Cadre Holdings, Inc. (CDRE) - Q1 2026 10-Q Summary
Business Context and Reporting Period
Cadre Holdings, Inc. (d/b/a The Safariland Group) is a global manufacturer and distributor of safety equipment for law enforcement, first responders, military, and nuclear markets. The company operates through two segments: Product (manufacturing) and Distribution. This report covers the quarterly period ended March 31, 2026. The company is classified as an Emerging Growth Company and an Accelerated Filer.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Sales | $155.4 million | $130.1 million |
| Gross Profit | $60.2 million | $56.1 million |
| Operating Income | $7.5 million | $13.6 million |
| Net Income | $2.0 million | $9.2 million |
| Diluted EPS | $0.05 | $0.23 |
| Adjusted EBITDA | $21.1 million | $20.5 million |
| Cash from Operations | $22.5 million | $17.4 million |
| Total Debt (Net) | $365.8 million | $307.3 million |
| Cash & Equivalents | $41.3 million | $122.9 million |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 19.5% year-over-year, driven primarily by the acquisition of TYR Tactical (closed Jan 2026) and Zircaloy (closed April 2025). The Product segment saw a 24.8% increase, while the Distribution segment declined 27.2% due to lower demand for hard goods.
- Profitability Decline: Net income decreased 78.6% to $2.0 million. This was caused by a 44.7% drop in operating income, driven by a 163.9% increase in restructuring/transaction costs and a 1,462.5% increase in related party expenses (a $2.0 million fee paid to the CEO's company for the TYR acquisition).
- Interest Expense: Net interest expense nearly doubled (91.4% increase) to $4.3 million due to debt assumed in recent acquisitions and higher utilization of credit facilities.
- Balance Sheet: Cash and cash equivalents decreased significantly from $122.9 million to $41.3 million, primarily due to $153.6 million in cash used for the TYR acquisition. Total debt increased to $365.8 million.
Guidance, Outlook, and Risks
- Acquisitions: The company completed the $185.2 million acquisition of TYR Tactical in January 2026 and the $10.3 million acquisition of Alien Gear holsters in April 2026 (subsequent event). TYR contributed $15.5 million in revenue in Q1 2026.
- Backlog: Orders backlog increased significantly to $355.4 million (from $189.8 million at year-end 2025), driven by large orders for explosive ordnance disposal (EOD) products and the TYR acquisition.
- Liquidity: The company maintains a $175 million revolving credit facility with $173 million available as of March 31, 2026. Management believes cash flows and borrowing capacity are sufficient for the next 12 months.
- Risks: Key risks include integration of recent acquisitions, supply chain disruptions, inflationary pressures, and compliance with debt covenants (maximum leverage ratio of 4.00:1.00, temporarily extendable to 4.50:1.00 for acquisitions).
Investor Verification Checklist
- Related Party Transaction: Verify the $2.0 million fee paid to Kanders & Company, Inc. (controlled by CEO Warren Kanders) for the TYR acquisition and its impact on operating margins.
- Debt Covenants: Confirm compliance with the 2024 Credit Agreement leverage ratios, especially given the recent increase in debt load from acquisitions.
- Acquisition Integration: Monitor the integration progress of TYR Tactical and the subsequent Alien Gear acquisition to ensure projected synergies are realized.
- Backlog Conversion: Assess the conversion rate of the $355.4 million order backlog into future revenue, noting that some orders are subject to government budget appropriations.
- Non-GAAP Reconciliation: Review the reconciliation of Adjusted EBITDA ($21.1M) to Net Income ($2.0M) to understand the magnitude of one-time costs and amortization impacting GAAP earnings.