Cadre Holdings, Inc.

Previous wording

Net sales decreased by $7.8 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily as a result of a decrease in explosive ordnance disposal (“EOD”) and armor products, partially offset by increases from recent acquisitions and international crowd control products.

Current wording

Net sales increased by $12.8 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily as a result of the Zircaloy acquisition and increased demand for existing nuclear safety products, partially offset by a decrease in explosive ordnance disposal (“EOD”) products.

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

Orders backlog increased by $22.4 million as of March 31, 2025 compared to December 31, 2024, primarily due to increases of $10.6 million from EOD products, $6.6 million from chemiluminescent products, $2.8 million from duty gear products, and $2.2 million from structural armor products, partially offset by a reduction of $1.4 million from delivery of large international crowd control orders.

Current wording

Orders backlog increased by $57.5 million as of June 30, 2025 compared to December 31, 2024, primarily due to increases of $56.6 million from the Zircaloy acquisition, $5.9 million from chemiluminescent products and $3.8 million from structural armor products, partially offset by reductions of $6.5 million from existing nuclear safety products and $3.5 million from the delivery of large orders for crowd control products in the six months ended June 30, 2025.

Previous wording

The following table presents data from our results of operations for the three months ended March 31, 2025 and 2024 (in thousands unless otherwise noted):

Current wording

The following table presents data from our results of operations for the three and six months ended June 30, 2025 and 2024 (in thousands unless otherwise noted):

Previous wording

The following tables present segment data for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following tables present segment data for the three and six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

*Net sales.*Product segment net sales decreased by $6.1 million, or 5.1%, from $118.8 million to $112.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to decreases of $8.7 million from EOD products and $7.2 million from armor products, both from large orders delivered in 2024, partially offset by increases of $9.1 million from recent acquisitions and $1.4 million from international crowd control products. Distribution segment net sales decreased by $0.3 million, or 1.2%, from $28.2 million to $27.9 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to decreased demand for hard goods. Reconciling items consisting primarily of intercompany eliminations were $10.5 million and $9.1 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

*Net sales.*Product segment net sales increased by $11.7 million, or 9.1%, from $128.4 million to $140.1 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to increases of $13.4 million from the Zircaloy acquisition and $1.8 million from existing nuclear safety products, partially offset by a decrease of $3.4 million from EOD products. Distribution segment net sales decreased by $0.1 million, or 0.3%, from $25.6 million to $25.5 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to decreased demand for hard goods. Reconciling items consisting primarily of intercompany eliminations were $8.5 million and $9.7 million for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

*Cost of goods sold and gross profit.*Product segment cost of goods sold decreased by $5.2 million, or 7.6%, from $67.8 million to $62.6 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to decreased volumes and the absence of inventory step-up amortization, partially offset by increased costs to manufacture product. Product segment gross profit as a percentage of net sales increased by 150 basis points to 44.4% for the three months ended March 31, 2025 from 43.0% for the three months ended March 31, 2024, mainly driven by favorable mix, favorable pricing net of material inflation and the absence of inventory step-up amortization, partially offset by lower volumes. Distribution segment cost of goods sold increased by $0.2 million, or 1.3%, from $21.6 million to $21.8 million for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to unfavorable mix. Distribution segment gross profit as a percentage of net sales decreased by 192 basis points to 21.6% for the three months ended March 31, 2025 from 23.5% for the three months ended March 31, 2024, mainly driven by unfavorable mix. Reconciling items consisting primarily of intercompany eliminations were $10.5 million and $9.1 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

*Cost of goods sold and gross profit.*Product segment cost of goods sold increased by $6.1 million, or 8.0%, from $75.6 million to $81.7 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to the Zircaloy acquisition and increased costs to manufacture products, partially offset by continuous improvement projects. Product segment gross profit as a percentage of net sales increased by 60 basis points to 41.7% for the three months ended June 30, 2025 from 41.1% for the three months ended June 30, 2024, mainly driven by favorable pricing net of material inflation, a decrease in inventory step-up amortization, and exchange rate favorability. Distribution segment cost of goods sold decreased by $0.1 million, or 0.6%, from $19.7 million to $19.6 million for the three months ended June 30, 2025 as compared to the same period in 2024, primarily due to favorable mix. Distribution segment gross profit as a percentage of net sales increased by 20 basis points to 23.1% for the three months ended June 30, 2025 from 22.9% for the three months ended June 30, 2024, mainly driven by favorable mix. Reconciling items consisting primarily of intercompany eliminations were $8.5 million and $9.7 million for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

*Restructuring and transaction costs.*Restructuring and transaction costs decreased by $2.4 million for the three months ended March 31, 2025 primarily due to costs incurred in 2024 associated with the ICOR and Alpha Safety acquisitions.

Current wording

*Restructuring and transaction costs.*Restructuring and transaction costs increased by $3.3 million for the three months ended June 30, 2025 primarily due to costs incurred for the Zircaloy acquisition.

Previous wording

*Related party expense.*Related party expense, which ordinarily consists of rent expense related todistribution warehouses and retail stores that we lease from related parties, decreased by $1.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to a$1.8 million transaction fee paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, in connection with the acquisition of Alpha Safety.

Current wording

*Related party expense.*Related party expense, which ordinarily consists of rent expense related todistribution warehouses and retail stores that we lease from related parties, increased by $1.0 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 due to a$1.0 million transaction fee paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, in connection with the Zircaloy acquisition.

Previous wording

*Interest expense.*Interest expense increased by $0.6 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to the debt refinancing that occurred in the fourth quarter of 2024.

Current wording

*Interest expense.*Interest expense increased by $1.6 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to the debt assumed as part of the Zircaloy acquisition in April 2025.

Previous wording

*Other income (expense), net.*Other income, net was $1.3 million for the three months ended March 31, 2025 as compared to Other expense, net of $1.4 million for the three months ended March 31, 2024, primarily due to changes in foreign currency exchange rates.

Current wording

*Other income (expense), net.*Other income, net was $7.4 million for the three months ended June 30, 2025 as compared to Other expense, net of $1.8 million for the three months ended June 30, 2024, primarily due to changes in foreign currency exchange rates.

Previous wording

Provision for income taxes. Provision for income taxes was $3.4 million for the three months ended March 31, 2025 compared to $2.0 million for the three months ended March 31, 2024. The effective tax rate was 26.6% for the three months ended March 31, 2025 and was higher than the statutory rate primarily due to state taxes and non-deductible executive compensation. The effective tax rate was 22.1% for the three months ended March 31, 2024 and was lower than the statutory rate primarily due tothe vesting of stock compensation, partially offset by non-deductible executive compensation.

Current wording

*Provision for income taxes.*Provision for income taxes was $5.0 million for the three months ended June 30, 2025 compared to $5.0 million for the three months ended June 30, 2024. The effective tax rate was 29.0% for the three months ended June 30, 2025 and was higher than the statutory rate primarily due to state taxes and non-deductible executive compensation. The effective tax rate was 28.7% for the three months ended June 30, 2024 andwas higher than the statutory rate primarily due to non-deductible executive compensation.

Previous wording

*Selling, general and administrative.*Selling, general and administrative increased by $1.0 million, or 2.5%, for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to recent acquisitions.

Current wording

*Selling, general and administrative.*Selling, general and administrative increased by $7.6 million, or 9.6%, for the six months ended June 30, 2025 as compared to the same period in 2024, primarily due to the Zircaloy acquisition, payroll expense and associated benefits, and professional services expenses.

Previous wording

This Quarterly Report on Form 10-Q 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

Current wording

This Quarterly Report on Form 10-Q 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 (income) expense, net, stock-based compensation expense, stock-based compensation payroll tax expense, long-term incentive plan (“LTIP”) bonus, amortization of inventory step-up and contingent consideration expense as these items do not represent our core operating performance.

Previous wording

For the three months ended March 31, 2025, net cash provided by operating activities totaled $17.4 million and as of March 31, 2025, cash and cash equivalents totaled $133.4 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 Quarterly Report on Form 10-Q. 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.

Current wording

For the six months ended June 30, 2025, net cash provided by operating activities totaled $20.0 million and as of June 30, 2025, cash and cash equivalents totaled $137.5 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 Quarterly Report on Form 10-Q. 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 March 31, 2025 and December 31, 2024, we had $220.5 million and $223.2 million in outstanding debt, net of debt discounts and debt issuance costs, respectively, primarily related to the term loan facilities.

Current wording

As of June 30, 2025 and December 31, 2024, we had $315.2 million and $223.2 million in outstanding debt, net of debt discounts and debt issuance costs, respectively, primarily related to the term loan facilities.

Previous wording

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

Current wording

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.

Previous wording

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.

Current wording

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

Previous wording

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 Borrower and the Guarantors. As of May 2, 2025, there were no amounts outstanding under the Revolving Loan.

Current wording

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 Borrower and the Guarantors. As of August 1, 2025, there were no amounts outstanding under the 2024 Revolving Loan.

Previous wording

There were no amounts outstanding under the 2024 Revolving Loan as of March 31, 2025 and December 31, 2024. As of March 31, 2025, there were $2.2 million in outstanding letters of credit and $172.8 million of availability.

Current wording

There were no amounts outstanding under the 2024 Revolving Loan as of June 30, 2025 and December 31, 2024. As of June 30, 2025, there were $2.0 million in outstanding letters of credit and $173.0 million of availability.

Previous wording

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 at a base rate or SOFR, in each case, plus an applicable margin, in the case of borrowings in United States dollars, or at a Canadian Prime Rate (as announced from time to time by PNC Canada) or a Canadian deposit offered rate (“CDOR”) as determined from time to time by PNC Canada in accordance with the Canadian Loan Agreement. The applicable

Current wording

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 at a base rate or SOFR, in each case, plus an applicable margin, in the case of borrowings in United States dollars, or at a Canadian Prime Rate (as announced from time to time by PNC Canada) or a Canadian deposit offered rate (“CDOR”) as determined from time to time by PNC Canada in accordance with the Canadian Loan Agreement. The applicable margin for these borrowings will range 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 SOFR borrowings and CDOR borrowings. The Canadian Loan Agreement also requires the Canadian Borrowers to pay (i) an unused line fee on the unused portion of the loan commitments in an amount ranging

Previous wording

margin for these borrowings will range 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 SOFR borrowings and CDOR borrowings. The Canadian Loan Agreement also requires the Canadian Borrowers to pay (i) 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, and (ii) an upfront fee equal to 0.25% of the principal amount of the Note.

Current wording

between 0.175% and 0.25% per annum, based upon the level of the Company’s consolidated total net leverage ratio, and (ii) an upfront fee equal to 0.25% of the principal amount of the Note.

Previous wording

During the three months ended March 31, 2025, net cash provided by operating activities of $17.4 million resulted primarily from net income of $9.2 million, a $3.9 million add-back to net income for depreciation and amortization, a $2.0 million add-back to net income for stock-based compensation, and a net add-back to net income of $1.6 million for changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by a decrease in accounts receivable of $10.6 million and an increase in inventories of $9.1 million.

Current wording

During the six months ended June 30, 2025, net cash provided by operating activities of $20.0 million resulted primarily from net income of $21.5 million, add-backs to net income of a $8.5 million for depreciation and amortization, and $4.4 million for stock-based compensation, primarily offset by deductions to net income of $3.5 million for unrealized foreign currency transaction gains and $13.4 million for changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by a decrease in accounts receivable of $10.4 million, an increase in inventories of $11.3 million and a decrease in accounts payable and other liabilities of $15.8 million.

Previous wording

During the three months ended March 31, 2024, net cash provided by operating activities of $2.1 million resulted primarily from net income of $6.9 million, a $3.9 million add back to net income for depreciation and amortization, a $2.1 million add-back to net income for stock-based compensation and a net deduction to net income of $15.2 million for changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by a decrease in accounts payable and other liabilities of $21.7 million, a decrease in accounts receivable of $2.7 million and a decrease in prepaid expenses and other assets of $2.0 million.

Current wording

During the six months ended June 30, 2024, net cash provided by operating activities of $13.3 million resulted primarily from net income of $19.5 million, a $8.6 million add-back to net income for depreciation and amortization, a $4.2 million add-back to net income for stock-based compensation and a net deduction to net income of $22.3 million for changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by a decrease in accounts payable and other liabilities of $22.0 million, an increase in accounts receivable of $3.4 million and a decrease in inventories of $2.4 million.

Previous wording

During the three months ended March 31, 2024, we used $142.6 million of cash in investing activities, primarily consisting of $141.3 million for the acquisition of ICOR and Alpha Safety.

Current wording

During the six months ended June 30, 2024, we used $145.1 million of cash in investing activities, primarily consisting of $141.8 million for the acquisition of ICOR and Alpha Safety.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities of $139.8 million resulted primarily from proceeds from term loans of $80.0 million and proceeds from the secondary offering of $73.5 million, partially offset by taxes paid in connection with employee stock transactions of $5.3 million and dividends distributed of $3.3 million.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities of $149.9 million resulted primarily from proceeds from term loans of $80.0 million and proceeds from the secondary offering, including option exercise, of $91.8 million, partially offset by principal payments on term loans of $6.1 million, taxes paid in connection with employee stock transactions of $5.3 million and dividends distributed of $6.8 million.