Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q2 2022 Earnings Presentation
21 slides from Cadre's earnings presentation, Aug 11, 2022
Slide 1: Second Quarter 2022
ADRE fal) (EID) | NGS SECOND QUARTER 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 • Q2 Review • Business Overview • Financial Summary • Full Year Outlook • Conclusion and Q&A
Slide 5: Continued Execution in Q2
5 CONTINUED EXECUTION IN Q2 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 92% in Q2, at the high end of
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 • Budgets are healthy 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 • Experiencing exte
Slide 8: Business Strategy to Attain & Sustain Exceptional Results
8 BUSINESS STRATEGY TO ATTAIN & SUSTAIN EXCEPTIONAL RESULTS OPERATING MODEL EXCELLENCE MATURITY MODEL CADRE core values Leadership Capability & Management Processes Maturity Model = Cultural Transformation
Slide 9: Cadre's Key M&A Criteria
9 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 10: Cyalume Acquisition and Integration
10 Over 60 years as a leading manufacturer of chemical light solutions .. Preeminent supplier of light sticks, chemi - luminescent ammunition and infra - red devices to US, NATO military forces, and commercial and law enforcement markets .. KEY M&A CRITERIA MET Leading market position Mission - crit
Slide 11: Second Quarter 2022 Financial Performance
SECOND QUARTER 2022 FINANCIAL PERFORMANCE Q2 2022 Q1 2022 Q2 2021 NET SALES $118.2M $104.4M $114.6M GROSS MARGIN 36.6% 38.5% 42.1% NET INCOME (LOSS) $4.4M / $0.12 per diluted share ($10.2M) / ($0.30) per diluted share $6.8M / $0.25 per diluted share ADJUSTED EBITDA 1 $18.4M $14.2M $20.5M ADJUSTED EB
Slide 12: Net Sales and Adjusted EBITDA
12 Net Sales / Adj. EBITDA Full Year Guidance for Net Sales / Adj. EBITDA NET SALES AND ADJUSTED EBITDA NET SALES ($MM) $427.3M $222.6M 1H22 FY 2022 Guidance Range $444M to $452M 2021 2022 YTD % Y/Y GROWTH 4.8 % at Guidance Midpoint ADJ. EBITDA 1 ($MM) $71.4M $32.6M 1H22 FY 2022 Guidance Range $72.5
Slide 13: Q2 2022 Capital Structure
13 Q2 2022 CAPITAL STRUCTURE 1. Non - GAAP financial measures. See slide 21 definitions and reconciliations to the nearest GAAP measures June 30, 2022 (in thousands) Cash and cash equivalents $ 28,862 Debt: Revolver $ — Current portion of long - term debt 10,321 Long - term debt 144,070 Capitalized
Slide 14: 2022 Management Outlook
14 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 21 for definitions and reconciliations to the nearest GAAP measures
Slide 15: Conclusion
CONCLUSION 15 Accelerate Organic Revenue Growth Pursue M&A Opportunities Continuously Improve Gross and Adj. EBITDA Margins
Slide 16: Appendix
APPENDIX ‘ me
Slide 17: Balance Sheet
17 BALANCE SHEET 17 UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) June 30, 2022 December 31, 2021 Assets Current assets Cash and cash equivalents $ 28,862 $ 33,857 Accounts receivable, net of allowance for doubtful accounts of $817 and $645, respectively 56,521 48,344 Inventories 76,6
Slide 18: Statement of Operations
18 STATEMENT OF OPERATIONS 18 UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net sales $ 118,232 $ 114,561 $ 222,638 $ 225,097 Cost of goods sold 75,011 66,333 139,228 132,910 Gross profit 43,221 48,228 83,410 92
Slide 19: Statement of Cash Flows
19 STATEMENT OF CASH FLOWS 19 UNAUDITED (IN THOUSANDS) Continued on next slide Six Months Ended June 30, 2022 2021 Cash Flows From Operating Activities: Net (loss) income $ (5,720) $ 13,679 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amor
Slide 20: Statement of Cash Flows - Continued
20 STATEMENT OF CASH FLOWS - CONTINUED 20 UNAUDITED (IN THOUSANDS) Six Months Ended June 30, 2022 2021 Cash Flows From Financing Activities: Proceeds from revolving credit facilities 48,000 176,548 Principal payments on revolving credit facilities (48,000) (176,548) Principal payments on term loans
Slide 21: Non-GAAP Definitions and Reconciliations
21 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