Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q2 2024 Earnings Presentation
21 slides from Cadre's earnings presentation, 2024
Slide 1: Second Quarter 2024
LADRE HOLDINGS SECOND QUARTER i= 2024
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Please note that in this presentation we may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private
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 4
Slide 4: Agenda
AGENDA • Q2 Highlights • 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, generating significant quarterly Adj. EBITDA growth and strong margins Commentary: Pricing Growth: ✓ Exceeded target Q2 Mix: − Neutral mix in the quarter, positive portfolio mix offset by product mix Orders Backlog: − As e
Slide 6: Long-Term Industry Tailwinds Supporting Sustainable Growth Opportunity
LONG-TERM INDUSTRY TAILWINDS SUPPORTING SUSTAINABLE GROWTH OPPORTUNITY Public Safety Tailwinds Police protection expenditures have continued to trend upward even during previous financial and industrial recessions Major US cities continue to increase police budgets European leaders continue to advoc
Slide 7: Latest Market Trends
LATEST MARKET TRENDS North American • Police protection expenditures remain stable as recruiting to fill open positions Law Enforcement continues Geopolitical • Demand for EOD products after global conflicts de-escalate will lead to future Landscape opportunities Consumer • While demand for Cadre’s
Slide 8: Key M&A Criteria
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 Market Niche market No large-cap c
Slide 9: Q2 Financial Results
Q2 Financial Results 9
Slide 10: Second Quarter 2024 Highlights
SECOND QUARTER 2024 HIGHLIGHTS Q2 2024 Q1 2024 Q2 2023 NET SALES $144.3M $137.9M $121.1M GROSS MARGIN 40.6%2 41.8%3 41.9% $12.6M / $6.9M / $11.0M / NET INCOME $0.31 per $0.18 per $0.29 per diluted share diluted share diluted share ADJUSTED EBITDA 1 $28.3M $24.5M $22.8M ADJUSTED EBITDA MARGIN 1 19.6%
Slide 11: Net Sales and Adjusted EBITDA Growth
NET SALES AND ADJUSTED EBITDA GROWTH NET SALES ($MM) ADJ. EBITDA1 ($MM) % CAGR % CAGR 18.3% % Y/Y 12.2% GROWTH % Y/Y GROWTH 23.5% at guidance 19.5% midpoint at guidance FY 2024 midpoint Guidance FY 2024 Guidance Range Range FY 2023 $103M to $571M to $85.8M $109M FY 2023 $482.5M $582M $0.0 FY 2022 FY
Slide 12: Q2 2024 Capital Structure
Q2 2024 CAPITAL STRUCTURE June 30, 2024 (in thousands) Cash and cash equivalents $ 105,903 Debt: Revolver $ — Current portion of long-term debt 13,128 Long-term debt 199,885 Capitalized discount/issuance costs (1,652) Total debt, net $ 211,361 Net debt (Total debt net of cash) $ 105,458 Total debt /
Slide 13: 2024 Management Outlook
2024 MANAGEMENT OUTLOOK 2024 GUIDANCE NET SALES $571M to $582M ADJ. EBITDA $103M to $109M CAPITAL EXPENDITURES $7M to $9M 1. A non-GAAP financial measure. See slide 20 for definitions and reconciliations to the nearest GAAP measures 13
Slide 14: Conclusion
CONCLUSION Continued strong execution in Q2 Ongoing implementation of Cadre operating model Increased Quarterly Net Sales, Net Income, Adjusted EBITDA and Adjusted EBITDA Margin Committed to improving gross and Adj. EBITDA margins Continuously focused on M&A opportunities Capitalizing on strong macr
Slide 15: Appendix
APPENDIX 15
Slide 16: Balance Sheet
BALANCE SHEET UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) June 30, 2024 December 31, 2023 Assets Current assets Cash and cash equivalents $ 105,903 $ 87,691 Accounts receivable, net of allowance for doubtful accounts of $1,349 and $635, respectively 72,685 58,360 Inventories 95,637
Slide 17: 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, 2024 2023 2024 2023 Net sales $ 144,309 $ 121,087 $ 282,169 $ 232,835 Cost of goods sold 85,659 70,340 165,891 135,470 Gross profit 58,650 50,747 116,278 97,365
Slide 18: Statement of Cash Flows
STATEMENT OF CASH FLOWS UNAUDITED (IN THOUSANDS) Six Months Ended June 30, 2024 2023 Cash Flows From Operating Activities: Net income $ 19,495 $ 17,994 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,562 8,220 Amortization of original
Slide 19: Statement of Cash Flows - Continued
STATEMENT OF CASH FLOWS - CONTINUED UNAUDITED (IN THOUSANDS) Year Ended June 30, 2024 2023 Cash Flows From Financing Activities: Proceeds from revolving credit facilities 5,500 — Principal payments on revolving credit facilities (5,500) — Proceeds from term loans 80,000 — Principal payments on term
Slide 20: 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 2023 2024 2024 2023 2024 2023 June 30, 2024 Net income $ 38,641 $ 6,928 $ 12,567 $ 10,992 $ 19,495 $ 17,994 $ 40,142 Add back: Deprecia
Slide 21: Use of Non-GAAP Measures
USE OF NON-GAAP MEASURES The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The presentation contains the non-GAAP measures: (i) earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), (ii)