Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q3 2023 Earnings Presentation
19 slides from Cadre's earnings presentation, Nov 8, 2023
Slide 1: Third Quarter 2023
LADRE m HOLDINGS pa THIRD QUARTER a 2023
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 • Q3 Highlights • Business Overview • Financial Summary • Full Year Outlook • Conclusion and Q&A 4
Slide 5: Continued Execution in Q3
CONTINUED EXECUTION IN Q3 Cadre continues to deliver on strategic objectives, generating record quarterly Adj. EBITDA and achieving significant margin expansion Commentary: Pricing Growth: ✓ Exceeded target Q3 Mix: ✓ Favorable armor demand resulted in continued solid product and portfolio mix Orders
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 • Spend per officer increasing but police departments still struggling to fill open Law Enforcement positions Geopolitical • Larger opportunities to provide safety and survivability equipment—primarily EOD Landscape products—as war in Ukraine de-escalates Supply C
Slide 8: Cadre's Key M&A Criteria
CADRE'S KEY M&A CRITERIA CADRE'S KEY M&A CRITERIA Business Leading market position Cost structure where material > labor High cost of substitution Leading and defensible technology Mission-critical to customer Strong brand recognition Financial Recurring revenue profile Asset-light Attractive ROIC M
Slide 9: Third Quarter 2023 Financial Performance
THIRD QUARTER 2023 FINANCIAL PERFORMANCE Q3 2023 Q2 2023 Q3 2022 NET SALES $125.1M $121.1M $111.6M GROSS MARGIN 42.9% 41.9% 39.2% $11.1M / $11.0M / $4.9M / NET INCOME $0.29 per diluted $0.29 per diluted $0.13 per diluted share share share ADJUSTED EBITDA 1 $23.7M $22.8M $20.7M ADJUSTED EBITDA MARGIN
Slide 10: Net Sales and Adjusted EBITDA
NET SALES AND ADJUSTED EBITDA Current Period Net Sales and Adj. EBITDA Full Year Guidance for Net Sales and Adj. EBITDA NET SALES ($MM) ADJ. EBITDA1 ($MM) % Y/Y GROWTH % Y/Y 5% GROWTH at Guidance 10% Midpoint at Guidance Midpoint FY 2023 FY 2023 Guidance Range Guidance Range FY 2022 $82M to $85M FY
Slide 11: Q3 2023 Capital Structure
Q3 2023 CAPITAL STRUCTURE September 30, 2023 (in thousands) Cash and cash equivalents $ 69,412 Debt: Revolver $ — Current portion of long-term debt 13,251 Long-term debt 131,573 Capitalized discount/issuance costs (1,264) Total debt, net $ 143,560 Net debt (Total debt net of cash) $ 74,148 Total deb
Slide 12: 2023 Management Outlook
2023 MANAGEMENT OUTLOOK 2023 GUIDANCE NET SALES $477M to $481M Previous: $472M to $484M ADJ. EBITDA $82M to $85M Previous: $80M to $84M CAPITAL EXPENDITURES $7M to $8M 1. A non-GAAP financial measure. See slide 19 for definitions and reconciliations to the nearest GAAP measures 12
Slide 13: Conclusion
CONCLUSION Outstanding execution in Q3 Ongoing implementation of Cadre operating model Revenue, Net Income and Adjusted EBITDA Growth Y/Y Committed to improving gross and Adj. EBITDA margins Continuously focused on M&A opportunities Capitalizing on strong macro tailwinds driving demand and visibilit
Slide 14: Appendix
APPENDIX 14
Slide 15: Balance Sheet
BALANCE SHEET UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) September 30, 2023 December 31, 2022 Assets Current assets Cash and cash equivalents $ 69,412 $ 45,286 Accounts receivable, net of allowance for doubtful accounts of $819 and $924, respectively 61,261 64,557 Inventories 82,54
Slide 16: Statement of Operations
STATEMENT OF OPERATIONS UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net sales $ 125,114 $ 111,554 $ 357,949 $ 334,192 Cost of goods sold 71,511 67,814 206,981 207,042 Gross profit 53,603 43,740 150,
Slide 17: Statement of Cash Flows
STATEMENT OF CASH FLOWS UNAUDITED (IN THOUSANDS) Nine Months Ended September 30, 2023 2022 Cash Flows From Operating Activities: Net income (loss) $ 29,047 $ (779) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 12,385 11,319 Amo
Slide 18: Statement of Cash Flows - Continued
STATEMENT OF CASH FLOWS - CONTINUED UNAUDITED (IN THOUSANDS) Nine Months Ended September 30, 2023 2022 Cash Flows From Financing Activities: Proceeds from revolving credit facilities — 43,000 Principal payments on revolving credit facilities — (43,000) Principal payments on term loans (7,500) (7,514
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (IN THOUSANDS) Year ended Three Months Three Months Ended Nine Months Ended Last Twelve December 31, Ended June 30, September 30, September 30, Months 2022 2023 2023 2022 2023 2022 September 30, 2023 Net income (loss) $ 5,820 $ 10,992 $ 11,053 $ 4,941 $ 29,047 $ (779) $ 35,64