Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Cadre Holdings Reports Third Quarter 2023 Financial Results By: Cadre Holdings, Inc. via Business Wire November 08, 2023 at 16:15 PM EST Increased Quarterly Revenue, Net Income, and Gross Margin Sequentially and Year-Over-Year Second Consecutive Quarter of Record Adjusted EBITDA and Adjusted EBITDA Margin Expects Record Full-Year 2023 Net Sales Between $477 to $481 Million and Raises 2023 Full-Year Adjusted EBITDA Guidance Range to $82 to $85 Million Cadre Holdings, Inc. (NYSE: CDRE) ("Cadre" or "the Company"), a global leader in the manufacturing and distribution of safety and survivability equipment for first responders, announced today its consolidated operating results for the three and nine months ended September 30, 2023. Net sales of $125.1 million for the third quarter; net sales of $357.9 million for the nine months ended September 30, 2023 Gross profit margin of 42.8% for the third quarter; gross profit margin of 42.2% for the nine months ended September 30, 2023 Net income of $11.1 million, or $0.29 per diluted share, for the third quarter; net income of $29.0 million, or $0.77 per diluted share, for the nine months ended September 30, 2023 Adjusted EBITDA of $23.7 million for the third quarter; Adjusted EBITDA of $65.1 million for the nine months ended September 30, 2023 Adjusted EBITDA margin of 19.0% for the third quarter; Adjusted EBITDA margin of 18.2% for the nine months ended September 30, 2023 Declared quarterly cash dividend of $0.08 per share in October 2023 “Cadre’s outstanding third quarter is a testament to our team’s continued strategic execution, together with strong, sustained demand for our mission-critical safety and survivability equipment,” said Warren Kanders, CEO and Chairman. “The implementation of the Cadre operating model, focused on constant improvement and the optimization of outcomes, continued to drive our strong financial performance, highlighted by record Adjusted EBITDA margins and gross margins. For the second consecutive quarter, we achieved our highest Adjusted EBITDA in history, while generating increased net sales and net income both sequentially and year-over-year.” Mr. Kanders added, “We are pleased to once again raise our full year Adjusted EBITDA outlook based on Cadre’s outperformance to date and confidence in our businesses’ fundamentals for the remainder of 2023. In both the US and internationally, we have seen a broad push to prioritize public safety and believe Cadre is ideally positioned to capitalize on these secular tailwinds over the medium and long term. We continue to actively pursue M&A opportunities to either enhance our market dominance or enter attractive, new adjacencies consistent with our key criteria. With entrenched positions in law enforcement, first responder and military markets, we are on pace to deliver record full year net sales in 2023 and remain excited about the opportunity to further grow our leading platform of premium safety brands moving forward.” Third Quarter and Nine-Month 2023 Operating Results For the quarter ended September 30, 2023, Cadre generated net sales of $125.1 million, as compared to $111.6 million for the quarter ended September 30, 2022. This increase was primarily the result of higher domestic demand for armor products and large international orders for crowd control products, partially offset by decreased agency demand for hard goods. For the nine months ended September 30, 2023, Cadre generated net sales of $357.9 million, as compared to $334.2 million for the prior year period, mainly driven by recent acquisitions and higher demand for armor and crowd control products, partially offset by timing for our EOD products. For the quarter ended September 30, 2023, Cadre generated gross profit of $53.6 million, as compared to $43.7 million for the quarter ended September 30, 2022. For the nine months ended September 30, 2023, Cadre generated gross profit of $151.0 million, as compared to $127.2 million for the prior year period. Gross profit margin was 42.9% for the quarter ended September 30, 2023, as compared to 39.2% for the quarter ended September 30, 2022. Gross profit margin was 42.2% for the nine months ended September 30, 2023, as compared to 38.0% for the prior year period, mainly driven by favorable pricing and product mix, prior year amortization of inventory step-up related to acquisitions, and productivity, partially offset by inflation. Net income was $11.1 million for the quarter ended September 30, 2023, as compared to a net income of $4.9 million for the quarter ended September 30, 2022. The increase resulted primarily from the change in year-over-year sales and the increase in gross profit margin. Net income was $29.0 million for the nine months ended September 30, 2023, as compared to a net loss of $0.8 million for the prior year period, primarily due to the change in year-over-year sales, the increase in gross profit margin, and a decrease in stock-based compensation expense. Cadre generated $23.7 million of Adjusted EBITDA for the quarter ended September 30, 2023, as compared to $20.7 million for the quarter ended September 30, 2022. Adjusted EBITDA margin was 19.0% for the quarter ended September 30, 2023, as compared to 18.6% for the prior year period. Cadre generated $65.1 million of Adjusted EBITDA for the nine months ended September 30, 2023, as compared to $53.3 million for the prior year period. Adjusted EBITDA margin was 18.2% for the nine months ended September 30, 2023, as compared to 16.0% for the prior year period. Product segment gross margin was 44.3% and 43.9% for the third quarter and first nine months of 2023, respectively, compared to 41.6% and 40.2% for the respective prior year periods. Distribution segment gross margin was 22.7% and 23.3% for the third quarter and first nine months of 2023, respectively, compared to 19.8% and 20.9% for the respective prior year periods. Liquidity, Cash Flows and Capital Allocation Cash and cash equivalents increased by $24.1 million from $45.3 million as of December 31, 2022 to $69.4 million as of September 30, 2023. Total debt decreased by $6.1 million from $149.7 million as of December 31, 2022, to $143.6 million as of September 30, 2023. Net debt (total debt net of cash and cash equivalents) decreased by $30.3 million from $104.4 million as of December 31, 2022, to $74.2 million as of September 30, 2023. Capital expenditures totaled $1.8 million for the third quarter and $4.3 million for the nine months ended September 30, 2023, compared with $0.7 million for the third quarter and $3.2 million for the nine months ended September 30, 2022. Dividend On October 24, 2023, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.08 per share, or $0.32 per share on an annualized basis. Cadre's dividend payment will be made on November 17, 2023, to shareholders of record as of the close of business on the record date of November 3, 2023. The declaration of any future dividend is subject to the discretion of the Company's Board of Directors. 2023 Outlook Update As a result of the Company's third-quarter performance and management's outlook for the remainder of the year, Cadre raised the midpoint of its full-year Adjusted EBITDA guidance range and increased net sales guidance. For the full year 2023, Cadre expects to generate net sales in the range of $477 million to $481 million and Adjusted EBITDA in the range of $82 million to $85 million. We expect capital expenditures to be in the range of $7.0 million to $8.0 million. Conference Call Cadre management will host a conference call on Wednesday, November 8, 2023, at 5:00 PM EST to discuss the latest corporate developments and financial results. The dial-in number for callers in the US is (888)-510-2553 and the dial-in number for international callers is 646-960-0473. The access code for all callers is 1410384. A live webcast will also be available on the Company’s website at https://www.cadre-holdings.com/. A replay of the call will be available through November 22, 2023. To access the replay, please dial 800-770-2030 in the U.S. or +1-647-362-9199 if outside the U.S., and then enter the access code 1410384. About Cadre Headquartered in Jacksonville, Florida, Cadre is a global leader in the manufacturing and distribution of safety and survivability products for first responders. Cadre's equipment provides critical protection to allow users to safely and securely perform their duties and protect those around them in hazardous or life-threatening situations. The Company's core products include body armor, explosive ordnance disposal equipment, and duty gear. Our highly engineered products are utilized in over 100 countries by federal, state and local law enforcement, fire and rescue professionals, explosive ordnance disposal teams, and emergency medical technicians. Our key brands include Safariland® and Med-Eng®, amongst others. Use of Non-GAAP Measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The press release contains the non-GAAP measures: (i) earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), (ii) adjusted EBITDA, (iii) adjusted EBITDA margin and (iv) last twelve months adjusted EBITDA. The Company believes the presentation of these non-GAAP measures provides useful information for the understanding of its ongoing operations and enables investors to focus on period- over-period operating performance, and thereby enhances the user’s overall understanding of the Company’s current financial performance relative to past performance and provides, along with the nearest GAAP measures, a baseline for modeling future earnings expectations. Non-GAAP measures are reconciled to comparable GAAP financial measures within this press release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results. Additionally, the Company notes that there can be no assurance that the above referenced non-GAAP financial measures are comparable to similarly titled financial measures used by other publicly traded companies. Forward-Looking Statements Except for historical information, certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to all projections and anticipated levels of future performance. Forward-looking statements involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Any number of factors could cause actual results to differ materially from projections or forward-looking statements, including without limitation, changes to global, social and political economic conditions, spending patterns of government agencies, competitive pressures, the impact of acquisitions and related integration activities, logistical challenges related to disruptions and delays, product liability claims, the success of new product introductions, currency exchange rate fluctuations and the risks of doing business in the markets in which we operate, including foreign countries. More information on potential factors that could affect the Company’s financial results are more fully described from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release. CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share amounts) September 30, 2023 December 31, 2022 Assets Current assets Cash and cash equivalents $ 69,412 $ 45,286 Accounts receivable, net of allowance for doubtful accounts of $819 and $924, respectively 61,261 64,557 Inventories 82,546 70,273 Prepaid expenses 14,667 10,091 Other current assets 8,836 6,811 Total current assets 236,722 197,018 Property and equipment, net of accumulated depreciation and amortization of $48,994 and $42,694, respectively 43,657 45,285 Operating lease assets 6,643 8,489 Deferred tax assets, net 2,299 2,255 Intangible assets, net 44,333 50,695 Goodwill 81,212 81,576 Other assets 5,639 6,634 Total assets $ 420,505 $ 391,952 Liabilities, Mezzanine Equity and Shareholders' Equity Current liabilities Accounts payable $ 30,733 $ 23,406 Accrued liabilities 38,673 38,720 Income tax payable 7,049 4,584 Liabilities held for sale — — Current portion of long-term debt 13,251 12,211 Total current liabilities 89,706 78,921 Long-term debt 130,309 137,476 Long-term operating lease liabilities 3,603 4,965 Deferred tax liabilities 5,047 3,508 Other liabilities 1,843 1,192 Total liabilities 230,508 226,062 Mezzanine equity Preferred stock ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022) — — Shareholders' equity Common stock ($0.0001 par value, 190,000,000 shares authorized, 37,586,031 and 37,332,271 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively) 4 4 Additional paid-in capital 210,543 206,540 Accumulated other comprehensive income 2,143 2,087 Accumulated deficit (22,693 ) (42,741 ) Total shareholders’ equity 189,997 165,890 Total liabilities, mezzanine equity and shareholders' equity $ 420,505 $ 391,952 CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net sales $ 125,114 $ 111,554 $ 357,949 $ 334,192 Cost of goods sold 71,511 67,814 206,981 207,042 Gross profit 53,603 43,740 150,968 127,150 Operating expenses Selling, general and administrative 36,314 31,732 105,615 118,431 Restructuring and transaction costs 439 1,578 1,132 3,380 Related party expense 116 112 379 1,346 Total operating expenses 36,869 33,422 107,126 123,157 Operating income 16,734 10,318 43,842 3,993 Other expense Interest expense (1,073 ) (1,567 ) (3,727 ) (4,496 ) Other (expense) income, net (315 ) (1,851 ) 395 (2,812 ) Total other expense, net (1,388 ) (3,418 ) (3,332 ) (7,308 ) Income (loss) before provision for income taxes 15,346 6,900 40,510 (3,315 ) (Provision) benefit for income taxes (4,293 ) (1,959 ) (11,463 ) 2,536 Net income (loss) $ 11,053 $ 4,941 $ 29,047 $ (779 ) Net income (loss) per share: Basic $ 0.29 $ 0.13 $ 0.77 $ (0.02 ) Diluted $ 0.29 $ 0.13 $ 0.77 $ (0.02 ) Weighted average shares outstanding: Basic 37,586,031 37,289,880 37,515,976 35,697,891 Diluted 37,930,888 37,747,614 37,830,790 35,697,891 CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended September 30, 2023 2022 Cash Flows From Operating Activities: Net income (loss) $ 29,047 $ (779 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 12,385 11,319 Amortization of original issue discount and debt issue costs 359 554 Amortization of inventory step-up — 3,055 Deferred income taxes 1,317 (2,755 ) Stock-based compensation 7,060 28,988 Gain on sale of fixed assets (98 ) — Provision for losses on accounts receivable 37 245 Foreign exchange (gain) loss (243 ) 3,006 Other (296 ) — Changes in operating assets and liabilities, net of impact of acquisitions: Accounts receivable 3,429 (3,271 ) Inventories (12,229 ) (7,187 ) Prepaid expenses and other assets (3,131 ) 986 Accounts payable and other liabilities 8,623 (4,660 ) Net cash provided by operating activities 46,260 29,501 Cash Flows From Investing Activities: Purchase of property and equipment (4,248 ) (2,938 ) Proceeds from disposition of property and equipment 206 — Business acquisitions, net of cash acquired — (55,039 ) Net cash used in investing activities (4,042 ) (57,977 ) Cash Flows From Financing Activities: Proceeds from revolving credit facilities — 43,000 Principal payments on revolving credit facilities — (43,000 ) Principal payments on term loans (7,500 ) (7,514 ) Proceeds from insurance premium financing 3,949 3,989 Principal payments on insurance premium financing (2,909 ) (3,878 ) Payment of capital leases — (26 ) Taxes paid in connection with employee stock transactions (2,725 ) (6,216 ) Proceeds from secondary offering, net of underwriter discounts — 56,329 Deferred offering costs — (2,953 ) Dividends distributed (8,999 ) (8,521 ) Net cash (used in) provided by financing activities (18,184 ) 31,210 Effect of foreign exchange rates on cash and cash equivalents 92 (241 ) Change in cash and cash equivalents 24,126 2,493 Cash and cash equivalents, beginning of period 45,286 33,857 Cash and cash equivalents, end of period $ 69,412 $ 36,350 Supplemental Disclosure of Cash Flows Information: Cash paid for income taxes, net $ 7,923 $ 710 Cash paid for interest $ 7,389 $ 3,860 Supplemental Disclosure of Non-Cash Investing and Financing Activities: Accruals and accounts payable for capital expenditures $ 24 $ 272 CADRE HOLDINGS, INC. SEGMENT INFORMATION (Unaudited) (In thousands) Three Months Ended September 30, 2023 Reconciling Product Distribution Items(1) Total Net sales $ 108,495 $ 24,208 $ (7,589 ) $ 125,114 Cost of goods sold 60,380 18,724 (7,593 ) 71,511 Gross profit $ 48,115 $ 5,484 $ 4 $ 53,603 Three Months Ended September 30, 2022 Reconciling Product Distribution Items(1) Total Net sales $ 92,718 $ 26,012 $ (7,176 ) $ 111,554 Cost of goods sold 54,125 20,859 (7,170 ) 67,814 Gross profit $ 38,593 $ 5,153 $ (6 ) $ 43,740 Nine Months Ended September 30, 2023 Reconciling Product Distribution Items(1) Total Net sales $ 305,057 $ 74,594 $ (21,702 ) $ 357,949 Cost of goods sold 171,204 57,200 (21,423 ) 206,981 Gross profit $ 133,853 $ 17,394 $ (279 ) $ 150,968 Nine Months Ended September 30, 2022 Reconciling Product Distribution Items(1) Total Net sales $ 277,941 $ 73,836 $ (17,585 ) $ 334,192 Cost of goods sold 166,192 58,437 (17,587 ) 207,042 Gross profit $ 111,749 $ 15,399 $ 2 $ 127,150 _________________ (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. CADRE HOLDINGS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (In thousands) Year ended Three Months Three Months Ended Nine Months Ended Last Twelve December 31, Ended June 30, September 30, September 30, Months 2022 2023 2023 2022 2023 2022 September 30, 2023 Net income (loss) $ 5,820 $ 10,992 $ 11,053 $ 4,941 $ 29,047 $ (779 ) $ 35,646 Add back: Depreciation and amortization 15,651 3,959 4,165 3,939 12,385 11,319 16,717 Interest expense 6,206 1,013 1,073 1,567 3,727 4,496 5,437 Provision (benefit) for income taxes 3,553 4,229 4,293 1,959 11,463 (2,536 ) 17,552 EBITDA $ 31,230 $ 20,193 $ 20,584 $ 12,406 $ 56,622 $ 12,500 $ 75,352 Add back: Restructuring and transaction costs(1) 5,355 693 439 1,578 1,132 4,380 2,107 Other general income(2) (159 ) — — — — — (159 ) Other expense (income), net(3) 1,137 (346 ) 315 1,851 (395 ) 2,812 (2,070 ) Stock-based compensation expense(4) 32,239 2,105 2,208 2,820 7,060 29,361 9,938 Stock-based compensation payroll tax expense(5) 305 — — — 220 305 220 LTIP bonus(6) 1,369 160 185 375 489 933 925 Amortization of inventory step-up(7) 4,255 — — 1,711 — 3,055 1,200 Adjusted EBITDA $ 75,731 $ 22,805 $ 23,731 $ 20,741 $ 65,128 $ 53,346 $ 87,513 Adjusted EBITDA margin(8) 16.5 % 18.8 % 19.0 % 18.6 % 18.2 % 16.0 % _________________ (1) Reflects the “Restructuring and transaction costs” line item on our condensed consolidated statement of operations, which primarily includes transaction costs composed of legal and consulting fees, and $1.0 million paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, for services related to the acquisition of Cyalume, which is included in related party expense in the Company’s consolidated statements of operations for the year ended December 31, 2022. (2) Reflects the “Other general income” line item on our condensed consolidated statement of operations and includes a gain from a long-lived asset sale. (3) Reflects the “Other (income) expense, net” line item on our condensed consolidated statement of operations and primarily includes gains and losses on foreign currency transactions. (4) Reflects compensation expense related to equity and liability classified stock-based compensation plans. (5) Reflects payroll taxes associated with vested stock-based compensation awards. (6) Reflects the cost of a cash-based long-term incentive plan awarded to employees that vests over three years. (7) Reflects amortization expense related to the step-up inventory adjustment recorded as a result of our recent acquisitions. (8) Reflects Adjusted EBITDA / Net Sales for the relevant periods. View source version on businesswire.com: https://www.businesswire.com/news/home/20231108483737/en/Contacts Gray Hudkins Cadre Holdings, Inc. 203-550-7148 gray.hudkins@cadre-holdings.com Investor Relations: The IGB Group Leon Berman / Matt Berkowitz 212-477-8438 / 212-227-7098 lberman@igbir.com / mberkowitz@igbir.com Media: Jonathan Keehner / Andrew Siegel Joele Frank, Wilkinson Brimmer Katcher 212-355-4449 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Cadre Holdings Reports Third Quarter 2023 Financial Results By: Cadre Holdings, Inc. via Business Wire November 08, 2023 at 16:15 PM EST Increased Quarterly Revenue, Net Income, and Gross Margin Sequentially and Year-Over-Year Second Consecutive Quarter of Record Adjusted EBITDA and Adjusted EBITDA Margin Expects Record Full-Year 2023 Net Sales Between $477 to $481 Million and Raises 2023 Full-Year Adjusted EBITDA Guidance Range to $82 to $85 Million Cadre Holdings, Inc. (NYSE: CDRE) ("Cadre" or "the Company"), a global leader in the manufacturing and distribution of safety and survivability equipment for first responders, announced today its consolidated operating results for the three and nine months ended September 30, 2023. Net sales of $125.1 million for the third quarter; net sales of $357.9 million for the nine months ended September 30, 2023 Gross profit margin of 42.8% for the third quarter; gross profit margin of 42.2% for the nine months ended September 30, 2023 Net income of $11.1 million, or $0.29 per diluted share, for the third quarter; net income of $29.0 million, or $0.77 per diluted share, for the nine months ended September 30, 2023 Adjusted EBITDA of $23.7 million for the third quarter; Adjusted EBITDA of $65.1 million for the nine months ended September 30, 2023 Adjusted EBITDA margin of 19.0% for the third quarter; Adjusted EBITDA margin of 18.2% for the nine months ended September 30, 2023 Declared quarterly cash dividend of $0.08 per share in October 2023 “Cadre’s outstanding third quarter is a testament to our team’s continued strategic execution, together with strong, sustained demand for our mission-critical safety and survivability equipment,” said Warren Kanders, CEO and Chairman. “The implementation of the Cadre operating model, focused on constant improvement and the optimization of outcomes, continued to drive our strong financial performance, highlighted by record Adjusted EBITDA margins and gross margins. For the second consecutive quarter, we achieved our highest Adjusted EBITDA in history, while generating increased net sales and net income both sequentially and year-over-year.” Mr. Kanders added, “We are pleased to once again raise our full year Adjusted EBITDA outlook based on Cadre’s outperformance to date and confidence in our businesses’ fundamentals for the remainder of 2023. In both the US and internationally, we have seen a broad push to prioritize public safety and believe Cadre is ideally positioned to capitalize on these secular tailwinds over the medium and long term. We continue to actively pursue M&A opportunities to either enhance our market dominance or enter attractive, new adjacencies consistent with our key criteria. With entrenched positions in law enforcement, first responder and military markets, we are on pace to deliver record full year net sales in 2023 and remain excited about the opportunity to further grow our leading platform of premium safety brands moving forward.” Third Quarter and Nine-Month 2023 Operating Results For the quarter ended September 30, 2023, Cadre generated net sales of $125.1 million, as compared to $111.6 million for the quarter ended September 30, 2022. This increase was primarily the result of higher domestic demand for armor products and large international orders for crowd control products, partially offset by decreased agency demand for hard goods. For the nine months ended September 30, 2023, Cadre generated net sales of $357.9 million, as compared to $334.2 million for the prior year period, mainly driven by recent acquisitions and higher demand for armor and crowd control products, partially offset by timing for our EOD products. For the quarter ended September 30, 2023, Cadre generated gross profit of $53.6 million, as compared to $43.7 million for the quarter ended September 30, 2022. For the nine months ended September 30, 2023, Cadre generated gross profit of $151.0 million, as compared to $127.2 million for the prior year period. Gross profit margin was 42.9% for the quarter ended September 30, 2023, as compared to 39.2% for the quarter ended September 30, 2022. Gross profit margin was 42.2% for the nine months ended September 30, 2023, as compared to 38.0% for the prior year period, mainly driven by favorable pricing and product mix, prior year amortization of inventory step-up related to acquisitions, and productivity, partially offset by inflation. Net income was $11.1 million for the quarter ended September 30, 2023, as compared to a net income of $4.9 million for the quarter ended September 30, 2022. The increase resulted primarily from the change in year-over-year sales and the increase in gross profit margin. Net income was $29.0 million for the nine months ended September 30, 2023, as compared to a net loss of $0.8 million for the prior year period, primarily due to the change in year-over-year sales, the increase in gross profit margin, and a decrease in stock-based compensation expense. Cadre generated $23.7 million of Adjusted EBITDA for the quarter ended September 30, 2023, as compared to $20.7 million for the quarter ended September 30, 2022. Adjusted EBITDA margin was 19.0% for the quarter ended September 30, 2023, as compared to 18.6% for the prior year period. Cadre generated $65.1 million of Adjusted EBITDA for the nine months ended September 30, 2023, as compared to $53.3 million for the prior year period. Adjusted EBITDA margin was 18.2% for the nine months ended September 30, 2023, as compared to 16.0% for the prior year period. Product segment gross margin was 44.3% and 43.9% for the third quarter and first nine months of 2023, respectively, compared to 41.6% and 40.2% for the respective prior year periods. Distribution segment gross margin was 22.7% and 23.3% for the third quarter and first nine months of 2023, respectively, compared to 19.8% and 20.9% for the respective prior year periods. Liquidity, Cash Flows and Capital Allocation Cash and cash equivalents increased by $24.1 million from $45.3 million as of December 31, 2022 to $69.4 million as of September 30, 2023. Total debt decreased by $6.1 million from $149.7 million as of December 31, 2022, to $143.6 million as of September 30, 2023. Net debt (total debt net of cash and cash equivalents) decreased by $30.3 million from $104.4 million as of December 31, 2022, to $74.2 million as of September 30, 2023. Capital expenditures totaled $1.8 million for the third quarter and $4.3 million for the nine months ended September 30, 2023, compared with $0.7 million for the third quarter and $3.2 million for the nine months ended September 30, 2022. Dividend On October 24, 2023, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.08 per share, or $0.32 per share on an annualized basis. Cadre's dividend payment will be made on November 17, 2023, to shareholders of record as of the close of business on the record date of November 3, 2023. The declaration of any future dividend is subject to the discretion of the Company's Board of Directors. 2023 Outlook Update As a result of the Company's third-quarter performance and management's outlook for the remainder of the year, Cadre raised the midpoint of its full-year Adjusted EBITDA guidance range and increased net sales guidance. For the full year 2023, Cadre expects to generate net sales in the range of $477 million to $481 million and Adjusted EBITDA in the range of $82 million to $85 million. We expect capital expenditures to be in the range of $7.0 million to $8.0 million. Conference Call Cadre management will host a conference call on Wednesday, November 8, 2023, at 5:00 PM EST to discuss the latest corporate developments and financial results. The dial-in number for callers in the US is (888)-510-2553 and the dial-in number for international callers is 646-960-0473. The access code for all callers is 1410384. A live webcast will also be available on the Company’s website at https://www.cadre-holdings.com/. A replay of the call will be available through November 22, 2023. To access the replay, please dial 800-770-2030 in the U.S. or +1-647-362-9199 if outside the U.S., and then enter the access code 1410384. About Cadre Headquartered in Jacksonville, Florida, Cadre is a global leader in the manufacturing and distribution of safety and survivability products for first responders. Cadre's equipment provides critical protection to allow users to safely and securely perform their duties and protect those around them in hazardous or life-threatening situations. The Company's core products include body armor, explosive ordnance disposal equipment, and duty gear. Our highly engineered products are utilized in over 100 countries by federal, state and local law enforcement, fire and rescue professionals, explosive ordnance disposal teams, and emergency medical technicians. Our key brands include Safariland® and Med-Eng®, amongst others. Use of Non-GAAP Measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The press release contains the non-GAAP measures: (i) earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), (ii) adjusted EBITDA, (iii) adjusted EBITDA margin and (iv) last twelve months adjusted EBITDA. The Company believes the presentation of these non-GAAP measures provides useful information for the understanding of its ongoing operations and enables investors to focus on period- over-period operating performance, and thereby enhances the user’s overall understanding of the Company’s current financial performance relative to past performance and provides, along with the nearest GAAP measures, a baseline for modeling future earnings expectations. Non-GAAP measures are reconciled to comparable GAAP financial measures within this press release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results. Additionally, the Company notes that there can be no assurance that the above referenced non-GAAP financial measures are comparable to similarly titled financial measures used by other publicly traded companies. Forward-Looking Statements Except for historical information, certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to all projections and anticipated levels of future performance. Forward-looking statements involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Any number of factors could cause actual results to differ materially from projections or forward-looking statements, including without limitation, changes to global, social and political economic conditions, spending patterns of government agencies, competitive pressures, the impact of acquisitions and related integration activities, logistical challenges related to disruptions and delays, product liability claims, the success of new product introductions, currency exchange rate fluctuations and the risks of doing business in the markets in which we operate, including foreign countries. More information on potential factors that could affect the Company’s financial results are more fully described from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release. CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share amounts) September 30, 2023 December 31, 2022 Assets Current assets Cash and cash equivalents $ 69,412 $ 45,286 Accounts receivable, net of allowance for doubtful accounts of $819 and $924, respectively 61,261 64,557 Inventories 82,546 70,273 Prepaid expenses 14,667 10,091 Other current assets 8,836 6,811 Total current assets 236,722 197,018 Property and equipment, net of accumulated depreciation and amortization of $48,994 and $42,694, respectively 43,657 45,285 Operating lease assets 6,643 8,489 Deferred tax assets, net 2,299 2,255 Intangible assets, net 44,333 50,695 Goodwill 81,212 81,576 Other assets 5,639 6,634 Total assets $ 420,505 $ 391,952 Liabilities, Mezzanine Equity and Shareholders' Equity Current liabilities Accounts payable $ 30,733 $ 23,406 Accrued liabilities 38,673 38,720 Income tax payable 7,049 4,584 Liabilities held for sale — — Current portion of long-term debt 13,251 12,211 Total current liabilities 89,706 78,921 Long-term debt 130,309 137,476 Long-term operating lease liabilities 3,603 4,965 Deferred tax liabilities 5,047 3,508 Other liabilities 1,843 1,192 Total liabilities 230,508 226,062 Mezzanine equity Preferred stock ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022) — — Shareholders' equity Common stock ($0.0001 par value, 190,000,000 shares authorized, 37,586,031 and 37,332,271 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively) 4 4 Additional paid-in capital 210,543 206,540 Accumulated other comprehensive income 2,143 2,087 Accumulated deficit (22,693 ) (42,741 ) Total shareholders’ equity 189,997 165,890 Total liabilities, mezzanine equity and shareholders' equity $ 420,505 $ 391,952 CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net sales $ 125,114 $ 111,554 $ 357,949 $ 334,192 Cost of goods sold 71,511 67,814 206,981 207,042 Gross profit 53,603 43,740 150,968 127,150 Operating expenses Selling, general and administrative 36,314 31,732 105,615 118,431 Restructuring and transaction costs 439 1,578 1,132 3,380 Related party expense 116 112 379 1,346 Total operating expenses 36,869 33,422 107,126 123,157 Operating income 16,734 10,318 43,842 3,993 Other expense Interest expense (1,073 ) (1,567 ) (3,727 ) (4,496 ) Other (expense) income, net (315 ) (1,851 ) 395 (2,812 ) Total other expense, net (1,388 ) (3,418 ) (3,332 ) (7,308 ) Income (loss) before provision for income taxes 15,346 6,900 40,510 (3,315 ) (Provision) benefit for income taxes (4,293 ) (1,959 ) (11,463 ) 2,536 Net income (loss) $ 11,053 $ 4,941 $ 29,047 $ (779 ) Net income (loss) per share: Basic $ 0.29 $ 0.13 $ 0.77 $ (0.02 ) Diluted $ 0.29 $ 0.13 $ 0.77 $ (0.02 ) Weighted average shares outstanding: Basic 37,586,031 37,289,880 37,515,976 35,697,891 Diluted 37,930,888 37,747,614 37,830,790 35,697,891 CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended September 30, 2023 2022 Cash Flows From Operating Activities: Net income (loss) $ 29,047 $ (779 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 12,385 11,319 Amortization of original issue discount and debt issue costs 359 554 Amortization of inventory step-up — 3,055 Deferred income taxes 1,317 (2,755 ) Stock-based compensation 7,060 28,988 Gain on sale of fixed assets (98 ) — Provision for losses on accounts receivable 37 245 Foreign exchange (gain) loss (243 ) 3,006 Other (296 ) — Changes in operating assets and liabilities, net of impact of acquisitions: Accounts receivable 3,429 (3,271 ) Inventories (12,229 ) (7,187 ) Prepaid expenses and other assets (3,131 ) 986 Accounts payable and other liabilities 8,623 (4,660 ) Net cash provided by operating activities 46,260 29,501 Cash Flows From Investing Activities: Purchase of property and equipment (4,248 ) (2,938 ) Proceeds from disposition of property and equipment 206 — Business acquisitions, net of cash acquired — (55,039 ) Net cash used in investing activities (4,042 ) (57,977 ) Cash Flows From Financing Activities: Proceeds from revolving credit facilities — 43,000 Principal payments on revolving credit facilities — (43,000 ) Principal payments on term loans (7,500 ) (7,514 ) Proceeds from insurance premium financing 3,949 3,989 Principal payments on insurance premium financing (2,909 ) (3,878 ) Payment of capital leases — (26 ) Taxes paid in connection with employee stock transactions (2,725 ) (6,216 ) Proceeds from secondary offering, net of underwriter discounts — 56,329 Deferred offering costs — (2,953 ) Dividends distributed (8,999 ) (8,521 ) Net cash (used in) provided by financing activities (18,184 ) 31,210 Effect of foreign exchange rates on cash and cash equivalents 92 (241 ) Change in cash and cash equivalents 24,126 2,493 Cash and cash equivalents, beginning of period 45,286 33,857 Cash and cash equivalents, end of period $ 69,412 $ 36,350 Supplemental Disclosure of Cash Flows Information: Cash paid for income taxes, net $ 7,923 $ 710 Cash paid for interest $ 7,389 $ 3,860 Supplemental Disclosure of Non-Cash Investing and Financing Activities: Accruals and accounts payable for capital expenditures $ 24 $ 272 CADRE HOLDINGS, INC. SEGMENT INFORMATION (Unaudited) (In thousands) Three Months Ended September 30, 2023 Reconciling Product Distribution Items(1) Total Net sales $ 108,495 $ 24,208 $ (7,589 ) $ 125,114 Cost of goods sold 60,380 18,724 (7,593 ) 71,511 Gross profit $ 48,115 $ 5,484 $ 4 $ 53,603 Three Months Ended September 30, 2022 Reconciling Product Distribution Items(1) Total Net sales $ 92,718 $ 26,012 $ (7,176 ) $ 111,554 Cost of goods sold 54,125 20,859 (7,170 ) 67,814 Gross profit $ 38,593 $ 5,153 $ (6 ) $ 43,740 Nine Months Ended September 30, 2023 Reconciling Product Distribution Items(1) Total Net sales $ 305,057 $ 74,594 $ (21,702 ) $ 357,949 Cost of goods sold 171,204 57,200 (21,423 ) 206,981 Gross profit $ 133,853 $ 17,394 $ (279 ) $ 150,968 Nine Months Ended September 30, 2022 Reconciling Product Distribution Items(1) Total Net sales $ 277,941 $ 73,836 $ (17,585 ) $ 334,192 Cost of goods sold 166,192 58,437 (17,587 ) 207,042 Gross profit $ 111,749 $ 15,399 $ 2 $ 127,150 _________________ (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. CADRE HOLDINGS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (In thousands) Year ended Three Months Three Months Ended Nine Months Ended Last Twelve December 31, Ended June 30, September 30, September 30, Months 2022 2023 2023 2022 2023 2022 September 30, 2023 Net income (loss) $ 5,820 $ 10,992 $ 11,053 $ 4,941 $ 29,047 $ (779 ) $ 35,646 Add back: Depreciation and amortization 15,651 3,959 4,165 3,939 12,385 11,319 16,717 Interest expense 6,206 1,013 1,073 1,567 3,727 4,496 5,437 Provision (benefit) for income taxes 3,553 4,229 4,293 1,959 11,463 (2,536 ) 17,552 EBITDA $ 31,230 $ 20,193 $ 20,584 $ 12,406 $ 56,622 $ 12,500 $ 75,352 Add back: Restructuring and transaction costs(1) 5,355 693 439 1,578 1,132 4,380 2,107 Other general income(2) (159 ) — — — — — (159 ) Other expense (income), net(3) 1,137 (346 ) 315 1,851 (395 ) 2,812 (2,070 ) Stock-based compensation expense(4) 32,239 2,105 2,208 2,820 7,060 29,361 9,938 Stock-based compensation payroll tax expense(5) 305 — — — 220 305 220 LTIP bonus(6) 1,369 160 185 375 489 933 925 Amortization of inventory step-up(7) 4,255 — — 1,711 — 3,055 1,200 Adjusted EBITDA $ 75,731 $ 22,805 $ 23,731 $ 20,741 $ 65,128 $ 53,346 $ 87,513 Adjusted EBITDA margin(8) 16.5 % 18.8 % 19.0 % 18.6 % 18.2 % 16.0 % _________________ (1) Reflects the “Restructuring and transaction costs” line item on our condensed consolidated statement of operations, which primarily includes transaction costs composed of legal and consulting fees, and $1.0 million paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, for services related to the acquisition of Cyalume, which is included in related party expense in the Company’s consolidated statements of operations for the year ended December 31, 2022. (2) Reflects the “Other general income” line item on our condensed consolidated statement of operations and includes a gain from a long-lived asset sale. (3) Reflects the “Other (income) expense, net” line item on our condensed consolidated statement of operations and primarily includes gains and losses on foreign currency transactions. (4) Reflects compensation expense related to equity and liability classified stock-based compensation plans. (5) Reflects payroll taxes associated with vested stock-based compensation awards. (6) Reflects the cost of a cash-based long-term incentive plan awarded to employees that vests over three years. (7) Reflects amortization expense related to the step-up inventory adjustment recorded as a result of our recent acquisitions. (8) Reflects Adjusted EBITDA / Net Sales for the relevant periods. View source version on businesswire.com: https://www.businesswire.com/news/home/20231108483737/en/Contacts Gray Hudkins Cadre Holdings, Inc. 203-550-7148 gray.hudkins@cadre-holdings.com Investor Relations: The IGB Group Leon Berman / Matt Berkowitz 212-477-8438 / 212-227-7098 lberman@igbir.com / mberkowitz@igbir.com Media: Jonathan Keehner / Andrew Siegel Joele Frank, Wilkinson Brimmer Katcher 212-355-4449
Increased Quarterly Revenue, Net Income, and Gross Margin Sequentially and Year-Over-Year Second Consecutive Quarter of Record Adjusted EBITDA and Adjusted EBITDA Margin Expects Record Full-Year 2023 Net Sales Between $477 to $481 Million and Raises 2023 Full-Year Adjusted EBITDA Guidance Range to $82 to $85 Million
Cadre Holdings, Inc. (NYSE: CDRE) ("Cadre" or "the Company"), a global leader in the manufacturing and distribution of safety and survivability equipment for first responders, announced today its consolidated operating results for the three and nine months ended September 30, 2023. Net sales of $125.1 million for the third quarter; net sales of $357.9 million for the nine months ended September 30, 2023 Gross profit margin of 42.8% for the third quarter; gross profit margin of 42.2% for the nine months ended September 30, 2023 Net income of $11.1 million, or $0.29 per diluted share, for the third quarter; net income of $29.0 million, or $0.77 per diluted share, for the nine months ended September 30, 2023 Adjusted EBITDA of $23.7 million for the third quarter; Adjusted EBITDA of $65.1 million for the nine months ended September 30, 2023 Adjusted EBITDA margin of 19.0% for the third quarter; Adjusted EBITDA margin of 18.2% for the nine months ended September 30, 2023 Declared quarterly cash dividend of $0.08 per share in October 2023 “Cadre’s outstanding third quarter is a testament to our team’s continued strategic execution, together with strong, sustained demand for our mission-critical safety and survivability equipment,” said Warren Kanders, CEO and Chairman. “The implementation of the Cadre operating model, focused on constant improvement and the optimization of outcomes, continued to drive our strong financial performance, highlighted by record Adjusted EBITDA margins and gross margins. For the second consecutive quarter, we achieved our highest Adjusted EBITDA in history, while generating increased net sales and net income both sequentially and year-over-year.” Mr. Kanders added, “We are pleased to once again raise our full year Adjusted EBITDA outlook based on Cadre’s outperformance to date and confidence in our businesses’ fundamentals for the remainder of 2023. In both the US and internationally, we have seen a broad push to prioritize public safety and believe Cadre is ideally positioned to capitalize on these secular tailwinds over the medium and long term. We continue to actively pursue M&A opportunities to either enhance our market dominance or enter attractive, new adjacencies consistent with our key criteria. With entrenched positions in law enforcement, first responder and military markets, we are on pace to deliver record full year net sales in 2023 and remain excited about the opportunity to further grow our leading platform of premium safety brands moving forward.” Third Quarter and Nine-Month 2023 Operating Results For the quarter ended September 30, 2023, Cadre generated net sales of $125.1 million, as compared to $111.6 million for the quarter ended September 30, 2022. This increase was primarily the result of higher domestic demand for armor products and large international orders for crowd control products, partially offset by decreased agency demand for hard goods. For the nine months ended September 30, 2023, Cadre generated net sales of $357.9 million, as compared to $334.2 million for the prior year period, mainly driven by recent acquisitions and higher demand for armor and crowd control products, partially offset by timing for our EOD products. For the quarter ended September 30, 2023, Cadre generated gross profit of $53.6 million, as compared to $43.7 million for the quarter ended September 30, 2022. For the nine months ended September 30, 2023, Cadre generated gross profit of $151.0 million, as compared to $127.2 million for the prior year period. Gross profit margin was 42.9% for the quarter ended September 30, 2023, as compared to 39.2% for the quarter ended September 30, 2022. Gross profit margin was 42.2% for the nine months ended September 30, 2023, as compared to 38.0% for the prior year period, mainly driven by favorable pricing and product mix, prior year amortization of inventory step-up related to acquisitions, and productivity, partially offset by inflation. Net income was $11.1 million for the quarter ended September 30, 2023, as compared to a net income of $4.9 million for the quarter ended September 30, 2022. The increase resulted primarily from the change in year-over-year sales and the increase in gross profit margin. Net income was $29.0 million for the nine months ended September 30, 2023, as compared to a net loss of $0.8 million for the prior year period, primarily due to the change in year-over-year sales, the increase in gross profit margin, and a decrease in stock-based compensation expense. Cadre generated $23.7 million of Adjusted EBITDA for the quarter ended September 30, 2023, as compared to $20.7 million for the quarter ended September 30, 2022. Adjusted EBITDA margin was 19.0% for the quarter ended September 30, 2023, as compared to 18.6% for the prior year period. Cadre generated $65.1 million of Adjusted EBITDA for the nine months ended September 30, 2023, as compared to $53.3 million for the prior year period. Adjusted EBITDA margin was 18.2% for the nine months ended September 30, 2023, as compared to 16.0% for the prior year period. Product segment gross margin was 44.3% and 43.9% for the third quarter and first nine months of 2023, respectively, compared to 41.6% and 40.2% for the respective prior year periods. Distribution segment gross margin was 22.7% and 23.3% for the third quarter and first nine months of 2023, respectively, compared to 19.8% and 20.9% for the respective prior year periods. Liquidity, Cash Flows and Capital Allocation Cash and cash equivalents increased by $24.1 million from $45.3 million as of December 31, 2022 to $69.4 million as of September 30, 2023. Total debt decreased by $6.1 million from $149.7 million as of December 31, 2022, to $143.6 million as of September 30, 2023. Net debt (total debt net of cash and cash equivalents) decreased by $30.3 million from $104.4 million as of December 31, 2022, to $74.2 million as of September 30, 2023. Capital expenditures totaled $1.8 million for the third quarter and $4.3 million for the nine months ended September 30, 2023, compared with $0.7 million for the third quarter and $3.2 million for the nine months ended September 30, 2022. Dividend On October 24, 2023, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.08 per share, or $0.32 per share on an annualized basis. Cadre's dividend payment will be made on November 17, 2023, to shareholders of record as of the close of business on the record date of November 3, 2023. The declaration of any future dividend is subject to the discretion of the Company's Board of Directors. 2023 Outlook Update As a result of the Company's third-quarter performance and management's outlook for the remainder of the year, Cadre raised the midpoint of its full-year Adjusted EBITDA guidance range and increased net sales guidance. For the full year 2023, Cadre expects to generate net sales in the range of $477 million to $481 million and Adjusted EBITDA in the range of $82 million to $85 million. We expect capital expenditures to be in the range of $7.0 million to $8.0 million. Conference Call Cadre management will host a conference call on Wednesday, November 8, 2023, at 5:00 PM EST to discuss the latest corporate developments and financial results. The dial-in number for callers in the US is (888)-510-2553 and the dial-in number for international callers is 646-960-0473. The access code for all callers is 1410384. A live webcast will also be available on the Company’s website at https://www.cadre-holdings.com/. A replay of the call will be available through November 22, 2023. To access the replay, please dial 800-770-2030 in the U.S. or +1-647-362-9199 if outside the U.S., and then enter the access code 1410384. About Cadre Headquartered in Jacksonville, Florida, Cadre is a global leader in the manufacturing and distribution of safety and survivability products for first responders. Cadre's equipment provides critical protection to allow users to safely and securely perform their duties and protect those around them in hazardous or life-threatening situations. The Company's core products include body armor, explosive ordnance disposal equipment, and duty gear. Our highly engineered products are utilized in over 100 countries by federal, state and local law enforcement, fire and rescue professionals, explosive ordnance disposal teams, and emergency medical technicians. Our key brands include Safariland® and Med-Eng®, amongst others. Use of Non-GAAP Measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The press release contains the non-GAAP measures: (i) earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), (ii) adjusted EBITDA, (iii) adjusted EBITDA margin and (iv) last twelve months adjusted EBITDA. The Company believes the presentation of these non-GAAP measures provides useful information for the understanding of its ongoing operations and enables investors to focus on period- over-period operating performance, and thereby enhances the user’s overall understanding of the Company’s current financial performance relative to past performance and provides, along with the nearest GAAP measures, a baseline for modeling future earnings expectations. Non-GAAP measures are reconciled to comparable GAAP financial measures within this press release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results. Additionally, the Company notes that there can be no assurance that the above referenced non-GAAP financial measures are comparable to similarly titled financial measures used by other publicly traded companies. Forward-Looking Statements Except for historical information, certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to all projections and anticipated levels of future performance. Forward-looking statements involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Any number of factors could cause actual results to differ materially from projections or forward-looking statements, including without limitation, changes to global, social and political economic conditions, spending patterns of government agencies, competitive pressures, the impact of acquisitions and related integration activities, logistical challenges related to disruptions and delays, product liability claims, the success of new product introductions, currency exchange rate fluctuations and the risks of doing business in the markets in which we operate, including foreign countries. More information on potential factors that could affect the Company’s financial results are more fully described from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release. CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share amounts) September 30, 2023 December 31, 2022 Assets Current assets Cash and cash equivalents $ 69,412 $ 45,286 Accounts receivable, net of allowance for doubtful accounts of $819 and $924, respectively 61,261 64,557 Inventories 82,546 70,273 Prepaid expenses 14,667 10,091 Other current assets 8,836 6,811 Total current assets 236,722 197,018 Property and equipment, net of accumulated depreciation and amortization of $48,994 and $42,694, respectively 43,657 45,285 Operating lease assets 6,643 8,489 Deferred tax assets, net 2,299 2,255 Intangible assets, net 44,333 50,695 Goodwill 81,212 81,576 Other assets 5,639 6,634 Total assets $ 420,505 $ 391,952 Liabilities, Mezzanine Equity and Shareholders' Equity Current liabilities Accounts payable $ 30,733 $ 23,406 Accrued liabilities 38,673 38,720 Income tax payable 7,049 4,584 Liabilities held for sale — — Current portion of long-term debt 13,251 12,211 Total current liabilities 89,706 78,921 Long-term debt 130,309 137,476 Long-term operating lease liabilities 3,603 4,965 Deferred tax liabilities 5,047 3,508 Other liabilities 1,843 1,192 Total liabilities 230,508 226,062 Mezzanine equity Preferred stock ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022) — — Shareholders' equity Common stock ($0.0001 par value, 190,000,000 shares authorized, 37,586,031 and 37,332,271 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively) 4 4 Additional paid-in capital 210,543 206,540 Accumulated other comprehensive income 2,143 2,087 Accumulated deficit (22,693 ) (42,741 ) Total shareholders’ equity 189,997 165,890 Total liabilities, mezzanine equity and shareholders' equity $ 420,505 $ 391,952 CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net sales $ 125,114 $ 111,554 $ 357,949 $ 334,192 Cost of goods sold 71,511 67,814 206,981 207,042 Gross profit 53,603 43,740 150,968 127,150 Operating expenses Selling, general and administrative 36,314 31,732 105,615 118,431 Restructuring and transaction costs 439 1,578 1,132 3,380 Related party expense 116 112 379 1,346 Total operating expenses 36,869 33,422 107,126 123,157 Operating income 16,734 10,318 43,842 3,993 Other expense Interest expense (1,073 ) (1,567 ) (3,727 ) (4,496 ) Other (expense) income, net (315 ) (1,851 ) 395 (2,812 ) Total other expense, net (1,388 ) (3,418 ) (3,332 ) (7,308 ) Income (loss) before provision for income taxes 15,346 6,900 40,510 (3,315 ) (Provision) benefit for income taxes (4,293 ) (1,959 ) (11,463 ) 2,536 Net income (loss) $ 11,053 $ 4,941 $ 29,047 $ (779 ) Net income (loss) per share: Basic $ 0.29 $ 0.13 $ 0.77 $ (0.02 ) Diluted $ 0.29 $ 0.13 $ 0.77 $ (0.02 ) Weighted average shares outstanding: Basic 37,586,031 37,289,880 37,515,976 35,697,891 Diluted 37,930,888 37,747,614 37,830,790 35,697,891 CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended September 30, 2023 2022 Cash Flows From Operating Activities: Net income (loss) $ 29,047 $ (779 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 12,385 11,319 Amortization of original issue discount and debt issue costs 359 554 Amortization of inventory step-up — 3,055 Deferred income taxes 1,317 (2,755 ) Stock-based compensation 7,060 28,988 Gain on sale of fixed assets (98 ) — Provision for losses on accounts receivable 37 245 Foreign exchange (gain) loss (243 ) 3,006 Other (296 ) — Changes in operating assets and liabilities, net of impact of acquisitions: Accounts receivable 3,429 (3,271 ) Inventories (12,229 ) (7,187 ) Prepaid expenses and other assets (3,131 ) 986 Accounts payable and other liabilities 8,623 (4,660 ) Net cash provided by operating activities 46,260 29,501 Cash Flows From Investing Activities: Purchase of property and equipment (4,248 ) (2,938 ) Proceeds from disposition of property and equipment 206 — Business acquisitions, net of cash acquired — (55,039 ) Net cash used in investing activities (4,042 ) (57,977 ) Cash Flows From Financing Activities: Proceeds from revolving credit facilities — 43,000 Principal payments on revolving credit facilities — (43,000 ) Principal payments on term loans (7,500 ) (7,514 ) Proceeds from insurance premium financing 3,949 3,989 Principal payments on insurance premium financing (2,909 ) (3,878 ) Payment of capital leases — (26 ) Taxes paid in connection with employee stock transactions (2,725 ) (6,216 ) Proceeds from secondary offering, net of underwriter discounts — 56,329 Deferred offering costs — (2,953 ) Dividends distributed (8,999 ) (8,521 ) Net cash (used in) provided by financing activities (18,184 ) 31,210 Effect of foreign exchange rates on cash and cash equivalents 92 (241 ) Change in cash and cash equivalents 24,126 2,493 Cash and cash equivalents, beginning of period 45,286 33,857 Cash and cash equivalents, end of period $ 69,412 $ 36,350 Supplemental Disclosure of Cash Flows Information: Cash paid for income taxes, net $ 7,923 $ 710 Cash paid for interest $ 7,389 $ 3,860 Supplemental Disclosure of Non-Cash Investing and Financing Activities: Accruals and accounts payable for capital expenditures $ 24 $ 272 CADRE HOLDINGS, INC. SEGMENT INFORMATION (Unaudited) (In thousands) Three Months Ended September 30, 2023 Reconciling Product Distribution Items(1) Total Net sales $ 108,495 $ 24,208 $ (7,589 ) $ 125,114 Cost of goods sold 60,380 18,724 (7,593 ) 71,511 Gross profit $ 48,115 $ 5,484 $ 4 $ 53,603 Three Months Ended September 30, 2022 Reconciling Product Distribution Items(1) Total Net sales $ 92,718 $ 26,012 $ (7,176 ) $ 111,554 Cost of goods sold 54,125 20,859 (7,170 ) 67,814 Gross profit $ 38,593 $ 5,153 $ (6 ) $ 43,740 Nine Months Ended September 30, 2023 Reconciling Product Distribution Items(1) Total Net sales $ 305,057 $ 74,594 $ (21,702 ) $ 357,949 Cost of goods sold 171,204 57,200 (21,423 ) 206,981 Gross profit $ 133,853 $ 17,394 $ (279 ) $ 150,968 Nine Months Ended September 30, 2022 Reconciling Product Distribution Items(1) Total Net sales $ 277,941 $ 73,836 $ (17,585 ) $ 334,192 Cost of goods sold 166,192 58,437 (17,587 ) 207,042 Gross profit $ 111,749 $ 15,399 $ 2 $ 127,150 _________________ (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. CADRE HOLDINGS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (In thousands) Year ended Three Months Three Months Ended Nine Months Ended Last Twelve December 31, Ended June 30, September 30, September 30, Months 2022 2023 2023 2022 2023 2022 September 30, 2023 Net income (loss) $ 5,820 $ 10,992 $ 11,053 $ 4,941 $ 29,047 $ (779 ) $ 35,646 Add back: Depreciation and amortization 15,651 3,959 4,165 3,939 12,385 11,319 16,717 Interest expense 6,206 1,013 1,073 1,567 3,727 4,496 5,437 Provision (benefit) for income taxes 3,553 4,229 4,293 1,959 11,463 (2,536 ) 17,552 EBITDA $ 31,230 $ 20,193 $ 20,584 $ 12,406 $ 56,622 $ 12,500 $ 75,352 Add back: Restructuring and transaction costs(1) 5,355 693 439 1,578 1,132 4,380 2,107 Other general income(2) (159 ) — — — — — (159 ) Other expense (income), net(3) 1,137 (346 ) 315 1,851 (395 ) 2,812 (2,070 ) Stock-based compensation expense(4) 32,239 2,105 2,208 2,820 7,060 29,361 9,938 Stock-based compensation payroll tax expense(5) 305 — — — 220 305 220 LTIP bonus(6) 1,369 160 185 375 489 933 925 Amortization of inventory step-up(7) 4,255 — — 1,711 — 3,055 1,200 Adjusted EBITDA $ 75,731 $ 22,805 $ 23,731 $ 20,741 $ 65,128 $ 53,346 $ 87,513 Adjusted EBITDA margin(8) 16.5 % 18.8 % 19.0 % 18.6 % 18.2 % 16.0 % _________________ (1) Reflects the “Restructuring and transaction costs” line item on our condensed consolidated statement of operations, which primarily includes transaction costs composed of legal and consulting fees, and $1.0 million paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, for services related to the acquisition of Cyalume, which is included in related party expense in the Company’s consolidated statements of operations for the year ended December 31, 2022. (2) Reflects the “Other general income” line item on our condensed consolidated statement of operations and includes a gain from a long-lived asset sale. (3) Reflects the “Other (income) expense, net” line item on our condensed consolidated statement of operations and primarily includes gains and losses on foreign currency transactions. (4) Reflects compensation expense related to equity and liability classified stock-based compensation plans. (5) Reflects payroll taxes associated with vested stock-based compensation awards. (6) Reflects the cost of a cash-based long-term incentive plan awarded to employees that vests over three years. (7) Reflects amortization expense related to the step-up inventory adjustment recorded as a result of our recent acquisitions. (8) Reflects Adjusted EBITDA / Net Sales for the relevant periods. View source version on businesswire.com: https://www.businesswire.com/news/home/20231108483737/en/
Gray Hudkins Cadre Holdings, Inc. 203-550-7148 gray.hudkins@cadre-holdings.com Investor Relations: The IGB Group Leon Berman / Matt Berkowitz 212-477-8438 / 212-227-7098 lberman@igbir.com / mberkowitz@igbir.com Media: Jonathan Keehner / Andrew Siegel Joele Frank, Wilkinson Brimmer Katcher 212-355-4449
