Cadre Holdings, Inc.

1. SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Basis of Presentation

Cadre Holdings, Inc. (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety equipment and other related products for the law enforcement, first responder, military and nuclear markets. The business operates through manufacturing plants within the U.S., Mexico, Canada, the United Kingdom, Germany, Italy, France, and Lithuania, and sells its products worldwide through its direct sales force, distribution channel and distribution partners, online stores, and third-party resellers.

Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP" or “U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and include the accounts of the Company, its wholly owned subsidiaries, and other entities consolidated as required by GAAP. Accordingly, they do not include all of the information and footnotes required by GAAP for annual audited financial statements. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and include all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s most recently completed annual consolidated financial statements. All adjustments considered necessary for a fair presentation have been included. All intercompany balances and transactions have been eliminated in consolidation.

Emerging Growth Company

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, reduced disclosure obligations regarding executive compensation and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements.

In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our condensed consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. We will cease to be an emerging growth company no later than December 31, 2026, the last day of the fiscal year in which the fifth anniversary of our initial public offering occurs. Following that date, we will no longer be entitled to rely on the reduced disclosure and other accommodations available to emerging growth companies.

Use of Estimates

The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates.

Fair Value Measurements

The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820,Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This guidance also establishes the following three-level hierarchy based upon the transparency of inputs to the valuation of an asset or liability on the measurement date:

Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available.

The Company’s financial instruments consist principally of cash and cash equivalents (which consist of money market funds), restricted cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, income taxes payable and debt. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities and income taxes payable approximate their current fair value due to the relatively short-term nature of these accounts.

The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis:

There wereno transfers of assets or liabilities between levels during the three months ended September 30, 2026 and 2025.

There have not been material changes in the fair value of debt (Level 2), as compared to the carrying value, as of September 30, 2026 and December 31, 2025.

Cash and Cash Equivalents and Restricted Cash

Cash equivalents are defined as highly liquid, short-term investments having an original maturity of three months or less. Included in cash and cash equivalents are deposits with banks, cash on hand in stores, amounts due from credit card transactions and money market funds. Restricted cash consists of cash balances held by financial institutions as collateral for letters of credit. These balances are reclassified to cash and cash equivalents when the underlying obligation is satisfied. Restricted cash balances expected to become unrestricted during the next twelve months are recorded as current assets. As of September 30, 2026, the Company had $4,349 in outstanding letters of credit that were collateralized by restricted cash.

The following table provides a reconciliation of cash and cash equivalents and restricted cash presented in our condensed consolidated balance sheets to the total cash, cash equivalents and restricted cash presented in our condensed consolidated statements of cash flows:

Revenue Recognition

The Company derives revenue primarily from the sale of physical products. The Company recognizes such revenue at point-in-time when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or services to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer. Sales are made on normal and customary short-term credit terms or payment upon delivery for point-of-sale transactions.

The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms.

The Company has certain long-term contracts that contain performance obligations that are satisfied over time. The Company invoices the customer once billing milestones are reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress toward complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.

At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold.

Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying condensed consolidated statements of operations and comprehensive income. We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer.

Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs have historically been immaterial and are capitalized and amortized over the life of the contract. Commission costs are recorded in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income.

Product Warranty

Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements, and is recorded in cost of goods sold in the Company’s condensed consolidated statements of operations and comprehensive income.

The following table sets forth the changes in the Company’s accrued warranties, which are recorded in accrued liabilities in the condensed consolidated balance sheets:

Net Income per Share

Basic income per share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. Diluted income per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. The calculation of weighted average shares outstanding and net income per share are as follows:

For the three months ended September 30, 2026 and 2025, equity awards of 1,171,505 and 709,694, respectively, and for the nine months ended September 30, 2026 and 2025, equity awards of 1,190,374 and 709,694, respectively, were outstanding and anti-dilutive and therefore not included in the calculation of net income per share for these periods.

Recent Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Comprehensive Income (Topic 220) – Disaggregation of Income Statement Expenses, to improve financial reporting by requiring disclosures in the notes to financial statements about specific types of expenses included in the expense captions presented on the face of the statement of operations. The requirements of the ASU are effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements are able to be applied prospectively with the option for retrospective application. The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements and related disclosures.

2. ACQUISITIONS

Alien Gear Acquisition

On April 7, 2026, the Company completed the acquisition of Alien Gear holsters and certain assets and liabilities from Tedder Industries, LLC (“Alien Gear”) for cash of $10,300 through a court-supervised bankruptcy auction.

The acquisition was accounted for as a business combination. Total acquisition-related costs for the acquisition of Alien Gear were $792 for the nine months ended September 30, 2026.

The following table summarizes the total purchase price consideration and the preliminary amounts recognized for the assets acquired and liabilities assumed, which have been estimated at their fair values. Since our initial purchase price allocation, we have decreased goodwill by$19 for changes in assumptions used to fair value equipment. The fair value estimates for the purchase price allocation are based on the Company’s best estimates and assumptions as of the reporting date and are considered preliminary. The fair value measurements of identifiable assets and liabilities, and the resulting goodwill related to the Alien Gear acquisition are subject to change and the final purchase price allocation could be different from the amounts presented below. We expect to finalize the valuations as soon as practicable, but no later than one year from the date of the acquisition. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for the Alien Gear acquisition is included in the Product segment and reflects synergies and additional legacy growth and profitability expected from this acquisition through expansion into new markets and customers.

In connection with the acquisition, the Company acquired exclusive rights to Alien Gear’s trademarks, customer relationships, and product technologies. The amounts assigned to each class of intangible asset and the related average useful lives are as follows:

The full amount of goodwill is expected to be deductible for tax purposes. There were no pre-existing relationships between the Company and Alien Gear prior to the acquisition. Alien Gear revenue is included in the Product segment from the date of acquisition and amounted to$4,795 and$9,682 for the three and nine months ended September 30, 2026, respectively. It is not practical to determine the amount of earnings related to Alien Gear from the date of acquisition. The acquisition is not expected to be material to our operations, and consequently we have not included any pro forma information.

TYR Acquisition

On January 30, 2026, the Company completed the acquisition of TYR Tactical, LLC (“TYR”) including certain real estate property owned by an affiliate of TYR.

The acquisition was accounted for as a business combination. Total acquisition-related costs for the acquisition of TYR were $6,147, of which $3,681 (including $2,000 paid to a related party as discussed in Note 13) was recognized during the nine months ended September 30, 2026.

Total consideration, net of cash acquired, was $186,116 for 100% of the equity interests in TYR. The total consideration was as follows:

The following table summarizes the total purchase price consideration and the preliminary amounts recognized for the assets acquired and liabilities assumed, which have been estimated at their fair values. Since our initial purchase price allocation, we have increased goodwill by$949 for changes in cash consideration and assumptions used to fair value inventories, other current assets, customer relationships, and technology. The fair value measurements of identifiable assets and liabilities, and the resulting goodwill related to the TYR acquisition are subject to change and the final purchase price allocation could be different from the amounts presented below. We expect to finalize the valuations as soon as practicable, but no later than one year from the date of the acquisition. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for the TYR acquisition is included in the Product segment and reflects synergies and additional legacy growth and profitability expected from this acquisition through expansion into new markets and customers.

In connection with the acquisition, the Company acquired exclusive rights to TYR’s trademarks, customer relationships, and product technologies. The amounts assigned to each class of intangible asset and the related average useful lives are as follows:

The full amount of goodwill is expected to be deductible for tax purposes. There were no pre-existing relationships between the Company and TYR prior to the acquisition. TYR revenue is included in the Product segment from the date of acquisition and amounted to$31,208 and$78,403 for the three and nine months ended September 30, 2026, respectively. It is not practical to determine the amount of earnings related to TYR from the date of acquisition.

The purchase agreement provided for the payment of contingent consideration of up to$8,333 per calendar year 2026, 2027, and 2028 based on the achievement of specified net revenue targets for each respective year. Using a Monte Carlo pricing model, the Company estimated the fair value of the contingent consideration to be$4,080 as of January 30, 2026. Significant unobservable inputs used in the valuation include adiscount rate of 8.0% and the probability-adjusted net sales during the contingency periods. The contingent consideration liability is remeasured at the estimated fair value at the end of each reporting period with the change in fair

value recognized within operating income in the condensed consolidated statements of operations and comprehensive income for such period. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements.

As the contingent consideration liability is remeasured to fair value each reporting period, significant increases or decreases in projected sales, discount rates or the time until payment is made could result in a significantly lower or higher fair value measurement. Our determination of fair value of the contingent consideration liabilities could change in future periods based on our ongoing evaluation of these significant unobservable inputs.

The following table summarizes the change in the TYR contingent consideration liability for the three and nine months ended September 30, 2026:

The following unaudited pro forma results are based on the individual historical results of the Company and TYR, with adjustments to give effect as if the acquisition and borrowings used to finance the acquisition had occurred on January 1, 2025, after giving effect to certain adjustments including the amortization of intangible assets and inventory step-up, depreciation of fixed assets, interest expense, transaction costs, and taxes and assumes the purchase price was allocated to the assets purchased and liabilities assumed based on their fair market values at the date of purchase.

Zircaloy Acquisition

On April 22, 2025, the Company completed the acquisition of Carr’s Engineering Limited (excluding Chirton Engineering) and Carr's Engineering (US), Inc. (collectively “Zircaloy”), each a subsidiary of Carr’s Group plc.

Total consideration, net of cash acquired, was $89,590 for 100% of the equity interests in Zircaloy. The total consideration was as follows:

The following table summarizes the final purchase price consideration and the amounts recognized for the assets acquired and liabilities assumed, which have been estimated at their fair values. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for the Zircaloy acquisition is included in the Product segment and reflects synergies and additional legacy growth and profitability expected from this acquisition through expansion into new markets and customers.

In connection with the acquisition, the Company acquired exclusive rights to Zircaloy’s trademarks, customer relationships, and product technologies. The amounts assigned to each class of intangible asset and the related average useful lives are as follows:

The full amount of goodwill is expected to be non-deductible for tax purposes.

3. REVENUE RECOGNITION

The following tables disaggregate net sales by channel and geography:

(a) Includes all Distribution sales

Revenue by product is not disclosed, as it is impractical to do so.

Contract Assets and Liabilities

Contract assets represent unbilled amounts resulting from certain long-term contracts that contain performance obligations that are satisfied over time. In these contracts, the revenue recognized exceeds the amount billed to the customer. Contract assets totaled $21,911 and $17,875 as of September 30, 2026 and January 1, 2026, respectively. The Company presents contract assets in either accounts receivable, net or other current assets in the condensed consolidated balance sheets based on the nature of the underlying right to consideration and the contractual billing provisions.

Contract liabilities are recorded when customers are billed or remit cash payments in advance of the Company satisfying performance obligations. Contract liabilities are recognized into revenue when the performance obligation is satisfied. Contract liabilities are included in accrued liabilities in the Company’s condensed consolidated balance sheets, as they are expected to be recognized in revenue within one year, and totaled $11,179 and $12,023 as of September 30, 2026 and January 1, 2026, respectively. Revenue recognized during the three and nine months ended September 30, 2026 from amounts included in contract liabilities as of January 1, 2026 was $2,359 and $10,091, respectively.

Remaining Performance Obligations

As of September 30, 2026, we had $180,789 of remaining unfulfilled performance obligations, which include amounts that will be invoiced and recognized in future periods. The remaining performance obligations are limited only to arrangements that meet the definition of a contract under ASC Topic 606,Revenue from Contracts with Customers, as of September 30, 2026. We expect to recognize approximately 53% of this balance over the next twelve months and expect theremainder to be recognized in the followingtwo years.

4. INVENTORIES

The following table sets forth a summary of inventories, stated at lower of cost or net realizable value, as of September 30, 2026 and December 31, 2025:

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table summarizes the changes in goodwill for the three and nine months ended September 30, 2026:

Gross goodwill and accumulated impairment losses were $241,313 and $7,585, respectively, as of September 30, 2026 and $188,991 and $7,585, respectively, as of December 31, 2025.

Intangible Assets

Intangible assets such as certain customer relationships and patents on core technologies and product technologies are amortizable over their estimated useful lives. Certain trade names and trademarks which provide exclusive and perpetual rights to manufacture and sell their respective products are deemed indefinite-lived and are therefore not subject to amortization.

Intangible assets consisted of the following as of September 30, 2026 and December 31, 2025:

Amortization expense for the three months ended September 30, 2026 and 2025 was $3,231 and $2,574, respectively, of which $1,402 and $1,234 was included in cost of goods sold in the condensed consolidated statements of operations and comprehensive income for the respective periods. Amortization expense for the nine months ended September 30, 2026 and 2025 was $9,348 and $7,100, respectively, of which $4,286 and $3,506 was included in cost of goods sold in the condensed consolidated statements of operations and comprehensive income for the respective periods.

The estimated amortization expense for definite-lived intangible assets for the remaining three months of 2026, the next four years and thereafter is as follows:

6. ACCRUED LIABILITIES

Accrued liabilities as of September 30, 2026 and December 31, 2025 consist of the following:

7. DEBT

The Company’s debt is as follows:

The following summarizes the aggregate principal payments of our long-term debt, excluding debt discount and debt issuance costs:

2024 Credit Agreement

On December 20, 2024 (the “2024 Credit Agreement Closing Date”), the Company refinanced its existing credit facilities and entered into an Amended and Restated Credit Agreement (the “2024 Credit Agreement”), whereby Safariland, LLC, as borrower (the “2024 Borrower”), the Company, and certain domestic subsidiaries of the 2024 Borrower, as guarantors (the “2024 Guarantors”), closed on and received funding under the 2024 Credit Agreement with PNC, as administrative agent, swingline lender, and issuing lender, along with several other lenders (collectively, the “2024 Lenders”). The 2024 Credit Agreement amends and restates the prior credit agreement in its entirety.

Pursuant to the 2024 Credit Agreement, the 2024 Borrower (i) borrowed $225,000 under a term loan facility (the “2024 Term Loans”), (ii) may borrow up to $175,000 under a revolving credit facility (the “2024 Revolving Loan”), including up to $30,000 for letters of credit and up to $10,000 for swingline loans, (iii) may borrow up to $115,000 under a delayed draw term loan A-1 facility (the “DDTL A-1 Facility”) available through June 20, 2025, and (iv) may borrow up to $75,000 under a delayed draw term loan A-2 facility (the “DDTL A-2 Facility”) available through June 20, 2026. Each of these facilities matures on December 20, 2029. The proceeds of the 2024 Term Loans were used to refinance the outstanding term loans under the 2021 Credit Agreement and to pay fees and expenses incurred in connection with entering into the 2024 Credit Agreement. The 2024 Credit Agreement also permits the 2024 Borrower, subject to certain requirements, to arrange with lenders for an aggregate of $100,000 (or more if certain leverage ratios are met) of additional revolving and/or term loan commitments (both of which are currently uncommitted).

The 2024 Borrower may elect to have borrowings under the 2024 Credit Agreement bear interest at either (i) a base rate plus an applicable margin ranging from 0.50% to 1.50% per annum or (ii) a term SOFR rate plus an applicable margin ranging from 1.50% to 2.50% per annum, in each case based on the Company’s consolidated total net leverage ratio. The 2024 Borrower is also required to pay a commitment fee on the unused portion of the 2024 Revolving Loan, the DDTL A-1 Facility, and the DDTL A-2 Facility, ranging from 0.175% to 0.25% per annum, based on the Company’s consolidated total net leverage ratio.

The 2024 Term Loans require scheduled quarterly principal payments of 1.25% of the original aggregate principal amount, beginning March 31, 2025, with the balance due at maturity.

The 2024 Credit Agreement is guaranteed, jointly and severally, by the 2024 Guarantors and, subject to certain exceptions, secured by a first-priority security interest in substantially all of the assets of the 2024 Borrower and the 2024 Guarantors pursuant to an Amended and Restated Security and Pledge Agreement and an Amended and Restated Guaranty and Suretyship Agreement, each dated as of the 2024 Credit Agreement Closing Date.

The 2024 Credit Agreement contains customary representations and warranties, and affirmative and negative covenants, including limitations on additional indebtedness, dividends, and other distributions, entry into new lines of business, use of loan proceeds, capital expenditures, restricted payments, restrictions on liens on the assets of the 2024 Borrower or any 2024 Guarantor, transactions with affiliates, amendments to organizational documents, accounting changes, sale and leaseback transactions, dispositions, and mandatory prepayments in connection with certain liquidity events. Additionally, the 2024 Credit Agreement contains certain restrictive debt covenants, which require us to: (i) maintain a minimum fixed charge coverage ratio of 1.25 to 1.00, starting with the quarter ended December 31, 2024, which is to be determined for each quarter end on a trailing four quarter basis and (ii) maintain a quarterly maximum consolidated total net leverage ratio of 4.00 to 1.00 from the quarter ended December 31, 2024 until the quarter ended March 31, 2026, and thereafter 3.50 to 1.00, which is in each case to be determined on a trailing four quarter basis; provided that under certain circumstances and subject to certain limitations, in the event of a material acquisition, we may temporarily increase the consolidated total net leverage ratio by up to 0.50 to 1.00 for four fiscal quarters following such acquisition, subject to a maximum consolidated total net leverage ratio of 4.00 to 1.00. Furthermore, the 2024 Credit Agreement also includes customary events of default, including non-payment of principal, interest, or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payments on other material indebtedness, bankruptcy and insolvency events, material judgments, and change of control provisions. Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the 2024 Credit Agreement may be accelerated, and the Lenders could foreclose on their security interests in the assets of the 2024 Borrower and the Guarantors.

In April 2025, in connection with the Zircaloy acquisition, the Company drew $97,500 of the $115,000 available under the DDTL- A-1 Facility. In June 2026, the Company drew $75,000 under the DDTL-A-2 Facility. The DDTL-A-1 and DDTL-A-2 facilities have the same terms and conditions as the 2024 Term Loan, including such items as interest rate, quarterly amortization payment requirements, and maturity date.

There wereno amounts outstanding under the 2024 Revolving Loan as of September 30, 2026 and December 31, 2025, respectively. As of September 30, 2026, there were $1,987 in outstanding letters of credit and $173,013 of availability.

Canadian Credit Facility

On July 23, 2026, Med-Eng Holdings ULC, Pacific Safety Products Inc., ICOR Technology Inc. and TYR Tactical Canada ULC, the Company’s Canadian subsidiaries, as borrowers (the “Canadian Borrowers”), and Safariland, LLC, as guarantor (the “Canadian Guarantor”), closed on a line of credit pursuant to an Amended and Restated Loan Agreement (the “Canadian Loan Agreement”) and an Amended and Restated Revolving Line of Credit Note (the “Note”) with PNC Bank Canada Branch (“PNC Canada”), as lender pursuant to which the Canadian Borrowers may borrow up to CDN$20,000 under a revolving line of credit (including up to CDN$6,000 for letters of credit) (the “Revolving Canadian Loan”). The Revolving Canadian Loan matures on December 20, 2029. The Canadian Loan Agreement is guaranteed by the Canadian Guarantor pursuant to an Amended and Restated Guaranty and Suretyship Agreement. The Canadian Loan Agreement amends and restates the prior Canadian loan agreement, which was entered into on October 14, 2021, in its entirety.

The Canadian Borrowers may elect to have borrowings either in United States dollars or Canadian dollars under the Canadian Loan Agreement, which will bear interest, in the case of borrowings in United States dollars, at a base rate, daily SOFR or term SOFR, in each case, plus an applicable margin, and, in the case of borrowings in Canadian dollars, at a Canadian Prime Rate (as announced from time to time by PNC Canada) or the daily Canadian Overnight Repo Rate Average (“CORRA”) as determined from time to time by the Bank of Canada (or any successor administrator of CORRA). The applicable margin for these borrowings range, based on the Company’s consolidated total net leverage ratio, from 0.50% to 1.50% per annum, in the case of base rate borrowings and Canadian Prime Rate borrowings, and 1.50% to 2.50% per annum, in the case of daily SOFR borrowings, term SOFR borrowings and CORRA borrowings. The Canadian Loan Agreement also requires the Canadian Borrowers to pay an unused line fee on the unused portion of the loan commitments in an amount ranging between 0.175% and 0.25% per annum, based upon the level of the Company’s consolidated total net leverage ratio.

There wereno amounts outstanding under the Revolving Canadian Loan as of September 30, 2026 and December 31, 2025.

8. DERIVATIVE INSTRUMENTS

Interest Rate Swaps

We entered into interest rate swap agreements to hedge forecasted monthly interest rate payments on our floating rate debt. Under the terms of the interest rate swap agreements (“Swap Agreements”), we receive payments based on the 1-month SOFR (3.91% as of September 30, 2026). We had the following Swap Agreements as of September 30, 2026:

During the three months ended September 30, 2026, two Swap Agreements with aggregate notional amounts of $118,125 expired in accordance with their contractual terms.

We designated the Swap Agreements as cash flow hedges. A portion of the amount included in accumulated other comprehensive (loss) income is reclassified into interest expense, net as a yield adjustment as interest is either paid or received on the hedged debt. The fair value of our Swap Agreements is based upon Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements.

It is our policy to execute such instruments with creditworthy banks and not to enter into derivative financial instruments for speculative purposes. We believe our interest rate swap counterparty will be able to fulfill its obligations under our agreements, and we believe we will have debt outstanding through the expiration date of the swap agreements such that the occurrence of future cash flow hedges remains probable.

The estimated fair value of our Swap Agreements in the condensed consolidated balance sheets was as follows:

A cumulative gain, net of tax, of $3,933 and a cumulative loss, net of tax, of $431 is recorded in accumulated other comprehensive (loss) income as of September 30, 2026 and December 31, 2025, respectively.

The Company recognized a gain, net of tax, of $2,822 and a loss, net of tax, of $139 in other comprehensive income (loss) for the three months ended September 30, 2026 and 2025, respectively. There was a gain, net of tax, of $106 and $772 reclassified from accumulated other comprehensive (loss) income into earnings for the three months ended September 30, 2026 and 2025, respectively.

The Company recognized a gain, net of tax, of $5,292 and a loss, net of tax, of $1,103 in other comprehensive income (loss) for the nine months ended September 30, 2026 and 2025, respectively. There was a gain, net of tax, of $928 and $2,001 reclassified from accumulated other comprehensive (loss) income into earnings for the nine months ended September 30, 2026 and 2025, respectively.

As of September 30, 2026, approximately $1,410 is expected to be reclassified from accumulated other comprehensive (loss) income into interest expense, net over the next 12 months.

Foreign Currency Hedge

We entered into forward contracts to hedge forecasted Mexican Peso (“MXN”) denominated costs associated with our Mexican subsidiary. These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and reported as current assets or current liabilities in the condensed consolidated balance sheets. Any changes in the fair value of designated cash flow hedges are recorded in other comprehensive income (loss) and are reclassified from accumulated other comprehensive (loss) income into earnings in the period the hedged item impacts earnings.

As of September 30, 2026, the Company had outstanding contracts with a total notional amount of MXN 129,375 and recognized a cumulative gain, net of tax, of $192 in accumulated other comprehensive (loss) income.

The Company recognized a gain, net of tax, of $215 and $246 in other comprehensive income (loss) for the three months ended September 30, 2026 and 2025, respectively. There was a gain, net of tax, of $80 and a loss, net of tax, of $240 reclassified from accumulated other comprehensive (loss) income into earnings for the three months ended September 30, 2026 and 2025, respectively.

The Company recognized a gain, net of tax, of $103 and $373 in other comprehensive income (loss) for the nine months ended September 30, 2026 and 2025, respectively. There was a gain, net of tax, of $214 and a loss, net of tax, of $129 reclassified from accumulated other comprehensive (loss) income into earnings for the nine months ended September 30, 2026 and 2025, respectively.

As of September 30, 2026, approximately $192 is expected to be reclassified from accumulated other comprehensive (loss) income into earnings over the next 12 months.

9. STOCK-BASED COMPENSATION

Performance Awards

On June 16, 2026, the Company granted 1,886,500 stock options and 1,073,500 restricted stock units ("RSUs") to certain executives under the 2021 Stock Incentive Plan. The performance awards contain market conditions based on the achievement of specified volume-weighted average stock price ("VWAP") thresholds of $60 and $80 per share over a 20 consecutive trading day measurement period. Certain awards vest solely upon achievement of the applicable market condition, while other awards require both achievement of the applicable market condition and continued employment through the third anniversary of the grant date. The market-condition awards were valued using a Monte Carlo simulation model, which incorporates assumptions regarding stock price volatility, risk-free interest rates, and dividend yield. Compensation expense for awards containing both a market condition and an explicit service condition is recognized over the longer of the explicit service period or the derived service period determined through the Monte Carlo valuation. Compensation expense for awards containing only a market condition is recognized over the derived service period. Because the market conditions are reflected in the grant-date fair value of the awards, compensation cost is recognized regardless of whether the market conditions are ultimately achieved, provided the requisite service period is rendered. The impact on the periods presented in our condensed consolidated financial statements is immaterial.

10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is also involved in various legal disputes and other legal proceedings and claims that arise from time to time in the ordinary course of business. The Company vigorously defends itself against lawsuits and evaluates the amount of reasonably possible losses that the Company could incur as a result of these matters. While any litigation contains an element of uncertainty, the Company believes that the reasonably possible losses that the Company could incur in excess of insurance coverage would not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.

Insurance

The Company has various insurance policies, including product liability insurance, covering risks and in amounts it considers adequate. There can be no assurance that the insurance coverage maintained by the Company is sufficient or will be available in adequate amounts or at a reasonable cost.

International

As an international company, we are, from time to time, the subject of investigations related to the Company’s international operations, including under U.S. export control laws (such as ITAR), the FCPA and other similar U.S. and foreign laws. As of the date of this Report, the Company is not aware of any pending governmental investigation relating to its international operations that it expects would have a material adverse effect on its consolidated financial position, results of operations or liquidity.

ICOR Contingent Consideration

As part of the ICOR acquisition, the purchase agreement with respect to the acquisition provided for the payment of contingent consideration of up to CDN$8,000 (approximately $5,797 on the acquisition date) based upon future cumulative net sales during the three-year period ended January 9, 2027. Using a Monte Carlo pricing model, the Company estimated the fair value of the contingent consideration to be $2,225 as of January 9, 2024. Significant unobservable inputs used in the valuation include a discount rate of 6.2% and the probability adjusted net sales during the contingency period. The contingent consideration liability is remeasured at the estimated fair value at the end of each reporting period with the change in fair value recognized within operating income in the condensed consolidated statements of operations and comprehensive income for such period. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements.

As the contingent consideration liability is remeasured to fair value each reporting period, significant increases or decreases in projected sales, discount rates or the time until payment is made could result in a significantly lower or higher fair value measurement. Our determination of fair value of the contingent consideration liabilities could change in future periods based on our ongoing evaluation of these significant unobservable inputs.

The following table summarizes the changes in the contingent consideration liability for the three and nine months ended September 30, 2026:

11. INCOME TAXES

The effective tax rate was 33.2% for the three months ended September 30, 2026 and was higher than the statutory rate primarily due to state taxes and non-deductible executive compensation. The effective tax rate was 26.3% for the three months ended September 30, 2025 and was higher than the statutory rate primarily due to state taxes and non-deductible executive compensation.

The effective tax rate was 32.8% for the nine months ended September 30, 2026 and was higher than the statutory rate primarily due to state taxes and non-deductible executive compensation. The effective tax rate was 27.5% for the nine months ended September 30, 2025 and was higher than the statutory rate primarily due to state taxes and non-deductible executive compensation.

12. LEASES

Supplemental cash flow information related to leases is as follows:

13. RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2026, the Company paid$2,000 to Kanders & Company, Inc., a company controlled by Warren Kanders, our Chief Executive Officer, for services related to the acquisition of TYR, which is included in related party expense in the Company’s condensed consolidated statements of operations and comprehensive income.

During the nine months ended September 30, 2025, the Company paid$1,000 to Kanders & Company, Inc. for services related to the acquisition of Zircaloy, which is included in related party expense in the Company’s condensed consolidated statements of operations and comprehensive income.

14. SEGMENT DATA

Our segment disclosure is intended to provide the users of our consolidated financial statements with a view of the business that is consistent with the management of the Company.

Our operations are comprised oftwo operating and reportable segments: Product and Distribution. The Product segment is comprised of components that manufacture and sell products, while the Distribution segment is comprised of our business that serves as a one-stop shop for law enforcement agencies that sells goods produced by the Product segment, as well as other third-party products. Segment information is consistent with how the chief operating decision maker (“CODM”), our chief executive officer, reviews the business, makes investing and resource allocation decisions and assesses operating performance. The CODM evaluates segment performance and decides how to allocate resources based on segment gross profit. The CODM is not regularly provided asset information or operating expenses by segment as that information is not available.

(1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments.

15. SUBSEQUENT EVENTS

In October 2026, the Company completed the acquisition of Robadair Ltd. and certain real property owned by an affiliate of Robadair Ltd. for total cash consideration of approximately $14,800.

The acquisition will be accounted for using the acquisition method of accounting whereby the acquired assets and liabilities will be recorded at their respective fair values and added to those of the Company, including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets. Results of operations will be included in the operations of the Company beginning on the closing date.

On November 4, 2026, the Company's board of directors authorized a share repurchase program under which the Company may repurchase up to an aggregate of$100,000 of its common stock. Repurchases may be made from time to time at the discretion of management through open market purchases, block trades, privately negotiated transactions, Rule 10b5-1 plans or other means, subject to market conditions, applicable legal and regulatory requirements, contractual restrictions and other factors.