Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q4 2021 Earnings Presentation
20 slides from Cadre's earnings presentation, 2022
Slide 1: Fourth Quarter 2021
LADRE HOLDINGS FOURTH QUARTER 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 • Q4 and FY21 Highlights • Business Overview • Financial Summary • 2022 Outlook • Conclusion and Q&A 4
Slide 5: Fourth Quarter and Full Year 2021 Highlights
FOURTH QUARTER AND FULL YEAR 2021 HIGHLIGHTS Q4 2021 Q4 2020 FY 2021 FY 2020 NET SALES $103.5M $107.6M $427.3M $404.6M GROSS MARGIN 37.9% 37.0% 39.9% 37.8% NET $4.3M $15.8M / $12.7M1 $38.5M2 INCOME / $0.13 $0.57 per / $0.44 / $1.40 per share share per share per share ADJUSTED EBITDA $15.3M $15.5M $7
Slide 6: Strategic Objectives
STRATEGIC OBJECTIVES Achieve Organic Revenue Growth Continuously Improve Gross and Adj. EBITDA Margins Pursue M&A Opportunities 6
Slide 7: Macro Tailwinds Support Long Term Sustainable Growth Opportunity
MACRO TAILWINDS SUPPORT LONG TERM SUSTAINABLE GROWTH OPPORTUNITY 2021 Homicide Rates 44% 20 NATO Countries Spend less than 2% of Higher than in 2019(1) GDP Target on Defense and Security GERMANY 2022 STATE OF THE UNION ADDRESS Chancellor Scholz said ”it is clear we need to President Biden said “So l
Slide 8: Cadre's Key M&A Criteria
CADRE'S KEY M&A CRITERIA CADRE'S KEY M&ACRITERIA Business Leading market position Cost structure where material > labor High cost ofsubstitution Leading anddefensible technology Mission-critical tocustomer Strong brandrecognition Financial Recurring revenueprofile Asset-light Attractive ROIC Market
Slide 9: Acquisition of Radar Leather Division S.r.l.
ACQUISITION OF RADAR LEATHER DIVISION S.r.l. 60+ years history as a leading brand in designing and development of engineered holsters and hunting accessories KEYM&A CRITERIA MET INTEGRATION –TOP PRIORITIES #1 or #2 market position • Functional teams working on first 100-day basics Mission-critical t
Slide 10: Record Net Sales and Gross Profit
RECORD NET SALES AND GROSS PROFIT Net Sales / Gross Profit Financial Contribution from Mustang Survival Holdings Divested in 2019A NET SALES AND GROWTH PROFILE ($MM) GROSS PROFIT ($MM) % CAGR % CAGR 8.1% 0.8% % Y/Y % Y/Y GROWTH GROWTH 11.6% $170.7 5.6% $427.3 $420.7 $146.0 $404.6 $152.9 $18.8 $5.9 $
Slide 11: Adj. EBITDA and Free Cash Flow Generation
ADJ. EBITDA AND FREE CASH FLOW GENERATION ADJ. EBITDA1 ($MM) ADJ. EBITDA CONVERSION2 ($MM) % CAGR % CAGR 27.8% 29.7% % Y/Y % Y/Y GROWTH GROWTH 23.1% $71.4 28.3% $68.4 $58.0 $53.3 $43.7 $40.6 2019 2020 2021 2019 2020 2021 Adj. EBITDA 10.4% 14.3% 16.7% Adj. EBITDA 93% 92% 96% Margin1 Conversion2 1. No
Slide 12: 4Q21 Capital Structure
4Q21 CAPITAL STRUCTURE December 31, 2021 (in thousands) Cash and cash equivalents $ 33,857 Debt: Revolver $ — Current portion of long-term debt 13,174 Long-term debt 148,564 Capitalized discount/issuance costs (2,048) Total debt, net $ 159,690 Net debt (Total debt net of cash) $ 125,833 Total debt /
Slide 13: 2022 Management Outlook
2022 MANAGEMENT OUTLOOK 2022 GUIDANCE NET SALES $434M to $441M Adj. EBITDA(1) $70.0M to $75.5M Adj. EBITDA Conversion(1) 92% to 95% 1. A non-GAAP financial measure. See slide 17 definitions and reconciliations to the nearest GAAP measures 13
Slide 14: Conclusion
CONCLUSION Momentous and Record 2021 Strong Tailwinds Driving Demand for Mission Critical Products Focused on Accelerating Growth Both Organically and Through Acquisitions Financial Flexibility to Capitalize on Robust Acquisition Pipeline Strong Free Cash Flow Generation and History of Margin Expans
Slide 15: Appendix
APPENDIX CADRE HOLDINGS
Slide 16: Income Statement
INCOME STATEMENT UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Net sales $ 103,537 $ 107,623 $ 427,288 $ 404,642 Cost of goods sold 64,342 67,835 256,598 251,704 Gross profit 39,195 39,788 170,690 152,938 Oper
Slide 17: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (IN THOUSANDS) Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 2019 Net income $ 4,288 $ 15,780 $ 12,661 $ 38,453 $ (1,928) Add back: Depreciation and amortization 3,292 3,526 13,718 14,733 15,443 Interest expense 2,296 6,113 16,425 24,388 29,848 P
Slide 18: Statement of Cash Flows
STATEMENT OF CASH FLOWS UNAUDITED (IN THOUSANDS) Year Ended December 31, 2021 2020 Cash Flows From Operating Activities: Net income $ 12,661 $ 38,453 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 13,718 14,733 Amortization of original
Slide 19: Statement of Cash Flows - Continued
STATEMENT OF CASH FLOWS - CONTINUED UNAUDITED (IN THOUSANDS) Year Ended December 31, 2021 2020 Cash Flows From Investing Activities: Purchase of property and equipment (2,832) (4,708) Proceeds from disposition of property and equipment — 12,408 Proceeds from sale of equity securities — 14,372 Paymen
Slide 20: Balance Sheet
BALANCE SHEET UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) December 31, 2021 December 31, 2020 Assets Current assets Cash and cash equivalents $ 33,857 $ 2,873 Accounts receivable, net 48,344 43,646 Inventories 63,978 60,923 Prepaid expenses 10,353 6,665 Other current assets 3,171 3,