Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q3 2022 Earnings Presentation
19 slides from Cadre's earnings presentation, 2022
Slide 1: Third Quarter 2022
LADRE m HOLDINGS pa THIRD QUARTER a 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 • Q3 Review • 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 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 97% in Q3, above the hi
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 • Amid continued war in Ukraine, uptick in inquiries, which have resulted in small orders Landscape • Anticipate larger opportunities to prov
Slide 8: 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 9: Third Quarter 2022 Financial Performance
THIRD QUARTER 2022 FINANCIAL PERFORMANCE Q3 2022 Q2 2022 Q3 2021 NET SALES $111.6M $118.2M $98.7M GROSS MARGIN 39.2% 36.6% 39.8% NET INCOME $4.9M / $4.4M / ($5.3M) / (LOSS) $0.13 per diluted $0.12 per diluted ($0.19) per diluted share share share ADJUSTED EBITDA 1 $20.7M $18.4M $15.4M ADJUSTED EBITD
Slide 10: Net Sales and Adjusted EBITDA
NET SALES AND ADJUSTED EBITDA Net Sales / Adj. EBITDA Full Year Guidance for Net Sales / Adj. EBITDA NET SALES ($MM) ADJ. EBITDA1 ($MM) % Y/Y GROWTH % Y/Y 4.8% GROWTH at Guidance Midpoint 5.0% at Guidance FY 2022 Midpoint Guidance Range FY 2022 $444M to $452M Guidance Range $72.5M to $77.5M $427.3M
Slide 11: Q3 2022 Capital Structure
Q3 2022 CAPITAL STRUCTURE September 30, 2022 (in thousands) Cash and cash equivalents $ 36,350 Debt: Revolver $ — Current portion of long-term debt 13,285 Long-term debt 141,530 Capitalized discount/issuance costs (1,712) Total debt, net $ 153,103 Net debt (Total debt net of cash) $ 116,753 Total de
Slide 12: Reaffirm 2022 Management Outlook
REAFFIRM 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 19 for definitions and reconciliations to the nearest GAAP measures 12
Slide 13: Conclusion
CONCLUSION Accelerate Organic Revenue Growth Continuously Improve Gross and Adj. EBITDA Margins Pursue M&A Opportunities 13
Slide 14: Appendix
APPENDIX 14
Slide 15: Balance Sheet
BALANCE SHEET UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) September 30, 2022 December 31, 2021 Assets Current assets Cash and cash equivalents $ 36,350 $ 33,857 Accounts receivable, net of allowance for doubtful accounts of $774 and $645, respectively 55,759 48,344 Inventories 79,24
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, 2022 2021 2022 2021 Net sales $ 111,554 $ 98,654 $ 334,192 $ 323,751 Cost of goods sold 67,814 59,346 207,042 192,256 Gross profit 43,740 39,308 127,1
Slide 17: Statement of Cash Flows
STATEMENT OF CASH FLOWS UNAUDITED (IN THOUSANDS) Nine Months Ended September 30, 2022 2021 Cash Flows From Operating Activities: Net (loss) income $ (779) $ 8,373 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 11,319 10,426 Amor
Slide 18: Statement of Cash Flows - Continued
STATEMENT OF CASH FLOWS - CONTINUED UNAUDITED (IN THOUSANDS) Nine Months Ended September 30, 2022 2021 Cash Flows From Financing Activities: Proceeds from revolving credit facilities 43,000 248,000 Principal payments on revolving credit facilities (43,000) (223,132) Proceeds from term loans — 198,73
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (IN THOUSANDS) Year ended Three Months Three Months Ended Nine Months Ended LTM December 31, Ended June 30, September 30, September 30, September 30 2021 2022 2022 2021 2022 2021 2022 Net income (loss) $ 12,661 $ 4,445 $ 4,941 $ (5,306) $ (779) $ 8,373 $ 3,509 Add back: Depre