Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q4 2022 Earnings Presentation
22 slides from Cadre's earnings presentation, Mar 15, 2023
Slide 1: Fourth Quarter 2022
LADRE HOLDINGS FOURTH 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 • Q4 and FY22 Highlights • Business Overview • Financial Summary • Full Year 2023 Outlook • Conclusion and Q&A 4
Slide 5: Continued Execution in Q4
CONTINUED EXECUTION IN Q4 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 93% in Q4, within our g
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 • Anticipate larger opportunities to provide safety and survivability equipment as Landscape conflict de-escalates Supply Chain/ • Conditions
Slide 8: Safari-Vault: Features & Benefits
SAFARI-VAULT: FEATURES & BENEFITS Reused Proven Weapon Retention Feature Classic Optic Cover New Shell Architecture Industry Leading Mounting • Thicker Material Platform • Bolted Construction Modern Industrial Design • Streamlined to Prevent Snags • Protected Internal Fits more Lights and Optics Com
Slide 9: HyperX Tactical Armor Platform: Key Features
HYPERX TACTICAL ARMOR PLATFORM: KEY FEATURES • Designed to capture the functionality of a plate rack, but with the additional protection offered by full-coverage armor systems • Capitalize on our strengths in Hard Armor and Soft Ballistics technology to form a purpose-built system that eliminates ex
Slide 10: XpertFit: 3D Body Sizing
XPERTFIT: 3D BODY SIZING Using patented technology, we can measure fully dressed individuals with the highest precision of accuracy in seconds. The neural algorithm was trained on a proprietary data set of user generated scans, manually measured and digitally scanned people with an in-house scanning
Slide 11: 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 12: Fourth Quarter and Full Year 2022 Highlights
FOURTH QUARTER AND FULL YEAR 2022 HIGHLIGHTS Q4 2022 Q4 2021 FY 2022 FY 2021 NET SALES $123.6M $103.5M $457.8M $427.3M GROSS MARGIN 39.2% 37.9% 38.4% 39.9% $6.6M $4.3M $5.8M1 $12.7M2 NET INCOME / $0.17 / $0.13 / $0.16 / $0.44 per diluted share per diluted share per diluted share per diluted share AD
Slide 13: Net Sales and Adjusted EBITDA
NET SALES AND ADJUSTED EBITDA NET SALES ($MM) ADJ. EBITDA1 ($MM) % CAGR % CAGR 14.3% % Y/Y 6.4% GROWTH % Y/Y 6.1% $75.7 GROWTH $71.4 7.1% $457.8 $58.0 $427.3 $404.6 2020 2021 2022 2020 2021 2022 Adj. EBITDA 14.3% 16.7% 16.5% Margin1 1. A non-GAAP financial measure. See slide 22 for definitions and r
Slide 14: Q4 2022 Capital Structure
Q4 2022 CAPITAL STRUCTURE December 31, 2022 (in thousands) Cash and cash equivalents $ 45,286 Debt: Revolver $ — Current portion of long-term debt 12,211 Long-term debt 139,076 Capitalized discount/issuance costs (1,600) Total debt, net $ 149,687 Net debt (Total debt net of cash) $ 104,401 Total deb
Slide 15: 2023 Management Outlook
2023 MANAGEMENT OUTLOOK 2023 GUIDANCE NET SALES $463M to $493M Adj. EBITDA $76.0M to $82.0M Adj. EBITDA Conversion 87% to 90% 1. A non-GAAP financial measure. See slide 22 for definitions and reconciliations to the nearest GAAP measures 15
Slide 16: Conclusion
CONCLUSION Record 2022 net Sales and Adj. EBITDA Exceeded 1% target above material inflation Completed two accretive acquisitions in 2022 Committed to improving gross and Adj. EBITDA margins Continuously focused on M&A opportunities Capitalizing on strong macro tailwinds driving demand and visibilit
Slide 17: Appendix
APPENDIX 17
Slide 18: Balance Sheet
BALANCE SHEET UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) December 31, 2022 December 31, 2021 Assets Current assets Cash and cash equivalents $ 45,286 $ 33,857 Accounts receivable, net 64,557 48,344 Inventories 70,273 63,978 Prepaid expenses 10,091 10,353 Other current assets 6,811
Slide 19: Statement of Operations
STATEMENT OF OPERATIONS UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net sales $ 123,645 $ 103,537 $ 457,837 $ 427,288 Cost of goods sold 75,117 64,342 282,159 256,598 Gross profit 48,528 39,195 175,678 170,6
Slide 20: Statement of Cash Flows
STATEMENT OF CASH FLOWS UNAUDITED (IN THOUSANDS) Year Ended December 31, 2022 2021 Cash Flows From Operating Activities: Net income $ 5,820 $ 12,661 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,651 13,718 Amortization of original
Slide 21: Statement of Cash Flows - Continued
STATEMENT OF CASH FLOWS - CONTINUED UNAUDITED (IN THOUSANDS) Year Ended December 31, 2022 2021 Cash Flows From Financing Activities: Proceeds from revolving credit facilities 43,000 257,980 Principal payments on revolving credit facilities (43,000) (258,612) Proceeds from term loans — 198,716 Princi
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (IN THOUSANDS) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 2020 Net income $ 6,599 $ 4,288 $ 5,820 $ 12,661 $ 38,453 Add back: Depreciation and amortization 4,332 3,292 15,651 13,718 14,733 Interest expense 1,710 2,296 6,206 16,425 24,388 Provi