Cadre Holdings Reports First Quarter 2024 Financial Results
Achieves Record Quarterly
Reaffirms 2024 Full-Year Guidance
-
Net sales of
$137.9 million for the first quarter - Gross profit margin of 41.8% for the first quarter
-
Net income of
$6.9 million , or$0.18 per diluted share, for the first quarter -
Adjusted EBITDA of
$24.5 million for the first quarter - Adjusted EBITDA margin of 17.8% for the first quarter
-
Declared quarterly cash dividend of
$0.0875 per share inApril 2024 .
“Building on a year of record net sales and Adjusted EBITDA, we continued to successfully increase net sales and gross margin sequentially and year over year,” said
“During the first quarter, we completed the acquisitions of ICOR Technology and Alpha Safety, two leading high-margin safety businesses, representing important progress expanding and diversifying our platform. We believe there are additional attractive opportunities in our M&A funnel to accelerate growth. We will continue to focus on our current verticals, which include the law enforcement, military and nuclear markets in the near future and believe there are ample targets to drive continued growth in the business. Patience and discipline have always been hallmarks of our approach, and we remain committed to evaluating M&A consistent with our highly selective key criteria focused on companies with strong margins, leading and defensible market positions, along with recurring revenues and cash flows.”
First Quarter 2024 Operating Results
For the quarter ended
For the quarter ended
Gross profit margin was 41.8% for the quarter ended
Net income was
Cadre generated
Product segment gross profit margin was 43.0% for the first quarter, compared to 43.6% for the prior year period.
Distribution segment gross profit margin was 23.5% for the first quarter, compared to 24.2% for the prior year period.
Liquidity, Cash Flows and Capital Allocation
-
Cash and cash equivalents decreased by
$0.6 million from$87.7 million as ofDecember 31, 2023 to$87.1 million as ofMarch 31, 2024 . -
Total debt increased by
$75.7 million from$140.1 million as ofDecember 31, 2023 to$215.8 million as ofMarch 31, 2024 . -
Net debt (total debt net of cash and cash equivalents) increased by
$76.3 million from$52.4 million as ofDecember 31, 2023 to$128.8 million as ofMarch 31, 2024 . -
Capital expenditures totaled
$1.3 million for the three months endedMarch 31, 2024 , compared with$0.8 million for the three months endedMarch 31, 2023 .
Dividend
On
Acquisition of ICOR Technology
On
Acquisition of Alpha Safety
On
2024 Outlook
For the full year 2024, Cadre expects to generate net sales in the range of
Conference Call
Management will host a conference call on
A replay of the call will be available through
About Cadre
Headquartered in
Use of Non-GAAP Measures
The Company reports its financial results in accordance with
Forward-Looking Statements
Please note that in this press release we may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this press release, include, but are not limited to, those risks and uncertainties more fully described from time to time in the Company's public reports filed with the
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(Unaudited) |
||||||||
(In thousands, except share and per share amounts) |
||||||||
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
87,052 |
|
|
$ |
87,691 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|
|
68,107 |
|
|
|
58,360 |
|
Inventories |
|
|
95,759 |
|
|
|
80,976 |
|
Prepaid expenses |
|
|
12,365 |
|
|
|
11,930 |
|
Other current assets |
|
|
6,045 |
|
|
|
6,886 |
|
Total current assets |
|
|
269,328 |
|
|
|
245,843 |
|
Property and equipment, net of accumulated depreciation and amortization of |
|
|
46,709 |
|
|
|
44,647 |
|
Operating lease assets |
|
|
9,987 |
|
|
|
6,554 |
|
Deferred tax assets, net |
|
|
3,969 |
|
|
|
4,004 |
|
Intangible assets, net |
|
|
115,011 |
|
|
|
43,472 |
|
|
|
|
148,912 |
|
|
|
81,667 |
|
Other assets |
|
|
5,526 |
|
|
|
4,992 |
|
Total assets |
|
$ |
599,442 |
|
|
$ |
431,179 |
|
|
|
|
|
|
|
|
||
Liabilities, Mezzanine Equity and Shareholders' Equity |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
30,282 |
|
|
$ |
28,418 |
|
Accrued liabilities |
|
|
47,467 |
|
|
|
44,524 |
|
Income tax payable |
|
|
2,573 |
|
|
|
9,944 |
|
Current portion of long-term debt |
|
|
15,234 |
|
|
|
12,320 |
|
Total current liabilities |
|
|
95,556 |
|
|
|
95,206 |
|
Long-term debt |
|
|
200,601 |
|
|
|
127,812 |
|
Long-term operating lease liabilities |
|
|
5,822 |
|
|
|
3,186 |
|
Deferred tax liabilities |
|
|
21,554 |
|
|
|
4,843 |
|
Other liabilities |
|
|
5,208 |
|
|
|
2,970 |
|
Total liabilities |
|
|
328,741 |
|
|
|
234,017 |
|
|
|
|
|
|
|
|
||
Mezzanine equity |
|
|
|
|
|
|
||
Preferred stock ( |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
||
Shareholders' equity |
|
|
|
|
|
|
||
Common stock ( |
|
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
|
282,176 |
|
|
|
212,630 |
|
Accumulated other comprehensive income |
|
|
988 |
|
|
|
634 |
|
Accumulated deficit |
|
|
(12,467 |
) |
|
|
(16,106 |
) |
Total shareholders’ equity |
|
|
270,701 |
|
|
|
197,162 |
|
Total liabilities, mezzanine equity and shareholders' equity |
|
$ |
599,442 |
|
|
$ |
431,179 |
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(Unaudited) |
||||||||
(In thousands, except share and per share amounts) |
||||||||
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
2024 |
|
2023 |
||||
Net sales |
|
$ |
137,860 |
|
|
$ |
111,748 |
|
Cost of goods sold |
|
|
80,232 |
|
|
|
65,130 |
|
Gross profit |
|
|
57,628 |
|
|
|
46,618 |
|
Operating expenses |
|
|
|
|
|
|
||
Selling, general and administrative |
|
|
40,719 |
|
|
|
35,250 |
|
Restructuring and transaction costs |
|
|
3,087 |
|
|
|
— |
|
Related party expense |
|
|
1,843 |
|
|
|
148 |
|
Total operating expenses |
|
|
45,649 |
|
|
|
35,398 |
|
Operating income |
|
|
11,979 |
|
|
|
11,220 |
|
Other expense |
|
|
|
|
|
|
||
Interest expense |
|
|
(1,637 |
) |
|
|
(1,641 |
) |
Other (expense) income, net |
|
|
(1,444 |
) |
|
|
364 |
|
Total other expense, net |
|
|
(3,081 |
) |
|
|
(1,277 |
) |
Income before provision for income taxes |
|
|
8,898 |
|
|
|
9,943 |
|
Provision for income taxes |
|
|
(1,970 |
) |
|
|
(2,941 |
) |
Net income |
|
$ |
6,928 |
|
|
$ |
7,002 |
|
|
|
|
|
|
|
|
||
Net income per share: |
|
|
|
|
|
|
||
Basic |
|
$ |
0.18 |
|
|
$ |
0.19 |
|
Diluted |
|
$ |
0.18 |
|
|
$ |
0.19 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
||
Basic |
|
|
37,946,576 |
|
|
|
37,373,529 |
|
Diluted |
|
|
38,554,185 |
|
|
|
37,629,498 |
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) |
||||||||
(In thousands) |
||||||||
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
2024 |
|
2023 |
||||
Cash Flows From Operating Activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
6,928 |
|
|
$ |
7,002 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
3,942 |
|
|
|
4,261 |
|
Amortization of original issue discount and debt issue costs |
|
|
149 |
|
|
|
64 |
|
Amortization of inventory step-up |
|
|
769 |
|
|
|
— |
|
Deferred income taxes |
|
|
1,546 |
|
|
|
183 |
|
Stock-based compensation |
|
|
2,067 |
|
|
|
2,747 |
|
Remeasurement of contingent consideration |
|
|
451 |
|
|
|
— |
|
Provision for losses on accounts receivable |
|
|
480 |
|
|
|
40 |
|
Foreign exchange loss (gain) |
|
|
934 |
|
|
|
(213 |
) |
Other loss (gain) |
|
|
52 |
|
|
|
(103 |
) |
Changes in operating assets and liabilities, net of impact of acquisitions: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
2,696 |
|
|
|
9,075 |
|
Inventories |
|
|
1,818 |
|
|
|
(5,830 |
) |
Prepaid expenses and other assets |
|
|
2,028 |
|
|
|
(556 |
) |
Accounts payable and other liabilities |
|
|
(21,723 |
) |
|
|
(3,948 |
) |
Net cash provided by operating activities |
|
|
2,137 |
|
|
|
12,722 |
|
Cash Flows From Investing Activities: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
|
(1,343 |
) |
|
|
(781 |
) |
Proceeds from disposition of property and equipment |
|
|
— |
|
|
|
201 |
|
Business acquisitions, net of cash acquired |
|
|
(141,293 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(142,636 |
) |
|
|
(580 |
) |
Cash Flows From Financing Activities: |
|
|
|
|
|
|
||
Proceeds from revolving credit facilities |
|
|
5,500 |
|
|
|
— |
|
Principal payments on revolving credit facilities |
|
|
(5,500 |
) |
|
|
— |
|
Proceeds from term loans |
|
|
80,000 |
|
|
|
— |
|
Principal payments on term loans |
|
|
(2,500 |
) |
|
|
(2,500 |
) |
Principal payments on insurance premium financing |
|
|
(1,083 |
) |
|
|
(1,092 |
) |
Payments for debt issuance costs |
|
|
(844 |
) |
|
|
— |
|
Taxes paid in connection with employee stock transactions |
|
|
(5,311 |
) |
|
|
(2,725 |
) |
Proceeds from secondary offering, net of underwriter discounts |
|
|
73,535 |
|
|
|
— |
|
Deferred offering costs |
|
|
(722 |
) |
|
|
— |
|
Dividends distributed |
|
|
(3,289 |
) |
|
|
(2,986 |
) |
Net cash provided by (used in) financing activities |
|
|
139,786 |
|
|
|
(9,303 |
) |
Effect of foreign exchange rates on cash and cash equivalents |
|
|
74 |
|
|
|
169 |
|
Change in cash and cash equivalents |
|
|
(639 |
) |
|
|
3,008 |
|
Cash and cash equivalents, beginning of period |
|
|
87,691 |
|
|
|
45,286 |
|
Cash and cash equivalents, end of period |
|
$ |
87,052 |
|
|
$ |
48,294 |
|
Supplemental Disclosure of Cash Flows Information: |
|
|
|
|
|
|
||
Cash paid for income taxes, net |
|
$ |
9,369 |
|
|
$ |
3,141 |
|
Cash paid for interest |
|
$ |
2,498 |
|
|
$ |
2,359 |
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities: |
|
|
|
|
|
|
||
Accruals and accounts payable for capital expenditures |
|
$ |
210 |
|
|
$ |
238 |
|
|
|||||||||||||
SEGMENT INFORMATION |
|||||||||||||
(Unaudited) |
|||||||||||||
(In thousands) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|||||||||||
|
|
|
|
|
|
|
|
Reconciling |
|
|
|
||
|
|
Product |
|
Distribution |
|
Items(1) |
|
Total |
|||||
Net sales |
|
$ |
118,785 |
|
$ |
28,191 |
|
$ |
(9,116 |
) |
|
$ |
137,860 |
Cost of goods sold |
|
|
67,764 |
|
|
21,557 |
|
|
(9,089 |
) |
|
|
80,232 |
Gross profit |
|
$ |
51,021 |
|
$ |
6,634 |
|
$ |
(27 |
) |
|
$ |
57,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|||||||||||
|
|
|
|
|
|
|
|
Reconciling |
|
|
|
||
|
|
Product |
|
Distribution |
|
Items(1) |
|
Total |
|||||
Net sales |
|
$ |
93,194 |
|
$ |
24,660 |
|
$ |
(6,106 |
) |
|
$ |
111,748 |
Cost of goods sold |
|
|
52,608 |
|
|
18,697 |
|
|
(6,175 |
) |
|
|
65,130 |
Gross profit |
|
$ |
40,586 |
|
$ |
5,963 |
|
$ |
69 |
|
|
$ |
46,618 |
______________________ | ||
(1) |
Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. |
|
|||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In thousands) |
|||||||||||||||
|
|
Year ended |
|
Three Months Ended |
|
Last Twelve |
|||||||||
|
|
|
|
|
|
Months |
|||||||||
|
|
2023 |
|
2024 |
|
2023 |
|
|
|||||||
Net income |
|
$ |
38,641 |
|
|
$ |
6,928 |
|
$ |
7,002 |
|
|
$ |
38,567 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
15,737 |
|
|
|
3,942 |
|
|
4,261 |
|
|
|
15,418 |
|
Interest expense |
|
|
4,531 |
|
|
|
1,637 |
|
|
1,641 |
|
|
|
4,527 |
|
Provision for income taxes |
|
|
14,283 |
|
|
|
1,970 |
|
|
2,941 |
|
|
|
13,312 |
|
EBITDA |
|
$ |
73,192 |
|
|
$ |
14,477 |
|
$ |
15,845 |
|
|
$ |
71,824 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Restructuring and transaction costs(1) |
|
|
3,192 |
|
|
|
4,837 |
|
|
— |
|
|
|
8,029 |
|
Other general income(2) |
|
|
(92 |
) |
|
|
— |
|
|
— |
|
|
|
(92 |
) |
Other (income) expense, net(3) |
|
|
(936 |
) |
|
|
1,444 |
|
|
(364 |
) |
|
|
872 |
|
Stock-based compensation expense(4) |
|
|
9,368 |
|
|
|
2,067 |
|
|
2,747 |
|
|
|
8,688 |
|
Stock-based compensation payroll tax expense(5) |
|
|
234 |
|
|
|
393 |
|
|
220 |
|
|
|
407 |
|
LTIP bonus(6) |
|
|
860 |
|
|
|
50 |
|
|
144 |
|
|
|
766 |
|
Amortization of inventory step-up(7) |
|
|
— |
|
|
|
769 |
|
|
— |
|
|
|
769 |
|
Contingent consideration expense(8) |
|
|
— |
|
|
|
451 |
|
|
— |
|
|
|
451 |
|
Adjusted EBITDA |
|
$ |
85,818 |
|
|
$ |
24,488 |
|
$ |
18,592 |
|
|
$ |
91,714 |
|
Adjusted EBITDA margin(9) |
|
|
16.5 |
|
% |
|
17.8 |
% |
|
16.6 |
|
% |
|
|
______________________ | ||
(1) |
Reflects the “Restructuring and transaction costs” line item on our consolidated statement of operations and comprehensive income, which primarily includes transaction costs composed of legal and consulting fees. In addition, this line item reflects a |
|
(2) |
Reflects gains from long-lived asset sales. |
|
(3) |
Reflects the “Other income (expense), net” line item on our consolidated statements of operations and primarily includes gains and losses due to fluctuations in foreign currency exchange rates. |
|
(4) |
Reflects compensation expense related to equity and liability classified stock-based compensation plans. |
|
(5) |
Reflects payroll taxes associated with vested stock-based compensation awards. |
|
(6) |
Reflects the cost of a cash-based long-term incentive plan awarded to employees that vests over three years. |
|
(7) |
Reflects amortization expense related to the step-up inventory adjustment recorded as a result of our recent acquisitions. |
|
(8) |
Reflects contingent consideration expense related to the acquisition of ICOR. |
|
(9) |
Reflects Adjusted EBITDA / Net sales for the relevant periods. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507465810/en/
203-550-7148
gray.hudkins@cadre-holdings.com
Investor Relations:
212-477-8438 / 212-227-7098
lberman@igbir.com / mberkowitz@igbir.com
Media Contact:
212-355-4449
Source: