Summary of Cadre Holdings (CDRE) 2025 Conference Call Company Overview - **Company Name**: Cadre Holdings - **Public Listing Date**: November 2021 - **Industry**: Safety equipment for public safety and nuclear sectors - **History**: Over 55 years in operation, positioned as a global leader in safety equipment Core Product Offerings 1. **Explosive Ordnance Disposal (EOD)**: - Major customer base includes militaries worldwide - Estimated 87-90% market share in bomb suits for militaries and law enforcement [3][4] 2. **Duty Gear**: - Focus on holsters, with approximately 90% market share in the US law enforcement sector [4] 3. **Body Armor**: - Includes hard and soft armor, with market share estimated in the high 30% to low 40% range in the US [5][6] 4. **Nuclear Segment**: - Entered in 2021, aiming for diversification into nuclear safety equipment [6] Growth Algorithm - **Market Growth Rates**: - Public safety and law enforcement: 3% growth - Nuclear sector: 4-6% growth [7] - **EBITDA Expansion**: - Price increases contribute approximately 1% net of material inflation, driving 5% EBITDA expansion [8] - Low CapEx business model (<2% of revenue), allowing for high free cash flow generation [10][11] Competitive Positioning - **Brand Recognition**: Strong brand presence in safety equipment, with over 2,254 saves attributed to their products [12][13] - **Innovation**: Continuous product development to meet customer needs, although new products often cannibalize existing ones [14][23] Tariff and Supply Chain Management - **Supply Chain Resilience**: - Primarily regional sourcing, with limited exposure to tariffs due to North American manufacturing [16][17] - USMCA agreement mitigates tariff impacts on goods movement [18][19] - **Price Increases**: - Implemented price increases in response to tariffs, with a focus on maintaining competitive pricing [20][46] Market Trends and Customer Sensitivity - **Public Safety Budgets**: - Historical consistency in law enforcement budgets, typically growing at 2.8-3% CAGR [26][27] - Demand for safety equipment remains stable even during budget constraints [30][31] - **Nuclear Market Drivers**: - Growth driven by environmental safety, national security, and nuclear energy needs [33] - Significant investments in nuclear power plant decommissioning and modernization of nuclear arsenals [38][40][44] Margin and Financial Outlook - **EBITDA Margin Goals**: - Long-term target of mid-20s EBITDA margins, with ongoing margin expansion opportunities [64][66] - **Leverage Strategy**: - Current leverage at 1.8x, with a target range of 2x for optimal investor returns [68][70] - Focus on M&A as the primary capital allocation strategy [71] Integration and Cross-Selling Opportunities - **Integration Progress**: - Successful integration of back-office functions post-acquisition, with ongoing development of operating models [55][56] - **Cross-Selling Strategy**: - Opportunities to introduce Alpha Safety products into existing customer bases, particularly in the UK [59][62] Conclusion - Cadre Holdings is positioned for stable growth in both public safety and nuclear sectors, leveraging strong brand recognition, innovative product development, and a resilient supply chain. The company aims to enhance margins and pursue strategic acquisitions while maintaining a focus on cash flow generation and operational efficiency.

Financial Data and Key Metrics Changes - Surgery Partners reported full-year adjusted EBITDA growth of 16% and net revenue growth of 13.5%, resulting in margin expansion of 30 basis points [7][39] - The company achieved revenue over $3 billion and adjusted EBITDA over $500 million for the first time [8] - Adjusted EBITDA for Q4 was $163.8 million, with a margin of 18.9%, while full-year adjusted EBITDA was $508.2 million, reflecting a 16% increase over 2023 [40][41] Business Line Data and Key Metrics Changes - The company performed over 656,000 surgical cases in 2024, an increase from 605,000 cases in 2023, with significant growth in orthopedic procedures, particularly total joint procedures, which grew by 50% [12][13] - Same facility revenue growth was 8% for the year, with Q4 same facility total revenue increasing by 5.6% [39] Market Data and Key Metrics Changes - Approximately 90% of the company's revenue was generated from commercial payers and Medicare in 2024 [18] - The company expects Medicare rate increases of approximately 3% for 2025, contributing to revenue growth [19] Company Strategy and Development Direction - The company focuses on organic growth, margin improvement, and capital deployment for M&A as part of its long-term growth algorithm [6][11] - Surgery Partners plans to continue investing in acquisitions, facility expansions, and service line expansions, with a target of at least 10 de novo facilities annually [16][24] - The company aims to maintain a robust pipeline of attractive partnership opportunities, having added seven surgical facilities in 2024 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning relative to the current regulatory environment, noting minimal exposure to Medicaid and site neutrality legislation [30][32] - The company anticipates continued margin expansion and double-digit adjusted EBITDA growth in 2025, with initial guidance for net revenue between $3.3 billion and $3.45 billion [27][49] Other Important Information - Surgery Partners has a strong liquidity position with $270 million in cash and over $770 million in total liquidity [40] - The company incurred approximately $11 million in costs related to strategic alternatives considered by the Board in 2024, with expectations for similar costs in 2025 [45][134] Q&A Session Summary Question: Impact of potential legislation on revenue - Management indicated that the worst-case scenario from site neutrality legislation could impact revenue by approximately 1%, but they expect a net positive effect as procedures may shift from acute care to their facilities [55][60] Question: Guidance for Q1 considering weather impacts - Management noted that while unusual weather conditions may cause some rescheduling, it has been factored into their guidance, expecting Q1 to contribute about 23% of the annual revenue midpoint [64][66] Question: Changes in M&A approach due to Bain Capital's proposal - Management stated that the M&A pipeline remains strong and has not been impacted by the proposal, with three facilities already closed in Q1 2025 [71][74] Question: Revenue contribution from divested assets - Management clarified that less than 2% of the projected revenue growth is related to divestitures, emphasizing a focus on portfolio optimization [88][89] Question: Visibility on reducing transaction and integration costs - Management expressed confidence in reducing transaction and integration costs in 2025, with expectations for free cash flow improvement as these costs normalize [131][132]