United States
Securities and Exchange Commission
Washington, D.C. 20549
Form
(Amendment No. 1)
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or other jurisdiction | (Commission File Number) | (IRS Employer |
of incorporation) |
| Identification Number) |
(Zip Code) | |
(Address of principal executive offices) |
|
Registrant’s telephone number, including area code: (
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
EXPLANATORY NOTE
Cadre Holdings, Inc. (the “Company”) is filing this Amendment No. 1 to its Current Report on Form 8-K filed with the Securities and Exchange Commission on August 8, 2023 (the “Original Form 8-K”), solely to refurnish the press release attached as Exhibit 99.1 thereto in order to correct a typographical error. The third italicized headline of the press release should read “Expects Full-Year 2023 Net Sales of $472 to $484 Million and Raises 2023 Full-Year Adjusted EBITDA Range to $80 to $84 Million.” No changes to the other documents furnished with the Original Form 8-K have been made.
Item 2.02 Results of Operations and Financial Condition
On August 8, 2023, Cadre Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2023. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Attached to the Original Form 8-K as Exhibit 99.2 and incorporated herein by reference is a presentation regarding the Company’s financial results for the quarter ended June 30, 2023.
The press release and presentation contain the non-GAAP measures earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), adjusted EBITDA and adjusted EBITDA margin. The Company believes that the presentation of these non-GAAP measures provides useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance, and thereby enhances the user's overall understanding of the Company's current financial performance relative to past performance and provides, along with the nearest GAAP measures, a baseline for modeling future earnings expectations. The non-GAAP measures are reconciled to comparable GAAP financial measures within the press release and the presentation. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results. Additionally, the Company notes that there can be no assurance that the above referenced non-GAAP financial measures are comparable to similarly titled financial measures used by other publicly traded companies.
The information in Items 2.02 and 7.01 of this Current Report on Form 8-K (including Exhibits 99.1 and 99.2 attached and incorporated by reference hereto, respectively) shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure
The information set forth under Item 2.02 “Results of Operations and Financial Condition” is incorporated into this Item 7.01 by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit | Description | |
|
|
|
99.1 |
| |
99.2 |
| |
104 |
| Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 8, 2023
| CADRE HOLDINGS, INC. | |
|
| |
|
| |
| By: | /s/ Blaine Browers |
|
| Name:Blaine Browers |
|
| Title:Chief Financial Officer |
Exhibit 99.1
Cadre Holdings Reports Second Quarter 2023 Financial Results
Achieved Revenue, Net Income, Gross Margin and Adjusted EBITDA Growth
Achieves Record Quarterly Adjusted EBITDA of $22.8 Million and Adjusted EBITDA Margin of 18.8%
Expects Full-Year 2023 Net Sales of $472 to $484 Million and Raises 2023 Full-Year Adjusted EBITDA Range to $80 to $84 Million
JACKSONVILLE, Fla., August 8, 2023 – Cadre Holdings, Inc. (NYSE: CDRE) ("Cadre" or "the Company"), a global leader in the manufacturing and distribution of safety and survivability equipment for first responders, announced today its consolidated operating results for the three and six months ended June 30, 2023.
| ● | Net sales of $121.1 million for the second quarter; net sales of $232.8 million for the six months ended June 30, 2023 |
| ● | Gross profit margin of 41.9% for the second quarter; gross profit margin of 41.8% for the six months ended June 30, 2023 |
| ● | Net income of $11.0 million, or $0.29 per diluted share, for the second quarter; net income of $18.0 million, or $0.48 per diluted share, for the six months ended June 30, 2023 |
| ● | Adjusted EBITDA of $22.8 million for the second quarter; Adjusted EBITDA of $41.4 million for the six months ended June 30, 2023 |
| ● | Adjusted EBITDA margin of 18.8% for the second quarter; Adjusted EBITDA margin of 17.8% for the six months ended June 30, 2023 |
| ● | Declared quarterly cash dividend of $0.08 per share in July 2023 |
“Our significant momentum continued in the second quarter, as we generated improvements in quarterly net sales, adjusted EBITDA, and net income both sequentially and year-over-year,” said Warren Kanders, CEO and Chairman. “Based on outstanding strategic execution and strong and recurring demand for our best-in-class mission-critical safety and survivability equipment, we are pleased to increase our full year 2023 adjusted EBITDA outlook. We continued to make progress expanding margins in the second quarter, driven by further implementation of our resilient and proven operating model. Our Q2 adjusted EBITDA margin of 18.8% was our highest since going public, with gross margins increasing 530 basis points compared to last year.”
Mr. Kanders added, “The consistency and strength of our financial results are a testament to Cadre’s innovative product offering, premium brands, and superior execution, underpinned by leading positions in law enforcement, first responder and military markets. We remain on track to deliver record full year net sales in 2023 and are ideally positioned to capitalize on organic and inorganic opportunities ahead to further enhance our market leadership over the long-term. As we continue to actively evaluate a robust pipeline of potential M&A transactions, we are steadfast in our patient and disciplined approach and focus on high margin companies with leading market positions and strong recurring revenues and cash flows.”
Second Quarter and Six-Month 2023 Operating Results
For the quarter ended June 30, 2023, Cadre generated net sales of $121.1 million, as compared to $118.2 million for the quarter ended June 30, 2022. The increase was primarily the result of the Cyalume acquisition, armor and holster volume, and agency demand for hard goods, partially offset by timing for our EOD products.
For the six months ended June 30, 2023, Cadre generated net sales of $232.8 million, as compared to $222.6 million for the six months ended June 30, 2022, mainly driven by recent acquisitions, armor and holster volume, and agency demand for hard goods, partially offset by timing for our EOD products.
For the quarter ended June 30, 2023, Cadre generated gross profit of $50.7 million, as compared to $43.2 million for the quarter ended June 30, 2022. For the six months ended June 30, 2023, Cadre generated gross profit of $97.4 million, as compared to $83.4 million for the prior year period.
Gross profit margin was 41.9% for the quarter ended June 30, 2023, as compared to 36.6% for the quarter ended June 30, 2022, mainly driven by favorable pricing, favorable product mix, prior year amortization of inventory step up related to acquisitions and productivity net of inflation. Gross profit margin was 41.8% for the six months ended June 30, 2023, as compared to 37.5% for the prior year period.
Net income was $11.0 million for the quarter ended June 30, 2023, as compared to $4.4 million for the three months ended June 30, 2022. The increase resulted primarily from the change in year-over-year revenue and the increase in gross profit margin.
Net income was $18.0 million for the six months ended June 30, 2023, as compared to a net loss of $5.7 million for the prior year period, primarily due to the change in year-over-year revenue, the increase in gross profit margin, and a decrease in stock-based compensation expense.
Cadre generated $22.8 million of Adjusted EBITDA for the quarter ended June 30, 2023, as compared to $18.4 million for the quarter ended June 30, 2022. Adjusted EBITDA margin was 18.8% for the quarter ended June 30, 2023, as compared to 15.6% for the prior year period.
Cadre generated $41.4 million of Adjusted EBITDA for the six months ended June 30, 2023, as compared to $32.6 million for the prior period. Adjusted EBITDA margin was 17.8% for the six months ended June 30, 2023, as compared to 14.6% for the prior year period.
Product segment gross margin was 43.7% and 43.6% for the second quarter and first half of 2023, respectively, compared to 39.0% and 39.5% for the prior year periods.
Distribution segment gross margin was 23.1% and 23.6% for the second quarter and first half of 2023, respectively, compared to 18.2% and 21.4% for the prior year periods.
Liquidity, Cash Flows and Capital Allocation
| ● | Cash and cash equivalents increased by $10.5 million from $45.3 million as of December 31, 2022 to $55.8 million as of June 30, 2023. |
| ● | Total debt decreased by $7.0 million from $149.7 million as of December 31, 2022, to $142.7 million as of June 30, 2023. |
| ● | Net Debt (total debt net of cash and cash equivalents) decreased by $17.4 million from $104.4 million as of December 31, 2022, to $87.0 million as of June 30, 2023. |
| ● | Capital expenditures totaled $1.5 million for the second quarter and $2.5 million for the six months ended June 30, 2023, compared with $1.4 million for the second quarter and $2.5 million for the six months ended June 30, 2022. |
Dividend
On July 25, 2023, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.08 per share, or $0.32 per share on an annualized basis. Cadre's dividend payment will be made on August 18, 2023, to shareholders of record as of the close of business on the record date of August 4, 2023. The declaration of any future dividend is subject to the discretion of the Company's Board of Directors.
2023 Outlook Update
As a result of the Company's second-quarter performance and management's outlook for the remainder of the year, Cadre increased its full-year Adjusted EBITDA guidance. For the full year 2023, Cadre expects to generate net sales in the range of $472 million to $484 million and Adjusted EBITDA in the range of $80 million to $84 million. We expect capital expenditures to be in the range of $8.0 million to $9.0 million.
Conference Call
Cadre management will host a conference call on Tuesday, August 8, 2023, at 5:00 PM EST to discuss the latest corporate developments and financial results. The dial-in number for callers in the US is (888)-510-2553 and the dial-in
number for international callers is (646)-960-0473. The access code for all callers is 1410384. 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 22, 2023. To access the replay, please dial (800)-770-2030 in the U.S. or +1-647-362-9199 if outside the U.S., and then enter the access code 1410384.
About Cadre
Headquartered in Jacksonville, Florida, Cadre is a global leader in the manufacturing and distribution of safety and survivability products for first responders. Cadre's equipment provides critical protection to allow users to safely and securely perform their duties and protect those around them in hazardous or life-threatening situations. The Company's core products include body armor, explosive ordnance disposal equipment, and duty gear. Our highly engineered products are utilized in over 100 countries by federal, state and local law enforcement, fire and rescue professionals, explosive ordnance disposal teams, and emergency medical technicians. Our key brands include Safariland® and Med-Eng®, amongst others.
Use of Non-GAAP Measures
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The press release contains the non-GAAP measures: (i) earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), (ii) adjusted EBITDA and (iii) adjusted EBITDA margin. The Company believes the presentation of these non-GAAP measures provides useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance, and thereby enhances the user’s overall understanding of the Company’s current financial performance relative to past performance and provides, along with the nearest GAAP measures, a baseline for modeling future earnings expectations. Non-GAAP measures are reconciled to comparable GAAP financial measures within this press release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results. Additionally, the Company notes that there can be no assurance that the above referenced non-GAAP financial measures are comparable to similarly titled financial measures used by other publicly traded companies.
Forward-Looking Statements
Except for historical information, certain matters discussed in this press release 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 anticipated levels of future performance. Forward-looking statements involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Any number of factors could cause actual results to differ materially from projections or forward-looking statements in this press release, including, but not limited to, 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.
Contact:
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
lberman@igbir.com / mberkowitz@igbir.com
Media Contact:
Jonathan Keehner / Andrew Siegel
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
CADRE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share amounts)
| | June 30, 2023 |
| December 31, 2022 | ||
Assets |
| |
|
| |
|
Current assets |
| |
|
| |
|
Cash and cash equivalents | | $ | 55,782 | | $ | 45,286 |
Accounts receivable, net of allowance for doubtful accounts of $800 and $924, respectively | | | 57,361 | | | 64,557 |
Inventories | |
| 82,777 | |
| 70,273 |
Prepaid expenses | |
| 10,009 | |
| 10,091 |
Other current assets | |
| 6,406 | |
| 6,811 |
Total current assets | |
| 212,335 | |
| 197,018 |
Property and equipment, net of accumulated depreciation and amortization of $47,046 and $42,694, respectively | |
| 44,531 | |
| 45,285 |
Operating lease assets | | | 6,657 | | | 8,489 |
Deferred tax assets, net | |
| 2,351 | |
| 2,255 |
Intangible assets, net | |
| 46,919 | |
| 50,695 |
Goodwill | |
| 81,560 | |
| 81,576 |
Other assets | |
| 5,566 | |
| 6,634 |
Total assets | | $ | 399,919 | | $ | 391,952 |
| | | | | | |
Liabilities, Mezzanine Equity and Shareholders' Equity | |
|
| |
|
|
Current liabilities | |
|
| |
|
|
Accounts payable | | $ | 29,640 | | $ | 23,406 |
Accrued liabilities | |
| 34,480 | |
| 38,720 |
Income tax payable | |
| 4,279 | |
| 4,584 |
Liabilities held for sale | | | — | | | — |
Current portion of long-term debt | |
| 10,022 | |
| 12,211 |
Total current liabilities | |
| 78,421 | |
| 78,921 |
Long-term debt | |
| 132,712 | |
| 137,476 |
Long-term operating lease liabilities | | | 3,211 | | | 4,965 |
Deferred tax liabilities | |
| 3,759 | |
| 3,508 |
Other liabilities | |
| 1,314 | |
| 1,192 |
Total liabilities | |
| 219,417 | |
| 226,062 |
| | | | | | |
Mezzanine equity | |
| | |
|
|
Preferred stock ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2023 and December 31, 2022) | |
| — | |
| — |
| | | | | | |
Shareholders' equity | |
| | |
|
|
Common stock ($0.0001 par value, 190,000,000 shares authorized, 37,586,031 and 37,332,271 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively) | |
| 4 | |
| 4 |
Additional paid-in capital | |
| 208,492 | |
| 206,540 |
Accumulated other comprehensive income | |
| 2,746 | |
| 2,087 |
Accumulated deficit | |
| (30,740) | |
| (42,741) |
Total shareholders’ equity | |
| 180,502 | |
| 165,890 |
Total liabilities, mezzanine equity and shareholders' equity | | $ | 399,919 | | $ | 391,952 |
CADRE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share amounts)
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||
Net sales | | $ | 121,087 | | $ | 118,232 | | $ | 232,835 | | $ | 222,638 |
Cost of goods sold | |
| 70,340 | |
| 75,011 | |
| 135,470 | |
| 139,228 |
Gross profit | |
| 50,747 | |
| 43,221 | |
| 97,365 | |
| 83,410 |
Operating expenses | |
|
| |
|
| |
|
| |
|
|
Selling, general and administrative | |
| 34,051 | |
| 32,749 | |
| 69,301 | |
| 86,699 |
Restructuring and transaction costs | |
| 693 | |
| 1,203 | |
| 693 | |
| 1,802 |
Related party expense | |
| 115 | |
| 1,112 | |
| 263 | |
| 1,234 |
Total operating expenses | |
| 34,859 | |
| 35,064 | |
| 70,257 | |
| 89,735 |
Operating income (loss) | |
| 15,888 | |
| 8,157 | |
| 27,108 | |
| (6,325) |
Other expense | |
|
| |
|
| |
|
| |
|
|
Interest expense | |
| (1,013) | |
| (1,439) | |
| (2,654) | |
| (2,929) |
Other income (expense), net | |
| 346 | |
| (756) | |
| 710 | |
| (961) |
Total other expense, net | |
| (667) | |
| (2,195) | |
| (1,944) | |
| (3,890) |
Income (loss) before provision for income taxes | |
| 15,221 | |
| 5,962 | |
| 25,164 | |
| (10,215) |
(Provision) benefit for income taxes | |
| (4,229) | |
| (1,517) | |
| (7,170) | |
| 4,495 |
Net income (loss) | | $ | 10,992 | | $ | 4,445 | | $ | 17,994 | | $ | (5,720) |
| | | | | | | | | | | | |
Net income (loss) per share: | |
|
| |
|
| |
|
| |
|
|
Basic | | $ | 0.29 | | $ | 0.13 | | $ | 0.48 | | $ | (0.16) |
Diluted | | $ | 0.29 | | $ | 0.12 | | $ | 0.48 | | $ | (0.16) |
Weighted average shares outstanding: | |
|
| |
|
| |
|
| |
|
|
Basic | |
| 37,586,031 | |
| 35,320,314 | |
| 37,480,367 | |
| 34,888,703 |
Diluted | |
| 37,850,708 | |
| 35,688,620 | |
| 37,758,998 | |
| 34,888,703 |
CADRE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
| | Six Months Ended June 30, | ||||
|
| 2023 |
| 2022 | ||
Cash Flows From Operating Activities: |
| |
|
| |
|
Net income (loss) | | $ | 17,994 | | $ | (5,720) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |
|
| |
|
|
Depreciation and amortization | |
| 8,220 | |
| 7,380 |
Amortization of original issue discount and debt issue costs | |
| 374 | |
| 367 |
Amortization of inventory step-up | | | — | | | 1,344 |
Deferred income taxes | |
| 14 | |
| (4,594) |
Stock-based compensation | | | 4,852 | | | 26,327 |
Gain on sale of fixed assets | | | (108) | | | — |
(Recoveries from) provision for losses on accounts receivable | |
| (21) | |
| 240 |
Foreign exchange (gain) loss | |
| (776) | |
| 1,107 |
Other | | | (325) | | | — |
Changes in operating assets and liabilities, net of impact of acquisitions: | |
| | |
| |
Accounts receivable | |
| 7,605 | |
| (3,243) |
Inventories | |
| (11,986) | |
| (1,461) |
Prepaid expenses and other assets | |
| 3,397 | |
| 3,616 |
Accounts payable and other liabilities | |
| (971) | |
| (345) |
Net cash provided by operating activities | |
| 28,269 | |
| 25,018 |
Cash Flows From Investing Activities: | |
|
| |
|
|
Purchase of property and equipment | |
| (2,404) | |
| (2,473) |
Proceeds from disposition of property and equipment | | | 206 | | | — |
Business acquisitions, net of cash acquired | |
| — | |
| (55,039) |
Net cash used in investing activities | |
| (2,198) | |
| (57,512) |
Cash Flows From Financing Activities: | |
|
| |
|
|
Proceeds from revolving credit facilities | |
| — | |
| 48,000 |
Principal payments on revolving credit facilities | |
| — | |
| (48,000) |
Principal payments on term loans | |
| (5,000) | |
| (5,009) |
Principal payments on insurance premium financing | |
| (2,189) | |
| (2,853) |
Payment of capital leases | |
| — | |
| (22) |
Taxes paid in connection with employee stock transactions | | | (2,725) | | | (6,216) |
Proceeds from secondary offering, net of underwriter discounts | | | — | | | 49,703 |
Deferred offering costs | | | — | | | (2,715) |
Dividends distributed | |
| (5,993) | |
| (5,533) |
Net cash (used in) provided by financing activities | |
| (15,907) | |
| 27,355 |
Effect of foreign exchange rates on cash and cash equivalents | |
| 332 | |
| 144 |
Change in cash and cash equivalents | |
| 10,496 | |
| (4,995) |
Cash and cash equivalents, beginning of period | |
| 45,286 | |
| 33,857 |
Cash and cash equivalents, end of period | | $ | 55,782 | | $ | 28,862 |
Supplemental Disclosure of Cash Flows Information: | | | | | | |
Cash paid for income taxes, net | | $ | 7,288 | | $ | 241 |
Cash paid for interest | | $ | 4,859 | | $ | 2,330 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | | | | | | |
Accruals and accounts payable for capital expenditures | | $ | 129 | | $ | 17 |
CADRE HOLDINGS, INC.
SEGMENT INFORMATION
(Unaudited)
(In thousands)
|
| 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 |
|
| Three Months Ended June 30, 2022 | ||||||||||
| | | | | | | | Reconciling | | | | |
|
| Product |
| Distribution |
| Items(1) |
| Total | ||||
Net sales |
| $ | 99,837 |
| $ | 23,728 |
| $ | (5,333) |
| $ | 118,232 |
Cost of goods sold | | | 60,947 | | | 19,406 | | | (5,342) | | | 75,011 |
Gross profit | | $ | 38,890 | | $ | 4,322 | | $ | 9 | | $ | 43,221 |
|
| 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 |
|
| Six Months Ended June 30, 2022 | ||||||||||
| | | | | | | | Reconciling | | | | |
|
| Product |
| Distribution |
| Items(1) |
| Total | ||||
Net sales |
| $ | 185,223 |
| $ | 47,824 |
| $ | (10,409) |
| $ | 222,638 |
Cost of goods sold | | | 112,067 | | | 37,578 | | | (10,417) | | | 139,228 |
Gross profit | | $ | 73,156 | | $ | 10,246 | | $ | 8 | | $ | 83,410 |
| (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)
| | Year ended | | Three Months | | Three Months Ended | | Six Months Ended | | Last Twelve | |||||||||||
| | December 31, | | Ended March 31, | | June 30, | | June 30, | | Months | |||||||||||
| | 2022 | | 2023 | | 2023 | | 2022 | | 2023 | | 2022 | | June 30, 2023 | |||||||
Net income (loss) | | $ | 5,820 | | $ | 7,002 | | $ | 10,992 | | $ | 4,445 | | $ | 17,994 | | $ | (5,720) | | $ | 29,534 |
Add back: | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Depreciation and amortization | |
| 15,651 | |
| 4,261 | |
| 3,959 | |
| 3,836 | |
| 8,220 | |
| 7,380 | |
| 16,491 |
Interest expense | |
| 6,206 | |
| 1,641 | |
| 1,013 | |
| 1,439 | |
| 2,654 | |
| 2,929 | |
| 5,931 |
Provision (benefit) for income taxes | |
| 3,553 | |
| 2,941 | |
| 4,229 | |
| 1,517 | |
| 7,170 | |
| (4,495) | |
| 15,218 |
EBITDA | | $ | 31,230 | | $ | 15,845 | | $ | 20,193 | | $ | 11,237 | | $ | 36,038 | | $ | 94 | | $ | 67,174 |
Add back: | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Restructuring and transaction costs(1) | |
| 5,355 | |
| — | |
| 693 | |
| 2,203 | |
| 693 | |
| 2,802 | |
| 3,246 |
Other general income(2) | | | (159) | | | — | | | — | | | — | | | — | | | — | | | (159) |
Other expense (income), net(3) | |
| 1,137 | |
| (364) | |
| (346) | |
| 756 | |
| (710) | |
| 961 | |
| (534) |
Stock-based compensation expense(4) | | | 32,239 | | | 2,747 | | | 2,105 | | | 2,818 | | | 4,852 | | | 26,541 | | | 10,550 |
Stock-based compensation payroll tax expense(5) | | | 305 | | | 220 | | | — | | | 7 | | | 220 | | | 305 | | | 220 |
LTIP bonus(6) | |
| 1,369 | |
| 144 | |
| 160 | |
| 174 | |
| 304 | |
| 558 | |
| 1,115 |
Amortization of inventory step-up(7) | | | 4,255 | | | — | | | — | | | 1,191 | | | — | | | 1,344 | | | 2,911 |
Adjusted EBITDA | | $ | 75,731 | | $ | 18,592 | | $ | 22,805 | | $ | 18,386 | | $ | 41,397 | | $ | 32,605 | | $ | 84,523 |
Adjusted EBITDA margin(8) | |
| 16.5 | % |
| 16.6 | % |
| 18.8 | % |
| 15.6 | % |
| 17.8 | % |
| 14.6 | % |
| |
| (1) | Reflects the “Restructuring and transaction costs” line item on our consolidated statement of operations, which primarily includes 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, for services related to the acquisition of Cyalume, which is included in related party expense in the Company’s consolidated statements of operations for the year ended December 31, 2022. |
| (2) | Reflects the “Other general income” line item on our consolidated statement of operations and includes a gain from a long-lived asset sale. |
| (3) | Reflects the “Other (income) expense, net” line item on our consolidated statement of operations and primarily includes gains and losses on foreign currency transactions. |
| (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 Adjusted EBITDA / Net Sales for the relevant periods. |
Document and Entity Information |
Aug. 08, 2023 |
|---|---|
| Document and Entity Information [Abstract] | |
| Document Type | 8-K/A |
| Document Period End Date | Aug. 08, 2023 |
| Entity File Number | 001-40698 |
| Entity Registrant Name | CADRE HOLDINGS, INC. |
| Entity Incorporation, State or Country Code | DE |
| Entity Tax Identification Number | 38-3873146 |
| Entity Address State Or Province | FL |
| Entity Address, Address Line One | 13386 International Pkwy |
| Entity Address, City or Town | Jacksonville |
| Entity Address, Postal Zip Code | 32218 |
| City Area Code | 904 |
| Local Phone Number | 741-5400 |
| Title of 12(b) Security | Common Stock, par value $0.0001 |
| Trading Symbol | CDRE |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | true |
| Entity Ex Transition Period | false |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Entity Central Index Key | 0001860543 |
| Amendment Flag | false |