CORRECTING and REPLACING Cadre Holdings Reports Second Quarter 2023 Financial Results
Achieved Revenue, Net Income, Gross Margin and Adjusted EBITDA Growth
Achieves Record Quarterly Adjusted EBITDA of
Expects Full-Year 2023 Net Sales of
The updated release reads:
CADRE HOLDINGS REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS
Achieved Revenue, Net Income, Gross Margin and Adjusted EBITDA Growth
Achieves Record Quarterly Adjusted EBITDA of
Expects Full-Year 2023 Net Sales of
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.
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Net sales of
$121.1 million $232.8 million -
Gross profit margin of
41.9% for the second quarter; gross profit margin of41.8% for the six months ended June 30, 2023 -
Net income of
$11.0 million $0.29 $18.0 million $0.48 -
Adjusted EBITDA of
$22.8 million $41.4 million -
Adjusted EBITDA margin of
18.8% for the second quarter; Adjusted EBITDA margin of17.8% for the six months ended June 30, 2023 -
Declared quarterly cash dividend of
$0.08
“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
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
For the six months ended June 30, 2023, Cadre generated net sales of
For the quarter ended June 30, 2023, 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
$10.5 million $45.3 million $55.8 million -
Total debt decreased by
$7.0 million $149.7 million $142.7 million -
Net Debt (total debt net of cash and cash equivalents) decreased by
$17.4 million $104.4 million $87.0 million -
Capital expenditures totaled
$1.5 million $2.5 million $1.4 million $2.5 million
Dividend
On July 25, 2023, the Company announced that its Board of Directors declared a quarterly cash dividend of
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
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
About Cadre
Headquartered in
Use of Non-GAAP Measures
The Company reports its financial results in accordance with
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.
CADRE HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share amounts) |
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June 30, 2023 |
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December 31, 2022 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
55,782 |
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$ |
45,286 |
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Accounts receivable, net of allowance for doubtful accounts of |
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57,361 |
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64,557 |
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Inventories |
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82,777 |
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70,273 |
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Prepaid expenses |
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10,009 |
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10,091 |
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Other current assets |
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6,406 |
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6,811 |
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Total current assets |
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212,335 |
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197,018 |
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Property and equipment, net of accumulated depreciation and amortization of |
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44,531 |
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45,285 |
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Operating lease assets |
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6,657 |
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8,489 |
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Deferred tax assets, net |
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2,351 |
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2,255 |
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Intangible assets, net |
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46,919 |
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50,695 |
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Goodwill |
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81,560 |
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81,576 |
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Other assets |
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5,566 |
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6,634 |
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Total assets |
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$ |
399,919 |
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$ |
391,952 |
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Liabilities, Mezzanine Equity and Shareholders' Equity |
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Current liabilities |
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Accounts payable |
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$ |
29,640 |
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$ |
23,406 |
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Accrued liabilities |
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34,480 |
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38,720 |
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Income tax payable |
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|
4,279 |
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|
4,584 |
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Liabilities held for sale |
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— |
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— |
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Current portion of long-term debt |
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10,022 |
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12,211 |
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Total current liabilities |
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78,421 |
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78,921 |
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Long-term debt |
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132,712 |
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137,476 |
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Long-term operating lease liabilities |
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3,211 |
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4,965 |
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Deferred tax liabilities |
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3,759 |
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3,508 |
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Other liabilities |
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1,314 |
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1,192 |
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Total liabilities |
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219,417 |
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226,062 |
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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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Common stock ( |
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4 |
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4 |
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Additional paid-in capital |
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208,492 |
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206,540 |
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Accumulated other comprehensive income |
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2,746 |
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2,087 |
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Accumulated deficit |
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(30,740 |
) |
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(42,741 |
) |
Total shareholders’ equity |
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180,502 |
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165,890 |
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Total liabilities, mezzanine equity and shareholders' equity |
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$ |
399,919 |
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$ |
391,952 |
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CADRE HOLDINGS, INC. 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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2023 |
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2022 |
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2023 |
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2022 |
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Net sales |
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$ |
121,087 |
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$ |
118,232 |
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$ |
232,835 |
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$ |
222,638 |
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Cost of goods sold |
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70,340 |
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75,011 |
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135,470 |
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139,228 |
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Gross profit |
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50,747 |
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43,221 |
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97,365 |
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83,410 |
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Operating expenses |
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Selling, general and administrative |
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34,051 |
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32,749 |
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69,301 |
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86,699 |
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Restructuring and transaction costs |
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693 |
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1,203 |
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693 |
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1,802 |
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Related party expense |
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115 |
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1,112 |
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263 |
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1,234 |
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Total operating expenses |
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34,859 |
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35,064 |
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70,257 |
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89,735 |
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Operating income (loss) |
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15,888 |
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8,157 |
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27,108 |
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(6,325 |
) |
Other expense |
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Interest expense |
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(1,013 |
) |
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(1,439 |
) |
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(2,654 |
) |
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(2,929 |
) |
Other income (expense), net |
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346 |
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(756 |
) |
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710 |
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(961 |
) |
Total other expense, net |
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(667 |
) |
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(2,195 |
) |
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(1,944 |
) |
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(3,890 |
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Income (loss) before provision for income taxes |
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15,221 |
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5,962 |
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25,164 |
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(10,215 |
) |
(Provision) benefit for income taxes |
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(4,229 |
) |
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(1,517 |
) |
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(7,170 |
) |
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4,495 |
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Net income (loss) |
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$ |
10,992 |
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$ |
4,445 |
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$ |
17,994 |
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$ |
(5,720 |
) |
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Net income (loss) per share: |
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Basic |
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$ |
0.29 |
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$ |
0.13 |
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$ |
0.48 |
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$ |
(0.16 |
) |
Diluted |
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$ |
0.29 |
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$ |
0.12 |
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$ |
0.48 |
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$ |
(0.16 |
) |
Weighted average shares outstanding: |
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Basic |
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37,586,031 |
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35,320,314 |
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37,480,367 |
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34,888,703 |
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Diluted |
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37,850,708 |
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35,688,620 |
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37,758,998 |
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34,888,703 |
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CADRE HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) |
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Six Months Ended June 30, |
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2023 |
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2022 |
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Cash Flows From Operating Activities: |
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Net income (loss) |
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$ |
17,994 |
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$ |
(5,720 |
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Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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Depreciation and amortization |
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8,220 |
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7,380 |
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Amortization of original issue discount and debt issue costs |
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|
374 |
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367 |
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Amortization of inventory step-up |
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— |
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|
1,344 |
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Deferred income taxes |
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14 |
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(4,594 |
) |
Stock-based compensation |
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|
4,852 |
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26,327 |
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Gain on sale of fixed assets |
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(108 |
) |
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— |
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(Recoveries from) provision for losses on accounts receivable |
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(21 |
) |
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240 |
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Foreign exchange (gain) loss |
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(776 |
) |
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|
1,107 |
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Other |
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(325 |
) |
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— |
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Changes in operating assets and liabilities, net of impact of acquisitions: |
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Accounts receivable |
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7,605 |
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(3,243 |
) |
Inventories |
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(11,986 |
) |
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(1,461 |
) |
Prepaid expenses and other assets |
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|
3,397 |
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|
3,616 |
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Accounts payable and other liabilities |
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(971 |
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(345 |
) |
Net cash provided by operating activities |
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|
28,269 |
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|
25,018 |
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Cash Flows From Investing Activities: |
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Purchase of property and equipment |
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(2,404 |
) |
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(2,473 |
) |
Proceeds from disposition of property and equipment |
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206 |
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— |
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Business acquisitions, net of cash acquired |
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— |
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(55,039 |
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Net cash used in investing activities |
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(2,198 |
) |
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(57,512 |
) |
Cash Flows From Financing Activities: |
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Proceeds from revolving credit facilities |
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— |
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48,000 |
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Principal payments on revolving credit facilities |
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— |
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(48,000 |
) |
Principal payments on term loans |
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(5,000 |
) |
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(5,009 |
) |
Principal payments on insurance premium financing |
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(2,189 |
) |
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(2,853 |
) |
Payment of capital leases |
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— |
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(22 |
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Taxes paid in connection with employee stock transactions |
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(2,725 |
) |
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|
(6,216 |
) |
Proceeds from secondary offering, net of underwriter discounts |
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— |
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|
49,703 |
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Deferred offering costs |
|
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— |
|
|
|
(2,715 |
) |
Dividends distributed |
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|
(5,993 |
) |
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|
(5,533 |
) |
Net cash (used in) provided by financing activities |
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|
(15,907 |
) |
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|
27,355 |
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Effect of foreign exchange rates on cash and cash equivalents |
|
|
332 |
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|
|
144 |
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Change in cash and cash equivalents |
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|
10,496 |
|
|
|
(4,995 |
) |
Cash and cash equivalents, beginning of period |
|
|
45,286 |
|
|
|
33,857 |
|
Cash and cash equivalents, end of period |
|
$ |
55,782 |
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$ |
28,862 |
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Supplemental Disclosure of Cash Flows Information: |
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Cash paid for income taxes, net |
|
$ |
7,288 |
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$ |
241 |
|
Cash paid for interest |
|
$ |
4,859 |
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$ |
2,330 |
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Supplemental Disclosure of Non-Cash Investing and Financing Activities: |
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Accruals and accounts payable for capital expenditures |
|
$ |
129 |
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$ |
17 |
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CADRE HOLDINGS, INC. SEGMENT INFORMATION (Unaudited) (In thousands) |
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Three Months Ended June 30, 2023 |
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Reconciling |
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Product |
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Distribution |
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Items(1) |
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Total |
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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 |
|
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Three Months Ended June 30, 2022 |
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Reconciling |
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Product |
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Distribution |
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Items(1) |
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Total |
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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 |
|
|
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Six Months Ended June 30, 2023 |
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Reconciling |
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Product |
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Distribution |
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Items(1) |
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Total |
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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 |
|
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Six Months Ended June 30, 2022 |
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Reconciling |
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Product |
|
Distribution |
|
Items(1) |
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Total |
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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. |
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CADRE HOLDINGS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (In thousands) |
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Year ended |
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Three Months |
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Three Months Ended |
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Six Months Ended |
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Last Twelve |
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December 31, |
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Ended March 31, |
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June 30, |
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June 30, |
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Months |
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|
2022 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
June 30, 2023 |
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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 |
(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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230808946301/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
lberman@igbir.com / mberkowitz@igbir.com
Media Contact:
Jonathan Keehner / Andrew Siegel
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
Source: Cadre Holdings, Inc.
