo has been relatively [indiscernible] mostly in the BKs and stuff. I mean can you talk about your market share globally and do you see any trends there? And then on top of that, what is your exposure to China and given the birth rate restriction limit being alleviated. So I appreciate that.

Sure, sure, sure, sure. So, first of all, globally on our market share. The data we see says that we're pretty solid on a POS level and not losing – definitely not losing material market share. And that's just sort of based on surveys, POS data, et cetera mostly domestically, but that's kind of what we see I'd say. In Europe if anything, I think we're gaining market share. And then in Asia, we have some of those inventory issues that we discussed with distributors, but we are seeing – we're not getting any data that says we're having a material decline in market share at all. Then as it relates to China, we do have a business or we do have some sales in China. It's not right now an exceedingly material part of our business. I'd say it has grown significantly. It grew significantly in 2017 and in the first half of 2018 and is doing okay in the back half, but probably not as strong as we would have expected given the macros that's going on there. So it continues to be a growth engine for us and we think that will sort of continue that trend next year. Does that answer your question, Brain?

Yeah, sure. And shifting over to 5.11 on the DTA, I definitely appreciate the lumpiness there. By going even discussing the market share again, are you confident you haven't lost any market share, just kind of trend there with even the lumpiness there.

Yeah, Brian, we're very – we're confident that we're winning the same percentage of opportunities coming to market. The problem is there just not lot of opportunities. I mean just to sort of level set what we've seen historically in this business and this is over a number of years. It kind of is in every other year business for DTA. And the cycle is sort of 18 months to 24 months on these contracts. Our pipeline for opportunities is really strong right now. That's probably partly a function of the fact that it's because – it's such a weak year in terms of actual revenue is being generated that it creates a really nice pipeline going into kind of the next year. But I would say with this business line, it's one that you would – we would expect to see a good year followed by a slower year, followed by a good year and that's just something that has historically happened. Now that being said, 2018 will turn out to be one of the weakest years that we've seen in the last decade. And I would say 2017 was a pretty good year. So, it is very volatile. I would say it’s one where the volatility has been really weak kind of in terms of this year, but we think it will revert back to – kind of a more normalized level. And I think with 5.11, our strategy has always been that we're growing other parts of the business. So this is going to be a less material kind of component of our business going forward. And therefore, hopefully over time we'll swing earnings less on a percentage basis.

Sure. And what is the business mix? Remind me.

So this year, I think we expect – last year I think we did kind of $22 million of it in terms of revenue. This year we did sort of – we expect to do about four. So just to give you a sense, it's kind of this year a point present a half of our business, last year it would have been something that looked like 7% of our business.

Thank you, guys. And then are these contracts, five year agreements. I mean are they bid them up every year or…

Yeah, you bid them up every year. So they come out, you bid on the contract and typically you fulfill within the next kind of 90 to 180 days. So these are not long-term contracts. They are – they come up. You supply the product relatively quickly after you're awarded the bid. And then when the need comes up again for whichever department you're working with globally, you re-bid on that. But it is based on when those departments are – when those kind of federal governments are coming out with their bids.

Alright. Shifting to the bigger picture, what are your thoughts on converting to a SEACORP? Any updated thoughts on there? I know I think we've discussed then watching the market and those who have done that. I just appreciate your updated thoughts.

Yeah, sure, Brian. We continue to keep it top of mind as part of our internal strategy and analysis. We look at some of the competitors of ours or those in similar fields such as KKR and REs. And if you look at their trading performance, I'd say from some – a few articles I've read, they've found some pickup in institutional ownership and some volume increases. However, if you look at their stock performance over that time, it doesn't look good, right. So we're not quite seeing I'd say some of – what we thought we might see there and I assume they would think the same, it continues to be something we consider at a minimum quarterly, our board expects updates and to the extent we have a change. We'll let you guys know. But at this point, we still believe a partnership structure makes the most sense today.

I appreciate your time today.

Thank you, Brian.

Thanks, Brian.

Your next question comes from the line of [indiscernible]. Your line is open.

Sorry, one quick follow-up question. We talked about the trade issues and the tariffs and everything. Like Manitoba having Canadian operation, do you find any benefit for your other companies or even more so for Manitoba to possibly have Canadian operations? So you can go direct to Asia, whether it would be China or others or even over to Europe to get around some of these issues?

Know it depends, Leslie, I would say, yes. Manitoba really isn't shipping product to Asia. So that's not something right now. I mean, there is so much opportunities specific to that company in the U.S. market that's where our resources are being allocated. But I would say broadly, there are some benefits, for example, like with Ergobaby having kind of European and Asian sourcing to be able to kind of address some of those markets. Arnold has the global footprint. So and some of the companies that are more global in terms of where our distribution is, those are two of our bigger businesses that have more global operation. Both of them do have a worldwide kind of subsidiaries that allow us to kind of manage through that.

Okay, perfect. Thank you.

Thank you.

There are no further questions at this time. I'll now turn the call back over to Elias for closing comments.

I would like to thank everyone again for joining us on today's call and for your continued interest in CODI. We look forward to sharing our progress with you in the future. Thank you.

This concludes Compass Diversified Holdings conference call. Thank you and have a great day.