Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q3 2024 Earnings Presentation
21 slides from Cadre's earnings presentation, Nov 6, 2024
Slide 1: Third Quarter 2024
LADRE m HOLDINGS pa THIRD QUARTER a 2024
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Please note that in this presentation we may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private
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 4
Slide 4: Agenda
AGENDA • Q3 Highlights • Business Overview • Financial Summary • Full Year Outlook • Conclusion and Q&A 4
Slide 5: Continued Execution in Q3
CONTINUED EXECUTION IN Q3 Cadre continues to deliver on strategic objectives and capitalize on favorable market trends driving strong demand for mission-critical safety equipment Commentary: Pricing Growth: ✓ Exceeded target Q3 Mix: − Neutral mix in the quarter Orders Backlog: ✓ Sequentially, backlo
Slide 6: Long-Term Industry Tailwinds Supporting Sustainable Growth Opportunity
LONG-TERM INDUSTRY TAILWINDS SUPPORTING SUSTAINABLE GROWTH OPPORTUNITY Public Safety Tailwinds Police protection expenditures have continued to trend upward even during previous financial and industrial recessions Major US cities continue to increase police budgets European leaders continue to advoc
Slide 7: Latest Market Trends
LATEST MARKET TRENDS North American Law Enforcement • Police protection expenditures remain stable Geopolitical • Demand for EOD products after global conflicts de-escalate will lead to future Landscape opportunities Consumer • Continued solid demand for Cadre’s products in Q3 New Products/ • Succes
Slide 8: Key M&A Criteria
KEY M&A CRITERIA Business Leading market position Cost structure where material > labor High cost of substitution Leading and defensible technology Mission-critical to customer Strong brand recognition Financial Recurring revenue profile Asset-light Attractive ROIC Market Niche market No large-cap c
Slide 9: Q3 Financial Results
Q3 Financial Results 9
Slide 10: Third Quarter 2024 Highlights
THIRD QUARTER 2024 HIGHLIGHTS Q3 2024 Q2 2024 Q3 2023 NET SALES $109.4M $144.3M $125.1M GROSS MARGIN 36.6%2 40.6%3 42.8% $3.7M / $12.6M / $11.0M / NET INCOME $0.09 per $0.31 per $0.29 per diluted share diluted share diluted share ADJUSTED EBITDA 1 $13.5M $28.3M $23.7M ADJUSTED EBITDA MARGIN 1 12.4%
Slide 11: Net Sales and Adjusted EBITDA Growth
NET SALES AND ADJUSTED EBITDA GROWTH NET SALES ($MM) ADJ. EBITDA1 ($MM) % CAGR % CAGR 17.2% % Y/Y 11.1% GROWTH % Y/Y GROWTH 21.2% at guidance 17.2% midpoint at guidance FY 2024 midpoint FY 2024 Guidance Guidance Range $101M FY 2023 to $107M FY 2023 Range $560M $85.8M $482.5M to $571M $0.0 $66.3M $39
Slide 12: Q3 2024 Capital Structure
Q3 2024 CAPITAL STRUCTURE September 30, 2024 (in thousands) Cash and cash equivalents $ 92,989 Debt: Revolver $ — Current portion of long-term debt 13,134 Long-term debt 196,399 Capitalized discount/issuance costs (1,450) Total debt, net $ 208,083 Net debt (Total debt net of cash) $ 115,094 Total de
Slide 13: 2024 Management Outlook
2024 MANAGEMENT OUTLOOK 2024 GUIDANCE NET SALES $560M to $571M ADJ. EBITDA $101M to $107M CAPITAL EXPENDITURES $6M to $8M 1. A non-GAAP financial measure. See slide 20 for definitions and reconciliations to the nearest GAAP measures 13
Slide 14: Conclusion
CONCLUSION Execution in line with strategic objectives in Q3 Ongoing implementation of Cadre operating model 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-critica
Slide 15: Appendix
APPENDIX 15
Slide 16: Balance Sheet
BALANCE SHEET UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) September 30, 2024 December 31, 2023 Assets Current assets Cash and cash equivalents $ 92,989 $ 87,691 Accounts receivable, net of allowance for doubtful accounts of $1,317 and $635, respectively 69,432 58,360 Inventories 99,
Slide 17: Statement of Operations
STATEMENT OF OPERATIONS UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net sales $ 109,408 $ 125,114 $ 391,577 $ 357,949 Cost of goods sold 69,392 71,511 235,283 206,981 Gross profit 40,016 53,603 156,
Slide 18: Statement of Cash Flows
STATEMENT OF CASH FLOWS UNAUDITED (IN THOUSANDS) Nine Months Ended September 30, 2024 2023 Cash Flows From Operating Activities: Net income $ 23,150 $ 29,047 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,325 12,385 Amortization of
Slide 19: Statement of Cash Flows - Continued
STATEMENT OF CASH FLOWS - CONTINUED UNAUDITED (IN THOUSANDS) Nine Months Ended September 30, 2024 2023 Cash Flows From Financing Activities: Proceeds from revolving credit facilities 5,500 — Principal payments on revolving credit facilities (5,500) — Proceeds from term loans 80,000 — Principal payme
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (IN THOUSANDS) Year ended Three Months Three Months Ended Nine Months Ended Last Twelve December 31, Ended June 30, September 30, September 30, Months 2023 2024 2024 2023 2024 2023 September 30, 2024 Net income $ 38,641 $ 12,567 $ 3,655 $ 11,053 $ 23,150 $ 29,047 $ 32,744 Add
Slide 21: Use of Non-GAAP Measures
USE OF NON-GAAP MEASURES The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The presentation contains the non-GAAP measures: (i) earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), (ii)