Cadre Holdings, Inc. · NYSE:CDRE
Cadre — Q4 2021 Earnings Presentation
20 slides from Cadre's earnings presentation, Mar 10, 2022
Slide 1: Fourth Quarter 2021
ADRE fal) (EID) | NGS FOURTH QUARTER 2021
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 • Q4 and FY21 Highlights • Business Overview • Financial Summary • 2022 Outlook • Conclusion and Q&A
Slide 5: Fourth Quarter and Full Year 2021 Highlights
1. Includes $15.2 million loss on extinguishment of debt 2. Includes $12.5 million gain due to earn - out and long - lived asset sale FOURTH QUARTER AND FULL YEAR 2021 HIGHLIGHTS 5 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 INCO
Slide 6: Strategic Objectives
STRATEGIC OBJECTIVES 6 Achieve Organic Revenue Growth Pursue M&A Opportunities Continuously Improve Gross and Adj. EBITDA Margins
Slide 7: Macro Tailwinds Support Long Term Sustainable Growth Opportunity
7 MACRO TAILWINDS SUPPORT LONG TERM SUSTAINABLE GROWTH OPPORTUNITY Source: NATO. Not shown: Canada and Iceland also under 2% GPD Target 20 NATO Countries Spend less than 2% of GDP Target on Defense and Security Chancellor Scholz said ”it is clear we need to invest significantly more in the security
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 share Cost structure where material > labor Leading and defensible technology High cost of substitution Mission - critical to customer Recurring revenue profile Asset - light Business Financial Market Strong b
Slide 9: Acquisition of Radar Leather Division S.r.l.
9 21 21 60+ years history as a leading brand in designing and development of engineered holsters and hunting accessories KEY M&A CRITERIA MET ACQUISITION OF RADAR LEATHER DIVISION S.r.l .. #1 or #2 market position Mission - critical to customer Strong brand recognition Asset light Attractive ROIC Re
Slide 10: Record Net Sales and Gross Profit
10 $140.1 $152.9 $170.7 $5.9 2019 2020 2021 RECORD NET SALES AND GROSS PROFIT NET SALES AND GROWTH PROFILE ($MM) GROSS PROFIT ($MM) $401.9 $404.6 $427.3 $18.8 2019 2020 2021 $420.7 Gross Margin 34.7% 37.8% 39.9% $146.0 Net Sales / Gross Profit Financial Contribution from Mustang Survival Holdings Di
Slide 11: Adj. EBITDA and Free Cash Flow Generation
11 1. Non - GAAP financial measures. See slide 17 for definitions and reconciliations to the nearest GAAP measures 2. Adj. EBITDA conversion (%) defined as (Adj. EBITDA – capital expenditure) / Adj. EBITDA ADJ. EBITDA AND FREE CASH FLOW GENERATION $40.6 $53.3 $68.4 2019 2020 2021 ADJ. EBITDA 1 ($MM)
Slide 12: 4Q21 Capital Structure
12 4Q21 CAPITAL STRUCTURE 1. Non - GAAP financial measures. See slide 17 definitions and reconciliations to the nearest GAAP measures 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
Slide 13: 2022 Management Outlook
13 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
Slide 14: Conclusion
14 CONCLUSION 14 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
Slide 15: Appendix
APPENDIX ~ Sie
Slide 16: Income Statement
16 INCOME STATEMENT 16 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 39,788 170,690 152,93
Slide 17: Non-GAAP Reconciliations
17 1. Reflects the “Restructuring and transaction costs” line item on our consolidated statement of operations, which for 2021 and 202 0 primarily includes transaction costs composed of legal and consulting fees compared to 2019, which primarily includes termi nat ion benefits and relocation of empl
Slide 18: Statement of Cash Flows
18 STATEMENT OF CASH FLOWS 18 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 or
Slide 19: Statement of Cash Flows - Continued
19 STATEMENT OF CASH FLOWS - CONTINUED 19 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
Slide 20: Balance Sheet
20 BALANCE SHEET 20 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,