Cadre (US:CDRE)2025-08-05 20:15markdown [Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Highlights) Cadre Holdings reported strong financial results for Q2 2025, with significant year-over-year increases in net sales and gross profit. The company also declared a quarterly cash dividend Q2 2025 and Six Months Ended June 30, 2025 Financial Highlights (in millions) | Metric | Q2 2025 | 6 Months Ended June 30, 2025 | | :--------------------- | :---------- | :----------------------------- | | Net Sales | $157.1 million | $287.2 million | | Gross Profit Margin | 40.9% | 41.9% | | Net Income | $12.2 million | $21.5 million | | Diluted EPS | $0.30 | $0.52 | | Adjusted EBITDA | $27.0 million | $47.5 million | | Adjusted EBITDA Margin | 17.2% | 16.5% | - Declared a quarterly cash dividend of **$0.095 per share** in July 2025[5](index=5&type=chunk) [CEO's Strategic Commentary](index=1&type=section&id=CEO%27s%20Strategic%20Commentary) CEO Warren Kanders highlighted strong revenue and profitability growth, driven by demand for safety products and recent acquisitions in the nuclear safety business. He expressed confidence in the company's execution, resilience, and capital allocation strategy for future growth, despite shifts in order timing - Revenue and gross profit increased year-over-year by **9%** and **10%**, respectively, driven by strong demand for best-in-class safety products across law enforcement, first responder, military, and nuclear categories[2](index=2&type=chunk) - Completed the acquisition of multiple leading, niche global nuclear brands from Carr's Group, enhancing exposure to the attractive nuclear safety market, with growth drivers including environmental cleanup and national defense programs[2](index=2&type=chunk) - Maintained a strong financial position with **$137 million in cash** and **$175 million in undrawn revolver capacity**, positioning the company to capitalize on organic and inorganic growth opportunities[2](index=2&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) [Consolidated Operating Results (Q2 and Six Months)](index=1&type=section&id=Consolidated%20Operating%20Results) Cadre Holdings reported increased net sales and gross profit for both the second quarter and six months ended June 30, 2025, primarily driven by recent acquisitions. Net income saw a slight decrease in Q2 due to acquisition costs but increased for the six-month period, while Adjusted EBITDA declined for both periods Net Sales Performance (in millions) | Period | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------- | :----------------- | :----------------- | :----------- | | Q2 Ended June 30 | $157.1 | $144.3 | +9% | | 6 Months Ended June 30 | $287.2 | $282.2 | +1.8% | - The increase in net sales was primarily a result of recent acquisitions, with strong demand for nuclear safety and duty gear products partially offset by large order shipment timing for EOD and armor products for the six-month period[3](index=3&type=chunk)[4](index=4&type=chunk) Gross Profit and Margin Performance (in millions, percentage points) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | 6 Months 2025 | 6 Months 2024 | Change (YoY) | | :------------------ | :-------- | :-------- | :----------- | :------------ | :------------ | :----------- | | Gross Profit (M) | $64.2 | $58.7 | +9.4% | $120.4 | $116.3 | +3.5% | | Gross Profit Margin | 40.9% | 40.6% | +0.3 pp | 41.9% | 41.2% | +0.7 pp | - Gross profit margin improvement was mainly driven by favorable pricing and product mix, the absence of inventory step-up amortization, and exchange rate favorability[7](index=7&type=chunk) Net Income and Diluted EPS Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | 6 Months 2025 | 6 Months 2024 | Change (YoY) | | :---------------- | :-------- | :-------- | :----------- | :------------ | :------------ | :----------- | | Net Income (M) | $12.2 | $12.6 | -3.2% | $21.5 | $19.5 | +10.3% | | Diluted EPS | $0.30 | $0.31 | -3.2% | $0.52 | $0.49 | +6.1% | - The Q2 net income decrease was primarily due to acquisition-related costs, offset by foreign exchange. The six-month net income increase was also primarily due to foreign exchange, offset by interest expense[8](index=8&type=chunk) Adjusted EBITDA and Margin Performance (in millions, percentage points) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | 6 Months 2025 | 6 Months 2024 | Change (YoY) | | :-------------------- | :-------- | :-------- | :----------- | :------------ | :------------ | :----------- | | Adjusted EBITDA (M) | $27.0 | $28.3 | -4.6% | $47.5 | $52.8 | -10.0% | | Adjusted EBITDA Margin | 17.2% | 19.6% | -2.4 pp | 16.5% | 18.7% | -2.2 pp | [Segment Performance](index=2&type=section&id=Segment%20Performance) Both the Product and Distribution segments showed slight changes in gross margin year-over-year, with the Product segment improving and the Distribution segment experiencing a minor decline over the six-month period Segment Gross Margin Performance (percentage points) | Segment | Period | 2025 Gross Margin | 2024 Gross Margin | Change (YoY) | | :---------------- | :------------------- | :------------------ | :------------------ | :----------- | | Product Segment | Q2 | 41.7% | 41.1% | +0.6 pp | | | 6 Months | 42.9% | 42.0% | +0.9 pp | | Distribution Segment | Q2 | 23.1% | 22.9% | +0.2 pp | | | 6 Months | 22.3% | 23.2% | -0.9 pp | [Liquidity and Capital Allocation](index=2&type=section&id=Liquidity%20and%20Capital%20Allocation) [Dividend Declaration](index=2&type=section&id=Dividend%20Declaration) Cadre's Board of Directors declared a quarterly cash dividend, continuing its commitment to shareholder returns - On July 22, 2025, the Board of Directors declared a quarterly cash dividend of **$0.095 per share**, or **$0.38 per share on an annualized basis**[13](index=13&type=chunk) - The dividend payment is scheduled for August 15, 2025, to shareholders of record as of August 1, 2025[13](index=13&type=chunk) [Balance Sheet Highlights](index=2&type=section&id=Balance%20Sheet%20Highlights) The company's balance sheet reflects increased cash and total debt, leading to a higher net debt position, while capital expenditures decreased year-over-year for both the quarter and six-month period Key Balance Sheet Changes (December 31, 2024 to June 30, 2025, in millions) | Metric | Dec 31, 2024 (in millions) | June 30, 2025 (in millions) | Change | | :-------------------------- | :------------------------- | :------------------------ | :------- | | Cash and cash equivalents | $124.9 | $137.5 | +$12.5M | | Total debt | $223.2 | $315.2 | +$91.9M | | Net debt | $98.3 | $177.7 | +$79.4M | Capital Expenditures (in millions) | Period | 2025 (in millions) | 2024 (in millions) | | :------------------- | :----------------- | :----------------- | | Q2 Ended June 30 | $1.3 | $2.1 | | 6 Months Ended June 30 | $2.7 | $3.4 | [2025 Financial Outlook](index=2&type=section&id=2025%20Financial%20Outlook) Cadre Holdings provided its full-year 2025 financial guidance, expecting increased net sales and Adjusted EBITDA, while noting that the outlook reflects updated expectations on order timing and excludes potential impacts from new tariffs Full Year 2025 Guidance (in millions) | Metric | Range (in millions) | | :------------------ | :------------------ | | Net Sales | $624 to $630 | | Adjusted EBITDA | $112 to $116 | | Capital Expenditures | $7 to $8 | - The outlook reflects updated expectations around the timing of orders and does not incorporate impacts from new tariffs announced July 31st[14](index=14&type=chunk) - Net income guidance was not provided due to the inherent difficulty of forecasting certain expenses and gains that affect net income but not Adjusted EBITDA[14](index=14&type=chunk)[16](index=16&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) [About Cadre Holdings, Inc.](index=3&type=section&id=About%20Cadre%20Holdings%2C%20Inc.) Cadre Holdings is a global leader in safety product manufacturing and distribution, providing critical protection equipment across various markets with key brands like Safariland® and Med-Eng® - Cadre is a global leader in the manufacturing and distribution of safety products, headquartered in Jacksonville, Florida[19](index=19&type=chunk) - Core products include body armor, explosive ordnance disposal equipment, duty gear, and nuclear safety products, utilized in over 100 countries by law enforcement, first responders, military, and emergency medical technicians[19](index=19&type=chunk) - Key brands include Safariland® and Med-Eng®[19](index=19&type=chunk) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) Management will host a conference call to discuss the latest corporate developments and financial results, with details provided for live access and replay - A conference call will be hosted on Wednesday, August 6, 2025, at **10:00 a.m. EST**[17](index=17&type=chunk) - Dial-in numbers: US **(800)-715-9871**, International **646-307-1963**; Access Code: **9511718**. A live webcast is available on the company's website[17](index=17&type=chunk) - A replay of the call will be available through August 20, 2025[18](index=18&type=chunk) [Contact Information](index=4&type=section&id=Contact%20Information) Contact details for Cadre Holdings and Investor Relations are provided for inquiries - For Cadre Holdings, contact Gray Hudkins at **203-550-7148** or gray.hudkins@cadre-holdings.com[22](index=22&type=chunk) - For Investor Relations, contact Leon Berman or Matt Berkowitz at The IGB Group, **212-477-8438** or **212-227-7098**[22](index=22&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets provide a snapshot of Cadre Holdings' financial position, detailing assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (Selected Items, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :------------------ | | Total current assets | $381,016 | $327,571 | | Total assets | $794,437 | $652,713 | | Total current liabilities | $106,068 | $94,125 | | Long-term debt | $298,885 | $211,830 | | Total liabilities | $461,977 | $341,198 | | Total shareholders' equity | $332,460 | $311,515 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations present the company's revenues, expenses, and net income for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Operations (Selected Items, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $157,109 | $144,309 | $287,215 | $282,169 | | Gross profit | $64,249 | $58,650 | $120,380 | $116,278 | | Operating income | $14,685 | $19,953 | $28,237 | $31,932 | | Net income | $12,211 | $12,567 | $21,459 | $19,495 | | Diluted Net income per share | $0.30 | $0.31 | $0.52 | $0.49 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The condensed consolidated statements of cash flows detail the cash generated and used by operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (Selected Items, in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $19,979 | $13,280 | | Net cash used in investing activities | $(92,317) | $(145,129) | | Net cash provided by financing activities | $82,943 | $149,881 | | Change in cash and cash equivalents | $12,536 | $18,212 | | Cash and cash equivalents, end of period | $137,469 | $105,903 | [Supplemental Information](index=8&type=section&id=Supplemental%20Information) [Segment Information](index=8&type=section&id=Segment%20Information) Cadre Holdings provides a breakdown of net sales and gross profit by its Product and Distribution segments, highlighting their individual contributions to the overall financial performance Segment Net Sales and Gross Profit (Three Months Ended June 30, in thousands) | Metric | Product 2025 | Distribution 2025 | Total 2025 | Product 2024 | Distribution 2024 | Total 2024 | | :----------- | :------------- | :---------------- | :--------- | :------------- | :---------------- | :--------- | | Net sales | $140,135 | $25,508 | $157,109 | $128,433 | $25,588 | $144,309 | | Gross profit | $58,433 | $5,899 | $64,249 | $52,812 | $5,865 | $58,650 | Segment Net Sales and Gross Profit (Six Months Ended June 30, in thousands) | Metric | Product 2025 | Distribution 2025 | Total 2025 | Product 2024 | Distribution 2024 | Total 2024 | | :----------- | :------------- | :---------------- | :--------- | :------------- | :---------------- | :--------- | | Net sales | $252,870 | $53,370 | $287,215 | $247,218 | $53,779 | $282,169 | | Gross profit | $108,543 | $11,920 | $120,380 | $103,833 | $12,499 | $116,278 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides a detailed reconciliation of GAAP net income to non-GAAP measures such as EBITDA and Adjusted EBITDA, offering insights into the company's operational performance by adjusting for specific non-recurring or non-cash items Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | LTM June 30, 2025 | | :---------------------------------- | :-------- | :-------- | :------------ | :------------ | :---------------- | | Net income | $12,211 | $12,567 | $21,459 | $19,495 | $38,097 | | Add back: Depreciation and amortization | $4,676 | $4,620 | $8,532 | $8,562 | $16,390 | | Add back: Interest expense | $3,590 | $2,003 | $5,821 | $3,640 | $10,003 | | Add back: Provision for income taxes | $4,998 | $5,047 | $8,358 | $7,017 | $19,426 | | **EBITDA** | **$25,475** | **$24,237** | **$44,170** | **$38,714** | **$83,916** | | Add back: Restructuring and transaction costs | $4,326 | $19 | $5,024 | $4,856 | $7,925 | | Add back: Other expense (income), net | $(6,114) | $336 | $(7,401) | $1,780 | $(4,460) | | Add back: Stock-based compensation expense | $2,425 | $2,084 | $4,393 | $4,151 | $8,611 | | Add back: Amortization of inventory step-up | $356 | $1,541 | $356 | $2,310 | $1,904 | | Add back: Contingent consideration expense | $526 | $58 | $857 | $509 | $1,533 | | **Adjusted EBITDA** | **$26,994** | **$28,322** | **$47,491** | **$52,810** | **$99,521** | | Adjusted EBITDA margin | 17.2% | 19.6% | 16.5% | 18.7% | | [Use of Non-GAAP Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Measures) Cadre Holdings utilizes non-GAAP financial measures like EBITDA and Adjusted EBITDA to provide investors with a clearer understanding of its ongoing operations and to facilitate period-over-period performance analysis, while cautioning against their use as substitutes for GAAP results - The company reports non-GAAP measures (EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, LTM Adjusted EBITDA) to provide useful information for understanding ongoing operations and focusing on period-over-period operating performance[20](index=20&type=chunk) - Non-GAAP measures are reconciled to comparable GAAP financial measures within the press release[20](index=20&type=chunk) - The company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, reported GAAP results, and may not be comparable to similarly titled measures used by other companies[20](index=20&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section serves as a cautionary statement regarding forward-looking information, emphasizing that actual results may differ materially due to various risks and uncertainties outlined in the company's SEC filings - The press release contains forward-looking statements, which are based on expectations and beliefs concerning future events and involve risks and uncertainties[21](index=21&type=chunk) - Actual results could differ materially from those expressed or implied in forward-looking statements due to potential risks and uncertainties described in the company's public reports filed with the SEC (e.g., Form 10-K, 10-Q, 8-K)[21](index=21&type=chunk) - The company assumes no obligation to update any forward-looking statements after the date of the press release[21](index=21&type=chunk)