Full Press Release Details
Cadre Holdings Reports Third Quarter 2021 Financial
Expanded Gross Profit Margin and Adjusted EBITDA
Initial Public Offering, Raising Gross Proceeds of $89.7 million; Announced Quarterly Cash Dividend
Fla., December 2, 2021 - 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 nine months ended
Third Quarter and Nine Month 2021 Highlights
"Our third quarter and year to date 2021 financial results highlight
Cadre's ongoing success capitalizing on our leading positions in large and growing markets with recurring demand characteristics,
as well our ability to generate strong operating cash flow," said Warren Kanders, CEO and Chairman. "We continue to build
on Cadre's impressive track record of margin expansion and have improved gross profit and Adjusted EBITDA margins in the year to
date period by 250 and 300 basis points, respectively."
Mr. Kanders continued, "With the recent completion of our successful
IPO, we have achieved an important milestone in our company's storied history that dates back over 55 years. We believe that we
are in a strong position to take advantage of the attractive tailwinds driving demand for Cadre's mission critical first responder
products, as we focus on seeking to accelerate growth organically, as well as through our robust acquisition pipeline. As part of our
disciplined capital allocation approach, we are also pleased to have implemented a regular quarterly dividend policy."
Third Quarter and Nine Month 2021 Operating Results
For the quarter ended September 30, 2021, Cadre generated net sales
of $98.7 million, as compared to $105.7 million for the quarter ended September 30, 2020.
For the nine months ended September 30, 2021, Cadre generated net sales
of $323.8 million, as compared to $297.0 million for the nine months ended September 30, 2020.
For the quarter ended September 30, 2021, Cadre generated gross profit
of $39.3 million, as compared to $40.0 million for the prior year period. For the nine months ended September 30, 2021, Cadre generated
gross profit of $131.5 million, as compared to $113.2 million for the prior year period.
Gross profit margin was 39.8% for the quarter ended September 30, 2021,
as compared to 37.8% for the prior year period, mainly driven by favorable pricing and product mix.
Gross profit margin was 40.6% for the nine months ended September 30,
2021, as compared to 38.1% for the prior year period, mainly driven by favorable pricing and product mix.
loss was $5.3 million for the quarter ended September 30, 2021, as compared to net income of $6.4 million for the three months ended September
30, 2020, primarily as a result of a loss on extinguishment of debt of $15.2 million in connection with the execution of a new
credit agreement during the quarter ended September 30, 2021.
income was $8.4 million for the nine months ended September 30, 2021, as compared to $22.7 million for the nine months ended September
30, 2020, primarily as a result of a loss on extinguishment of debt, an increase in provision for income taxes due to the release
of a valuation allowance on a portion of the Company's deferred tax assets in December 2020 and non-recurring transactions recognized
in the period ended September 30, 2020, offset by improvements in gross profit due to increased sales, favorable pricing and product mix.
Cadre generated $15.4 million of Adjusted EBITDA for the quarter ended
September 30, 2021, as compared to $15.0 million for the quarter ended September 30, 2020. Adjusted EBITDA margin was 15.6% for the quarter
ended September 30, 2021, as compared to 14.2% for the prior year period,
generated $56.1 million of Adjusted EBITDA for the nine months ended September 30, 2021, as compared to $42.5 million for the prior year
period. Adjusted EBITDA margin was 17.3% for the nine months ended September 30, 2021, as compared to 14.3% for the prior year
Product segment gross margin was 40.5% for the third quarter and 41.6%
for the nine months ended September 30, 2021.
Distribution segment gross margin was 24.6% for the third quarter and
25.2% for the nine months ended September 30, 2021.
Liquidity, Cash Flows and Capital Allocation
Cadre's cash and cash equivalents increased by $12.4 million
from $2.9 million as of December 31, 2020, to $15.3 million as of September 30, 2021. Capital expenditures totaled $0.7 million for the
third quarter and $2.2 million for the nine months ended September 30, 2021, compared with $1.3 million for the third quarter and $3.9
million for the nine months ended September 30, 2020. Net debt increased by $13.1 million from $212.8 million as of December 31, 2020,
to $225.9 million as of September 30, 2021.
During the quarter, the Company refinanced its existing credit facilities
and closed on a new credit agreement that included a term loan, under which Cadre borrowed $200 million, and may borrow up to $100 million
under a revolving credit facility. Both loans mature on July 23, 2026.
On November 3, 2021, the Company completed the closing of its initial
public offering ("IPO") of 6.9 million shares, including the full exercise of the underwriters' option, at a price to
the public of $13.00 per share, for net proceeds of approximately $78.3 million.
On November 9, 2021, the Company utilized proceeds received in connection
with the IPO and repaid $38.9 million and $20.5 million, respectively, of borrowings outstanding under its current term loan and revolving
On November 11, 2021, the Company announced that its Board of Directors
approved the initiation of a quarterly cash dividend policy of $0.08 per share of the Company's common stock or $0.32 per share
on an annualized basis. Cadre's first dividend payment will be made on December 7, 2021, to shareholders of record as of the close of
business on November 22, 2021. The declaration of any future dividend is subject to the discretion of the Company's Board of Directors.
Cadre management will host a conference call on Thursday, December
2, 2021, at 5:00 PM EST to discuss the latest corporate developments and financial results. The dial-in number for callers in the US
is (844)-200-6205 and the dial-in number for international callers is (929)-526-1599. The access code for all callers is 996677. 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 December 16, 2021. To
access the replay, please dial 866 813 9403 in the U.S. or +44 204 525 0658 if outside the U.S., and then enter the access code 515899.
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 by domestic and international first responders in state and local law enforcement, fire and rescue, explosive ordnance disposal,
emergency medical technicians, as well as numerous federal agencies and foreign government agencies in 104 countries. 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"). This press release contains the non-GAAP measures: (i) earnings before interest,
taxes, other income or expense, depreciation and amortization ("EBITDA"), (ii) adjusted EBITDA, (iii) adjusted EBITDA margin,
and (iv) LTM adjusted EBITDA . The Company believes that the presentation of certain non-GAAP measures, i.e.: (i) EBITDA, (ii) adjusted
EBITDA, (iii) adjusted EBITDA margin, and (iv) LTM adjusted EBITDA, provide 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, including without limitation
global economic conditions, spending patterns of government agencies, competitive pressures, the impact of acquisitions and related integration
activities, product liability claims, the success of new product introductions, currency exchange rate fluctuations and the risks of doing
business in 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 in our prospectus filed with the Securities and Exchange Commission pursuant to Rule
424(b) under the Securities Act of 1933, as amended, on November 5, 2021, and will be included 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