Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q2 2022 Earnings Presentation
21 slides from Cadre's earnings presentation, 2022
Slide 1: Second Quarter 2022
LADRE HOLDINGS SECOND QUARTER i= 2022
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Except for historical information, certain matters discussed in this presentation may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to all projections and ant
Slide 3: Today's Presenters
TODAY’S PRESENTERS WARREN KANDERS BRAD WILLIAMS BLAINE BROWERS Chief Executive Officer and President Chief Financial Officer Chairman of the Board 3
Slide 4: Agenda
AGENDA • Q2 Review • Business Overview • Financial Summary • Full Year Outlook • Conclusion and Q&A 4
Slide 5: Continued Execution in Q2
CONTINUED EXECUTION IN Q2 Cadre continues to deliver on strategic objectives in a challenging supply chain and inflationary environment Commentary: Pricing Growth: ✓ Exceeded 1% target above material inflation Adjusted EBITDA Conversion:1 ✓ Generated Adj. EBITDA conversion of 92% in Q2, at the high
Slide 6: Macro Tailwinds Support Long Term Sustainable Growth Opportunity
MACRO TAILWINDS SUPPORT LONG TERM SUSTAINABLE GROWTH OPPORTUNITY Police protection expenditures have continued to trend upward even during previous financial and industrial recessions Major US cities continue to increase police budgets The American Rescue Plan provides $350 billion to hire more poli
Slide 7: Latest Market Trends
LATEST MARKET TRENDS North American Law Enforcement • Budgets are healthy but police departments still struggling to fill open positions Geopolitical • Amid continued war in Ukraine, uptick in inquiries, which have resulted in small orders Landscape • Anticipate larger opportunities to provide safet
Slide 8: Business Strategy to Attain & Sustain Exceptional Results
BUSINESS STRATEGY TO ATTAIN & SUSTAIN EXCEPTIONAL RESULTS OPERATING MODEL EXCELLENCE MATURITY MODEL CADRE core values Leadership Capability & Management Processes Maturity Model = Cultural Transformation 8
Slide 9: Cadre's Key M&A Criteria
CADRE'S KEY M&A CRITERIA CADRE'S KEY M&ACRITERIA Business Leading market position Cost structure where material > labor High cost of substitution Leading and defensible technology Mission-critical tocustomer Strong brandrecognition Financial Recurring revenueprofile Asset-light Attractive ROIC Marke
Slide 10: Acquisition of Cyalume Technologies
ACQUISITION OF CYALUME TECHNOLOGIES Over 60 years as a leading manufacturer of chemical light Route / Landing Markings solutions. Preeminent supplier of light sticks, chemi- luminescent ammunition and infra-red devices to US, NATO military forces, and commercial and law enforcement markets. KEYM&A C
Slide 11: Second Quarter 2022 Financial Performance
SECOND QUARTER 2022 FINANCIAL PERFORMANCE Q2 2022 Q1 2022 Q2 2021 NET SALES $118.2M $104.4M $114.6M GROSS MARGIN 36.6% 38.5% 42.1% NET INCOME $4.4M / ($10.2M) / $6.8M / (LOSS) $0.12 per diluted ($0.30) per diluted $0.25 per share share diluted share ADJUSTED EBITDA 1 $18.4M $14.2M $20.5M ADJUSTED EB
Slide 12: Net Sales and Adjusted EBITDA
NET SALES AND ADJUSTED EBITDA Net Sales / Adj. EBITDA Full Year Guidance for Net Sales / Adj. EBITDA NET SALES ($MM) ADJ. EBITDA1 ($MM) % Y/Y GROWTH % Y/Y 4.8% GROWTH at Guidance Midpoint 5.0% at Guidance Midpoint FY 2022 Guidance Range FY 2022 $444M to $452M Guidance Range $72.5M to $77.5M $427.3M
Slide 13: 2Q 2022 Capital Structure
2Q 2022 CAPITAL STRUCTURE June 30, 2022 (in thousands) Cash and cash equivalents $ 28,862 Debt: Revolver $ — Current portion of long-term debt 10,321 Long-term debt 144,070 Capitalized discount/issuance costs (1,826) Total debt, net $ 152,565 Net debt (Total debt net of cash) $ 123,703 Total debt /
Slide 14: 2022 Management Outlook
2022 MANAGEMENT OUTLOOK 2022 GUIDANCE NET SALES $444M to $452M Adj. EBITDA $72.5M to $77.5M Adj. EBITDA Conversion 92% to 95% 1. A non-GAAP financial measure. See slide 21 for definitions and reconciliations to the nearest GAAP measures 14
Slide 15: Conclusion
CONCLUSION Accelerate Organic Revenue Growth Continuously Improve Gross and Adj. EBITDA Margins Pursue M&A Opportunities 15
Slide 16: Appendix
APPENDIX 16
Slide 17: Balance Sheet
BALANCE SHEET UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) June 30, 2022 December 31, 2021 Assets Current assets Cash and cash equivalents $ 28,862 $ 33,857 Accounts receivable, net of allowance for doubtful accounts of $817 and $645, respectively 56,521 48,344 Inventories 76,630 63,
Slide 18: Statement of Operations
STATEMENT OF OPERATIONS UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net sales $ 118,232 $ 114,561 $ 222,638 $ 225,097 Cost of goods sold 75,011 66,333 139,228 132,910 Gross profit 43,221 48,228 83,410 92,187 O
Slide 19: Statement of Cash Flows
STATEMENT OF CASH FLOWS UNAUDITED (IN THOUSANDS) Six Months Ended June 30, 2022 2021 Cash Flows From Operating Activities: Net (loss) income $ (5,720) $ 13,679 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 7,380 7,020 Amortizat
Slide 20: Statement of Cash Flows - Continued
STATEMENT OF CASH FLOWS - CONTINUED UNAUDITED (IN THOUSANDS) Six Months Ended June 30, 2022 2021 Cash Flows From Financing Activities: Proceeds from revolving credit facilities 48,000 176,548 Principal payments on revolving credit facilities (48,000) (176,548) Principal payments on term loans (5,009
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (IN THOUSANDS) Year ended Three Months Three Months Ended Six Months Ended Last Twelve December 31, Ended March 31, June 30, June 30, Months 2021 2022 2022 2021 2022 2021 June 30, 2022 Net income (loss) $ 12,661 $ (10,165) $ 4,445 $ 6,815 $ (5,720) $ 13,679 $ (6,738) Add back