Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q3 2021 Earnings Presentation
18 slides from Cadre's earnings presentation, 2021
Slide 1: Third Quarter 2021
LADRE m HOLDINGS pa THIRD QUARTER a 2021
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 and YTD Developments • Cadre Overview • Financial Summary • Conclusion and Q&A 4
Slide 5: Third Quarter 2021 Highlights and YTD Developments
THIRD QUARTER 2021 HIGHLIGHTS AND YTD DEVELOPMENTS Q3 2021 Q3 2020 YTD 2021 YTD 2020 NET SALES $98.7M $105.7M $323.8M $297.0M GROSS MARGIN 39.8% 37.8% 40.6% 38.1% NET LOSS / ($5.3M)1 $6.4M / $8.4M1 $22.7M2 NET INCOME / ($0.19) $0.23 per / $0.30 / $0.82 per share share per share per share ADJUSTED EB
Slide 6: Who Is Cadre?
WHO IS CADRE? BODY ARMOR DUTY GEAR EOD KEY FACTS AND FIGURES 2,380+ 23,000+ 55+ 85+ 104+ 15 Employees First Responders and Years in Design Engineers Countries in Manufacturing Facilities Federal Agencies that Business and Technicians which Cadre’s Rely on Cadre’s Products Products are Sold TOGETHER,
Slide 7: Attractive Tailwinds Driving Demand and Visibility for Cadre's Products
ATTRACTIVE TAILWINDS DRIVING DEMAND AND VISIBILITY FOR CADRE’S PRODUCTS DOMESTIC STATE & LOCAL GOVERNMENT POLICE PROTECTION MAJOR DOMESTIC LAW ENFORCEMENT BUDGETS ($BN) EXPENDITURES ($BN) Other Large Police Unemployment Rate 2008-2020 U.S. State U.S. Local 2008-2018 NYPD CAGR 118.8 CAGR Agencies¹ 12
Slide 8: Mission-Critical Products with Recurring Demand Characteristics
MISSION-CRITICAL PRODUCTS WITH RECURRING DEMAND CHARACTERISTICS Over 80% of Cadre’s products are tied to customer refresh cycles, which drive a predictable revenue stream BODY ARMOR EOD TOOLS & EQUIPMENT DUTY GEAR 5- to 10-Year 7- to 10-Year 4- to 7-Year Refresh Rate Refresh Rate Refresh Rate Techno
Slide 9: Net Sales and Gross Profit
NET SALES AND GROSS PROFIT Net Sales / Gross Profit Financial Contribution from Mustang Survival Holdings Divested in 2019A NET SALES AND GROWTH PROFILE ($MM) GROSS PROFIT ($MM) % GROWTH % GROWTH 0.7%1 4.7% % GROWTH % GROWTH $420.7 9.0% $404.6 16.2% $18.8 $152.9 $146.0 $323.8 $131.5 $5.9 $297.0 $113
Slide 10: Adj. EBITDA and Free Cash Flow Generation
ADJ. EBITDA AND FREE CASH FLOW GENERATION ADJ. EBITDA1 ($MM) ADJ. EBITDA CONVERSION2 % GROWTH % GROWTH % GROWTH 32.7% % GROWTH 31.2% 39.7% 32.1% $53.3 $53.9 $58.0 $56.1 $40.6 $43.7 $38.6 $42.5 % GROWTH % GROWTH 2.5% 6.8% $15.4 $13.8 $14.7 $15.0 2019A 2020A Q3 2020 Q3 2021 YTD 2020 YTD 2021 2019A 202
Slide 11: Pro Forma 3Q21 Capital Structure
PRO FORMA 3Q21 CAPITAL STRUCTURE Actual 9/30 Actual 9/30/21 Pro-forma for IPO ($MM) ($MM) Cash and cash equivalents $ 15,275 $ 29,141 DEBT: Revolver $ 25,500 $ - Current portion of long-term debt 12,904 12,904 Long-term debt 190,113 151,176 Capitalized Discount/Issuance (2,667) (2,147) Total debt, n
Slide 12: Conclusion
CONCLUSION Warren Kanders’ Strong Track Record of Creating Shareholder Value Leadership Positions for Mission-critical Products with Recurring Demand Entrenched Position in Large and Expanding TAM Robust Acquisition Pipeline to Accelerate Growth Strong Free Cash Flow Generation 12
Slide 13: Appendix
APPENDIX CADRE HOLDINGS
Slide 14: Income Statement
INCOME STATEMENT UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Net sales $ 98,654 $ 105,735 $ 323,751 $ 297,019 Cost of goods sold 59,346 65,739 192,256 183,869 Gross profi
Slide 15: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (IN THOUSANDS) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net (loss) income $ (5,306) $ 6,447 $ 8,373 $ 22,673 Add back: Depreciation and amortization 3,406 3,537 10,426 11,206 Interest expense 3,464 5,668 14,129 18,275 Provision for
Slide 16: Non-GAAP Reconciliation - Continued
NON-GAAP RECONCILIATION - CONTINUED (IN THOUSANDS) Year Ended Nine Months Ended September 30, LTM December 31, 2020 2020 2021 September 30, 2021 Net (loss) income $ 38,453 $ 22,673 $ 8,373 $ 24,153 Add back: Depreciation and amortization 14,733 11,207 10,426 13,952 Interest expense 24,388 18,275 14,
Slide 17: Statement of Cash Flows
STATEMENT OF CASH FLOWS UNAUDITED (IN THOUSANDS) Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Cash Flows From Operating Activities: Net income $ 8,373 $ 22,673 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization
Slide 18: Balance Sheet
BALANCE SHEET UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) September 30, 2021 December 31, 2020 ASSETS Current assets Cash and cash equivalents $ 15,275 $ 2,873 Accounts receivable, net of allowance for doubtful accounts of $624 and $1,113, respectively 42,230 43,646 Inventories 71,0