Leading Businesses. Solid Financial Structure....

Leading Businesses. Solid Financial Structure. Transparency.

2 Leading Businesses. Solid Financial Structure. Transparency

Legal Disclaimer

� This presentation contains certain forward-looking statements within the meaning of the federal securities laws. These statements may be made a part of this presentation or by reference to other documents we file with the SEC.

� Some of the forward-looking statements can be identified by the use of forward-looking words. Statements that are not historical in nature, including the words “anticipate,” “may,” “estimate,” “should,” “seek,” “expect,” “plan,” “believe,” “intend,” and similar words, or the negatives of those words, are intended to identify forward-looking statements. Certain statements regarding the following particularly are forward-looking in nature:Future financial performance, market forecasts or projections, projected capital expenditures;Our business strategy.

� All forward-looking statements are based on our management’s beliefs, assumptions and expectations of our future economic performance, taking into account the information currently available to it. These statements are not statements of historical fact. Forward-looking statements are subject to a number of factors, risks and uncertainties, some of which are not currently known to us, that may cause our actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial position. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to the risks set forth in “Risk Factors” included in our SEC filings.

� In addition, our discussion may include references to EBITDA, cash flow, CAD or other non-GAAP measure. A reconciliation of the most directly comparable GAAP financial measures to such non-GAAP financial measures is included in our annual and quarterly reports in Forms 10-K and 10-Q filed with the SEC.


Overview

Compass Diversified Holdings (CODI):� An acquirer, owner and manager of high cash flow, niche leading middle market

businesses operating in attractive industries

� Family of eight operating subsidiaries - 2/3rd branded products / 1/3rd niche industrial

� Four rapidly growing branded products businesses

� Four high free cash flow, predictable niche industrial businesses

� Defensible market positions with strong “reason to exist”

� Strong consolidated financial performance in fiscal 2012

� Revenues: 2011 : $606.6 million 2012 : $884.7 million 45.8%

� Cash Flow Available for Distribution and Reinvestment (CAD):

2011 : $69.0 million 2012 : $77.7 million 12.6%

� Experienced acquirer and manager of middle market businesses

� 27 professionals at the holding company employing consistent investment style since 1998

� Realized gains of $198 million through 5 company sales


Overview

Compass Diversified Holdings (CODI):� Substantial outperformance of indices since May 2006 public offering

� Consistent distributions

� Current distribution of $0.36 per quarter, $1.44 annually, approximate 8.5% yield

� Cumulative distributions of approximately $9.24 since IPO

� Have NEVER reduced distribution, even in 2009

� Unprecedented transparency

� Public filings include segment reporting on ALL 8 subsidiaries

TotalReturn

CODIOutperformance

AnnualizedReturn

CODIOutperformance

CODI 103.7% NA 10.9% NA

S&P 500 37.9% +65.8% 4.8% 6.1%

Nasdaq 49.9% +53.8% 6.1% 4.8%

DJIA 57.6% +46.1% 6.8% 4.1%


Growth Strategy

� 8 industry leading niche businesses with strong “reasons to exist”

� Attractive end markets served

� Positioned to take market share

� Scalable infrastructure

Organic Growth

Three Pronged Strategy to Drive Long Term Above Average Growth Rates

� High free cash flow subsidiaries

� Pursue high ROI growth capital expenditure opportunities

� Consummate add-on acquisitions

Reinvest Free Cash Flow

� Typically accretive to Cash Flow in first year

� 9 acquisitions consummated since May 2006

PlatformAcquisitions


Branded Products

($ millions)

Year-Ended

’12

Year-Ended

’11Change

QTR 2013

QTR 2012 Change

Revenue $549.2 $465.5 +18.0% $143.6 $120.7 +19.0%

EBITDA $105.9 $85.2 +24.3% $30.4 $22.8 +33.1%

Margin 19.3% 18.3% +1.0% 21.2% 18.9% +2.3%

� Four branded products companies

� Camelbak, Ergobaby, Fox Racing Shox, Liberty Safe

� Represents approximately two-thirds of subsidiary EBITDA

� Lifestyle brands with aspirational appeal

� Taking market share

� Extendable into adjacent categories

� Maintain pricing power in all economic environments

� Robust financial performance

� Revenues: 19.0% ( 3/31/13 vs. 3/31/12)

� EBITDA: 33.1% ( 3/31/13 vs. 3/31/12)

� EBITDA margin: 230 basis points increase

� High free cash flow

� Maintenance Capital Expenditure leakage of only 6.4% of 2012 annual EBITDA

37.8%

34.0%

15.2%

13.0%

Year-Ended December 31, 2012

EBITDA

Camelbak

Fox

Liberty

Ergobaby


Niche Industrial� Four niche industrial companies

� Advanced Circuits, American Furniture Manufacturing, Arnold Magnetic, Tridien Medical

� Represents approximately one-third of subsidiary EBITDA

� Defensible niche industry leaders

� Best in class manufacturing capabilities

� Diversified end markets

� Low capital expenditure requirements

� Steady consistent financial performance

� Pro forma Revenues flat (3/31/13 vs. 3/31/12)

� EBITDA consistent with expectations

� High free cash flow

� Maintenance Capital Expenditure leakage of only 7.6% of 2012 annual EBITDA

57.0%32.0%

12.0%

Year-Ended December 31, 2012

EBITDA

ACI

AFM

Arnold

Tridien

($ millions)

Year-Ended

’12

Year-Ended

’11Change

QTR 2013

QTR 2012 Change

Revenue $358.8 $376.1 -4.6% $98.0 $97.9 -

EBITDA $51.9 $`52.5 -1.0% $13.0 $14.0 -7.1%

Margin 14.5% 13.9% +0.6% 13.3 14.3 -1.0%


Value Creation Model

� 5 businesses sold at an approximate $198mm gain� In each case, cash flows had increased significantl y vs. acquisition

AND substantial multiple accretion was achieved vs. purchase

� Grow revenues and improve operations� Proactive approach to measurement and management (A LIGNMENT)� Sourcing, production strategy, customer acquisition , branding,

geographic or product markets, MIS, compensation � Highly accretive add-on acquisitions

� Disciplined investing criteria� Valuation is critical to success – no taking back va luation

� Target characteristics� Leading market position with solid ‘reasons to exis t’� Competitive advantage enabling market share gains� High free cash flow generation

� 9 acquisitions with attractive end markets served c onsummated since May 2006

Acquisition of Platform

Businesses

Management of Subsidiary Companies

Opportunistic Divestitures

Maximize cash flow returned to shareholders and reinvested in the business


Current Environment

Optimal structure for ownership � No forced investment or exit pace

• Disciplined approach to acquisitions – not forced to compromise on valuation or target company characteristics

� Extremely transparent financial reporting enables shareholders to understand health of underlying businesses during ownership period

We control and actively manage each of our businesses� Not subordinate to or dependent on others

� Experienced in managing and winning through economic cycles

� Diversity proving its benefit in this cycle

Ability to make acquisitions without third party financing� Acquisitions consummated with cash/committed facility

� Absence of financial contingences provides greater “certainty to close” for sellers

� Intermediary’s best friend


Outperformance since IPO

Compass Diversified Holdings (CODI):� Substantial outperformance of indices since May 2006 public offering

� Consistent distributions

� Current distribution of $0.36 per quarter, $1.44 annually, approximate 8.5% yield

� Cumulative distributions of $9.24 since IPO

� Have NEVER reduced distribution, even in 2009

Totalreturn

CODIOutperformance

AnnualizedReturn

CODIOutperformance

CODI 103.7% NA 10.9% NA

S&P 500 37.9% +65.8% 4.8% 6.1%

Nasdaq 49.9% +53.8% 6.1% 4.8%

DJIA 57.6% +46.1% 6.8% 4.1%


Liquidity

Strong Balance Sheet with:

� Liquidity position improved by $198mm in realized gains since IPO in May 2006

� Total debt of $272.3 million at 3/31/13 is less than 2x TTM subsidiary EBITDA

� $16.5 million of cash on balance sheet as of 3/31/13

� No significant maturities until late 2017


Liquidity

Current Assets:Cash and cash equivalents 16,500$ Other current assets 269,089

Total current assets 285,589 Property, plant and equipment 67,504 Goodwill, intangibles and other assets 612,405

Total assets 965,498$ Current Liabilities:

Current portion of debt 2,550$ Other current liabilities 130,095

Total current liabilities 132,645 Long-term debt 269,731 Other liabilities 123,179

Total liabilities 525,555

Stockholder Equity:Non-controlling interest 41,827 Controlling interest 398,116

Total stockholders' equity 439,943 Total liabilities and stockholders' equity 965,498$

March 31, 2013 CONDENSED BALANCE SHEET (000's)


Appendix: Current SubsidiariesEBITDA contribution

Based on Year Ended 12/31/12 (pro forma for acquisi tion of Arnold and sale of Halo) $157.9mm in total

Advanced Circuits, 19%

American Furniture, -1%

Tridien, 4%

CamelBak, 25%

Arnold, 11%

Fox Racing Shox, 23%

Liberty, 9%

ERGO, 10%

CODI Investor Day PresentationSALLY MCCOY | CEO

OUR STORYOUR STORY

TO CONTINUOUSLY REINVENT AND FOREVER CHANGE THE WAY PEOPLE HYDRATE AND PERFORM

MISSIONMISSION

REPLACE BOTTLED WATER AS THE MOST COMMON WAY TO HYDRATE

VISIONVISION

VALUESVALUES

WE ARE OBSESSIVELY INNOVATIVE.

IF WE BUILD IT , WE’LL BAK ITIF WE BUILD IT , WE’LL BAK IT

The Got Your Bak™ Lifetime Guarantee covers all reservoirs, backpacks, bottles and accessories from manufacturing defects in materials and workmanship for the lifetime of the product.

COMPANY HIGHLIGHTSCOMPANY HIGHLIGHTS

CREATED HANDS-FREE HYDRATION CATEGORY

CONTINUE TO DOMINATE CONSUMER AND MILITARY

MARKET SHARE

STRONG HISTORY OF PRODUCT INNOVATION

STRONG BRAND IDENTITY

PROVEN AND EXPERIENCED

MANAGEMENT TEAM

STRONG FREE CASH FLOW GENERATION

EXCEPTIONAL MANAGEMENT TEAMEXCEPTIONAL MANAGEMENT TEAMJeremy Galten—VP Research & DevelopmentJeremy joined CamelBak as an engineering manager in 2001 and has led the R&D team since 2008. His prior experience includes development in medical and consumer product design.

Kerri Tuuri—VP HR and AdministrationKerri joined CamelBak in March 2006 after directing North American operations at IsoTis OrthoBiologics.

Mike Crook—VP OperationsMike joined CamelBak in May 2006. Prior to CamelBak, he worked at Motorolla and Dell.

Nick Allen—VP Government ContractWith CamelBak since 2007, Nick spent 19 years at WL Gore, and 20 years as an officer in the United States Marine Corps.

Sally McCoy—Chief Executive OfficerSally assumed the role of President and CEO in October 2006 after 25 years of operations experience in the outdoor lifestyle space and 3 years as an M&A banker.

Jason Frame—Chief Financial OfficerJason joined CamelBak in February 2008 with previous tenure as an operating partner with Irving Place Capital and Director at AlixPartners.

Layne Rigney—SVP of Global SalesLayne joined CamelBak in June 2005. His background includes marketing and sale experience at PowerBar/Nestle, RockShox and Franklin Resource Group.

Chris Strain—CMO, VP of Product DevelopmentChris brings over 20 years of marketing and branding experience with Pepsi, Mountain Dewand Vans.

MOUNTAINBIKERS

MOUNTAINBIKERS

MOUNTAINBIKERS

RUNNERSRUNNERSRUNNERS SNOW SPORTSSNOW SPORTSSNOW SPORTS

ROAD CYCLISTS

ROAD CYCLISTS

ROAD CYCLISTS

LOHAS CONSUMERS

LOHAS CONSUMERS

LOHAS CONSUMERS

NEXTGENERATION

NEXTGENERATION

NEXTGENERATION

HIKERSHIKERSHIKERS

CAMELBAK CONSUMERSCAMELBAK CONSUMERS

MILLENNIALSMILLENNIALSMILLENNIALS

CAMELBAK CONSUMERSCAMELBAK CONSUMERS

FIREFIGHTERSFIREFIGHTERSFIREFIGHTERS ARMYARMYARMY ASTRONAUTASTRONAUTASTRONAUTSPECIALFORCESSPECIALFORCESSPECIALFORCES

HOWEVER YOU HYDRATE, WE’VE GOT YOUR BAK ™

FOR ANY ACTIVITY, CAMELBAK OFFERS RESPONSIBLE HYDRATION SOLUTIONS FOR A GROWING MOVEMENT OF SUSTAINABILITY

Retouch Image

WHY PEOPLE DRINK BOTTLED WATER?WHY PEOPLE DRINK BOTTLED WATER?

TASTETASTE

TEMPERATURETEMPERATURE

CONVENIENCECONVENIENCE

SAFETYSAFETY

BOTTLED WATER: THE IMPACTBOTTLED WATER: THE IMPACT

Producing plastic bottles for American consumption requires the equivalent of more than 17 million barrels of oil, not including the energy for transportation. (Source: National Geographic: “Drinking Water “2011)

That’s enough oil to power 1 million cars for 1 year. (Source: Pacific Institute, December 2007)

90% of the environmental impact has already happened before you even purchase a bottle of water. (Source: http://greenupgrader.com/3258/plastic-bottle-facts-make-you-think-before-you-drink)

COMPANY PERFORMANCE($ MILLIONS)COMPANY PERFORMANCE($ MILLIONS)

SALES BREAKDOWNSALES BREAKDOWN

PACKS PACKS

BIKEBIKEBIKE HIKEHIKEHIKE

PADDLEPADDLEPADDLESNOWSPORTSSNOWSPORTSSNOWSPORTS RUNRUNRUN

INDUSTRYINDUSTRYINDUSTRYMILITARYMILITARYMILITARY

BOTTLES BOTTLES

EVERYDAYEVERYDAYEVERYDAY KIDSKIDSKIDS INSULATEDINSULATEDINSULATED BIKE/SPORTBIKE/SPORTBIKE/SPORT

FILTRATION/PURIFICATIONFILTRATION/PURIFICATION

GROOVE®GROOVE®GROOVE® ALL CLEARALL CLEARALL CLEAR

DISTRIBUTION DISTRIBUTION

With 64 distributors worldwide, CamelBak has a distribution network to fulfill product and our Got Your Bak guarantee across the globe

OUR PARTNERSOUR PARTNERS

LEED CERTIFIEDHEADQUARTERS – PETALUMA, CA

THANK YOU!THANK YOU!

Growth. Leadership. Transparency.

BRANDED COMPANIES


Industry : Mountain bike and off-road suspension products

Competitive Strengths :

� Leading market position in premium mountain bike segment, significant market share in other segments

� Strong IP portfolio

� Significant brand equity

Compass Value Added :

� Working with management to reduce cost of production and to build brand image

Financials:

REARSHOCKS

FRONTFORKS

SNOWMOBILE& ATV

SUSPENSIONS

www.foxracingshox.com

Year-Ended Year-Ended Quarter-Ended Quarter-Ended

12/31/2012 12/31/2011 3/31/2013 3/31/2012

Revenue $235.9 $197.7 $54.9 $45.7

EBITDA $36.0 $30.8 $8.8 $6.4

Industry : Premium designer and manufacturer of soft structured baby carriers, stroller travel systems, as well as complimentary juvenile products


� Carrier endorsed as “one of the 20 best products in the last 20 years” by Parenting Magazine

� Superior design resulting in improved comfort for both parent and child

� Since introduction in 2004, company has achieved estimated 20% market share in US and estimated top market share in Korea & Japan

� Passionate and enthusiastic customer base

� Reduced cyclicality industry with low elasticity of price due to importance of product to purchaser

Compass Value Added:

� Recruited senior management team. Working with management to improve product distribution globally, and to identify related brand products to sell into passionate customer base

Financials:

www.ergobaby.com



12/31/2012 12/31/2011 3/31/2013 3/31/2012

Revenue $64.0 $44.3 $16.2 $13.7

EBITDA $16.1 $11.7 $3.9 $3.3


Industry : Premium home and gun safe manufacturing


� Market share leader

� Well-known brand names

� Category management capabilities for customers

� Low cost domestic manufacturer


� Working with management to expand manufacturing capabilities, develop national marketing efforts and to pursue organic growth initiatives

Financials:

www.libertysafe.com


12/31/2012 12/31/2011 3/31/2013 3/31/2012

Revenue $91.6 $82.2 $29.7 $21.2

EBITDA $13.8 $11.6 $4.8 $2.6

Growth. Leadership. Transparency.

NICHE INDUSTRIAL COMPANIES


Industry : Quick-turn production and prototype printed circuit board (“PCB”) manufacturing


� Insulated from Asian manufacturing due to small, customized order size and requirements for rapid turnaround

� Largest quick turn manufacturer in the US; 300+ unique daily orders received

� Manufacturing scale produces high margins

� Completed accretive acquisitions of Circuit Express and UCI

� Diverse customer base – 10,000 current customers

� Approximate 40% EBITDA margins


� Working with management to identify and consummate acquisitions and entered into complementary quick turn assembly business

Financials:

www.4pcb.com


12/31/2012 12/31/2011 3/31/2013 3/31/2012

Revenue $84.1 $78.5 $21.8 $19.4

EBITDA $29.8 $31.7 $7.2 $7.5


Industry : Engineered permanent magnet and magnetic assemblies manufacturer


� Market share leader

� Attractive and diverse end-markets

� Engineering and product development capabilities

� Stable blue chip customer base – 2,000+ customers globally

� Global manufacturing footprint


� Working with management in the pursuit of acquisitions, the development of its strategic plan, organic growth initiatives and sourcing program

Financials:

www.arnoldmagnetics.com

Pro-FormaYear-Ended Year-Ended Quarter-Ended

Pro- Forma Quarter-Ended

12/31/2012 12/31/2011 3/31/2013 3/31/2012

Revenue $127.4 $136.3 $30.4 $34.5

EBITDA $16.8 $17.1 $3.7 $4.6


Industry : Medical support surfaces product line includes specialty beds, mattress replacements, overlays, and patient positioning devices


� Cost savings through scale purchasing and operational improvements

� Full product line consisting of foam, air, gel and combination surfaces

� Significant intellectual property; FDA approvals


� Working with management on research and development opportunities for new products.

Financials:

www.tridien.com


12/31/2012 12/31/2011 3/31/2013 3/31/2012

Revenue $55.9 $55.9 $15.0 $13.6

EBITDA $6.4 $7.8 $1.4 $1.6


Industry : Promotionally priced upholstered furniture manufacturing product line includes stationary and motion sofas, loveseats, sectionals, and recliners


� Low cost domestic manufacturer; ability to ship most product in its product line within 48 hours

� Insulated from foreign imports due to transportation economics and customer demands


� Working with new management team to rationalize infrastructure, optimize margins, improve product costing information, and expand sales force.

Financials:


12/31/2012 12/31/2011 3/31/2013 3/31/2012

Revenue $91.5 $105.3 $30.8 $30.3

EBITDA $(1.1) $(4.2) $0.6 $0.4


Summary

Compass Diversified Holdings (CODI)

� An acquirer, owner and manager of high cash flow, niche leading middle market businesses operating in attractive industries

� Diversified family of rapidly growing branded product and niche industrial companies

� Experienced acquirer and manager of middle market businesses

� Committed to responsibly returning money to shareholders

� Unprecedented transparency

Leading Companies, Solid Financial Structure And Transparency.


Appendix: CODI Structure

Eight Subsidiary Businesses

Public Shareholders

Distributions

Cash Flows

Debt FacilityCompass Diversified Holdings

(“CODI”)


Appendix: CODI Structure (cont.)Subsidiary Cash Flows to CODI

� CODI uses cash on hand and its debt facility to acquire businesses� Significant advantage versus other potential acquirers� Particularly appealing to our target sellers – families and corporate

conglomerates

� CODI is both the SOLE lender to and majority equity holder in each of these businesses

� Management of subsidiaries is a material investor in EVERY case in the subsidiary companies

� Cash flows from subsidiaries first as interest on CODI loans

� Remainder of cash is utilized to amortize CODI loan – effect is to sweep 100% of cash to CODI while providing long term benefit to subsidiary management

� CODI is a tax partnership

� 2012 K1s available February 28, 2013

� Simplified reporting of interest income, interest expense and capital gain


Appendix: CODI Structure (cont.)

CODI Management / Compensation Structure

� Compass Group Management, LLC (CGM) is retained as a manager at the will of the independent Board of Directors via a Management Services Agreement

� Board audit, compensation and governance committees composed solely of independent members

� Fully SOX compliant

� Alan Offenberg seconded as CEO & Jim Bottiglieri seconded as CFO from CGM

� CODI is CGM’s sole vehicle for continuation of its long and successful track record on behalf of the Kattegat Trust.

� CGM is paid 2% of book value as a management fee� Ensures that investors bear no hidden expenses� No mark to market to increase fee level as value of businesses increases

� In lieu of options, CGM also receives 20% of realized gains after a 7% hurdle, high water mark, and recognition of any impairments to the value of owned subsidiaries

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