Cadre Holdings Reports Second Quarter 2024 Financial Results
Grew Quarterly Net Sales
Increased Quarterly Adjusted EBITDA of
-
Net sales of
$144.3 million $282.2 million -
Gross profit margin of
40.6% for the second quarter; gross profit margin of41.2% for the six months ended June 30, 2024. -
Net income of
$12.6 million $0.31 $19.5 million $0.49 -
Adjusted EBITDA of
$28.3 million $52.8 million -
Adjusted EBITDA margin of
19.6% for the second quarter; Adjusted EBITDA margin of18.7% for the six months ended June 30, 2024. -
Declared quarterly cash dividend of
$0.08 75
“Cadre delivered strong second quarter results, driven by outstanding execution in line with our strategic objectives, as well as significant demand for our mission-critical safety equipment,” said Warren Kanders, CEO and Chairman. “The value of the Cadre operating model continues to be evident, as we increased quarterly net sales, net income and adjusted EBITDA both sequentially and year-over-year. Importantly, Q2 adjusted EBITDA margin improved 80 basis points year-over-year and 180 basis points versus the first quarter.”
Mr. Kanders added, “Supported by Cadre’s entrenched positions and favorable industry trends across our law enforcement, first responder, military, and nuclear end-markets, we continue to see attractive long-term growth opportunities throughout the business. M&A remains an essential component of our strategy to increase value, and consistent with our patient and disciplined approach, we are actively evaluating a robust pipeline of potential transactions. We remain on track to deliver double-digit net sales and adjusted EBITDA growth in 2024 and are focused on taking advantage of both organic and inorganic opportunities ahead to enhance our market positions and accelerate growth.”
Second Quarter and Six-Month 2024 Operating Results
For the quarter ended June 30, 2024, Cadre generated net sales of
For the six months ended June 30, 2024, Cadre generated net sales of
For the quarter ended June 30, 2024, Cadre generated gross profit of
Gross profit margin was
Net income was
Net income was
Cadre generated
Cadre generated
Product segment gross margin was
Distribution segment gross margin was
Liquidity, Cash Flows and Capital Allocation
-
Cash and cash equivalents increased by
$18.2 million $87.7 million $105.9 million -
Total debt increased by
$71.3 million $140.1 million $211.4 million -
Net debt (total debt net of cash and cash equivalents) increased by
$53.0 million $52.4 million $105.5 million -
Capital expenditures totaled
$2.1 million $3.4 million $1.5 million $2.5 million
Dividend
On July 23, 2024, the Company announced that its Board of Directors declared a quarterly cash dividend of
2024 Outlook
As disclosed in our 8-K filed on July 19, 2024, Cadre experienced a cyber incident on July 15, 2024. The Company believes it has permanently contained and ended the incident and its associated risks and has either resumed or is in the process of resuming all affected business operations. The incident caused Cadre to limit production in a number of its facilities while the incident was being investigated and remediated. Cadre engaged a number of outside experts to assist in this effort. Due to the limited production during this time, the Company has modified its full year guidance for 2024, Cadre now expects to generate net sales in the range of
Conference Call
Management will host a conference call on Monday, August 12, 2024, at 11:00 AM EST to discuss the latest corporate developments and financial results. The dial-in number for callers in the US is (888)-596-4144 and the dial-in number for international callers is 646-968-2525. The access code for all callers is 3272793. A live webcast will also be available on the Company’s website at https://www.cadre-holdings.com/.
A replay of the call will be available through August 26, 2024. To access the replay, please dial 800-770-2030 in the
About Cadre
Headquartered in
Use of Non-GAAP Measures
The Company reports its financial results in accordance with
Forward-Looking Statements
Please note that in this press release 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 Securities Litigation Reform Act of 1995. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this press release, include, but are not limited to, potential legal, reputational, operational and financial effects on the Company resulting from the cybersecurity incident that the Company reported in July 2024 and/or future cybersecurity incidents on the Company’s business, operations and financial results as well as the effectiveness of the Company’s response and mitigation efforts to any such cybersecurity incidents, as well as those risks and uncertainties more fully described from time to time in the Company's public reports filed with the Securities and Exchange Commission, including under the section titled “Risk Factors” in the Company's Annual Report on Form 10-K, and/or Quarterly Reports on Form 10-Q, as well as in the Company’s Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release and speak only as of the date hereof. We assume no obligation to update any forward- looking statements to reflect events or circumstances after the date of this press release.
CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share amounts) |
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June 30, 2024 |
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December 31, 2023 |
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Assets |
|
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|
|
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||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
105,903 |
|
|
$ |
87,691 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|
|
72,685 |
|
|
|
58,360 |
|
Inventories |
|
|
95,637 |
|
|
|
80,976 |
|
Prepaid expenses |
|
|
9,751 |
|
|
|
11,930 |
|
Other current assets |
|
|
11,014 |
|
|
|
6,886 |
|
Total current assets |
|
|
294,990 |
|
|
|
245,843 |
|
Property and equipment, net of accumulated depreciation and amortization of |
|
|
46,718 |
|
|
|
44,647 |
|
Operating lease assets |
|
|
9,624 |
|
|
|
6,554 |
|
Deferred tax assets, net |
|
|
3,835 |
|
|
|
4,004 |
|
Intangible assets, net |
|
|
112,229 |
|
|
|
43,472 |
|
Goodwill |
|
|
148,141 |
|
|
|
81,667 |
|
Other assets |
|
|
5,095 |
|
|
|
4,992 |
|
Total assets |
|
$ |
620,632 |
|
|
$ |
431,179 |
|
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|
|
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|
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Liabilities, Mezzanine Equity and Shareholders' Equity |
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Current liabilities |
|
|
|
|
|
|
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Accounts payable |
|
$ |
31,489 |
|
|
$ |
28,418 |
|
Accrued liabilities |
|
|
46,645 |
|
|
|
44,524 |
|
Income tax payable |
|
|
1,788 |
|
|
|
9,944 |
|
Current portion of long-term debt |
|
|
13,128 |
|
|
|
12,320 |
|
Total current liabilities |
|
|
93,050 |
|
|
|
95,206 |
|
Long-term debt |
|
|
198,233 |
|
|
|
127,812 |
|
Long-term operating lease liabilities |
|
|
6,062 |
|
|
|
3,186 |
|
Deferred tax liabilities |
|
|
18,852 |
|
|
|
4,843 |
|
Other liabilities |
|
|
5,055 |
|
|
|
2,970 |
|
Total liabilities |
|
|
321,252 |
|
|
|
234,017 |
|
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|
|
|
|
|
|
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Mezzanine equity |
|
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|
||
Preferred stock ( |
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— |
|
|
|
— |
|
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|
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Shareholders' equity |
|
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|
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||
Common stock ( |
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|
4 |
|
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|
4 |
|
Additional paid-in capital |
|
|
302,603 |
|
|
|
212,630 |
|
Accumulated other comprehensive income |
|
|
226 |
|
|
|
634 |
|
Accumulated deficit |
|
|
(3,453 |
) |
|
|
(16,106 |
) |
Total shareholders’ equity |
|
|
299,380 |
|
|
|
197,162 |
|
Total liabilities, mezzanine equity and shareholders' equity |
|
$ |
620,632 |
|
|
$ |
431,179 |
|
CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share amounts) |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
|
2023 |
|
2024 |
|
2023 |
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Net sales |
|
$ |
144,309 |
|
|
$ |
121,087 |
|
|
$ |
282,169 |
|
|
$ |
232,835 |
|
Cost of goods sold |
|
|
85,659 |
|
|
|
70,340 |
|
|
|
165,891 |
|
|
|
135,470 |
|
Gross profit |
|
|
58,650 |
|
|
|
50,747 |
|
|
|
116,278 |
|
|
|
97,365 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
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Selling, general and administrative |
|
|
38,577 |
|
|
|
34,051 |
|
|
|
79,296 |
|
|
|
69,301 |
|
Restructuring and transaction costs |
|
|
19 |
|
|
|
693 |
|
|
|
3,106 |
|
|
|
693 |
|
Related party expense |
|
|
101 |
|
|
|
115 |
|
|
|
1,944 |
|
|
|
263 |
|
Total operating expenses |
|
|
38,697 |
|
|
|
34,859 |
|
|
|
84,346 |
|
|
|
70,257 |
|
Operating income |
|
|
19,953 |
|
|
|
15,888 |
|
|
|
31,932 |
|
|
|
27,108 |
|
Other expense |
|
|
|
|
|
|
|
|
|
|
|
|
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Interest expense |
|
|
(2,003 |
) |
|
|
(1,013 |
) |
|
|
(3,640 |
) |
|
|
(2,654 |
) |
Other (expense) income, net |
|
|
(336 |
) |
|
|
346 |
|
|
|
(1,780 |
) |
|
|
710 |
|
Total other expense, net |
|
|
(2,339 |
) |
|
|
(667 |
) |
|
|
(5,420 |
) |
|
|
(1,944 |
) |
Income before provision for income taxes |
|
|
17,614 |
|
|
|
15,221 |
|
|
|
26,512 |
|
|
|
25,164 |
|
Provision for income taxes |
|
|
(5,047 |
) |
|
|
(4,229 |
) |
|
|
(7,017 |
) |
|
|
(7,170 |
) |
Net income |
|
$ |
12,567 |
|
|
$ |
10,992 |
|
|
$ |
19,495 |
|
|
$ |
17,994 |
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Net income per share: |
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Basic |
|
$ |
0.31 |
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|
$ |
0.29 |
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$ |
0.50 |
|
|
$ |
0.48 |
|
Diluted |
|
$ |
0.31 |
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$ |
0.29 |
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|
$ |
0.49 |
|
|
$ |
0.48 |
|
Weighted average shares outstanding: |
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Basic |
|
|
40,606,825 |
|
|
|
37,586,031 |
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|
39,276,700 |
|
|
|
37,480,367 |
|
Diluted |
|
|
40,855,185 |
|
|
|
37,850,708 |
|
|
|
39,701,755 |
|
|
|
37,758,998 |
|
CADRE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) |
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Six Months Ended June 30, |
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|
2024 |
|
2023 |
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Cash Flows From Operating Activities: |
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|
|
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|
|
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Net income |
|
$ |
19,495 |
|
|
$ |
17,994 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
8,562 |
|
|
|
8,220 |
|
Amortization of original issue discount and debt issue costs |
|
|
502 |
|
|
|
374 |
|
Amortization of inventory step-up |
|
|
2,310 |
|
|
|
— |
|
Deferred income taxes |
|
|
(1,915 |
) |
|
|
14 |
|
Stock-based compensation |
|
|
4,151 |
|
|
|
4,852 |
|
Remeasurement of contingent consideration |
|
|
509 |
|
|
|
— |
|
Provision for losses on accounts receivable |
|
|
769 |
|
|
|
(21 |
) |
Foreign exchange loss (gain) |
|
|
971 |
|
|
|
(776 |
) |
Other loss (gain) |
|
|
251 |
|
|
|
(433 |
) |
Changes in operating assets and liabilities, net of impact of acquisitions: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(3,387 |
) |
|
|
7,605 |
|
Inventories |
|
|
2,355 |
|
|
|
(11,986 |
) |
Prepaid expenses and other assets |
|
|
705 |
|
|
|
3,397 |
|
Accounts payable and other liabilities |
|
|
(21,998 |
) |
|
|
(971 |
) |
Net cash provided by operating activities |
|
|
13,280 |
|
|
|
28,269 |
|
Cash Flows From Investing Activities: |
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|
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|
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|
||
Purchase of property and equipment |
|
|
(3,365 |
) |
|
|
(2,404 |
) |
Proceeds from disposition of property and equipment |
|
|
49 |
|
|
|
206 |
|
Business acquisitions, net of cash acquired |
|
|
(141,813 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(145,129 |
) |
|
|
(2,198 |
) |
Cash Flows From Financing Activities: |
|
|
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|
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|
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Proceeds from revolving credit facilities |
|
|
5,500 |
|
|
|
— |
|
Principal payments on revolving credit facilities |
|
|
(5,500 |
) |
|
|
— |
|
Proceeds from term loans |
|
|
80,000 |
|
|
|
— |
|
Principal payments on term loans |
|
|
(6,065 |
) |
|
|
(5,000 |
) |
Principal payments on insurance premium financing |
|
|
(2,187 |
) |
|
|
(2,189 |
) |
Payments for debt issuance costs |
|
|
(844 |
) |
|
|
— |
|
Taxes paid in connection with employee stock transactions |
|
|
(5,311 |
) |
|
|
(2,725 |
) |
Proceeds from secondary offering, net of underwriter discounts |
|
|
91,776 |
|
|
|
— |
|
Deferred offering costs |
|
|
(683 |
) |
|
|
— |
|
Dividends distributed |
|
|
(6,842 |
) |
|
|
(5,993 |
) |
Other |
|
|
37 |
|
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
149,881 |
|
|
|
(15,907 |
) |
Effect of foreign exchange rates on cash and cash equivalents |
|
|
180 |
|
|
|
332 |
|
Change in cash and cash equivalents |
|
|
18,212 |
|
|
|
10,496 |
|
Cash and cash equivalents, beginning of period |
|
|
87,691 |
|
|
|
45,286 |
|
Cash and cash equivalents, end of period |
|
$ |
105,903 |
|
|
$ |
55,782 |
|
Supplemental Disclosure of Cash Flows Information: |
|
|
|
|
|
|
||
Cash paid for income taxes, net |
|
$ |
21,605 |
|
|
$ |
7,288 |
|
Cash paid for interest |
|
$ |
6,458 |
|
|
$ |
4,859 |
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities: |
|
|
|
|
|
|
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Accruals and accounts payable for capital expenditures |
|
$ |
58 |
|
|
$ |
129 |
|
CADRE HOLDINGS, INC. SEGMENT INFORMATION (Unaudited) (In thousands) |
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Three Months Ended June 30, 2024 |
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|
|
|
|
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Reconciling |
|
|
|
||
|
|
Product |
|
Distribution |
|
Items(1) |
|
Total |
|||||
Net sales |
|
$ |
128,433 |
|
$ |
25,588 |
|
$ |
(9,712 |
) |
|
$ |
144,309 |
Cost of goods sold |
|
|
75,621 |
|
|
19,723 |
|
|
(9,685 |
) |
|
|
85,659 |
Gross profit |
|
$ |
52,812 |
|
$ |
5,865 |
|
$ |
(27 |
) |
|
$ |
58,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2023 |
|||||||||||
|
|
|
|
|
|
|
|
Reconciling |
|
|
|
||
|
|
Product |
|
Distribution |
|
Items(1) |
|
Total |
|||||
Net sales |
|
$ |
103,368 |
|
$ |
25,726 |
|
$ |
(8,007 |
) |
|
$ |
121,087 |
Cost of goods sold |
|
|
58,216 |
|
|
19,779 |
|
|
(7,655 |
) |
|
|
70,340 |
Gross profit |
|
$ |
45,152 |
|
$ |
5,947 |
|
$ |
(352 |
) |
|
$ |
50,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2024 |
|||||||||||
|
|
|
|
|
|
|
|
Reconciling |
|
|
|
||
|
|
Product |
|
Distribution |
|
Items(1) |
|
Total |
|||||
Net sales |
|
$ |
247,218 |
|
$ |
53,779 |
|
$ |
(18,828 |
) |
|
$ |
282,169 |
Cost of goods sold |
|
|
143,385 |
|
|
41,280 |
|
|
(18,774 |
) |
|
|
165,891 |
Gross profit |
|
$ |
103,833 |
|
$ |
12,499 |
|
$ |
(54 |
) |
|
$ |
116,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2023 |
|||||||||||
|
|
|
|
|
|
|
|
Reconciling |
|
|
|
||
|
|
Product |
|
Distribution |
|
Items(1) |
|
Total |
|||||
Net sales |
|
$ |
196,562 |
|
$ |
50,386 |
|
$ |
(14,113 |
) |
|
$ |
232,835 |
Cost of goods sold |
|
|
110,824 |
|
|
38,476 |
|
|
(13,830 |
) |
|
|
135,470 |
Gross profit |
|
$ |
85,738 |
|
$ |
11,910 |
|
$ |
(283 |
) |
|
$ |
97,365 |
| ____________________________ | |
(1) |
Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. |
CADRE HOLDINGS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (In thousands) |
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|
|||||
|
|
Year ended |
|
Three Months Ended |
|
Six Months Ended |
|
Last Twelve |
|||||||||||||||
|
|
December 31, |
|
June 30, |
|
June 30, |
|
Months |
|||||||||||||||
|
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
June 30, 2024 |
|||||||||||
Net income |
|
$ |
38,641 |
|
|
$ |
12,567 |
|
|
$ |
10,992 |
|
|
$ |
19,495 |
|
$ |
17,994 |
|
|
$ |
40,142 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization |
|
|
15,737 |
|
|
|
4,620 |
|
|
|
3,959 |
|
|
|
8,562 |
|
|
8,220 |
|
|
|
16,079 |
|
Interest expense |
|
|
4,531 |
|
|
|
2,003 |
|
|
|
1,013 |
|
|
|
3,640 |
|
|
2,654 |
|
|
|
5,517 |
|
Provision for income taxes |
|
|
14,283 |
|
|
|
5,047 |
|
|
|
4,229 |
|
|
|
7,017 |
|
|
7,170 |
|
|
|
14,130 |
|
EBITDA |
|
$ |
73,192 |
|
|
$ |
24,237 |
|
|
$ |
20,193 |
|
|
$ |
38,714 |
|
$ |
36,038 |
|
|
$ |
75,868 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restructuring and transaction costs(1) |
|
|
3,192 |
|
|
|
19 |
|
|
|
693 |
|
|
|
4,856 |
|
|
693 |
|
|
|
7,355 |
|
Other general income(2) |
|
|
(92 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(92 |
) |
Other (income) expense, net(3) |
|
|
(936 |
) |
|
|
336 |
|
|
|
(346 |
) |
|
|
1,780 |
|
|
(710 |
) |
|
|
1,554 |
|
Stock-based compensation expense(4) |
|
|
9,368 |
|
|
|
2,084 |
|
|
|
2,105 |
|
|
|
4,151 |
|
|
4,852 |
|
|
|
8,667 |
|
Stock-based compensation payroll tax expense(5) |
|
|
234 |
|
|
|
48 |
|
|
|
— |
|
|
|
441 |
|
|
220 |
|
|
|
455 |
|
LTIP bonus(6) |
|
|
860 |
|
|
|
(1 |
) |
|
|
160 |
|
|
|
49 |
|
|
304 |
|
|
|
605 |
|
Amortization of inventory step-up(7) |
|
|
— |
|
|
|
1,541 |
|
|
|
— |
|
|
|
2,310 |
|
|
— |
|
|
|
2,310 |
|
Contingent consideration expense(8) |
|
|
— |
|
|
|
58 |
|
|
|
— |
|
|
|
509 |
|
|
— |
|
|
|
509 |
|
Adjusted EBITDA |
|
$ |
85,818 |
|
|
$ |
28,322 |
|
|
$ |
22,805 |
|
|
$ |
52,810 |
|
$ |
41,397 |
|
|
$ |
97,231 |
|
Adjusted EBITDA margin(9) |
|
|
16.5 |
|
% |
|
19.6 |
|
% |
|
18.8 |
|
% |
|
18.7 |
% |
|
17.8 |
|
% |
|
|
|
| ____________________________ | |
(1)
|
Reflects the “Restructuring and transaction costs” line item on our consolidated statement of operations and comprehensive income, which primarily includes transaction costs composed of legal and consulting fees. In addition, this line item reflects a |
(2) |
Reflects gains from long-lived asset sales. |
(3) |
Reflects the “Other income (expense), net” line item on our consolidated statements of operations and primarily includes gains and losses due to fluctuations in foreign currency exchange rates. |
(4) |
Reflects compensation expense related to equity and liability classified stock-based compensation plans. |
(5) |
Reflects payroll taxes associated with vested stock-based compensation awards. |
(6) |
Reflects the cost of a cash-based long-term incentive plan awarded to employees that vests over three years. |
(7) |
Reflects amortization expense related to the step-up inventory adjustment recorded as a result of our recent acquisitions. |
(8) |
Reflects contingent consideration expense related to the acquisition of ICOR. |
(9) |
Reflects Adjusted EBITDA / Net sales for the relevant periods. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240809871263/en/
Gray Hudkins
Cadre Holdings, Inc.
203-550-7148
gray.hudkins@cadre-holdings.com
Investor Relations:
The IGB Group
Leon Berman / Matt Berkowitz
212-477-8438 / 212-227-7098
Source: Cadre Holdings, Inc.
