CDRE
$24.59
Cadre Holdings
($.37)
(1.48%)
Earnings Details
1st Quarter March 2022
Thursday, May 12, 2022 4:15:00 PM
Tweet Share Watch
Summary

Cadre Sees Revenue Above Estimates

Cadre Holdings (CDRE) reported a 1st Quarter March 2022 loss of $0.30 per share on revenue of $104.4 million. The consensus earnings estimate was $0.19 per share on revenue of $102.2 million.

The company said it expects 2022 revenue of $444.0 million to $452.0 million. The current consensus revenue estimate is $436.75 million for the year ending December 31, 2022.

Cadre is a global leader in the manufacturing and distribution of safety and survivability products for first responders.

Results
Reported Earnings
($0.30)
Earnings Whisper
-
Consensus Estimate
$0.19
Reported Revenue
$104.4 Mil
Revenue Estimate
$102.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Cadre Holdings Reports First Quarter 2022 Financial Results

Completes Second Accretive Acquisition Since IPO with Agreement to Add Leading Supplier of Chemical Illumination Solutions to U.S. and NATO Military Forces

Raises Guidance to Full Year 2022 Net Sales of $444.0 to $452.0 Million and Adjusted EBITDA of $72.5 to $77.5 Million Based on Continued Execution of Strategic Objectives

JACKSONVILLE, Fla.--(BUSINESS WIRE)--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 months ended March 31, 2022.

First Quarter 2022 Highlights

  • Net sales of $104.4 million for the first quarter
  • Gross profit margin of 38.5% for the first quarter
  • Net loss of $10.2 million, including $23.6 million stock-based compensation expense, or $0.30 per share, for the first quarter
  • Adjusted EBITDA of $14.2 million for the first quarter
  • Adjusted EBITDA margin of 13.6% for the first quarter
  • Declared quarterly cash dividend of $0.08 per share in April 2022
  • Orders backlog increased $3.3 million from year end 2021

“Following a year of record net sales and adjusted EBITDA, we continue to capitalize on attractive long-term tailwinds and recurring demand drivers in our entrenched mission-critical first responder markets,” said Warren Kanders, CEO and Chairman. “During the quarter, we achieved pricing growth that significantly exceeded our target, generated strong adjusted EBITDA conversion, and increased our backlog substantially. In the second half of the year, we expect a more favorable product portfolio mix and based on our success executing strategic objectives focused on accelerating growth we have increased our full year 2022 outlook.”

Mr. Kanders added, “Our resilient operating model continues to drive strong free cash flow generation that is enabling us to capitalize on attractive opportunities to unlock long-term shareholder value. In addition to January’s accretive acquisition of a premiere duty gear brand, which further expanded our international presence, we are excited to acquire the world leader in chemical light solutions for U.S. and NATO military forces. In a short period of time, we have delivered on the strategy we laid out to investors, adding high margin companies with leading market positions and strong recurring revenues and cash flows. Importantly, we maintain a robust acquisition pipeline, complementing our core organic growth initiatives.”

First Quarter 2022 Operating Results

For the quarter ended March 31, 2022, Cadre generated net sales of $104.4 million, as compared to $110.5 million for the quarter ended March 31, 2021. The decline was primarily the result of a large US Federal duty gear shipment in last year’s first quarter, combined with strong commercial demand and higher demand for crowd control products in the comparable period last year.

For the quarter ended March 31, 2022, Cadre generated gross profit of $40.2 million, as compared to $44.0 million for the quarter ended March 31, 2021.

Gross profit margin was 38.5% for the quarter ended March 31, 2022, as compared to 39.8% for the quarter ended March 31, 2021, mainly driven by less favorable portfolio mix, partially offset by price.

Net loss was $10.2 million for the quarter ended March 31, 2022, as compared to net income of $6.9 million for the three months ended March 31, 2021. The decrease resulted primarily from the change in year over year revenue and stock-based compensation expense of $23.6 million.

Cadre generated $14.2 million of Adjusted EBITDA for the quarter ended March 31, 2022, as compared to $20.2 million for the quarter ended March 31, 2021. Adjusted EBITDA margin was 13.6% for the quarter ended March 31, 2022, as compared to 18.3% for the prior year period.

Product segment gross margin was 40.1% for the first quarter compared to 40.7% for the prior year period.

Distribution segment gross margin was 24.6% for the first quarter compared to 25.3% for the prior year period.

Liquidity, Cash Flows and Capital Allocation

  • Cash and cash equivalents decreased by $24.0 million from $33.9 million as of December 31, 2021 to $9.9 million as of March 31, 2022.
  • Total debt decreased by $3.3 million from $159.7 million as of December 31, 2021, to $156.4 million as of March 31, 2022.
  • Net Debt (total debt net of cash and cash equivalents) increased by $20.7 million from $125.8 million as of December 31, 2021, to $146.5 million as of March 31, 2022.
  • Capital expenditures totaled $1.1 million for the three months ended March 31, 2022, compared with $0.8 million for the three months ended March 31, 2021.

Acquisition of Cyalume Technologies

On May 5, 2022, Cadre announced the completion of its accretive acquisition of Cyalume Technologies, a leading manufacturer of proprietary chemical illumination solutions for military, first responder and other commercial applications. The purchase price for the acquisition was $35.0 million, subject to customary adjustments for net working capital, transaction expenses and indebtedness, and was funded through a draw on its existing credit facilities.

Dividend

On April 21, 2022, 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 May 13, 2022, to shareholders of record as of the close of business on the record date of May 2, 2022. The declaration of any future dividend is subject to the discretion of the Company's Board of Directors.

2022 Outlook Update

Cadre increased its full-year guidance and expects to generate net sales in 2022 of between $444.0 million and $452.0 million and adjusted EBITDA in 2022 of between $72.5 and $77.5 million. Cadre expects EBITDA conversion in the range of 92-95% for the full year.

Conference Call

Cadre management will host a conference call on Thursday, May 12, 2022, 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 May 26, 2022. 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.

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, including without limitation, global, social and political economic conditions, spending patterns of government agencies, competitive pressures, the impact of acquisitions and related integration activities, logistical challenges related to disruptions and delays, product liability claims, the success of new product introductions, currency exchange rate fluctuations and the risks of doing business in the markets in which we operate, including foreign countries. More information on potential factors that could affect the Company’s financial results are more fully described from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and 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.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

March 31, 2022

 

December 31, 2021

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

9,877

 

 

$

33,857

 

Accounts receivable, net of allowance for doubtful accounts of $749 and $645, respectively

 

 

52,001

 

 

 

48,344

 

Inventories

 

 

69,401

 

 

 

63,978

 

Prepaid expenses

 

 

7,747

 

 

 

10,353

 

Other current assets

 

 

4,360

 

 

 

3,171

 

Assets held for sale

 

 

271

 

 

 

278

 

Total current assets

 

 

143,657

 

 

 

159,981

 

Property and equipment, net of accumulated depreciation and amortization of $38,631 and $37,171, respectively

 

 

35,729

 

 

 

33,053

 

Deferred tax assets, net

 

 

12,979

 

 

 

7,059

 

Intangible assets, net

 

 

50,158

 

 

 

42,415

 

Goodwill

 

 

72,510

 

 

 

66,262

 

Other assets

 

 

5,965

 

 

 

3,026

 

Total assets

 

$

320,998

 

 

$

311,796

 

 

 

 

 

 

 

 

Liabilities, Mezzanine Equity and Shareholders' Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

27,477

 

 

$

19,328

 

Accrued liabilities

 

 

34,363

 

 

 

40,736

 

Income tax payable

 

 

2,239

 

 

 

1,255

 

Liabilities held for sale

 

 

120

 

 

 

128

 

Current portion of long-term debt

 

 

11,700

 

 

 

13,174

 

Total current liabilities

 

 

75,899

 

 

 

74,621

 

Long-term debt

 

 

144,661

 

 

 

146,516

 

Deferred tax liabilities

 

 

3,799

 

 

 

1,297

 

Other liabilities

 

 

694

 

 

 

722

 

Total liabilities

 

 

225,053

 

 

 

223,156

 

 

 

 

 

 

 

 

Mezzanine equity

 

 

 

 

 

 

Preferred stock ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2022 and December 31, 2021)

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

Common stock ($0.0001 par value, 190,000,000 shares authorized, 34,782,271 shares and 34,383,350 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively)

 

 

3

 

 

 

3

 

Additional paid-in capital

 

 

144,978

 

 

 

127,606

 

Accumulated other comprehensive income (loss)

 

 

931

 

 

 

(1,917

)

Accumulated deficit

 

 

(49,967

)

 

 

(37,052

)

Total shareholders’ equity

 

 

95,945

 

 

 

88,640

 

Total liabilities, mezzanine equity and shareholders' equity

 

$

320,998

 

 

$

311,796

 

 

CADRE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2022

 

2021

Net sales

 

$

104,406

 

 

$

110,536

 

Cost of goods sold

 

 

64,217

 

 

 

66,577

 

Gross profit

 

 

40,189

 

 

 

43,959

 

Operating expenses

 

 

 

 

 

 

Selling, general and administrative

 

 

53,950

 

 

 

28,051

 

Restructuring and transaction costs

 

 

599

 

 

 

321

 

Related party expense

 

 

122

 

 

 

153

 

Total operating expenses

 

 

54,671

 

 

 

28,525

 

Operating (loss) income

 

 

(14,482

)

 

 

15,434

 

Other expense

 

 

 

 

 

 

Interest expense

 

 

(1,490

)

 

 

(5,044

)

Other expense, net

 

 

(205

)

 

 

(44

)

Total other expense, net

 

 

(1,695

)

 

 

(5,088

)

(Loss) income before provision for income taxes

 

 

(16,177

)

 

 

10,346

 

Benefit (provision) for income taxes

 

 

6,012

 

 

 

(3,482

)

Net (loss) income

 

$

(10,165

)

 

$

6,864

 

Net (loss) income per share:

 

 

 

 

 

 

Basic

 

$

(0.30

)

 

$

0.25

 

Diluted

 

$

(0.30

)

 

$

0.25

 

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

 

34,446,318

 

 

 

27,483,350

 

Diluted

 

 

34,446,318

 

 

 

27,483,350

 

 

CADRE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2022

 

2021

Cash Flows From Operating Activities:

 

 

 

 

 

 

Net (loss) income

 

$

(10,165

)

 

$

6,864

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

3,544

 

 

 

3,539

 

Amortization of original issue discount and debt issue costs

 

 

111

 

 

 

677

 

Deferred income taxes

 

 

(6,951

)

 

 

3,319

 

Stock-based compensation

 

 

23,588

 

 

 

 

(Recoveries from) provision for losses on accounts receivable

 

 

45

 

 

 

(91

)

Foreign exchange loss

 

 

253

 

 

 

109

 

Changes in operating assets and liabilities, net of impact of acquisition:

 

 

 

 

 

 

Accounts receivable

 

 

(1,693

)

 

 

(5,626

)

Inventories

 

 

(2,956

)

 

 

(2,496

)

Prepaid expenses and other assets

 

 

3,158

 

 

 

(141

)

Accounts payable and other liabilities

 

 

(18

)

 

 

10,678

 

Net cash provided by operating activities

 

 

8,916

 

 

 

16,832

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(950

)

 

 

(788

)

Business acquisition, net of cash acquired

 

 

(19,787

)

 

 

 

Net cash used in investing activities

 

 

(20,737

)

 

 

(788

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

Proceeds from revolving credit facilities

 

 

 

 

 

88,593

 

Principal payments on revolving credit facilities

 

 

 

 

 

(88,593

)

Principal payments on term loans

 

 

(2,506

)

 

 

(566

)

Principal payments on insurance premium financing

 

 

(1,474

)

 

 

(917

)

Payment of capital leases

 

 

(11

)

 

 

(7

)

Taxes paid in connection with employee stock transactions

 

 

(6,216

)

 

 

 

Dividends distributed

 

 

(2,750

)

 

 

 

Net cash used in financing activities

 

 

(12,957

)

 

 

(1,490

)

Effect of foreign exchange rates on cash and cash equivalents

 

 

798

 

 

 

13

 

Change in cash and cash equivalents

 

 

(23,980

)

 

 

14,567

 

Cash and cash equivalents, beginning of period

 

 

33,857

 

 

 

2,873

 

Cash and cash equivalents, end of period

 

$

9,877

 

 

$

17,440

 

Supplemental Disclosure of Cash Flows Information:

 

 

 

 

 

 

Cash (received) paid for income taxes, net

 

$

(100

)

 

$

15

 

Cash paid for interest

 

$

1,282

 

 

$

4,292

 

Supplemental Disclosure of Non-Cash Investing and Financing Activities:

 

 

 

 

 

 

Accruals and accounts payable for capital expenditures

 

$

119

 

 

$

 

CADRE HOLDINGS, INC.

SEGMENT INFORMATION

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2022

 

 

 

 

 

 

 

 

Reconciling

 

 

 

 

 

Products

 

Distribution

 

Items(1)

 

Total

Net sales

 

$

85,386

 

$

24,096

 

$

(5,076

)

 

$

104,406

Cost of goods sold

 

 

51,120

 

 

18,172

 

 

(5,075

)

 

 

64,217

Gross profit

 

$

34,266

 

$

5,924

 

$

(1

)

 

$

40,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2021

 

 

 

 

 

 

 

 

Reconciling

 

 

 

 

 

Products

 

Distribution

 

Items(1)

 

Total

Net sales

 

$

93,818

 

$

22,660

 

$

(5,942

)

 

$

110,536

Cost of goods sold

 

 

55,594

 

 

16,921

 

 

(5,938

)

 

 

66,577

Gross profit

 

$

38,224

 

$

5,739

 

$

(4

)

 

$

43,959

____________________

(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 Ended March 31,

 

LTM

 

 

 

December 31, 2021

 

2021

 

2022

 

March 31, 2022

 

Net (loss) income

 

$

12,661

 

 

$

6,864

 

 

$

(10,165

)

 

$

(4,368

)

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

13,718

 

 

 

3,539

 

 

 

3,544

 

 

 

13,723

 

 

Interest expense

 

 

16,425

 

 

 

5,044

 

 

 

1,490

 

 

 

12,871

 

 

(Benefit) provision for income taxes

 

 

6,531

 

 

 

3,482

 

 

 

(6,012

)

 

 

(2,963

)

 

EBITDA

 

$

49,335

 

 

$

18,929

 

 

$

(11,143

)

 

$

19,263

 

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and transaction costs(1)

 

 

3,430

 

 

 

321

 

 

 

599

 

 

 

3,708

 

 

Loss on extinguishment of debt(2)

 

 

15,155

 

 

 

 

 

 

 

 

 

15,155

 

 

Other expense, net(3)

 

 

947

 

 

 

44

 

 

 

205

 

 

 

1,108

 

 

Stock-based compensation expense(4)

 

 

355

 

 

 

 

 

 

23,723

 

 

 

24,078

 

 

Stock-based compensation payroll tax expense(5)

 

 

 

 

 

 

 

 

298

 

 

 

298

 

 

LTIP bonus(6)

 

 

2,162

 

 

 

952

 

 

 

384

 

 

 

1,594

 

 

Amortization of inventory step-up(7)

 

 

 

 

 

 

 

 

153

 

 

 

153

 

 

Adjusted EBITDA

 

$

71,384

 

 

$

20,246

 

 

$

14,219

 

 

$

65,357

 

 

Less: Capital expenditures

 

 

(3,029

)

 

 

(788

)

 

 

(1,069

)

 

 

(3,310

)

 

Adjusted EBITDA less capital expenditures

 

$

68,355

 

 

$

19,458

 

 

$

13,150

 

 

$

62,047

 

 

Adjusted EBITDA conversion rate(8)

 

 

96

 

%

 

96

 

%

 

92

 

%

 

95

 

%

Adjusted EBITDA margin(9)

 

 

16.7

 

%

 

18.3

 

%

 

13.6

 

%

 

 

 

____________________

(1)

Reflects the “Restructuring and transaction costs” line item on our consolidated statements of operations, which primarily includes transaction costs composed of legal and consulting fees.

(2)

Reflects losses incurred in connection with the August 2021 debt refinance.

(3)

Reflects the “Other expense, net” line item on our consolidated statements of operations. For the three months ended March 31, 2022 and 2021, other expense, net primarily includes 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 part of the Radar acquisition.

(8)

Reflects (Adjusted EBITDA less capital expenditures) / Adjusted EBITDA.

(9)

Reflects Adjusted EBITDA / Net Sales for the relevant periods.

 

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

Source: Cadre Holdings, Inc.