Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q3 2022 Earnings Presentation
19 slides from Cadre's earnings presentation, Nov 10, 2022
Slide 1: Third Quarter 2022
ADRE fal) (EID) | NGS THIRD QUARTER 5 2022
Slide 2: Forward-Looking Statements
2 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
Slide 3: Today's Presenters
TODAY’S PRESENTERS 3 BRAD WILLIAMS President BLAINE BROWERS Chief Financial Officer WARREN KANDERS Chief Executive Officer and Chairman of the Board
Slide 4: Agenda
4 AGENDA • Q3 Review • Business Overview • Financial Summary • Full Year Outlook • Conclusion and Q&A
Slide 5: Continued Execution in Q3
5 CONTINUED EXECUTION IN Q3 5 Cadre continues to deliver on strategic objectives in a challenging supply chain and inflationary environment Pricing Growth: ✓ Exceeded 1% target above material inflation Adjusted EBITDA Conversion: 1 ✓ Generated Adj. EBITDA conversion of 97% in Q3, above the high end
Slide 6: Macro Tailwinds Support Long Term Sustainable Growth Opportunity
6 MACRO TAILWINDS SUPPORT LONG TERM SUSTAINABLE GROWTH OPPORTUNITY Two - thirds of all NATO countries spend less than 2% of GDP targets on defense and security Amidst current geopolitical turmoil, European leaders have advocated for significant increases in defense budgets Police protection expendit
Slide 7: Latest Market Trends
7 7 • Spend per officer increasing but police departments still struggling to fill open positions • Amid continued war in Ukraine, uptick in inquiries, which have resulted in small orders • Anticipate larger opportunities to provide safety and survivability equipment as conflict continues • Continui
Slide 8: Cadre's Key M&A Criteria
8 20 20 13 CADRE'S KEY M&A CRITERIA Niche market No large - cap competition Leading market position Cost structure where material > labor Leading a nd d efensible technology High cost of substitution Mission - critical to customer Recurring revenue profile Asset - light Business Financial Market Str
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 (LOSS) $4.9M / $0.13 per diluted share $4.4M / $0.12 per diluted share ($5.3M) / ($0.19) per diluted share ADJUSTED EBITDA 1 $20.7M $18.4M $15.4M ADJUSTED EBITD
Slide 10: Net Sales and Adjusted EBITDA
10 Net Sales / Adj. EBITDA Full Year Guidance for Net Sales / Adj. EBITDA NET SALES AND ADJUSTED EBITDA NET SALES ($MM) $427.3M $334.2M YTD 2022 FY 2022 Guidance Range $444M to $452M 2021 2022 YTD % Y/Y GROWTH 4.8 % at Guidance Midpoint ADJ. EBITDA 1 ($MM) $71.4M $53.3M YTD 2022 FY 2022 Guidance Ran
Slide 11: Q3 2022 Capital Structure
11 Q3 2022 CAPITAL STRUCTURE 1. Non - GAAP financial measures. See slide 19 for definitions and reconciliations to the nearest GAAP measures 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 Cap
Slide 12: Reaffirm 2022 Management Outlook
12 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
Slide 13: Conclusion
CONCLUSION 13 Accelerate Organic Revenue Growth Pursue M&A Opportunities Continuously Improve Gross and Adj. EBITDA Margins
Slide 14: Appendix
APPENDIX ‘ me
Slide 15: Balance Sheet
15 BALANCE SHEET 15 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
Slide 16: Statement of Operations
16 STATEMENT OF OPERATIONS 16 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
Slide 17: Statement of Cash Flows
17 STATEMENT OF CASH FLOWS 17 UNAUDITED (IN THOUSANDS) Continued on next slide 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 a
Slide 18: Statement of Cash Flows - Continued
18 STATEMENT OF CASH FLOWS - CONTINUED 18 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 —
Slide 19: 1. Reflects the “Restructuring and transaction costs” line item on our consolidated statement of
19 1. Reflects the “Restructuring and transaction costs” line item on our consolidated statement of operations, which primarily inc lud es transaction costs composed of legal and consulting fees, and $1.0 million paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, f