Cadre Holdings Reports Second Quarter 2024 Financial Results
Grew Quarterly
Increased Quarterly Adjusted EBITDA of
-
Net sales of
$144.3 million for the second quarter; net sales of$282.2 million for the six months endedJune 30, 2024 . -
Gross profit margin of 40.6% for the second quarter; gross profit margin of 41.2% for the six months ended
June 30, 2024 . -
Net income of
$12.6 million , or$0.31 per diluted share, for the second quarter; net income of$19.5 million , or$0.49 per diluted share, for the six months endedJune 30, 2024 . -
Adjusted EBITDA of
$28.3 million for the second quarter; Adjusted EBITDA of$52.8 million for the six months endedJune 30, 2024 . -
Adjusted EBITDA margin of 19.6% for the second quarter; Adjusted EBITDA margin of 18.7% for the six months ended
June 30, 2024 . -
Declared quarterly cash dividend of
$0.0875 per share inJuly 2024 .
“Cadre delivered strong second quarter results, driven by outstanding execution in line with our strategic objectives, as well as significant demand for our mission-critical safety equipment,” said
Second Quarter and Six-Month 2024 Operating Results
For the quarter ended
For the six months ended
For the quarter ended
Gross profit margin was 40.6% for the quarter ended
Net income was
Net income was
Cadre generated
Cadre generated
Product segment gross margin was 41.1% and 42.0% for the second quarter and first half of 2024, respectively, compared to 43.7% and 43.6% for the prior year periods.
Distribution segment gross margin was 22.9% and 23.2% for the second quarter and first half of 2024, respectively, compared to 23.1% and 23.6% for the prior year periods.
Liquidity, Cash Flows and Capital Allocation
-
Cash and cash equivalents increased by
$18.2 million from$87.7 million as ofDecember 31, 2023 to$105.9 million as ofJune 30, 2024 . -
Total debt increased by
$71.3 million from$140.1 million as ofDecember 31, 2023 to$211.4 million as ofJune 30, 2024 . -
Net debt (total debt net of cash and cash equivalents) increased by
$53.0 million from$52.4 million as ofDecember 31, 2023 to$105.5 million as ofJune 30, 2024 . -
Capital expenditures totaled
$2.1 million for the second quarter and$3.4 million for the six months endedJune 30, 2024 , compared with$1.5 million for the second quarter and$2.5 million for the six months endedJune 30, 2023 .
Dividend
On
2024 Outlook
As disclosed in our 8-K filed on
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, potential legal, reputational, operational and financial effects on the Company resulting from the cybersecurity incident that the Company reported in
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share amounts) |
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Assets |
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|
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|
|
|
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Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
105,903 |
|
|
$ |
87,691 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|
|
72,685 |
|
|
|
58,360 |
|
Inventories |
|
|
95,637 |
|
|
|
80,976 |
|
Prepaid expenses |
|
|
9,751 |
|
|
|
11,930 |
|
Other current assets |
|
|
11,014 |
|
|
|
6,886 |
|
Total current assets |
|
|
294,990 |
|
|
|
245,843 |
|
Property and equipment, net of accumulated depreciation and amortization of |
|
|
46,718 |
|
|
|
44,647 |
|
Operating lease assets |
|
|
9,624 |
|
|
|
6,554 |
|
Deferred tax assets, net |
|
|
3,835 |
|
|
|
4,004 |
|
Intangible assets, net |
|
|
112,229 |
|
|
|
43,472 |
|
|
|
|
148,141 |
|
|
|
81,667 |
|
Other assets |
|
|
5,095 |
|
|
|
4,992 |
|
Total assets |
|
$ |
620,632 |
|
|
$ |
431,179 |
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Liabilities, Mezzanine Equity and Shareholders' Equity |
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Current liabilities |
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Accounts payable |
|
$ |
31,489 |
|
|
$ |
28,418 |
|
Accrued liabilities |
|
|
46,645 |
|
|
|
44,524 |
|
Income tax payable |
|
|
1,788 |
|
|
|
9,944 |
|
Current portion of long-term debt |
|
|
13,128 |
|
|
|
12,320 |
|
Total current liabilities |
|
|
93,050 |
|
|
|
95,206 |
|
Long-term debt |
|
|
198,233 |
|
|
|
127,812 |
|
Long-term operating lease liabilities |
|
|
6,062 |
|
|
|
3,186 |
|
Deferred tax liabilities |
|
|
18,852 |
|
|
|
4,843 |
|
Other liabilities |
|
|
5,055 |
|
|
|
2,970 |
|
Total liabilities |
|
|
321,252 |
|
|
|
234,017 |
|
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|
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|
|
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Mezzanine equity |
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|
|
|
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||
Preferred stock ( |
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— |
|
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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 |
|
|
|
4 |
|
Additional paid-in capital |
|
|
302,603 |
|
|
|
212,630 |
|
Accumulated other comprehensive income |
|
|
226 |
|
|
|
634 |
|
Accumulated deficit |
|
|
(3,453 |
) |
|
|
(16,106 |
) |
Total shareholders’ equity |
|
|
299,380 |
|
|
|
197,162 |
|
Total liabilities, mezzanine equity and shareholders' equity |
|
$ |
620,632 |
|
|
$ |
431,179 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share amounts) |
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Three Months Ended |
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Six Months Ended |
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2024 |
|
2023 |
|
2024 |
|
2023 |
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Net sales |
|
$ |
144,309 |
|
|
$ |
121,087 |
|
|
$ |
282,169 |
|
|
$ |
232,835 |
|
Cost of goods sold |
|
|
85,659 |
|
|
|
70,340 |
|
|
|
165,891 |
|
|
|
135,470 |
|
Gross profit |
|
|
58,650 |
|
|
|
50,747 |
|
|
|
116,278 |
|
|
|
97,365 |
|
Operating expenses |
|
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|
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|
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Selling, general and administrative |
|
|
38,577 |
|
|
|
34,051 |
|
|
|
79,296 |
|
|
|
69,301 |
|
Restructuring and transaction costs |
|
|
19 |
|
|
|
693 |
|
|
|
3,106 |
|
|
|
693 |
|
Related party expense |
|
|
101 |
|
|
|
115 |
|
|
|
1,944 |
|
|
|
263 |
|
Total operating expenses |
|
|
38,697 |
|
|
|
34,859 |
|
|
|
84,346 |
|
|
|
70,257 |
|
Operating income |
|
|
19,953 |
|
|
|
15,888 |
|
|
|
31,932 |
|
|
|
27,108 |
|
Other expense |
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|
|
|
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|
|
|
|
|
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|
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Interest expense |
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|
(2,003 |
) |
|
|
(1,013 |
) |
|
|
(3,640 |
) |
|
|
(2,654 |
) |
Other (expense) income, net |
|
|
(336 |
) |
|
|
346 |
|
|
|
(1,780 |
) |
|
|
710 |
|
Total other expense, net |
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|
(2,339 |
) |
|
|
(667 |
) |
|
|
(5,420 |
) |
|
|
(1,944 |
) |
Income before provision for income taxes |
|
|
17,614 |
|
|
|
15,221 |
|
|
|
26,512 |
|
|
|
25,164 |
|
Provision for income taxes |
|
|
(5,047 |
) |
|
|
(4,229 |
) |
|
|
(7,017 |
) |
|
|
(7,170 |
) |
Net income |
|
$ |
12,567 |
|
|
$ |
10,992 |
|
|
$ |
19,495 |
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|
$ |
17,994 |
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Net income per share: |
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Basic |
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$ |
0.31 |
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$ |
0.29 |
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$ |
0.50 |
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$ |
0.48 |
|
Diluted |
|
$ |
0.31 |
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$ |
0.29 |
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$ |
0.49 |
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$ |
0.48 |
|
Weighted average shares outstanding: |
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Basic |
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40,606,825 |
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37,586,031 |
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|
39,276,700 |
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|
37,480,367 |
|
Diluted |
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|
40,855,185 |
|
|
|
37,850,708 |
|
|
|
39,701,755 |
|
|
|
37,758,998 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) |
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Six Months Ended |
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2024 |
|
2023 |
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Cash Flows From Operating Activities: |
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Net income |
|
$ |
19,495 |
|
|
$ |
17,994 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
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|
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Depreciation and amortization |
|
|
8,562 |
|
|
|
8,220 |
|
Amortization of original issue discount and debt issue costs |
|
|
502 |
|
|
|
374 |
|
Amortization of inventory step-up |
|
|
2,310 |
|
|
|
— |
|
Deferred income taxes |
|
|
(1,915 |
) |
|
|
14 |
|
Stock-based compensation |
|
|
4,151 |
|
|
|
4,852 |
|
Remeasurement of contingent consideration |
|
|
509 |
|
|
|
— |
|
Provision for losses on accounts receivable |
|
|
769 |
|
|
|
(21 |
) |
Foreign exchange loss (gain) |
|
|
971 |
|
|
|
(776 |
) |
Other loss (gain) |
|
|
251 |
|
|
|
(433 |
) |
Changes in operating assets and liabilities, net of impact of acquisitions: |
|
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|
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Accounts receivable |
|
|
(3,387 |
) |
|
|
7,605 |
|
Inventories |
|
|
2,355 |
|
|
|
(11,986 |
) |
Prepaid expenses and other assets |
|
|
705 |
|
|
|
3,397 |
|
Accounts payable and other liabilities |
|
|
(21,998 |
) |
|
|
(971 |
) |
Net cash provided by operating activities |
|
|
13,280 |
|
|
|
28,269 |
|
Cash Flows From Investing Activities: |
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|
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Purchase of property and equipment |
|
|
(3,365 |
) |
|
|
(2,404 |
) |
Proceeds from disposition of property and equipment |
|
|
49 |
|
|
|
206 |
|
Business acquisitions, net of cash acquired |
|
|
(141,813 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(145,129 |
) |
|
|
(2,198 |
) |
Cash Flows From Financing Activities: |
|
|
|
|
|
|
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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 |
|
|
(6,065 |
) |
|
|
(5,000 |
) |
Principal payments on insurance premium financing |
|
|
(2,187 |
) |
|
|
(2,189 |
) |
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 |
|
|
91,776 |
|
|
|
— |
|
Deferred offering costs |
|
|
(683 |
) |
|
|
— |
|
Dividends distributed |
|
|
(6,842 |
) |
|
|
(5,993 |
) |
Other |
|
|
37 |
|
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
149,881 |
|
|
|
(15,907 |
) |
Effect of foreign exchange rates on cash and cash equivalents |
|
|
180 |
|
|
|
332 |
|
Change in cash and cash equivalents |
|
|
18,212 |
|
|
|
10,496 |
|
Cash and cash equivalents, beginning of period |
|
|
87,691 |
|
|
|
45,286 |
|
Cash and cash equivalents, end of period |
|
$ |
105,903 |
|
|
$ |
55,782 |
|
Supplemental Disclosure of Cash Flows Information: |
|
|
|
|
|
|
||
Cash paid for income taxes, net |
|
$ |
21,605 |
|
|
$ |
7,288 |
|
Cash paid for interest |
|
$ |
6,458 |
|
|
$ |
4,859 |
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities: |
|
|
|
|
|
|
||
Accruals and accounts payable for capital expenditures |
|
$ |
58 |
|
|
$ |
129 |
|
SEGMENT INFORMATION (Unaudited) (In thousands) |
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Three Months Ended |
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Reconciling |
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|
||
|
|
Product |
|
Distribution |
|
Items(1) |
|
Total |
|||||
Net sales |
|
$ |
128,433 |
|
$ |
25,588 |
|
$ |
(9,712 |
) |
|
$ |
144,309 |
Cost of goods sold |
|
|
75,621 |
|
|
19,723 |
|
|
(9,685 |
) |
|
|
85,659 |
Gross profit |
|
$ |
52,812 |
|
$ |
5,865 |
|
$ |
(27 |
) |
|
$ |
58,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
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|
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|
|
|
|
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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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|||||||||||
|
|
|
|
|
|
|
|
Reconciling |
|
|
|
||
|
|
Product |
|
Distribution |
|
Items(1) |
|
Total |
|||||
Net sales |
|
$ |
247,218 |
|
$ |
53,779 |
|
$ |
(18,828 |
) |
|
$ |
282,169 |
Cost of goods sold |
|
|
143,385 |
|
|
41,280 |
|
|
(18,774 |
) |
|
|
165,891 |
Gross profit |
|
$ |
103,833 |
|
$ |
12,499 |
|
$ |
(54 |
) |
|
$ |
116,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|||||||||||
|
|
|
|
|
|
|
|
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 |
____________________________ | |
(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) |
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|
|
|
|
|
|
|
|
|
|||||
|
|
Year ended |
|
Three Months Ended |
|
Six Months Ended |
|
Last Twelve |
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|
|
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|
|
|
|
Months |
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|
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|||||||||||
Net income |
|
$ |
38,641 |
|
|
$ |
12,567 |
|
|
$ |
10,992 |
|
|
$ |
19,495 |
|
$ |
17,994 |
|
|
$ |
40,142 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization |
|
|
15,737 |
|
|
|
4,620 |
|
|
|
3,959 |
|
|
|
8,562 |
|
|
8,220 |
|
|
|
16,079 |
|
Interest expense |
|
|
4,531 |
|
|
|
2,003 |
|
|
|
1,013 |
|
|
|
3,640 |
|
|
2,654 |
|
|
|
5,517 |
|
Provision for income taxes |
|
|
14,283 |
|
|
|
5,047 |
|
|
|
4,229 |
|
|
|
7,017 |
|
|
7,170 |
|
|
|
14,130 |
|
EBITDA |
|
$ |
73,192 |
|
|
$ |
24,237 |
|
|
$ |
20,193 |
|
|
$ |
38,714 |
|
$ |
36,038 |
|
|
$ |
75,868 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restructuring and transaction costs(1) |
|
|
3,192 |
|
|
|
19 |
|
|
|
693 |
|
|
|
4,856 |
|
|
693 |
|
|
|
7,355 |
|
Other general income(2) |
|
|
(92 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(92 |
) |
Other (income) expense, net(3) |
|
|
(936 |
) |
|
|
336 |
|
|
|
(346 |
) |
|
|
1,780 |
|
|
(710 |
) |
|
|
1,554 |
|
Stock-based compensation expense(4) |
|
|
9,368 |
|
|
|
2,084 |
|
|
|
2,105 |
|
|
|
4,151 |
|
|
4,852 |
|
|
|
8,667 |
|
Stock-based compensation payroll tax expense(5) |
|
|
234 |
|
|
|
48 |
|
|
|
— |
|
|
|
441 |
|
|
220 |
|
|
|
455 |
|
LTIP bonus(6) |
|
|
860 |
|
|
|
(1 |
) |
|
|
160 |
|
|
|
49 |
|
|
304 |
|
|
|
605 |
|
Amortization of inventory step-up(7) |
|
|
— |
|
|
|
1,541 |
|
|
|
— |
|
|
|
2,310 |
|
|
— |
|
|
|
2,310 |
|
Contingent consideration expense(8) |
|
|
— |
|
|
|
58 |
|
|
|
— |
|
|
|
509 |
|
|
— |
|
|
|
509 |
|
Adjusted EBITDA |
|
$ |
85,818 |
|
|
$ |
28,322 |
|
|
$ |
22,805 |
|
|
$ |
52,810 |
|
$ |
41,397 |
|
|
$ |
97,231 |
|
Adjusted EBITDA margin(9) |
|
|
16.5 |
|
% |
|
19.6 |
|
% |
|
18.8 |
|
% |
|
18.7 |
% |
|
17.8 |
|
% |
|
|
____________________________ | |
(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/20240809871263/en/
203-550-7148
gray.hudkins@cadre-holdings.com
Investor Relations:
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