Cadre Holdings Inc

Previous wording

Cadre is a global leader in the manufacturing and distribution of safety equipment. Our equipment provides critical protection to allow its users to safely and securely perform their duties and protect those around them in hazardous or life-threatening situations. Through our dedication to superior quality, we establish a direct covenant with end users that our products will perform and keep them safe when they are most needed. We sell a wide range of products including body armor, explosive ordnance disposal equipment and duty gear through both direct and indirect channels. In addition, through our owned distribution, we serve as a one-stop shop for first responders providing equipment we manufacture as well as third-party products including uniforms, optics, boots, firearms and ammunition. The majority of our diversified product offering is governed by rigorous safety standards and regulations. Demand for our products is driven by technological advancement as well as recurring modernization and replacement cycles for the equipment to maintain its efficiency, effective performance and regulatory compliance.

Current wording

Cadre is a global leader in the manufacturing and distribution of safety equipmentand other related products for the law enforcement, first responder, military and nuclear markets. Our equipment provides critical protection to allow its users to safely and securely perform their duties and protect those around them in hazardous or life-threatening situations. Through our dedication to superior quality, we establish a direct covenant with end users that our products will perform and keep them safe when they are most needed. We sell a wide range of products including body armor, explosive ordnance disposal equipment and duty gear through both direct and indirect channels. In addition, through our owned distribution, we serve as a one-stop shop for first responders providing equipment we manufacture as well as third-party products including uniforms, optics, boots, firearms and ammunition. The majority of our diversified product offering is governed by rigorous safety standards and regulations. Demand for our products is driven by technological advancement as well as recurring modernization and replacement cycles for the equipment to maintain its efficiency, effective performance and regulatory compliance.

Previous wording

We service the ever-changing needs of our end users by investing in research and development for new product innovation and technical advancements that continually raise the standards for safety equipment. Our target end user base includes domestic and international first responders such as state and local law enforcement, fire and rescue, explosive ordnance disposal technicians, emergency medical technicians, fishing and wildlife enforcement and departments of corrections, as well as federal agencies including the U.S. Department of State, U.S. Department of Defense, U.S. Department of Interior, U.S. Department of Justice, U.S. Department of Homeland Security, U.S. Department of Corrections and numerous foreign government agencies in over 100 countries.

Current wording

We service the ever-changing needs of our end users by investing in research and development for new product innovation and technical advancements that continually raise the standards for safety equipment. Our target end user base includes domestic and international first responders such as state and local law enforcement, fire and rescue, explosive ordnance disposal technicians, emergency medical technicians, fishing and wildlife enforcement and departments of corrections, as well as federal agencies including DoS, DoD, DoI, DoJ, DHS, DoC and numerous foreign government agencies in over 100 countries.

Previous wording

In January 2024, the Company acquired ICOR Technology Inc. (“ICOR”) for approximately CDN$52.0 million (approximately $38.8 million), net of cash acquired.

Current wording

In January 2024, the Company acquired ICOR Technology Inc. (“ICOR”) for $40.4 million.

Previous wording

In March 2024, the Company acquired Alpha Safety Intermediate, LLC (“Alpha Safety”) for approximately$106.5 million, net of cash acquired.

Current wording

In February 2024, the Company acquired Alpha Safety Intermediate, LLC (“Alpha Safety”) for $107.1 million.

Previous wording

Net sales increased by $24.7 million for the year ended December 31, 2023 as compared to December 31, 2022, primarily as a result ofhigher demand for armor and crowd control products, as well as recent acquisitions, partially offset by a decrease from large international orders for explosive ordnance disposal products fulfilled in the prior year.

Current wording

Net sales increased by $85.0 million for the year ended December 31, 2024 as compared to December 31, 2023, primarily as a result ofhigher demand for armor, duty gear and crowd control products, as well as recent acquisitions, partially offset by a decline inaccessories.

Previous wording

Net income increased by $32.8 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily as a result of an increase in net sales and gross profit margin, accretive impact of recent acquisitions and a decrease in stock compensation expense.

Current wording

Net income decreased by $2.5 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily as a result of an increase in selling, general and administrative expenses from acquisitions, acquisition related costs, higher interest expense and lower productivityas a result of the cybersecurity incidents that we reported in 2024, partially offset byfavorable pricing and volume.

Previous wording

On June 9, 2022, the Company completed a secondary offering in which the Company issued and sold 2,250,000 shares of common stock at a price of $23.50 per share. The Company’s net proceeds from the sale of shares were $47.0 million after underwriter discounts and commissions, fees and expenses of $2.7 million, of which $2.0 million was paid to Kanders & Company, Inc., a company controlled by Warren Kanders, our Chief Executive Officer.

Current wording

On March 19, 2024, the Company completed a secondary offering in which the Company issued and sold 2,200,000 shares of common stock at a price of $35.00 per share. The Company’s net proceeds from the sale of shares were $72.8 million after underwriter discounts and commissions, fees and expenses of $4.2 million.

Previous wording

On July 14, 2022, the underwriters exercised a portion of their over-allotment option and purchased an additional 300,000 shares of common stock at a price of $23.50 per share, resulting in net proceeds to the Company of $6.6 million after underwriter discounts and commissions, fees and expenses of $0.4 million.

Current wording

On April 1, 2024, the underwriters exercised the full amount of their over-allotment option and purchased an additional 545,719 shares of common stockat a price of $35.00 per share, resulting in net proceeds to the Company of $18.3 million after underwriter discounts and commissions, fees and expenses of $0.8 million.

Previous wording

Orders comprising backlog as of a given balance sheet date are typically invoiced in subsequent periods. The majority of our products are generally processed and shipped within one to three weeks of an order being placed, though the fulfillment time for certain products, for example, explosive ordnance disposal equipment, may take three months or longer. Our orders backlog could experience volatility between periods, including as a result of customer order volumes and the speed of our order fulfilment, which in turn may be impacted by the nature of products ordered, the amount of inventory on hand and the necessary manufacturing lead time.

Current wording

Orders comprising backlog as of a given balance sheet date are typically invoiced in subsequent periods. The majority of our products are generally processed and shipped within one to three weeks of an order being placed, though the fulfillment time for certain products, for example, explosive ordnance disposal equipment, may take three months or longer. Our orders backlog could experience volatility between periods, including as a result of customer order volumes and the speed of our order fulfillment, which in turn may be impacted by the nature of products ordered, the amount of inventory on hand and the necessary manufacturing lead time.

Previous wording

We recognize revenue 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 service 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 but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. At the time of revenue recognition we also provide for estimated sales returns and miscellaneous claims from customers as reductions to revenues. Charges for shipping and handling fees billed to customers are included in net sales. Taxes collected from customers and remitted to government authorities are reported on a net basis and are excluded from sales. See Note 1 “Significant Accounting Policies — Revenue Recognition” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Current wording

At the time of revenue recognition we also provide for estimated sales returns and miscellaneous claims from customers as reductions to revenues. Charges for shipping and handling fees billed to customers are included in net sales. Taxes collected from customers and remitted to government authorities are reported on a net basis and are excluded from sales. See Note 1 “Significant Accounting Policies — Revenue Recognition” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Previous wording

Cost of goods sold. Cost of goods sold includes raw material purchases, manufacturing-related labor costs, contracted labor, shipping, reimbursable research and development costs, allocated manufacturing overhead, facility costs, depreciation and amortization, and product warranty costs.

Current wording

Cost of goods sold. Cost of goods sold includes raw material purchases, manufacturing-related labor costs, contracted labor, project costs, shipping costs, allocated manufacturing overhead, facility costs, depreciation and amortization, and product warranty costs.

Previous wording

*Related party expense.*Related party expense primarily consists of rent expense related to distribution locations owned by related parties and any one-time transaction fees paid to related parties.

Current wording

*Related party expense.*Related party expense primarily consists of rent expense related to distribution locations owned by certain employees and any one-time fees paid to related parties.

Previous wording

Other expense, net. Other expense, net primarily consists of gains and losses from foreign currency transactions.

Current wording

Other (expense) income, net. Other (expense) income, net primarily consists of gains and losses from foreign currency transactions.

Previous wording

In order to reflect the way our chief operating decision maker reviews and assesses the performance of the business, Cadre has determined that it has two reportable segments — the Product segment and the Distribution segment. Segment information is consistent with how the chief operating decision maker, our chief executive officer, reviews the business, makes investing and resource allocation decisions and assesses operating performance.

Current wording

In order to reflect the way our chief operating decision maker reviews and assesses the performance of the business, Cadre has determined that it has two reportable segments — the Product segment, which is comprised of components that manufacture and sell products, and the Distribution segment, which 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, our chief executive officer, reviews the business, makes investing and resource allocation decisions and assesses operating performance.

Previous wording

*Net sales.*Product segment net sales increased by $25.4 million or 6.6%, from $385.4 million to $410.8 million for the year ended December 31, 2023 as compared to 2022, primarily due to$20.4 million from higher demand for armor products, $9.2 million from higher demand for crowd control products, $3.4 million from higher demand for duty gear products and $7.4 million from recent acquisitions, partially offset by a reduction of $13.7 million from large international orders for explosive ordnance disposal products fulfilled in the prior year. Distribution segment net sales increased by $5.3 million or 5.4%, from $97.1 million to $102.4 million for the year ended December 31, 2023 as compared to 2022, primarily due toincreased agency demand for hard goods. Reconciling items consisting primarily of intercompany eliminations were $30.7 million and $24.7 million for year ended December 31, 2023 and 2022, respectively.

Current wording

*Net sales.*Product segment net sales increased by $86.8 million, or 21.1%, from $410.8 million to $497.6 million for theyear ended December 31, 2024 as compared to 2023, primarily due to an increase of $73.3 million as a result of recent acquisitions, $8.2 million from higher demand for duty gear products, $7.5 million from higher North American demand for armor products, and $3.2 million from higher demand for crowd control products, partially offset by a $6.2 million decline in automotive. Distribution segment net sales increased by $3.0 million or 3.0%, from $102.4 million to $105.4 million for the year ended December 31, 2024 as compared to 2023, primarily due toincreased agency demand for hard goods. Reconciling items consisting primarily of intercompany eliminations were $35.5 million and $30.7 million for year ended December 31, 2024 and 2023, respectively.

Previous wording

*Cost of goods sold.*Product segment cost of goods sold increased by $3.7 million, or 1.6%, from $230.2 million to $233.9 million for the year ended December 31, 2023 as compared to 2022 primarily due toincreased volume and increasing costs to manufacture product (principally material and labor), partially offset by prior year increases from the amortization of inventory step-up adjustments related to 2022 acquisitions, product mix and productivity. Product segment gross profit as a percentage of net sales increased by 280 basis points to 43.1% in 2023 from 40.3% in 2022 mainly driven byfavorable pricing, product mix and productivity, partially offset by inflation and pressure from a stronger Mexican peso. Distribution segment cost of goods sold increased by $1.7 million, or 2.2%, from $76.6 million to $78.3 million for the year ended December 31, 2023 as compared to 2022 primarily due toincreased volume, partially offset by costs to acquire products. Distribution segment gross profit as a percentage of net sales increased by 240 basis points to 23.5% in 2023 from 21.1% in 2022 mainly driven byfavorable product mix within the agency channel. Reconciling items consisting primarily of intercompany eliminations were $30.5 million and $24.7 million for year ended December 31, 2023 and 2022, respectively.

Current wording

*Cost of goods sold.*Product segment cost of goods sold increased by $54.0 million, or 23.1%, from $233.9 million to $287.9 million for the year ended December 31, 2024 as compared to 2023 primarily due to increased volume, increased costs to manufacture product (principally material and labor), and increases from the amortization of inventory step up adjustments related to 2024 acquisitions, partially offset by product mix. Product segment gross profit as a percentage of net sales decreased by 90 basis points to 42.2% in 2024 from 43.1% in 2023 mainly driven by the amortization of inventory step up adjustments related to the recent acquisitions, lower productivity driven by the 2024 cybersecurity incidents, unfavorable mix and inflation, partially offset by favorable pricing. Distribution segment cost of goods sold increased by $3.3 million, or 4.2%, from $78.3 million to $81.6 million for the year ended December 31, 2024 as compared to 2023 primarily due toincreased volume, partially offset by costs to acquire products. Distribution segment gross profit as a percentage of net sales decreased by 93 basis points to 22.5% in 2024 from 23.5% in 2023 mainly driven by inflation and unfavorable mix. Reconciling items consisting primarily of intercompany eliminations were $35.4 million and $30.5 million for year ended December 31, 2024 and 2023, respectively.

Previous wording

*Selling, general and administrative.*SG&A decreased by $12.6 million, or 8.2%, for the year ended December 31, 2023 as compared to 2022 primarily due toa $22.9 million decrease in stock-based compensation expense, partially offset by an increase in employee compensation and related benefits.

Current wording

*Selling, general and administrative.*SG&A increased by $17.8 million, or 12.7%, for the year ended December 31, 2024 as compared to 2023 primarily due to recent acquisitions, employee compensation and related benefits, and professional services.

Previous wording

*Restructuring and transaction costs.*Restructuring and transaction costs decreased by $2.2 million for the year ended December 31, 2023 as compared to 2022 primarily due tocosts incurred in 2022 associated with acquisitions.

Current wording

*Restructuring and transaction costs.*Restructuring and transaction costs increased by $3.8 million for the year ended December 31, 2024 as compared to 2023 primarily due tocosts incurred associated with the ICOR and Alpha Safety acquisitions.

Previous wording

*Related party expense.*Related party expense remained consistent for the year ended December 31, 2023 as compared to 2022 and primarily consisted of a$1.0 million transaction fee paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, in connection with the acquisition of ICOR for the year ended December 31, 2023 and a $1.0 million transaction fee paid to Kanders & Company, Inc. in connection with the acquisition of Cyalume for the year ended December 31, 2022. We also recorded rent expense relating to distribution warehouses and retail stores that we lease from related parties.

Current wording

*Related party expense.*Related party expense increased by $0.9 million for the year ended December 31, 2024 as compared to 2023 and primarily consisted of a $1.8 million fee paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, in connection with the acquisition of Alpha Safety, as well as a $0.3 million fee paid to Kanders & Company, Inc. in connection with the execution of our debt refinancing for the year ended December 31, 2024, and a$1.0 million fee paid to Kanders & Company, Inc. in connection with the acquisition of ICOR for the year ended December 31, 2023, in each case for financial advisory and other related services.

Previous wording

*Other income (expense), net.*Other income, net was $0.9 million for the year ended December 31, 2023 compared to Other expense, net of $1.1 million for the year ended December 31, 2022, primarily due tochanges in foreign currency exchange rates.

Current wording

*Other (expense) income, net.*Other expense, net was $4.7 million for the year ended December 31, 2024 compared to Other income, net of $0.9 million for the year ended December 31, 2023, primarily due to changes in foreign currency exchange rates.

Previous wording

Provision for income taxes. Provision for income taxes increased by $10.7 million for the year ended December 31, 2023 as compared to 2022. The effective tax rate was 27.0% for the year ended December 31, 2023 and was higher than the statutory rate due to state taxes and executive compensation, partially offset by research and development tax credits. For the year ended December 31, 2022, the effective tax rate was 37.9% and was higher than the statutory rate due to state taxes, executive compensation and the tax impact of our foreign earnings, partially offset by research and development tax credits.

Current wording

Provision for income taxes. Provision for income taxes increased by $3.8 million for the year ended December 31, 2024 as compared to 2023. The effective tax rate was 33.4% for the year ended December 31, 2024 and was higher than the statutory rate due to state taxes, transaction expenses and executive compensation, partially offset by research and development tax credits. For the year ended December 31, 2023, the effective tax rate was 27.0% and was higher than the statutory rate due to state taxes, limitation on executive compensation deduction, and the tax impact of our foreign earnings, partially offset by research and development tax credits.

Previous wording

This Annual Report on Form 10-K includes EBITDA and Adjusted EBITDA, which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. EBITDA is defined as net income before depreciation and amortization expense, interest expense and provision for income tax. Adjusted EBITDA represents EBITDA that excludes restructuring and transaction costs, other general income, other (income) expense, net, stock-based compensation expense, stock-based compensation payroll tax expense, long-term incentive plan (“LTIP”) bonus and amortization of inventory step-up as these items do not represent our core operating performance.

Current wording

This Annual Report on Form 10-K includes EBITDA and Adjusted EBITDA, which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. EBITDA is defined as net income before depreciation and amortization expense, interest expense and provision for income tax. Adjusted EBITDA represents EBITDA that excludes restructuring and transaction costs, other general income, other expense (income), net, stock-based compensation expense, stock-based compensation payroll tax expense, long-term incentive plan (“LTIP”) bonus and amortization of inventory step-up as these items do not represent our core operating performance.

Previous wording

EBITDA and Adjusted EBITDA are not recognized measures under U.S. GAAP and are not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly-titled measures of performance of other companies. Investors should exercise caution in comparing our non-GAAP measures to any similarly titled measures used by other

Current wording

EBITDA and Adjusted EBITDA are not recognized measures under U.S. GAAP and are not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly-titled measures of performance of other

Previous wording

companies. These non-GAAP financial measures exclude certain items required by U.S. GAAP and should not be considered as alternatives to information reported in accordance with U.S. GAAP.

Current wording

companies. Investors should exercise caution in comparing our non-GAAP measures to any similarly titled measures used by other companies. These non-GAAP financial measures exclude certain items required by U.S. GAAP and should not be considered as alternatives to information reported in accordance with U.S. GAAP.

Previous wording

For the year ended December 31, 2022, net cash provided from operating activities was $73.2 million and as of December 31, 2023, cash and cash equivalents totaled $87.7 million. We believe that our cash flows from operations and cash on hand, and available borrowing capacity under our existing credit facilities (as described below) will be adequate to meet our liquidity requirements for at least the 12 months following the date of this Annual Report on Form 10-K. Our future capital requirements will depend on several factors, including future acquisitions and investments in our manufacturing facilities and equipment. We could be required, or could elect, to

Current wording

For the year ended December 31, 2024, net cash provided from operating activities was $31.8 million and as of December 31, 2024, cash and cash equivalents totaled $124.9 million. We believe that our cash flows from operations and cash on hand, and available borrowing capacity under our existing credit facilities (as described below) will be adequate to meet our liquidity requirements for at least the twelve months following the date of this Annual Report on Form 10-K. Our future capital requirements will depend on several factors, including future acquisitions and investments in our manufacturing facilities and equipment. We could be required, or could elect, to seek additional funding through public or private equity or debt financings; however, additional funds may not be available on terms acceptable to us, if at all.

Previous wording

As of December 31, 2023 and December 31, 2022, we had $140.1 million and $149.7 million in outstanding debt, net of debt discounts and debt issuance costs, respectively, primarily related to the term loan facilities.

Current wording

As of December 31, 2024 and December 31, 2023, we had $223.2 million and $140.1 million in outstanding debt, net of debt discounts and debt issuance costs, respectively, primarily related to the term loan facilities.

Previous wording

There were no amounts outstanding under the Revolving Loan as of December 31, 2023 and 2022. As of December 31, 2023, there were $2.6 million in outstanding letters of credit and $97.4 million of availability.

Current wording

There were no amounts outstanding under the Revolving Loan as of December 31, 2024 and 2023. As of December 31, 2024, there were $2.2 million in outstanding letters of credit and $172.8 million of availability.

Previous wording

The 2021 Credit Agreement also 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 Borrowers or any Guarantor, transactions with affiliates, amendments to organizational documents, accounting changes, sale and leaseback transactions, dispositions, and mandatory prepayments in connection with certain liquidity events. The 2021 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, 2021, 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 3.75 to 1.00 from the quarter ended December 31, 2021 until the quarter ended September 30, 2022, 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. The 2021 Credit Agreement contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain 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 2021 Credit Agreement may be accelerated and the Lenders could foreclose on their security interests in the assets of the Borrowers and the Guarantors. As of March 8, 2024, there were no amounts outstanding under the Revolving Loan.

Current wording

The 2021 Credit Agreement also 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 Borrowers or any Guarantor, transactions with affiliates, amendments to organizational documents, accounting changes, sale and leaseback transactions, dispositions, and mandatory prepayments in connection with certain liquidity events. The 2021 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, 2021, 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 3.75 to 1.00 from the quarter ended December 31, 2021 until the quarter ended September 30, 2022, 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. The 2021 Credit Agreement contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain 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 2021 Credit Agreement may be accelerated and the Lenders could foreclose on their security interests in the assets of the Borrowers and the Guarantors.

Previous wording

During the year ended December 31, 2022, net cash provided by operating activities of $46.4 million resulted primarily from net income of $5.8 million, a $31.9 million add back to net income for stock-based compensation, a $15.7 million add back to net income for depreciation and amortization, a $4.3 million add back to net income for amortization of inventory step-up and a $12.6 million deduction to net income from changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by an increase in accounts receivable of $11.5 million, an increase in prepaid expense and other assets of $7.7 million and an increase in accounts payable and other liabilities of $5.5 million.

Current wording

During the year ended December 31, 2024, net cash provided by operating activities of $31.8 million resulted primarily from net income of $36.1 million, a $16.4 million add back to net income for depreciation and amortization, a $8.4 million add back to net income for stock-based compensation, a $3.9 million add back for amortization of inventory step-up and a $36.4 million deduction from net income from changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by an increase in accounts receivable of $24.9 million and a decrease in accounts payable and other liabilities of $15.6 million, partially offset by a decrease in inventories of $10.0 million.

Previous wording

During the year ended December 31, 2022, we used $59.6 million of cash in investing activities, primarily consisting of $19.4 million for the acquisition of Radar, $36.2 million for the acquisition of Cyalume and $4.5 million for purchases of property and equipment.

Current wording

During the year ended December 31, 2024, we used $147.4 million of cash in investing activities, primarily consisting of $141.8 million for the acquisition of ICOR and Alpha Safety and $5.7 million for purchases of property and equipment.

Previous wording

During the year ended December 31, 2022, net cash provided by financing activities of $24.5 million resulted primarily from proceeds from the secondary offering of $56.3 million, partially offset by principal payments on term loans of $10.1 million, taxes paid in connection with employee stock transactions of $6.3 million and dividends distributed of $11.5 million.

Current wording

During the year ended December 31, 2024, net cash provided by financing activities of $152.7 million resulted primarily from proceeds from term loans of $129.4 million and proceeds from the secondary offering, including option exercise, of $91.8 million, partially offset by principal payments on term loans of $43.3 million, payments for debt issuance costs of $3.1 million, taxes paid in connection with employee stock transactions of $5.3 million and dividends distributed of $13.9 million.

Previous wording

Critical Accounting Policies and Significant Judgements and Estimates

Current wording

Critical Accounting Policies and Significant Judgments and Estimates

Previous wording

We allocate the purchase price, including contingent consideration, of our acquisitions to the assets and liabilities acquired, including identifiable intangible assets, based on their fair values at the date of acquisition. The fair values are primarily based on third-party valuations using our management assumptions that require significant judgments and estimates. The purchase price allocated to intangibles is based on unobservable factors, including but not limited to, projected revenues, expenses, customer attrition rates, royalty rates, and weighted average cost of capital, among others. The weighted average cost of capital uses a market participant’s cost of equity and after-tax cost of debt and reflects the risks inherent in the cash flows. The unobservable factors we use are based upon assumptions believed to be reasonable, but are also uncertain and unpredictable, as a result these estimates, and assumptions may require adjustment in the future if actual results differ from our estimates.

Current wording

We allocate the purchase price, including our estimate of contingent consideration, of our acquisitions to the assets and liabilities acquired, including identifiable intangible assets, based on their fair values at the date of acquisition. The fair values are primarily based on third-party valuations using our management assumptions that require significant judgments and estimates. The purchase price allocated to intangibles is based on unobservable factors, including but not limited to, projected revenues, expenses, customer attrition rates, royalty rates, and weighted average cost of capital, among others. The weighted average cost of capital uses a market participant’s cost of equity and after-tax cost of debt and reflects the risks inherent in the cash flows. The unobservable factors we use are based upon assumptions believed to be reasonable, but are subject to estimation uncertainty.