Financial Data and Key Metrics Changes - Revenue and gross profit increased year over year by 9% and 10.5% respectively, reflecting strong demand for protection products despite a challenging macro environment [4][22] - Q2 sales reached $157 million, exceeding expectations, with gross margin improving by 30 basis points year over year due to favorable pricing and absence of inventory step-up amortization [22][24] - Full year outlook implies year over year revenue and adjusted EBITDA growth of 10.5% and 8.7% respectively at the midpoints [24] Business Line Data and Key Metrics Changes - The acquisition of KAR's engineering division in April expanded CADRE's nuclear vertical and added scale to its operations [5][20] - The law enforcement segment remains the largest market, with consistent growth driven by increased police protection expenditures [11] - The nuclear safety sector is experiencing accelerating global demand, supported by energy, defense, and nuclear waste management trends [6][12] Market Data and Key Metrics Changes - Positive trends in North American law enforcement are highlighted by significant federal investments [14] - Geopolitical instability continues to underscore the importance of CADRE's offerings, particularly in conflict zones [14] - The consumer channel has shown resilience despite broader market challenges, with strong demand for consumer holsters [15] Company Strategy and Development Direction - CADRE is focused on strategic acquisitions to enhance its market leadership and operational efficiency [5][21] - The company aims to leverage its strong balance sheet and robust acquisition pipeline to pursue additional M&A opportunities [5][21] - Innovation remains a core focus, with successful new product launches contributing to market share growth [16][68] Management's Comments on Operating Environment and Future Outlook - Management noted a greater degree of uncertainty in the operating environment compared to previous years, particularly regarding large opportunities in the sales funnel [17][18] - Despite timing shifts for some large public safety and nuclear opportunities, management remains confident in the quality of the sales funnel [27] - The company anticipates strong long-term growth driven by macro tailwinds in law enforcement, military, and nuclear markets [19] Other Important Information - The company maintains significant financial flexibility with a net leverage ratio of 1.8 times, allowing it to pursue inorganic growth opportunities [23] - The integration of the acquired engineering division is underway, focusing on finance, accounting, IT, and compliance [10][20] Q&A Session Summary Question: On the contracts or the push out on some of these orders - Management indicated that the shift in timing is across various business units, but there are no reductions in budgets or allocations [30][32] Question: Margin outlook for the future - Management expressed confidence in long-term margin expansion, aiming for mid to upper 40s gross margins [38] Question: Clarification on guidance change - The guidance change was strictly a matter of timing, with no potential business exiting the funnel [42] Question: Sales mix and margin expectations for the second half - Management expects Q3 gross margins to be similar to Q2, with a slight increase anticipated in Q4 due to stronger EOD business [45] Question: Updates on the Nuclear business and integration - Early integration efforts are focused on functional areas, with initial discussions on potential commercial synergies underway [48][73] Question: Pricing trends across the portfolio - Pricing has exceeded expectations, with a net increase of 1% in Q2, and further increases expected in the second half [52] Question: Opportunities in defense and EOD business - Management noted that cleanup phases in conflict zones are not yet underway, but they are preparing for future opportunities [57] Question: Exposure to ICE and Border Patrol - Management highlighted ongoing opportunities as these agencies expand their personnel and equipment needs [60] Question: Tariff impacts on guidance - Current guidance reflects known tariffs, with mitigation plans in place to address potential future changes [62] Question: Performance of new products - Recent product launches have performed well, contributing positively to market share despite broader market challenges [68]

Financial Data and Key Metrics Changes - Cash increased to $6.2 million from $3.6 million in Q1 2024 [3] - Margins improved over 21 points, rising from 56.6% in Q1 2024 to 77.8% in Q1 2025 [3] - Cost of revenues decreased by 73.4%, from $640,000 to $170,000 [3] - Operating loss improved by 5.2%, from negative $4.1 million in Q1 2024 to negative $3.9 million in Q1 2025 [3] - Q1 2025 revenue was $765,000, with net income of $109,000 compared to $117,000 in Q1 2024 [3] Business Line Data and Key Metrics Changes - The company is tracking over a dozen departments using the BolaWrap device significantly more than other tools on their belts [8][14] - New training programs are expected to accelerate the deployment of BolaWrap, making it a preferred choice for officers [10][18] Market Data and Key Metrics Changes - The company is seeing increased interest and usage of BolaWrap in various departments across the U.S. [14][16] - There is a growing trend of departments reporting lower usage of traditional force tools due to policy changes [42] Company Strategy and Development Direction - The company aims to build out its sales and marketing infrastructure to support the BolaWrap program [25][29] - There is a strategic shift towards engaging political leadership and community leaders to drive product awareness and sales [31][46] - The company is focusing on international opportunities, particularly in countries like Chile, where there is significant interest in the BolaWrap program [56][60] Management's Comments on Operating Environment and Future Outlook - Management believes that the data collected will drive future sales and product awareness, making it easier to engage with potential customers [20][25] - The company is optimistic about the international market, with multiple pilots underway and interest from various national police forces [58][62] - Management acknowledges past challenges but emphasizes that recent data has changed the conversation and mindset regarding the BolaWrap program [65][67] Other Important Information - The company has completed its move to a new facility in Virginia, which is expected to enhance production capabilities [52] - The company is actively engaging with community leaders and advocacy groups to strengthen its outreach efforts [46][47] Q&A Session Summary Question: What is Wrap doing to drive more sales and increased product awareness? - The company has sold over $30 million of the product without solid data, but now has data to support its effectiveness, which is expected to drive sales [20][22] Question: Are there any plans to shift sales efforts towards political leadership rather than police directly? - Yes, the company is engaging with political leaders as part of a broader strategy to address national use of force conversations [31][34] Question: Does Wrap engage with community leaders as part of its outreach plan? - The company acknowledges past efforts and plans to increase engagement with community leaders and advocacy groups [46][47] Question: How will the end of Governor Youngkin's term and a potential new candidate impact Wrap's outlook in Virginia? - The impact is expected to be negligible as the issues addressed by the company are bipartisan and relevant across political lines [49][50] Question: Can you provide an update on international orders, specifically Chile and Italy? - Chile is moving forward with a significant rollout, while updates on Italy are not available at this time [54][56] Question: What happened with the LAPD testing of the BolaWrap a few years back? - Previous pilot programs did not succeed, but recent data has changed the conversation, and the company is optimistic about re-engaging with major cities [63][65] Question: With all of these new hires, is Wrap building something similar to Kroll Associates? - The company is leveraging new talent with extensive networks to enhance its global outreach and support its BolaWrap program [69][71]