Core Insights - Cadre Holdings, Inc. (NYSE:CDRE) is recognized as a Strong Buy by Wall Street analysts, with an average price target of $51, indicating a 21% upside potential from current levels [1][2] Group 1: Contract Details - Cadre's subsidiary, Med-Eng LLC, secured a five-year contract worth $50 million from the US Department of Defense to enhance exposure identification methods [2] - The contract involves providing blast-exposure monitoring systems to track exposures from heavy weapons and explosive breaching in both combat and training environments [3] - The first delivery under this contract is scheduled for next year [3] Group 2: Company Overview - Cadre Holdings, Inc. designs, manufactures, and distributes critical safety and survivability products, including body armor, EOD gear, and communication tools for first responders and federal agencies globally [5] - The company operates through well-known brands such as Safariland, Med-Eng, and Bianchi, equipping users for dangerous situations and providing distribution for related gear [5] Group 3: Leadership Commentary - Cadre President Brad Williams expressed pride in securing the contract, highlighting the company's commitment to developing best-in-class systems for user safety and operational support [4]

Core Insights - Cadre Holdings, Inc. (NYSE:CDRE) is recognized as one of the 14 best up-and-coming dividend stocks to buy [1] - The company reported strong third-quarter results for 2025, with revenue of $155.8 million, a 42% increase year-over-year, and a net income of $10.9 million, or $0.27 per diluted share [2] - Roth MKM reaffirmed a Buy rating for Cadre Holdings with a price target of $49 [2] Acquisition Details - Cadre Holdings announced the acquisition of TYR Tactical for $175 million in cash and stock, marking its sixth and largest acquisition since its IPO [3] - The acquisition is aimed at expanding Cadre's diversified portfolio in the durable safety business [3] - CEO Warren Kanders emphasized TYR Tactical's advanced engineering capabilities and its established relationships with military clients in Northern Europe [4] Company Overview - Cadre Holdings specializes in designing, manufacturing, and distributing safety and survivability equipment for first responders, law enforcement, and military personnel, including body armor and bomb suits [5]

Core Insights - Cadre Holdings, Inc. is recognized as one of the best small-cap defense stocks to buy, with an upside potential of 12.90% as of November 14 [1] - B. Riley raised its price target for Cadre from $50 to $62, maintaining a Buy rating following a strong Q3 earnings report [2] - The company reported a 42.5% year-over-year increase in net sales for Q3, reaching $155.9 million, driven by demand for armor and duty gear products [3] Financial Performance - Gross profit margin improved from 36.6% to 42.7% year-over-year [3] - Net income for Q3 was $10.9 million, up from $3.7 million in Q3 2024, with diluted EPS increasing to $0.27 from $0.09 [3] - The company reaffirmed its full-year outlook for 2025, expecting net sales between $624 million and $630 million and adjusted EBITDA between $112 million and $116 million [4] Market Position and Growth Drivers - Management highlighted national defense initiatives, increased global spending, and rising safety threats as factors that could support long-term growth [5] - Cadre Holdings manufactures and distributes safety equipment for law enforcement, military, and nuclear markets [5] - The stock has gained 33% year-to-date in 2025, indicating strong market performance [5]

Core Insights - The small-cap defense stocks have seen significant growth in 2025, driven by rising demand for AI-powered drones and unmanned vehicles, which are cost-effective and reduce reliance on ground forces [2][3] - The NYSE Arca Defense Index has increased by 31.24% year-to-date, outperforming the S&P 500's 13.70% return [1] - Companies investing in adaptable, technology-backed combat systems are expected to benefit from changing trends in defense spending [3] Industry Trends - The Department of War's 2026 budget request for drones and counter-drones is 53% higher than the actual spend in fiscal 2024 and 78% more than fiscal 2025 funding [3] - Traditional defense contractors are expanding capabilities through mergers and acquisitions, particularly in AI, communications, and cybersecurity [4] Company Highlights - **Cadre Holdings, Inc. (NYSE:CDRE)**: - Share price upside potential of 12.90% as of November 14 [9] - Q3 net sales increased by 42.5% year-over-year to $155.9 million, driven by strong demand for armor and duty gear [11] - Gross profit margin improved from 36.6% to 42.7% year-over-year [11] - Full-year 2025 net sales expected between $624 million and $630 million [12] - **Ducommun Incorporated (NYSE:DCO)**: - Share price upside potential of 18.20% as of November 14 [14] - Q3 net revenue reached $212.6 million, a 6% year-over-year increase, attributed to strong defense business performance [15] - Reported a net loss of $64.4 million due to litigation costs, but adjusted net income was $15.2 million, exceeding estimates [17] - Stock has gained 43.53% year-to-date as of November 14 [19]

Financial Data and Key Metrics Changes - In Q3, net sales reached $155.9 million, representing a 42% year-over-year increase [18] - Gross margin improved by 610 basis points year-over-year and 180 basis points sequentially, driven by favorable pricing and the absence of prior year inventory step-up amortization [18] - The company reaffirmed its 2025 guidance, expecting net sales between $624 million and $630 million, and adjusted EBITDA between $112 million and $116 million, implying adjusted EBITDA margins of 18.2% [19] Business Line Data and Key Metrics Changes - The organic backlog increased by $20 million sequentially, indicating strong demand and successful booking of previously delayed opportunities [8] - The EOD business, MedEng, was awarded a $50 million IDIQ contract by the U.S. Department of Defense, marking a significant achievement [10] - The company reported strong demand for armor and duty gear, contributing to organic growth despite challenging year-over-year comparisons due to cybersecurity impacts [44] Market Data and Key Metrics Changes - The law enforcement market is experiencing rising safety threats globally, with increasing investments in protective equipment [12] - In the nuclear sector, long-term demand is driven by policy and commercial tailwinds, with significant government and private sector support [12] - The company is strategically positioned to support the full nuclear life cycle, capitalizing on expanding national defense initiatives [13] Company Strategy and Development Direction - The company is focused on disciplined M&A, with the recent agreement to acquire Tier Tactical, enhancing its portfolio in mission-critical products [4][5] - The acquisition aims to unlock new growth opportunities in high-value end markets, particularly in Northern Europe [5] - The company continues to see robust acquisition pipelines in both public safety and nuclear markets, emphasizing a patient and disciplined approach [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver long-term value creation for shareholders, supported by a strong culture and resilient business model [6] - The macro environment remains dynamic, but the company has made considerable progress in booking large opportunities, reflected in significant backlog growth [14] - Management remains optimistic about future growth opportunities, particularly in the context of government funding and security needs for large-scale events [58] Other Important Information - The company has deployed over $400 million in acquisitions over the past 24 months, reinforcing its commitment to expanding its diversified platform of durable safety businesses [5] - The company has maintained a strong free cash flow generation, allowing for dividend payments while supporting organic growth and M&A objectives [9] Q&A Session Summary Question: Thoughts on sequential margin improvement - Management noted broad-based margin improvement across all major categories, driven by productivity and positive mix [25] Question: Progress on the Cadre operating model - Management reported exceptional progress in adopting the operating model across various international teams, with positive cultural feedback [26] Question: Long-term opportunity with the $50 million IDIQ contract - Management highlighted the commitment from the Department of Defense and the potential for future international opportunities [28][30] Question: Expected gross margin for Q4 - Management anticipates gross margins to land between Q2 and Q3 rates, with a positive outlook for the remainder of the year [34] Question: Impact of government shutdown on guidance - Management has considered potential delays in guidance due to the government shutdown but remains optimistic about covering any slippages [50][56] Question: Input costs and inflation outlook - Management indicated that input costs have remained consistent, with no significant changes expected in the inflation environment [63] Question: New product mix and innovation history - Management noted a significant refresh of the product portfolio in recent years, with expectations for continued innovation from the Tier acquisition [66]

Financial Performance - Net sales for Q3 2025 reached $155.9 million, a significant increase compared to $109.4 million in Q3 2024[34] - Adjusted EBITDA for Q3 2025 was $29.8 million, up from $13.5 million in Q3 2024[34] - Gross margin improved to 42.7% in Q3 2025, a 610 bps increase year-over-year from 36.6% in Q3 2024[34] - Adjusted EBITDA margin improved to 19.1% in Q3 2025, a 670 bps increase year-over-year from 12.4% in Q3 2024[34] - The company reaffirms its FY 2025 guidance with net sales projected between $624 million and $630 million and adjusted EBITDA between $112 million and $116 million[41] Strategic Initiatives and M&A - Cadre announced an agreement to acquire TYR Tactical for a total consideration of $175 million, including $150 million in cash and $25 million in CDRE stock[12, 27] - TYR Tactical generated $93 million in revenue in FY2024 and is expected to be immediately accretive to earnings and adjusted EBITDA margins[27] - Med-Eng was awarded a $50 million IDIQ (Indefinite Delivery Indefinite Quantity) contract with the Department of Defense for the Blast Exposure Monitoring System (BEMO)[13, 15] Market Trends and Growth Drivers - The company is capitalizing on strong macro tailwinds driving demand for mission-critical products[45] - Organic backlog increased by $20 million from Q2 to Q3[12] - International revenue accounts for 7% of Cadre's revenue and 75% of TYR's revenue[29]

Core Insights - Cadre Holdings, Inc. reported revenue of $155.87 million for the quarter ended September 2025, marking a year-over-year increase of 42.5% [1] - The company's EPS for the same period was $0.27, compared to $0.09 a year ago, indicating significant growth [1] - Revenue fell short of the Zacks Consensus Estimate of $159.64 million, resulting in a surprise of -2.36%, while the EPS exceeded the consensus estimate of $0.26 by 3.85% [1] Financial Performance Metrics - Net sales for products were reported at $138.79 million, below the average estimate of $142.34 million from three analysts [4] - Net sales for reconciling items were -$9.4 million, compared to the average estimate of -$8.28 million from three analysts [4] - Net sales for distribution reached $26.48 million, slightly above the average estimate of $25.61 million from three analysts [4] Stock Performance - Shares of Cadre Holdings, Inc. have returned +13.2% over the past month, outperforming the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Cadre Holdings, Inc. (CDRE) reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, and showing significant growth from $0.09 per share a year ago, resulting in an earnings surprise of +3.85% [1] - The company posted revenues of $155.87 million for the quarter ended September 2025, which was below the Zacks Consensus Estimate by 2.36%, but an increase from $109.41 million year-over-year [2] - Cadre Holdings, Inc. shares have increased approximately 31.5% year-to-date, outperforming the S&P 500's gain of 16.5% [3] Earnings Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.43 for the upcoming quarter and $1.23 for the current fiscal year, alongside expected revenues of $181.43 million and $628.28 million respectively [7] - The trend of estimate revisions for Cadre Holdings, Inc. was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Security and Safety Services industry, to which Cadre Holdings, Inc. belongs, is currently ranked in the top 16% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5]

Financial Performance - For the three months ended September 30, 2025, net sales increased to $155,869,000, a 42.5% increase from $109,408,000 in the same period of 2024[20] - Gross profit for the nine months ended September 30, 2025, was $187,005,000, representing a 19.6% increase compared to $156,294,000 for the same period in 2024[20] - Operating income for the three months ended September 30, 2025, rose to $18,674,000, up 244.5% from $5,426,000 in the prior year[20] - Net income for the nine months ended September 30, 2025, was $32,400,000, a 40% increase from $23,150,000 in the same period of 2024[20] - The company’s diluted net income per share for the three months ended September 30, 2025, was $0.27, compared to $0.09 for the same period in 2024, reflecting a 200% increase[20] - Net income for the quarter ending June 30, 2025, was reported at $10,941,000, compared to $9,248,000 for the previous quarter, indicating a sequential increase of 18.4%[25] - For the three months ended September 30, 2025, net income was $10,941,000, compared to $3,655,000 for the same period in 2024, representing a significant increase[49] - Adjusted EBITDA for the three months ended September 30, 2025, was $29.8 million, compared to $13.5 million in the same period of 2024, reflecting a significant increase in operational performance[130] Cash and Assets - Cash and cash equivalents increased to $150,875,000 as of September 30, 2025, compared to $124,933,000 at the end of 2024, reflecting a growth of 20.7%[17] - Total assets grew to $792,055,000 as of September 30, 2025, up 21.4% from $652,713,000 at the end of 2024[17] - As of September 30, 2025, total shareholders' equity increased to $340,374,000 from $311,515,000 as of December 31, 2024, reflecting a growth of approximately 9.3%[25] - The company reported a net cash provided by operating activities of $42,455,000 for the nine months ended September 30, 2025, significantly higher than $8,066,000 in the same period of 2024[24] - The company had $150.9 million in cash and cash equivalents at the end of the period on September 30, 2025, compared to $92.9 million at the end of 2024[192] Liabilities and Debt - Total liabilities increased to $451,681,000 as of September 30, 2025, compared to $341,198,000 at the end of 2024, marking a 32.5% rise[17] - Total long-term debt as of September 30, 2025, is $294,971, an increase from $211,830 as of December 31, 2024[78] - Outstanding debt increased to $311.2 million as of September 30, 2025, up from $223.2 million as of December 31, 2024, primarily related to term loan facilities[175] Acquisitions - Business acquisitions for the nine months ended September 30, 2025, totaled $89,590,000, down from $141,813,000 in the same period of 2024[24] - The total consideration for the acquisition of Zircaloy was $89,590,000, net of cash acquired, with total acquisition-related costs amounting to $4,520,000[53] - The company signed a definitive agreement to acquire Tyr Tactical, LLC for a total consideration of $175,000, including $150,000 in cash at closing[121] - The acquisition of ICOR resulted in total consideration of $39,282,000, net of cash acquired, with contingent consideration of $2,226,000 included[56] - The acquisition of Alpha Safety had a total consideration of $102,531, with goodwill of $49,133, indicating anticipated profitability from market expansion[63] Revenue Segments - Net sales for the Product segment for the three months ended September 30, 2025, were $138,789, an increase from $96,493 in the same period of 2024[120] - The Product segment net sales increased by $42.3 million, or 43.8%, to $138.8 million for the three months ended September 30, 2025, primarily due to the Zircaloy acquisition and stronger demand for armor and duty gear products[146] - Distribution segment net sales increased by $8.7 million, or 48.5%, to $26.5 million for the three months ended September 30, 2025, driven by stronger demand for hard goods[146] - Product segment net sales increased by $48.0 million, or 14.0%, from $343.7 million to $391.7 million for the nine months ended September 30, 2025, primarily due to the Zircaloy acquisition and increased demand for duty gear products[155] - Distribution segment net sales increased by $8.3 million, or 11.5%, from $71.6 million to $79.9 million for the nine months ended September 30, 2025, driven by stronger demand for hard goods[155] Expenses - Selling, general and administrative expenses increased by $19.2 million, or 17.0%, for the nine months ended September 30, 2025, primarily due to the Zircaloy acquisition and increased payroll expenses[157] - Interest expense, net increased by $3.2 million for the nine months ended September 30, 2025, primarily due to debt assumed from the Zircaloy acquisition[161] Tax and Other Income - Provision for income taxes was $12.3 million for the nine months ended September 30, 2025, with an effective tax rate of 27.5%[163] - Other income, net was $6.6 million for the nine months ended September 30, 2025, compared to other expense, net of $0.2 million for the same period in 2024, primarily due to changes in foreign currency exchange rates[162] Market Risks - The company is exposed to foreign currency exchange risk, primarily with the Canadian dollar and Mexican peso, due to its geographically diverse operations[214] - Forward contracts have been established to hedge forecasted costs in Mexican pesos, designated as cash flow hedges to manage foreign currency transaction risk[215] - Market risks, including interest rate and foreign currency exchange risks, are not currently significant to the company's results of operations but may become so in the future[207]

Financial Performance - Quarterly net sales increased by 42% year-over-year to $155.9 million, and net sales for the nine months ended September 30, 2025, reached $443.1 million, up from $391.6 million in the prior year[3][4][5] - Gross profit for the third quarter was $66.6 million, representing a gross profit margin of 42.7%, compared to 36.6% in the same quarter last year[6][7] - Adjusted EBITDA for the third quarter was $29.8 million, with an Adjusted EBITDA margin of 19.1%, an increase of 670 basis points year-over-year[10][11] - Net income for the third quarter was $10.9 million, or $0.27 per diluted share, compared to $3.7 million, or $0.09 per diluted share, in the same quarter last year[8][5] - Operating income for the nine months ended September 30, 2025, was $46.9 million, compared to $37.4 million for the same period in 2024, reflecting a 25.5% increase[27] - Net income for the nine months ended September 30, 2025, was $32.4 million, a 40% increase from $23.2 million in 2024[28] - Adjusted EBITDA for the nine months ended September 30, 2025, reached $66,335,000, with an adjusted EBITDA margin of 19.1% for the three months ended September 30, 2025[31] - The EBITDA for the last twelve months was reported at $96,420,000, showcasing strong operational performance[31] Cash and Debt Management - Cash and cash equivalents increased by $25.9 million to $150.9 million as of September 30, 2025, while total debt rose by $88.0 million to $311.2 million[16] - Cash and cash equivalents increased to $150.9 million as of September 30, 2025, from $124.9 million at the end of 2024[28] - Total assets grew to $792.1 million as of September 30, 2025, compared to $652.7 million at the end of 2024, marking a 21.4% increase[26] - Total liabilities increased to $451.7 million as of September 30, 2025, from $341.2 million at the end of 2024, representing a 32.5% rise[26] Business Developments - The company announced an agreement to acquire TYR Tactical for $175 million, expected to close in the first half of 2026, which produced approximately $92.6 million in revenue in 2024[14] - Med-Eng, a subsidiary, was awarded a $50 million contract by the Department of Defense, with the first purchase order of $10 million to be shipped in 2026[15] - Organic backlog increased by $20 million from Q2 to Q3 2025, indicating strong demand and growth potential[1] Expenses and Costs - Operating expenses for the nine months ended September 30, 2025, totaled $140.1 million, up from $118.9 million in 2024, reflecting a 17.5% increase[27] - The company incurred $89.6 million in business acquisitions during the nine months ended September 30, 2025[28] - Depreciation and amortization expenses for the year ended December 31, 2024, totaled $16,420,000, and interest expense, net, was $7,822,000 for the same period[31] - Restructuring and transaction costs amounted to $7,757,000 for the year ended December 31, 2024, reflecting significant transaction-related expenses[31] - Stock-based compensation expense was $8,369,000 for the year ended December 31, 2024, indicating a substantial investment in employee incentives[31] - The company incurred contingent consideration expenses of $1,185,000 related to the acquisition of ICOR[31] Dividends and Shareholder Returns - The company declared a quarterly cash dividend of $0.095 per share, with an annualized basis of $0.38 per share[17] Currency and Other Expenses - Other net expenses included a loss of $1,555,000 for the three months ended September 30, 2025, primarily due to foreign currency fluctuations[31] - The company reported a net provision for income taxes of $18,085,000 for the year ended December 31, 2024[31]