Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q1 2023 Earnings Presentation
19 slides from Cadre's earnings presentation, May 9, 2023
Slide 1: First Quarter 2023
LADRE HOLDINGS FIRST QUARTER 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 • Q1 Highlights • Business Overview • Financial Summary • Full Year Outlook • Conclusion and Q&A 4
Slide 5: Continued Execution in Q1
CONTINUED EXECUTION IN Q1 Cadre continues to deliver on strategic objectives in a challenging supply chain and inflationary environment Commentary: Pricing Growth: ✓ Exceeded target Q1 Mix: ✓ Higher duty gear and favorable hard armor demand resulted in continued solid product mix Orders Backlog: ✓ I
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/ • Continuing
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: First Quarter 2023 Financial Performance
FIRST QUARTER 2023 FINANCIAL PERFORMANCE Q1 2023 Q1 2022 NET SALES $111.7M $104.4M GROSS MARGIN 41.7% 38.5% NET (LOSS) INCOME $7.0M / $0.19 ($10.2M) / ($0.30) 2 per share per share ADJUSTED EBITDA 1 $18.6M $14.2M ADJUSTED EBITDA MARGIN 1 16.6% 13.6% • Achieved pricing growth that exceeded target and
Slide 10: Net Sales and Adjusted EBITDA
NET SALES AND ADJUSTED EBITDA Current Period Net Sales and Adj. EBITDA Full Year Guidance for Net Sales and Adj. EBITDA NET SALES ($MM) ADJ. EBITDA1 ($MM) % Y/Y GROWTH % Y/Y 4.4% GROWTH at Guidance 4.3% Midpoint at Guidance Midpoint FY 2023 FY 2023 FY 2022 Guidance Range FY 2022 Guidance Range $457.
Slide 11: Q1 2023 Capital Structure
Q1 2023 CAPITAL STRUCTURE March 31, 2023 (in thousands) Cash and cash equivalents $ 48,294 Debt: Revolver $ — Current portion of long-term debt 11,119 Long-term debt 136,587 Capitalized discount/issuance costs (1,489) Total debt, net $ 146,217 Net debt (Total debt net of cash) $ 97,923 Total debt /
Slide 12: 2023 Management Outlook
2023 MANAGEMENT OUTLOOK 2023 GUIDANCE NET SALES $463M to $493M ADJ. EBITDA $76M to $82M CAPITAL EXPENDITURES $8.5M to $9.5M 1. A non-GAAP financial measure. See slide 19 for definitions and reconciliations to the nearest GAAP measures 12
Slide 13: Conclusion
CONCLUSION Strong execution in Q1 Exceeded pricing growth target 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 visibility for Cadre's mission-
Slide 14: Appendix
APPENDIX 14
Slide 15: Balance Sheet
BALANCE SHEET UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) March 31, 2023 December 31, 2022 Assets Current assets Cash and cash equivalents $ 48,294 $ 45,286 Accounts receivable, net of allowance for doubtful accounts of $930 and $924, respectively 55,704 64,557 Inventories 76,343 70
Slide 16: Statement of Operations
STATEMENT OF OPERATIONS UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) Three Months Ended December 31, 2023 2022 Net sales $ 111,748 $ 104,406 Cost of goods sold 65,130 64,217 Gross profit 46,618 40,189 Operating expenses Selling, general and administrative 35,250 53,950 Restructuring
Slide 17: Statement of Cash Flows
STATEMENT OF CASH FLOWS UNAUDITED (IN THOUSANDS) Three Months Ended March 31, 2023 2022 Cash Flows From Operating Activities: Net income (loss) $ 7,002 $ (10,165) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 4,261 3,544 Amorti
Slide 18: Statement of Cash Flows - Continued
STATEMENT OF CASH FLOWS - CONTINUED UNAUDITED (IN THOUSANDS) Year Ended March 31, 2023 2022 Cash Flows From Financing Activities: Principal payments on term loans (2,500) (2,506) Principal payments on insurance premium financing (1,092) (1,474) Payment of capital leases — (11) Taxes paid in connecti
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (IN THOUSANDS) Year ended Three Months Ended March 31, LTM December 31, 2022 2023 2022 March 31, 2023 Net income (loss) $ 5,820 $ 7,002 $ (10,165) $ 22,987 Add back: Depreciation and amortization 15,651 4,261 3,544 16,368 Interest expense 6,206 1,641 1,490 6,357 Provision (be