Cadre (US:CDRE)2021-12-01 16:00Financial Performance - Net sales for Q3 2021 were $98,654,000, a decrease of 6.4% compared to $105,735,000 in Q3 2020[19] - Gross profit for Q3 2021 was $39,308,000, slightly down from $39,996,000 in Q3 2020, resulting in a gross margin of 39.8%[19] - Operating income for Q3 2021 was $11,542,000, compared to $12,758,000 in Q3 2020, reflecting a decrease of 9.5%[19] - The company reported a net loss of $5,306,000 for Q3 2021, compared to a net income of $6,447,000 in Q3 2020[19] - Net income for the nine months ended September 30, 2021, was $8,373,000, a decrease of 63.0% compared to $22,673,000 for the same period in 2020[25] - Adjusted EBITDA for the three months ended September 30, 2021, was $15,419, compared to $15,039 for the same period in 2020[127] - Adjusted EBITDA increased by $0.4 million for the three months ended September 30, 2021, and by $13.6 million for the nine months ended September 30, 2021, primarily due to increased sales volume and margin rate increases[196] Assets and Liabilities - Total current assets increased to $143,643,000 as of September 30, 2021, up from $117,469,000 at the end of 2020, representing a growth of 22.3%[16] - Total liabilities rose to $294,687,000 as of September 30, 2021, compared to $274,428,000 at the end of 2020, indicating an increase of 7.4%[16] - Long-term debt stood at $212,946,000 as of September 30, 2021, slightly up from $209,310,000 at the end of 2020[16] - The company’s accumulated deficit increased to $38,589,000 as of September 30, 2021, compared to $36,962,000 at the end of 2020[16] - Outstanding debt as of September 30, 2021, was $225.9 million, compared to $212.8 million as of December 31, 2020[201] Cash Flow - The company’s cash and cash equivalents increased significantly to $15,275,000 from $2,873,000, marking a growth of 431.5%[16] - Net cash provided by operating activities increased to $30,989,000 from $28,192,000, representing a growth of 6.4% year-over-year[25] - Cash and cash equivalents at the end of the period were $15,275,000, up from $2,484,000 at the end of the previous period[25] Sales and Revenue Breakdown - For the nine months ended September 30, 2021, net sales increased to $323.751 million, up 9.0% from $297.019 million in the prior year[62] - U.S. state and local agencies contributed $55.559 million in sales for the three months ended September 30, 2021, down from $64.507 million in the same period last year[62] - International sales rose significantly to $22.613 million for the three months ended September 30, 2021, compared to $16.254 million in the prior year, marking a 39.1% increase[62] Expenses - Selling, general and administrative (SG&A) expenses increased by $0.8 million, or 2.8%, to $27.7 million for the three months ended September 30, 2021, primarily due to the implementation of the LTIP bonus plan[162] - SG&A expenses for the nine months ended September 30, 2021, increased by $7.2 million, or 9.0%, to $87.2 million compared to the same period in 2020[173] - Interest expense decreased by $2.2 million, or 38.9%, to $3.5 million for the three months ended September 30, 2021, due to lower interest rates from recent refinancings[165] - Interest expense decreased by $4.1 million, or 22.7%, for the nine months ended September 30, 2021, due to lower interest rates from recent refinancings and voluntary debt repayments[177] Debt and Financing Activities - The company refinanced its credit facilities, borrowing $200,000 thousand under a term loan and establishing a revolving credit facility of up to $100,000 thousand[76] - The company incurred financing costs totaling $4,095 thousand in connection with the new credit agreement, with $2,730 thousand related to the term loan and $1,365 thousand related to the revolving loan[81] - The new credit agreement requires scheduled quarterly payments of 1.25% per quarter of the original principal amount of the term loan, starting December 31, 2021[202] - The new credit agreement includes covenants requiring a minimum fixed charge coverage ratio of 1.25 to 1.00 and a maximum consolidated total net leverage ratio of 3.75 to 1.00[207] Legal and Compliance - The Company is involved in various legal proceedings, including a False Claims Act investigation regarding the compliance of its products with performance standards[95] Other Notable Events - The company declared and paid a dividend of $10,000,000, or $0.36 per share, to shareholders in August 2021[34] - The company completed its IPO on November 3, 2021, raising gross proceeds of $89,700 from the sale of 6,900,000 shares at $13.00 per share[117] - The company utilized IPO proceeds to repay $38,937 and $20,500 under its Term Loan and Revolving Loan, respectively[118] - The company continues to invest in research and development to enhance product innovation and meet the evolving needs of first responders[126]