10q10k10q10k.net

What changed in Cadre Holdings, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Cadre Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+300 added−286 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-12)

Top changes in Cadre Holdings, Inc.'s 2024 10-K

300 paragraphs added · 286 removed · 245 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

62 edited+4 added−8 removed45 unchanged
Biggest changeWe also launched a new concealable carrier system, APEX ® , that redefines the standard for agility, comfort and protection for officers by containing a four ballistic panel design within a compression fit carrier system that allows the armor to move fluidly with the body. 7 Table of Contents Our principal body armor product offerings include concealable, corrections and tactical armor, which provide varying levels of protection against ballistic or sharp instrument threats.
Biggest changeThis unique configuration allows for unparalleled articulation, ensuring the armor moves fluidly with the body offering superior coverage. Our principal body armor product offerings include concealable, corrections and tactical armor, which provide varying levels of protection against ballistic or sharp instrument threats. Our body armor products are sold under the well-known Safariland ® and Protech ® Tactical brand names.
Body Armor, Duty Gear and Explosive Ordnance Disposal Body armor, duty gear, explosive ordnance disposal equipment are key product areas in the safety equipment market. Law enforcement personnel growth is a significant driver for our business. The U.S.
Body Armor, Duty Gear and Explosive Ordnance Disposal Body armor, duty gear, and explosive ordnance disposal equipment are key product areas in the safety equipment market. Law enforcement personnel growth is a significant driver for our business. The U.S.
We own patents and pending patent applications in the United States, Australia, Austria, Belgium, Brazil, Canada, the People’s Republic of China, Czech Republic, Denmark, France, Germany, Hong Kong, India, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Turkey, and the United Kingdom, as well as in the European Union.
We own patents and pending patent applications in the United States, Australia, Austria, Belgium, Brazil, Canada, People’s Republic of China, Czech Republic, Denmark, France, Germany, Hong Kong, India, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, and the United Kingdom, as well as in the European Union.
We maintain clear market-leadership positions in certain core product categories including body armor, explosive ordnance disposal equipment and duty gear. Over 80% of our product sales are tied to customary or mandated refresh cycles of between five and ten years, which drives a highly predictable recurring revenue stream. The majority of the remaining revenue is associated consumable products.
We maintain clear market-leadership positions in certain core product categories including body armor, explosive ordnance disposal equipment and duty gear. Over 70% of our product sales are tied to customary or mandated refresh cycles of between five and ten years, which drives a highly predictable recurring revenue stream. The majority of the remaining revenue is associated consumable products.
Our brand name recognition and reputation among our customers, diversified product line and extensive distribution network are central to our marketing strategy. Manufacturing and Raw Materials We operate a global manufacturing footprint with 21 sites across North America and Europe. Each site has capacity to scale up without significant further material investment in machinery and equipment.
Our brand name recognition and reputation among our customers, diversified product line and extensive distribution network are central to our marketing strategy. Manufacturing and Raw Materials We operate a global manufacturing footprint with 20 sites across North America and Europe. Each site has capacity to scale up without significant further material investment in machinery and equipment.
By way of reference, we sell concealable tactical, hard armor, or duty retention holsters to the majority of the top 50 police departments in the U.S. by size. For explosive ordnance disposal equipment, we are a party to multi-year contracts for the largest bomb suit teams in the world including the DoD.
By way of reference, we sell concealable, tactical or hard armor, or duty retention holsters to the majority of the top 50 police departments in the U.S. by size. For explosive ordnance disposal equipment, we are a party to single and multi-year contracts for the largest bomb suit teams in the world including the DoD.
In addition, like many other manufacturers, we are subject to compliance with the Fair Labor Standards Act (“FLSA”), the Occupational Safety and Health Act (“OSHA”), data privacy laws, and many other regulations surrounding employment law, environmental law, taxation, and consumer protection. The operations of our Alpha Safety business are highly regulated by the U.S.
In addition, like many other manufacturers, we are subject to compliance with the Fair Labor Standards Act, the Occupational Safety and Health Act, data privacy laws, and many other regulations surrounding employment law, environmental law, taxation, and consumer protection. The operations of our Alpha Safety business are highly regulated by the U.S.
More specifically, to export some of our products in accordance with ITAR or EAR, we must obtain export authorizations or licenses from the U.S. government, primarily the U.S. Department of State for ITAR and the U.S. Department of Commerce for EAR. Also, the Arms Export Control Act of 1976 (“AECA”) requires that a certification be provided to the U.S.
More specifically, to export some of our products in accordance with ITAR or EAR, we must obtain export authorizations or licenses from the U.S. government, primarily the DoS for ITAR and the U.S. Department of Commerce for EAR. Also, the Arms Export Control Act of 1976 (“AECA”) requires that a certification be provided to the U.S.
Demand pertaining to national security is driven by the recent mandate of the DoE and National Nuclear Security Administration to increase production to 80 plutonium pits per year by 2030, which has not regularly occurred since 1989. Lastly, demand pertaining to nuclear energy is driven by both ongoing nuclear plant operation, as well as the decommissioning of nuclear plants.
Demand pertaining to national security is driven by the recent mandate of the DoE to increase production to 80 plutonium pits per year by 2030, which has not regularly occurred since 1989. Lastly, demand pertaining to nuclear energy is driven by both ongoing nuclear plant operation, as well as the decommissioning of nuclear plants.
Domestically, the manufacture, sale, and purchase of certain products are subject to extensive federal, state, and local governmental regulation, with the primary regulatory body being the U.S. Bureau of Alcohol, Firearms, and Explosives (“ATF”). The primary federal laws are the National Firearms Act of 1934 (“NFA”), the Gun Control Act of 1968 (“GCA”) and the AECA.
Domestically, the manufacture, sale, and purchase of certain products are subject to extensive federal, state, and local governmental regulation, with the primary regulatory body being the U.S. Bureau of Alcohol, Firearms, and Explosives (“ATF”). The primary federal laws are the National Firearms Act of 1934, the Gun Control Act of 1968 and the AECA.
Among other things, the ATF conducts periodic audits of our facilities that hold Federal Firearms Licenses. The Federal Acquisition Regulation (“FAR”) governs the majority of our contracts with U.S. federal agencies, mandating uniform policies and procedures across agencies and with each agency supplementing the FAR as needed. For example, the U.S.
Among other things, the ATF conducts periodic audits of our facilities that hold Federal Firearms Licenses. The Federal Acquisition Regulation (“FAR”) governs the majority of our contracts with U.S. federal agencies, mandating uniform policies and procedures across agencies and with each agency supplementing the FAR as needed.
Forms 3, 4 and 5 filed with respect to our equity securities under Section 16(a) of the Securities Exchange Act of 1934, as amended, are also available on our website. All of the foregoing materials are located at the ‘‘SEC Filings’’ tab.
Forms 3, 4 and 5 filed with respect to our equity securities under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are also available on our website. All of the foregoing materials are located at the ‘‘SEC Filings’’ tab.
The SAVES CLUB ® currently has over 2,180 members and counting. Our mission is supported by our Cadre Operating Model (“COM”). The COM is a behavior-based, leadership centric, operating model that enables us to create greater value for our customers and stakeholders.
The SAVES CLUB ® currently has over 2,240 members and counting. Our mission is supported by our Cadre Operating Model (“COM”). The COM is a behavior-based, leadership centric, operating model that enables us to create greater value for our customers and stakeholders.
In connection with the mission critical nature of duty gear products, we dedicate significant product development resources to ensure efficient and effective performance of our products. In fact, we launched a new family of duty holsters, the SafariVault ® .
In connection with the mission critical nature of duty gear products, we dedicate significant product development resources to ensure efficient and effective performance of our products. In fact, we launched a new family of duty holsters, the Ballast.
The three key missions that are highly regulated and that our products and services fulfill are environmental safety, national security and nuclear energy. Any interaction with radioactive waste requires highly engineered safety solutions and domain expertise.
The three key missions that are highly regulated and that our products and services fulfill are environmental safety, national security and nuclear energy. Any interaction with radioactive materials requires highly engineered safety solutions and domain expertise.
We sell our 9 Table of Contents products through a network of longstanding third-party distributors as well as an owned distribution platform, both of which interact directly with agencies and end users. International. Over the past three years, we have sold products to more than 100 countries globally.
We sell our products through a network of longstanding third-party distributors as well as an owned distribution platform, both of which interact directly with agencies and end users. International. Over the past three years, we have sold products to more than 100 countries globally.
The loss of patent protection for patents expiring in 2024 is not expected to have a material effect on our business. Our material registered trademarks include SAFARILAND ® and MED-ENG ® .
The loss of patent protection for patents expiring in 2025 is not expected to have a material effect on our business. Our material registered trademarks include SAFARILAND ® and MED-ENG ® .
We have dedicated research and development centers at our manufacturing sites that specialize in product categories, including ballistics developments and state-of-the-art testing laboratory in Ontario, California, blast impact and technology development for explosive ordnances in Ottawa, Canada, and holster development and design in Jacksonville, Florida and Ontario, California, each of which focus on quality and product performance in order to generate critical real-time feedback.
We have dedicated research and development groups at our manufacturing sites that specialize in product categories, including ballistics developments and state-of-the-art testing laboratory in Ontario, California, blast impact and technology development for explosive ordnances in Ottawa, Canada, and holster development and design in Jacksonville, Florida and Ontario, California, each of which focuses on quality and product performance in order to generate critical real-time feedback.
The information found on our website shall not be deemed incorporated by reference by any general statement incorporating by reference this report into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such laws.
The information found on our website shall not be deemed incorporated by reference by any general statement incorporating by reference this report into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or under the Exchange Act, and shall not otherwise be deemed filed under such laws.
We intend to penetrate certain international markets through leveraging existing relationships, building local market teams and expansion into relevant market adjacencies. Targeted M&A Program. To supplement organic growth and internal research and development, our management team has historically undertaken a targeted M&A program, completing 16 transactions to date.
We intend to penetrate certain international markets through leveraging existing relationships, building local market teams and expansion into relevant market adjacencies, as well as through our targeted M&A program. Targeted M&A Program. To supplement organic growth and internal research and development, our management team has historically undertaken a targeted M&A program, completing 17 transactions to date.
Leveraging our differentiated product development process and technical knowhow, leading domestic market position and first mover advantage with our suppliers, we plan to drive profitable organic revenue growth via new product development and geographic expansion.
Leveraging our differentiated product development process and technical know-how, leading domestic market position and first mover advantage with our suppliers, we plan to drive profitable organic revenue growth via new product development and geographic expansion.
The export of certain of our products from the U.S. is subject to various U.S. regulations, including laws and regulations relating to import-export controls, technology transfers, the International Traffic in Arms Regulations (“ITAR”), and the Export Administration Regulations (“EAR”).
The export of certain of our products from the U.S. is subject to various U.S. regulations, including laws and regulations relating to import-export controls, technology transfers, the International Traffic in Arms Regulations (“ITAR”), and the Export 11 Table of Contents Administration Regulations (“EAR”).
Furthermore, our engineered container solution for the nuclear industry, the SAVY 400, is the only DoE compliant container. Our products continually exceed stringent industry safety standards and are recognized for advancements in performance through innovation and technological enhancement. 6 Table of Contents Mission-critical products with recurring demand characteristics.
Furthermore, our engineered container solution for the nuclear industry, the SAVY 400, is the only DoE compliant container. Our products continually exceed stringent industry safety standards and are recognized for advancements in performance through innovation and technological enhancement. Mission-critical products with recurring demand characteristics.
In total, we have 67 salespeople domestically and 24 internationally. We believe that by combining our third party network with our in-house salesforce and our extensive owned distribution network, we create continuous customer interaction and best- in-class service and training, providing us with a distinct advantage over our peers.
In total, we have 65 salespeople domestically and 12 internationally. We believe that by combining our third party network with our in-house salesforce and our extensive owned distribution network, we create continuous customer interaction and best- in-class service and training, providing us with a distinct advantage over our peers.
We service foreign defense ministries, foreign national law enforcement agencies and other foreign agencies through our distribution partners as well as through agency agreements with representatives to help service broad regions. U.S. Federal Agencies. We sell to a variety of federal agencies including the DoS, DoD, DoI, DoJ, DHS Inc. and DoE.
We service foreign defense ministries, foreign national law enforcement agencies and other foreign agencies directly, through our distribution partners as well as through agency agreements with representatives to help service broad regions. 9 Table of Contents U.S. Federal Agencies. We sell to a variety of federal agencies including the DoS, DoD, DoI, DoJ, DHS, and DoE.
These strategic acquisitions have allowed us to expand our product and technology offerings, enter new markets and expand geographically to achieve attractive returns in our invested capital period. We maintain a robust pipeline of opportunistic M&A opportunities, spanning our existing core products and markets as well as attractive adjacencies within the safety landscape.
These strategic acquisitions have allowed us to expand our product and technology offerings, enter new markets and expand geographically to achieve attractive returns. We maintain a robust pipeline of M&A opportunities, spanning our existing core products and markets as well as attractive adjacencies within the safety landscape.
The significant increase (66.7%) in active shooter incidents since 2018, continues to be a tailwind that leaves law enforcement agencies with making the decision to upgrade body armor or armored equipment that provides higher protection to officers due to these threats.
The significant increase (60%) in active shooter incidents since 2019, continues to be a tailwind that leaves law enforcement agencies with making the decision to upgrade body armor or armored equipment that provides higher protection to officers due to these threats.
While we believe that acceptance in this market is principally driven by the ability to bring new and innovative products to market, price point is critical. 10 Table of Contents Human Capital We have a total of 2,435 employees.
While we believe that acceptance in this market is principally driven by the ability to bring new and innovative products to market, price point is critical. Human Capital We have a total of 2,284 employees.
The lifecycle demand restarts as new nuclear plants emerge and new small modular reactor plants grow around the world. Our management estimates the total addressable market for our nuclear safety products to be between $3 billion and $6 billion based on the need for our products by the U.S. government and the U.S. commercial nuclear market.
The lifecycle demand restarts as new nuclear plants emerge and new small modular reactor plants become commercially viable. Our management estimates the total addressable market for our nuclear safety products to be between $3 billion and $6 billion based on the need for our products by the U.S. government and the U.S. commercial nuclear market.
Department of Defense implements the FAR through the Defense Federal Acquisition Regulation Supplement (“DFARS”). Finally, agencies routinely audit and review government contractors for performance and compliance with applicable laws, regulations, and standards.
For example, the DoD implements the FAR through the Defense Federal Acquisition Regulation Supplement. Finally, agencies routinely audit and review government contractors for performance and compliance with applicable laws, regulations, and standards.
Examples of recent product innovation include the development of a 3D body sizing solution for soft armor, introduction of our next generation holsters, a new tactical armor solution, a new concealable armor solution, a variety of consumer-focused holsters and working with key suppliers on the use of emerging materials for utilization in new armor products. International Market Expansion.
Examples of recent product innovation include the development of the APEX body armor carrier system, introduction of our next generation Ballast holsters, a new tactical armor solution, a variety of consumer-focused holsters and working with key suppliers on the use of emerging materials for utilization in new armor products. International Market Expansion.
Of these employees, 1,838 were engaged in manufacturing, 232 in sales, marketing, product management and customer support, 191 in corporate functions (IT, Finance, HR, Legal and Compliance, etc.), 133 in R&D, technical engineering, manufacturing engineering and project management, 26 retail store associates and 15 in various executive and administrative functions.
Of these employees, 1,685 were engaged in manufacturing, 232 in sales, marketing, product management and customer support, 177 in corporate functions (IT, Finance, HR, Legal and Compliance, etc.), 144 in R&D, technical engineering, manufacturing engineering and project management, 26 retail store associates and 20 in various executive and administrative functions.
The following table describes the material patents and patent applications owned or licensed by us, segregated by product category, including the range of expiry dates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Range of ​ Range of ​ ​ ​ ​ Number of ​ Expiration ​ Number of ​ Expiration Dates ​ ​ ​ ​ Patents ​ Dates for ​ Pending Patent ​ (if Pending Patent Product Category Ownership Granted Granted Patents Applications Granted) Body Armor Safariland, LLC 38 2025- 2048 3 2043 Duty Gear Safariland, LLC 107 2025 - 2048 43 2038 - 2043 Duty Gear ​ Radar Leather Division S.r.l. ​ 65 ​ 2024 – 2039 ​ 1 ​ 2039 EOD Med-Eng, LLC 93 2023 – 2045 1 2034 Crowd Control Defense Technology, LLC 41 2026 – 2048 9 2038 – 2048 Crowd Control ​ Safariland, LLC ​ 1 ​ 2032 ​ — ​ — Crowd Control ​ Radar Leather Division S.r.l. ​ 5 ​ 2029 – 2031 ​ — ​ 2031 Other – Diversified Safariland, LLC 31 2025 – 2048 2 2042 – 2043 Other – Diversified ​ Cyalume Technologies ​ 41 2027 – 2042 33 2038 – 2042 Nuclear Safety NucFil, LLC 6 2027 – 2036 — — 11 Table of Contents ​ Government Regulation We are subject to federal licensing requirements with respect to the sale of some of our products in foreign countries.
The following table describes the material patents and patent applications owned or licensed by us, segregated by product category, including the range of expiry dates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Range of ​ Range of ​ ​ ​ ​ Number of ​ Expiration ​ Number of ​ Expiration Dates ​ ​ ​ ​ Patents ​ Dates for ​ Pending Patent ​ (if Pending Patent Product Category Ownership Granted Granted Patents Applications Granted) Body Armor Safariland, LLC 37 2025 – 2049 9 2042 – 2044 Duty Gear Safariland, LLC 173 2025 – 2049 64 2039 – 2045 Duty Gear ​ Radar Leather Division S.r.l. ​ 64 ​ 2025 – 2039 ​ — ​ — EOD Med-Eng, LLC 89 2025 – 2045 — — Crowd Control Defense Technology, LLC 45 2026 – 2048 9 2042 – 2048 Crowd Control ​ Safariland, LLC ​ 1 ​ 2032 ​ — ​ — Crowd Control ​ Radar Leather Division S.r.l. ​ 5 ​ 2029 – 2031 ​ — ​ — Other – Diversified Safariland, LLC 31 2025 – 2048 2 2036 – 2042 Other – Diversified ​ Cyalume Technologies ​ 43 2027 – 2042 26 2038 – 2044 Nuclear Safety NucFil, LLC 6 2027 – 2036 — — ​ Government Regulation We are subject to federal licensing requirements with respect to the sale of some of our products in foreign countries.
Department of Transportation Hazardous Material Regulations (“HMR”), which govern the transportation of hazardous and radioactive materials in interstate, intrastate, and foreign commerce. Prior to transportation into and within the United States, explosives must be tested and classified by the U.S. Department of Transportation.
“Risk Factors.” The transportation of certain of our products is subject to U.S. Department of Transportation Hazardous Material Regulations (“HMR”), which govern the transportation of hazardous and radioactive materials in interstate, intrastate, and foreign commerce. Prior to transportation into and within the United States, explosives must be tested and classified by the U.S. Department of Transportation.
This mission lives in the hearts and minds of our associates around the world and remains in the forefront as we innovate new products and services and focus on processes to bring high quality standards to our customers.
Our mission that binds our leading brands as one is Together, We Save Lives. This mission lives in the hearts and minds of our associates around the world and remains in the forefront as we innovate new products and services and focus on processes to bring high quality standards to our customers.
Our products provide critical protection to their end users as well as those around them, with limited or no room for error. As a result, stringent safety standards and customary warranty provisions create refresh cycles on over 80% of the equipment we supply via our product segment. Demand associated with these refresh cycles drives a highly predictable recurring revenue stream.
Our products provide critical protection to their end users as well as those around them, with limited or no room for error. As a result, stringent safety standards and customary warranty provisions 6 Table of Contents create refresh cycles on over 70% of the equipment we supply via our Product segment.
Marines, FBI, ATF and all the armed forces of NATO countries. Duty Gear. We are the industry leader in holster innovation and safety engineering and our products incorporate industry standard safety locking mechanisms on which a majority of first responders are trained.
We are the industry leader in holster innovation and safety engineering and our products incorporate industry standard safety locking mechanisms on which a majority of first responders are trained.
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.
These products are marketed under several well- 8 Table of Contents known niche brands. 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.
Globally, we are a leading provider of explosive ordnance disposal technician equipment. We believe we have achieved these positions through our high-quality standards, innovation and a direct connection to the end users.
Domestically, we are a top provider of safety holsters and soft body armor for first responders, as well as a top provider of nuclear safety solutions. Globally, we are a leading provider of explosive ordnance disposal technician equipment. We believe we have achieved these positions through our high-quality standards, innovation and a direct connection to the end users.
Demand pertaining to environmental safety is fueled by mandated cleanup from the DoE related to a $528 billion liability that exists from legacy defense waste and nuclear research.
Demand pertaining to environmental safety is fueled by mandated cleanup from the DoE related to a $534 billion liability that exists from energy research and nuclear weapons production dating back decades.
None of our employees are represented by a union in collective bargaining with us. We believe that our employee relations are good. Our human capital objectives center around identifying, recruiting, retaining, incentivizing and integrating our existing and new employees. Research and Development Our significant IP portfolio combined with best-in-class product development and advanced materials processing separates us from our competitors.
Our human capital objectives center around identifying, recruiting, retaining, incentivizing and integrating our existing and new employees. 10 Table of Contents Research and Development Our significant IP portfolio combined with best-in-class product development and advanced materials processing separates us from our competitors.
We incur expenses in complying with environmental requirements and could incur higher costs in the future as a result of more stringent requirements that may be enacted in the future. 12 Table of Contents Available Information Our Internet address is www.cadre-holdings.com .
We have an excellent workplace safety track record and believe that our operations are in material compliance with these laws and regulations. We incur expenses in complying with environmental requirements and could incur higher costs in the future as a result of more stringent requirements that may be enacted in the future. Available Information Our Internet address is www.cadre-holdings.com .
Supplementary to our core product offerings, we design, manufacture, assemble, and market a suite of equipment to round out our product portfolio. Key products include chem light solutions, communications gear, forensic and investigation products, firearms cleaning solutions, and crowd control products. These products are marketed under several well-known niche brands.
Select customers include the DoE, LANL, BWXT and Veolia. Other Protective Equipment. Supplementary to our core product offerings, we design, manufacture, assemble, and market a suite of equipment to round out our product portfolio. Key products include chem light solutions, communications gear, forensic and investigation products, firearms cleaning solutions, and crowd control products.
We are also subject to the Foreign Corrupt Practices Act (“FCPA”) along with similar anti-corruption laws worldwide which prohibit improper payments to foreign governments and their officials by U.S. and other business entities. The transportation of certain of our products is subject to U.S.
We are subject to the Foreign Corrupt Practices Act (“FCPA”) along with similar anti-corruption laws worldwide which prohibit improper payments to foreign governments and their officials by U.S. and other business entities. However, FCPA enforcement is undergoing changes in 2025, which are discussed in further detail under Item 1A.
Industry Overview The market for safety equipment focuses on providing a diverse set of protective and mission enhancing products and solutions to our target end users.
It guides how we work, innovate, solve problems, improve and engage with each other, our customers and our communities. Industry Overview The market for safety equipment focuses on providing a diverse set of protective and mission enhancing products and solutions to our target end users.
We own a total of 520 patents and pending patent applications worldwide, of which 428 are patents granted and 92 are pending patent applications, with expiry dates ranging from 2023 to 2048 in 35 jurisdictions. Of those 520 patents and pending patent applications, 355 are for utility patents and 159 are for design patents.
We own a total of 604 patents and pending patent applications worldwide, of which 494 are patents granted and 110 are pending patent applications, with expiry dates ranging from 2025 to 2049 in 36 jurisdictions. Of those 604 patents and pending patent applications, 384 are for utility patents and 220 are for design patents.
Nuclear Safety. Founded in 1986, Alpha Safety is a global provider of highly engineered technical products and services spanning the nuclear value chain. Its partnership with key customers is approaching 40 years.
Founded in 1986, Alpha Safety is a global provider of highly engineered technical products and services spanning the nuclear value chain. Its partnership with key customers is approaching 40 years. We offer turnkey solutions to customers who rely on its decades of design, application and technical know-how to protect critical operational personnel and the environment.
Our body armor products are sold under the well-known Safariland ® and Protech ® Tactical brand names. We also sell products in partnership with industry leading developer Hardwire LLC. Our body armor panels manufactured in the United States are designed to meet applicable ballistic performance standards established by the NIJ.
We also sell products in partnership with industry leading developer Hardwire LLC. Our body armor panels manufactured in the United States are designed to meet applicable ballistic performance standards established by the NIJ. We also manufacture body armor in Canada, England and Lithuania that is certified to meet applicable U.S. 7 Table of Contents and international armor standards.
Med-Eng has a fielded installed base of bomb suits in over 100 countries, yielding predictable, recurring replacement cycles. Our continuous investment in R&D supported by our existing IP portfolio, drives next- generation technologies designed to meet the ever-evolving threats for operators in the field. Select customers include the U.S. Army, U.S. Navy, U.S. Air Force, U.S.
Our continuous investment in R&D supported by our existing IP portfolio, drives next-generation technologies designed to meet the ever-evolving threats for operators in the field. Select customers include the U.S. Army, U.S. Navy, U.S. Air Force, U.S. Marines, FBI, ATF and all the armed forces of NATO countries. Duty Gear.
In addition, increasing mandatory body armor use and refresh policies, and evolving technical standards continue to drive the need for safety equipment for first responders.
Demand for first responder safety equipment is also fueled by increasing law enforcement budgets and increases in expenditures per officer. 5 Table of Contents In addition, increasing mandatory body armor use and refresh policies, and evolving technical standards continue to drive the need for safety equipment for first responders.
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. Domestically, we are a top provider of safety holsters and soft body armor for first responders, as well as a top provider of nuclear safety solutions.
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.
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.
We sell a wide range of products including body armor, explosive ordnance disposal equipment, duty gear and nuclear safety products 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.
Our business has benefitted from key shifts serving as tailwinds to our growth strategy including the increasing focus on safety, replacement and modernization trends. Compelling organic and inorganic growth roadmap.
The majority of our end markets are acyclical in nature, as their demand is driven primarily by first responder budgets, and relatively unaffected by economic cycles. Our business has benefited from key shifts serving as tailwinds to our growth strategy including the increasing focus on safety, replacement and modernization trends. Compelling organic and inorganic growth roadmap.
The majority of our remaining revenue is associated consumable products driving recurring sales based on replenishment needs. Attractive macro-economic and secular tailwinds driving demand and visibility for our products. The majority of our end markets are acyclical in nature, as their demand is driven primarily by the first responder budgets, and relatively unaffected by economic cycles.
Demand associated with these refresh cycles drives a highly predictable recurring revenue stream. The majority of our remaining revenue is associated consumable products driving recurring sales based on replenishment needs. Attractive macro-economic and secular tailwinds driving demand and visibility for our products.
Our products provide end users with the latest protective technologies integrated with electronic components and communications equipment. The addition of ICOR, acquired in January 2024, gives us the ability to sell a full platform of robots suitable for bomb safety technicians but also meet the needs of law enforcement tactical teams as well.
The addition of ICOR, acquired in January 2024, gives us the ability to sell a full platform of robots suitable for bomb safety technicians but also meet the needs of law enforcement tactical teams as well. Med-Eng has a fielded installed base of bomb suits in over 100 countries, yielding predictable, recurring replacement cycles.
Department of Justice (“DoJ”), U.S. Department of Homeland Security (“DHS”), U.S. Department of Corrections (“DoC”), the Department of Energy (“DoE”), Los Alamos National Laboratories (“LANL”), Waste Isolation Plant (“WIPP”), numerous foreign government agencies and other companies involved in the nuclear industry.
Department of Justice (“DoJ”), U.S. Department of Homeland Security (“DHS”), U.S. Department of Corrections (“DoC”), the Department of Energy (“DoE”), numerous foreign government agencies and other companies involved in the nuclear industry. We have a large and diverse customer base, with no individual customer representing more than 10% of our total revenue.
We are the global leader of a highly engineered portfolio of critical operator survival suits, remotely operated vehicles, specialty tools, blast sensors, accessories and vehicle blast attenuation seats for bomb safety technicians. As the most trusted brand in the market, Med-Eng is the go-to source for explosive ordnance solutions in the developed world.
We also distribute a variety of third-party items, including helmets, plates and face shields for protection from blunt trauma, ballistic threats and explosive shrapnel. Explosive Ordnance Disposal. We are the global leader of a highly engineered portfolio of critical operator survival suits, remotely operated vehicles, specialty tools, blast sensors, accessories and vehicle blast attenuation seats for bomb safety technicians.
The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. In addition, you may request a copy of any such materials, without charge, by submitting a written request to: Cadre Holdings, Inc., c/o the Secretary, 13386 International Parkway, Jacksonville, FL 32218.
In addition, you may request a copy of any such materials, without charge, by submitting a written request to: Cadre Holdings, Inc., c/o the Secretary, 13386 International Parkway, Jacksonville, FL 32218. The contents of the websites identified above are not incorporated into this Annual Report on Form 10-K. ​
The product was engineered for extreme durability and a long list of use enhancements like magnetic slide guide to aid holstering a weapon, more prominent release lever button, a new auto-tension device to eliminate rattle, and many more. We manufacture and sell duty gear and commercial offerings under the widely recognized Safariland ® , Radar ® and Bianchi ® brands.
The product was engineered for extreme durability and a long list of use enhancements like open muzzle design, removable red dot sight optic lid, extreme temperature tolerance and a minimalist footprint. We manufacture and sell duty gear and commercial offerings under the widely recognized Safariland ® , Radar ® and Bianchi ® brands. Nuclear Safety.
Bureau of Labor Statistics projects that the number of 5 Table of Contents openings for law enforcement personnel in the U.S. to be 64,500 on average over the decade from 2022 to 2032. Demand for first responder safety equipment is also fueled by increasing law enforcement budgets and increases in expenditures per officer.
Bureau of Labor Statistics projects that the number of openings for law enforcement personnel in the U.S. to be 63,000 on average over the decade from 2023 to 2033.
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, duty gear and nuclear safety products through both direct and indirect channels.
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.
Item 1. Business BUSINESS Business Overview For over 60 years, we have been a global leader in the manufacturing and distribution of safety equipment for professionals. Our equipment provides critical protection which allows its users to safely perform their duties and protect those around them in hazardous or life-threatening situations.
Item 1. Business BUSINESS Business Overview For over 60 years, we have been a global leader in the manufacturing and distribution of safety equipment and other related products for the law enforcement, first responder, military and nuclear markets.
Removed
We have a large and diverse customer base, with no individual customer representing more than 10% of our total revenue. Our mission that binds our leading brands as one is Together, We Save Lives.
Added
We recently launched our innovative and groundbreaking APEX concealable body armor vest system, which redefines the standard of agility and comfort. At the core of APEX lies a revolutionary 4-piece compression carrier design that seamlessly integrates two side panels with front and rear counterparts.
Removed
It guides how we work, innovate, solve problems, improve and engage with each other, our customers and our communities. In our COM, we define six capabilities that all of our businesses give focus and learn as they master tools in their journey to excellence through our excellence maturity model.
Added
As the most trusted brand in the market, Med-Eng is the go-to source for explosive ordnance solutions in the developed world. Our products provide end users with the latest protective technologies integrated with electronic components and communications equipment.
Removed
We recently launched an industry-first partnership to provide law enforcement officers and first responders with the ability to determine their specific size through the use of our 3D body sizing app, XpertFit.
Added
None of our employees are represented by a union in collective bargaining with us. We believe that our employee relations are good.
Removed
In addition, we also launched a highly innovative tactical carrier system, Hyper-X, that increases soft ballistic coverage compared to traditional plate carrier systems, provides enhanced mobility and a large range of adjustments, is extremely adaptable to expand the system with additional accessories, and significantly reduces the overall weight compared to our competition.
Added
The SEC also maintains a website that contains reports, 12 Table of Contents proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
Removed
We also manufacture body armor in Canada, England and Lithuania that is certified to meet applicable international armor standards. We also distribute a variety of third-party items, including helmets, plates and face shields for protection from blunt trauma, ballistic threats and explosive shrapnel. Explosive Ordnance Disposal.
Removed
We offer turnkey solutions to customers who rely 8 Table of Contents on its decades of design, application and technical know how to protect critical operational personnel and the environment. Select customers include the DoE, LANL, WIPP and Veolia. Other Protective Equipment.
Removed
We have an excellent workplace safety track record and believe that our operations are in material compliance with these laws and regulations.
Removed
The contents of the websites identified above are not incorporated into this Annual Report on Form 10-K. ​

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

94 edited+26 added−21 removed167 unchanged
Biggest changeKanders, as well as any loss of officers or employees due to illness or other events outside of our control. ● We are uncertain of our ability to manage our growth. ● We have significant payment obligations under the terms of our long-term debt, $141.3 million of which was outstanding as of December 31, 2023. ● The concentration of our capital stock ownership with insiders will likely limit your ability to influence corporate matters. 13 Table of Contents ● We may face difficulty in integrating the operations of the businesses we have acquired and may acquire in the future.
Biggest changeKanders, as well as any loss of officers or employees due to illness or other events outside of our control. ● We are uncertain of our ability to manage our growth. ● We have significant payment obligations under the terms of our long-term debt, $225.4 million of which was outstanding as of December 31, 2024. ● The concentration of our capital stock ownership with insiders will likely limit your ability to influence corporate matters. ● We may face difficulty in integrating the operations of the businesses we have acquired and may acquire in the future. ● The ability of our information technology systems or information security systems to operate effectively, including as a result of cybersecurity incidents, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes, and the potential legal, reputational, operational and financial effects any such incident may have on the Company. 13 Table of Contents Risks Related to Our Industry The products we sell are inherently risky and could give rise to product liability, product warranty claims, and other loss contingencies.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: ● actual or anticipated fluctuations in our results of operations; ● the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; ● failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates or ratings by any securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; 27 Table of Contents ● announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, operating results or capital commitments; ● changes in operating performance and stock market valuations of other technology or retail companies generally, or those in our industry in particular; ● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; ● changes in our board of directors or management; ● sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; ● lawsuits threatened or filed against us; ● changes in laws or regulations applicable to our business; ● the expiration of contractual lock-up agreements; ● changes in our capital structure, such as future issuances of debt or equity securities; ● short sales, hedging and other derivative transactions involving our capital stock; ● general economic conditions in the United States and abroad; ● other events or factors, including those resulting from war, pandemics, incidents of terrorism or responses to these events; and ● the other factors described in the sections of the Annual Report on Form 10-K titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” In addition, stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: ● actual or anticipated fluctuations in our results of operations; ● the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; ● failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates or ratings by any securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; ● announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, operating results or capital commitments; ● changes in operating performance and stock market valuations of other technology or retail companies generally, or those in our industry in particular; ● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; ● changes in our board of directors or management; ● sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; ● lawsuits threatened or filed against us; ● changes in laws or regulations applicable to our business; ● the expiration of contractual lock-up agreements; ● changes in our capital structure, such as future issuances of debt or equity securities; ● short sales, hedging and other derivative transactions involving our capital stock; ● general economic conditions in the United States and abroad; ● other events or factors, including those resulting from war, pandemics, incidents of terrorism or responses to these events; and ● the other factors described in the sections of the Annual Report on Form 10-K titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” In addition, stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our second amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
For example, our indebtedness or any additional financing may: ● make it more difficult for us to pay or refinance debts as they become due; ● require us to use a larger portion of cash flow for debt service, reducing funds available for other purposes; 22 Table of Contents ● limit our ability to pursue business opportunities, such as potential acquisitions, and to react to changes in market or industry conditions; ● reduce the funds available for other purposes, such as implementing our strategy, funding capital expenditures and making distributions to stockholders; ● increase our vulnerability to adverse economic, industry or competitive developments; ● affect our ability to obtain additional financing; ● decrease our profitability or cash flow, or require us to dispose of significant assets in order to satisfy debts and other obligations if we are not able to satisfy these obligations using cash from operations or other sources; and ● disadvantage us compared to competitors.
For example, our indebtedness or any additional financing may: ● make it more difficult for us to pay or refinance debts as they become due; ● require us to use a larger portion of cash flow for debt service, reducing funds available for other purposes; ● limit our ability to pursue business opportunities, such as potential acquisitions, and to react to changes in market or industry conditions; ● reduce the funds available for other purposes, such as implementing our strategy, funding capital expenditures and making distributions to stockholders; ● increase our vulnerability to adverse economic, industry or competitive developments; ● affect our ability to obtain additional financing; ● decrease our profitability or cash flow, or require us to dispose of significant assets in order to satisfy debts and other obligations if we are not able to satisfy these obligations using cash from operations or other sources; and ● disadvantage us compared to competitors.
In pursuing our international expansion strategy, we face several additional risks, including: ● foreign laws and regulations, which may vary by country, that may impact how we conduct our business; ● uncertain costs of doing business in foreign countries, including different employment laws; ● potential adverse tax consequences if taxing authorities in different jurisdictions worldwide disagree with our interpretation of various tax laws or our determinations as to the income and expenses attributable to specific jurisdictions, which could result in our paying additional taxes, interest and penalties; ● technological differences that vary by marketplace, which we may not be able to support; ● longer payment cycles and foreign currency fluctuations; 15 Table of Contents ● economic downturns; and ● uncertainty of sustained revenue growth outside of the United States.
In pursuing our international expansion strategy, we face several additional risks, including: ● foreign laws and regulations, which may vary by country, that may impact how we conduct our business; ● uncertain costs of doing business in foreign countries, including different employment laws; ● potential adverse tax consequences if taxing authorities in different jurisdictions worldwide disagree with our interpretation of various tax laws or our determinations as to the income and expenses attributable to specific jurisdictions, which could result in our paying additional taxes, interest and penalties; ● technological differences that vary by marketplace, which we may not be able to support; ● longer payment cycles and foreign currency fluctuations; ● economic downturns; and ● uncertainty of sustained revenue growth outside of the United States.
While we intend to pay regular Quarterly Cash Dividends for the foreseeable future, all subsequent dividends will be reviewed quarterly and declared at the discretion and approval of our board of directors and will depend upon, among other things, our results of operations, capital requirements, general business conditions, contractual restrictions under our 2021 Credit Agreement on the payment of dividends, legal and regulatory restrictions on the payment of dividends, and other factors our board of directors deems relevant.
While we intend to pay regular Quarterly Cash Dividends for the foreseeable future, all subsequent dividends will be reviewed quarterly and declared at the discretion and approval of our board of directors and will depend upon, among other things, our results of operations, capital requirements, general business conditions, contractual restrictions under our 2024 Credit Agreement on the payment of dividends, legal and regulatory restrictions on the payment of dividends, and other factors our board of directors deems relevant.
Further, should we fail to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our customer service to suffer. Additionally, the U.S. Department of Labor has proposed rules that may have salary and wage impact for “exempt” team members, which could result in a substantial increase in store payroll expense.
Further, should we fail to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our customer service to suffer. Additionally, the U.S. Department of Labor has enacted rules that may have salary and wage impact for “exempt” team members, which could result in a substantial increase in store payroll expense.
Therefore, you should not purchase our common stock if you need immediate or future income by way of dividends from your investment. In addition, upon an event of default under our 2021 Credit Agreement, we are prohibited from declaring or paying any dividends on our common stock or generally making other distributions to our stockholders.
Therefore, you should not purchase our common stock if you need immediate or future income by way of dividends from your investment. In addition, upon an event of default under our 2024 Credit Agreement, we are prohibited from declaring or paying any dividends on our common stock or generally making other distributions to our stockholders.
In addition, first responder budgets have been the subject of increased discussions as a result of controversies relating to police reform. Our results of operations may be subject to substantial period-to-period fluctuations because of these and other factors affecting military, law enforcement and other governmental spending.
In addition, first responder budgets have been the subject of increased discussion as a result of controversies relating to police reform. Our results of operations may be subject to substantial period-to-period fluctuations because of these and other factors affecting military, law enforcement and other governmental spending.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, new Securities and Exchange Commission regulations and NASDAQ rules, are creating uncertainty for companies such as ours.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, new Securities and Exchange Commission regulations and NASDAQ rules, are creating uncertainty for companies such as ours.
Also, a significant or extended lawsuit, such as a class action, could divert significant amounts of management’s time and attention. We cannot assure you that our insurance coverage would be sufficient to cover the payment of any potential claim.
Also, a significant or extended lawsuit, such as a class action, could divert significant amounts of management’s time and attention. We cannot assure you that our insurance coverage would be sufficient to cover the payment of any potential claims.
We are also subject to routine audits to assure our compliance with these requirements. 14 Table of Contents While we continually work to enhance our international trade compliance programs, we cannot assure you that we are or will be in full compliance at all times with applicable laws and regulations governing the export and deemed export of defense articles, defense services, and dual-use products and services that are controlled by U.S. and/or foreign governments.
We are also subject to routine audits to assure our compliance with these requirements While we continually work to enhance our international trade compliance programs, we cannot assure you that we are or will be in full compliance at all times with applicable laws and regulations governing the export and deemed export of defense articles, defense services, and dual-use products and services that are controlled by U.S. and/or foreign governments.
Customers for our products include 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 and numerous foreign government agencies.
Customers for our products include domestic and international first responders such as state and local law enforcement, fire and rescue, explosive ordnance disposal technicians, emergency medical technicians, fish and wildlife enforcement and departments of corrections, as well as federal agencies and numerous foreign government agencies.
A breach of, or the inability to comply with, the covenants in our term loan facility and revolving credit agreement could result in an event of default, in which case the lenders will have the right to declare all borrowings to be immediately due and payable, which would have a material adverse effect on our business, financial condition, results of operations and prospects and could lead to foreclosure on our assets.
A breach of, or the inability to comply with, the covenants in our term loan facility and revolving credit agreement could result in an event of default, in which case the lenders will have the right to declare all borrowings to be immediately 23 Table of Contents due and payable, which would have a material adverse effect on our business, financial condition, results of operations and prospects and could lead to foreclosure on our assets.
If the DoE were to determine that the Price-Anderson Act did not apply to any claims or allegations asserted against Alpha Safety, we would have to pay all or part of any damages awarded as a result of such claims and the cost to us, including legal fees, could adversely affect our results of operations and financial condition.
If the DoE were to determine that the Price-Anderson Act did not apply to any claims or allegations asserted against the Company, we would have to pay all or part of any damages awarded as a result of such claims, and the cost to us, including legal fees, could adversely affect our results of operations and financial condition.
We are subject to extensive government regulations, and our failure or inability to comply with these regulations could materially restrict our operations and subject us to substantial penalties. We are subject to federal licensing requirements with respect to the export of certain of our products.
We are subject to extensive government regulations, and our failure or inability to comply with these regulations could materially restrict our operations and subject us to substantial penalties. We are subject to federal licensing requirements with respect to the export of some of our products.
A pandemic could also have material negative impact on the operation of our vendors’ and suppliers’ businesses and effect their ability to provide us the products and services we rely on to conduct our business and provide products and services to our customers.
A pandemic could also have material negative impact on the operation of our vendors’ and suppliers’ businesses and affect their ability to provide us the products and services we rely on to conduct our business and provide products and services to our customers.
In addition, we are obligated to comply with a variety of federal, state and local regulations, both domestically and abroad, governing certain aspects of our sales, operations and workplace, including regulations promulgated by, among others, the U.S. Departments of Commerce, Defense, Justice, Treasury, State and Transportation, the Federal Aviation Administration, the U.S. Environmental Protection Agency, the U.S.
In addition, we are obligated to comply with a variety of federal, state and local regulations, both domestically and abroad, governing certain aspects of our sales, operations and workplace, including regulations promulgated by, among others, the U.S. Departments of Commerce, Defense, Justice, Treasury, State and Transportation, the Federal Aviation Administration, the U.S.
As a direct and indirect contractor to the U.S. government, we must comply with laws and regulations relating to the formation, administration and performance of federal government contracts, which effect how we do business with our clients and may impose added costs on our business. These rules generally favor the U.S. government’s contractual position.
Furthermore, as a direct and indirect contractor to the U.S. government, we must comply with laws and regulations relating to the formation, administration and performance of federal government contracts, which affect how we do business with our clients and may impose added costs on our business. These rules generally favor the U.S. government’s contractual position.
As it is in short sellers’ interest for the price of the security to 31 Table of Contents decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short.
As it is in short sellers’ interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short.
As a result, the trading prices of our common stock may be more volatile than the common stock of companies with broader public ownership, and an investor be unable to liquidate an investment in our common stock at attractive prices. ​ We cannot predict the prices at which our common stock will trade in the future.
As a result, the trading prices of our common stock may be more volatile than the common stock of companies with broader public ownership, and an investor may be unable to liquidate an investment in our common stock at attractive prices. ​ 27 Table of Contents We cannot predict the prices at which our common stock will trade in the future.
In addition, challenges implementing new or modified technology systems may cause disruptions in our business operations and, if not anticipated and appropriately mitigated, could have a material adverse effect on our business operations. Misuse of our products may adversely affect the Company’s reputation.
In addition, challenges implementing new or modified technology systems may cause disruptions in our business operations and, if not anticipated and appropriately mitigated, could have a material adverse effect on our business operations. 22 Table of Contents Misuse of our products may adversely affect the Company’s reputation.
In addition, comparable insurance may not continue to be available to us in the future at acceptable prices, or at all. Alpha Safety’s business may suffer if it or its employees are unable to obtain the security clearances or other qualifications needed to perform services for its customers.
In addition, comparable insurance may not continue to be available to us in the future at acceptable prices, or at all. Our business may suffer if it or its employees are unable to obtain the security clearances or other qualifications needed to perform services for its customers.
We also may be subject to liability if contamination is discovered at a landfill or other location where we have disposed of wastes, notwithstanding that historic disposal practices may have been in accordance with all applicable requirements.
We also may be subject to liability if contamination is discovered at 19 Table of Contents a landfill or other location where we have disposed of wastes, notwithstanding that historic disposal practices may have been in accordance with all applicable requirements.
Our future operating results will depend to a significant extent on our ability to continue to provide design and manufacturing services for new products that compare favorably on the basis of time to introduction, cost and performance with 18 Table of Contents the design and manufacturing capabilities.
Our future operating results will depend to a significant extent on our ability to continue to provide design and manufacturing services for new products that compare favorably on the basis of time to introduction, cost and performance with the design and manufacturing capabilities.
Fixed-price contracts require us to price our contracts by forecasting our expenditures. When making proposals for fixed-price contracts, we rely on our estimates of costs and timing for completing these projects. These estimates reflect management’s judgments regarding our capability to complete projects efficiently 19 Table of Contents and timely.
Fixed-price contracts require us to price our contracts by forecasting our expenditures. When making proposals for fixed-price contracts, we rely on our estimates of costs and timing for completing these projects. These estimates reflect management’s judgments regarding our capability to complete projects efficiently and timely.
Our amended and restated bylaws provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or 30 Table of Contents liability created by the Exchange Act or the rules and regulations thereunder.
Our second amended and restated bylaws provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
Therefore, we may incur losses on fixed price contracts that we had expected to be profitable, or such contracts may be less profitable than expected, which could have a material adverse effect on our business, financial condition, results of operations and liquidity. Fixed-price contracts represented approximately 11% and 60% of 2023 Product and Distribution segment net sales, respectively.
Therefore, we may incur losses on fixed price contracts that we had expected to be profitable, or such contracts may be less profitable than expected, which could have a material adverse effect on our business, financial condition, results of operations and liquidity. Fixed-price contracts represented approximately 13.9% and 60% of 2024 Product and Distribution segment net sales, respectively.
Persons receiving shares of our common stock in connection with these acquisitions may be more likely to sell large quantities of their common stock, which may influence the price of our common stock.
Persons receiving shares of our common stock in connection with these acquisitions may be more likely to sell large quantities of their 31 Table of Contents common stock, which may influence the price of our common stock.
In those instances where we have identified non-compliances with applicable laws or regulations, we have taken affirmative steps to correct or mitigate such identified failures and to self-report them to the cognizant U.S. or foreign government agencies.
In those instances where 14 Table of Contents we have identified non-compliances with applicable laws or regulations, we have taken affirmative steps to correct or mitigate such identified failures and to self-report them to the cognizant U.S. or foreign government agencies.
Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware (or other state courts of the State of Delaware if the Court of Chancery in the State of Delaware does not have jurisdiction or the federal district court for the District of Delaware if no state court in the State of Delaware has jurisdiction) is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine or any action asserting an “internal corporate claim” as that term is defined in Section 115 of the Delaware General Corporation Law.
Our second amended and restated bylaws provide that the Court of Chancery of the State of Delaware (or the federal district court for the State of Delaware if the Court of Chancery does not have jurisdiction) is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws; or any action asserting a claim 30 Table of Contents against us that is governed by the internal affairs doctrine or any action asserting an “internal corporate claim” as that term is defined in Section 115 of the Delaware General Corporation Law.
Department of Transportation for packaging and labeling. We are also required to comply with Controlled Goods Directorate Registration regime in Canada for explosive ordnance disposal products. Additionally, the failure to obtain applicable governmental approval and clearances could materially adversely affect our ability to continue to service the government contracts we maintain.
We are also required to comply with Controlled Goods Directorate Registration regime in Canada for explosive ordnance disposal products. Additionally, the failure to obtain applicable governmental approval and clearances could materially adversely affect our ability to continue to service the government contracts we maintain.
In Alpha Safety’s contracts, it seeks to protect itself from liability associated with accidents, but there can be no assurance that such contractual limitations on liability will be effective in all cases or that Alpha Safety’s or its customers’ insurance will cover all the liabilities it has assumed under those contracts.
Our business seeks to protect itself from liability associated with accidents, but there can be no assurance that such contractual limitations on liability will be effective in all cases or that our Company or its customers’ insurance will cover all the liabilities it has assumed under those contracts.
An outbreak or escalation of hostilities between the United States and any foreign power, or between foreign powers, or a natural disaster, could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of electricity or energy generally as well as an increase in the cost of our raw materials, of which many are petroleum-based.
An outbreak or escalation of hostilities between the United States and any foreign power, or between foreign powers, such as the military conflict between Israel and Palestine and in Ukraine, or a natural disaster, could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of electricity or energy generally as well as an increase in the cost of our raw materials, of which many are petroleum-based.
As we expand our operations, any growth may place significant demands on our management, administrative, operating and financial resources. The growth of our customer base, the types of services and products offered and the geographic markets we serve could place a significant strain on our resources.
Our resources may be insufficient to manage demand. As we expand our operations, any growth may place significant demands on our management, administrative, operating and financial resources. The growth of our customer base, the types of services and products offered and the geographic markets we serve could place a significant strain on our resources.
Our overseas operations are subject to various risks, including: U.S.-imposed embargoes and/or sanctions of sales to specific countries (which could prohibit sales of our products there); foreign import controls (which may be arbitrarily imposed and enforced and which could interrupt our supplies or prohibit customers from purchasing our products); exchange rate fluctuations; dividend remittance restrictions; expropriation of assets; war, civil uprisings and riots; government instability; the necessity of obtaining government approvals for both new and continuing operations; and legal systems of decrees, laws, taxes, regulations, interpretations and court decisions that are not always fully developed and that may be retroactively or arbitrarily applied.
Our overseas operations are subject to various risks, including: U.S.-imposed embargoes and/or sanctions of sales to specific countries (which could prohibit sales of our products there); foreign import controls (which may be arbitrarily imposed and enforced and which could interrupt our supplies or prohibit customers from purchasing our products); exchange rate fluctuations; dividend remittance restrictions; expropriation of assets; war, civil uprisings and riots; government instability; the necessity of obtaining government approvals for both new and continuing operations; and legal systems of decrees, laws, taxes, regulations, interpretations and court decisions that are not always fully developed and that may be retroactively or arbitrarily applied. 15 Table of Contents One component of our strategy is to expand our operations into selected international markets.
Our significant payment obligations under the terms of our long-term debt, $141.3 million of which was outstanding as of December 31, 2023, together with any additional indebtedness we may incur in the future (including under the 2021 Credit Agreement (herein defined)), could adversely affect our business, financial condition, results of operations and prospects.
Our significant payment obligations under the terms of our long-term debt, $225.4 million of which was outstanding as of December 31, 2024, together with any additional indebtedness we may incur in the future (including under the 2024 Credit Agreement (herein defined)), could adversely affect our business, financial condition, results of operations and prospects.
Alpha Safety derives a portion of its revenue from programs with the U.S. government and its agencies that provide access to classified information, technology, facilities or programs.
Our Company derives a portion of its revenue from programs with the U.S. government and its agencies that provide access to classified information, technology, facilities, or programs.
Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, including sales of the shares beneficially owned by Mr. Kanders, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
Responding to governmental audits, inquiries or investigations may involve significant expense and divert management’s attention.
Department of Defense. Responding to governmental audits, inquiries or investigations may involve significant expense and divert management’s attention.
We could be an emerging growth company until December 31, 2026.
We could remain an emerging growth company until December 31, 2026.
Additionally, there can be no assurance that our relationships with our manufacturer customers will ultimately lead to volume orders for our products. The failure of manufacturers to incorporate our products into their final products could have a material adverse effect on our business, financial condition, results of operations and liquidity. We may be unable to protect our proprietary technology.
Additionally, there can be no assurance that our relationships with our manufacturer customers will ultimately lead to volume orders for our products. The failure of manufacturers to incorporate our 18 Table of Contents products into their final products could have a material adverse effect on our business, financial condition, results of operations and liquidity.
These new or changed laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity.
These new or changed laws, regulations, and standards are subject to varying interpretations, often due to their lack of specificity.
One component of our strategy is to expand our operations into selected international markets. Military procurement, for example, has traditionally had a large international base. We actively market our products in Europe, North and South America, the Middle East, Africa, and Asia. However, we may be unable to execute our business model in these markets or new markets.
Military procurement, for example, has traditionally had a large international base. We actively market our products in Europe, North and South America, the Middle East, Africa, and Asia. However, we may be unable to execute our business model in these markets or new markets.
We depend upon a variety of methods and techniques that we regard as proprietary trade secrets. We also depend upon a variety of trademarks, service marks and designs to promote brand name development and recognition.
We may be unable to protect our proprietary technology. We depend upon a variety of methods and techniques that we regard as proprietary trade secrets. We also depend upon a variety of trademarks, service marks and designs to promote brand name development and recognition.
Thus, if our supply of any of these materials or components were materially reduced or cut off or if there were a material increase in the prices of these materials or components, our manufacturing operations could be adversely affected and our costs increased, and our business, financial condition, results of operations and liquidity could be materially adversely affected. 17 Table of Contents Our resources may be insufficient to manage demand.
Thus, if our supply of any of these materials or components were materially reduced or cut off or if there were a material increase in the prices of these materials or components, our manufacturing operations could be adversely affected and our costs increased, and our business, financial condition, results of operations and liquidity could be materially adversely affected.
Alpha Safety maintains insurance coverage as part of our overall risk management strategy and due to requirements to maintain specific coverage in many of our contracts. These policies do not protect against all liabilities associated with accidents or for unrelated claims.
We maintain insurance coverage as part of our overall risk management strategy and due to requirements, we also maintain specific coverage for some of our contracts. These policies do not protect against all liabilities associated with accidents or unrelated claims.
Violations of international trade (export/ import) controls in the U.S. and elsewhere may result in severe criminal and/or civil penalties, which could have a material adverse effect on our business, financial condition, results of operations and liquidity. Like other companies operating internationally, we are subject to the U.S.
Violations of international trade (export/ import) controls in the U.S. and elsewhere may result in severe criminal and/or civil penalties, which could have a material adverse effect on our business, financial condition, results of operations and liquidity.
On January 23, 2024, the Company announced that its board of directors approved the initiation of a quarterly cash dividend policy of $0.0875 per share of the Company’s common stock (the “Quarterly Cash Dividend”) or $0.35 per share on an annualized basis, representing an increase of 3 cents over the previous annualized dividend of $0.32 per share.
On January 21, 2025, the Company announced that its board of directors approved the continuation of a quarterly cash dividend policy of $0.095 per share of the Company’s common stock (the “Quarterly Cash Dividend”) or $0.38 per share on an annualized basis, representing an increase of 3 cents over the previous annualized dividend of $0.35 per share.
If we and/or our cloud-based solution providers are not successful in preventing or effectively responding to outages and cyberattacks, our business, operations, and financial results could be materially and adversely affected.
If we and/or our cloud-based solution providers are not successful in preventing or effectively responding to outages and cyberattacks, such as the cybersecurity incidents occurring in July and September 2024, our business, operations, and financial results could be materially and adversely affected.
If Alpha Safety or its employees lose or are unable to obtain necessary security clearances, it may not be able to win new business and its existing government customers could terminate their contracts with us or decide not to renew them.
If our Company or its employees lose or are unable to obtain necessary 25 Table of Contents security clearances, we may not be able to win new business, and existing government customers could terminate or decide not to renew their contracts with us.
If some or our entire workforce were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements or work practice, it could have a material adverse effect on our business, financial condition, results of operations and liquidity. 23 Table of Contents Reductions in the availability of energy supplies or an increase in energy costs may increase our operating costs.
If some or our entire workforce were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements or work practice, it could have a material adverse effect on our business, financial condition, results of operations and liquidity.
Finally, our amended and restated bylaws provide that the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the Exchange Act.
Our second amended and restated bylaws provide that, unless we consent in writing to an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
If our due diligence fails to identify issues specific to an investment or acquisition, we may obtain a lower return from that transaction than the investment would return or otherwise subject ourselves to unexpected liabilities.
If our due diligence fails to identify issues specific to an investment or acquisition, we may obtain a lower return from that transaction than the investment would return or otherwise subject ourselves to unexpected liabilities. We may face difficulty in integrating the operations of the businesses we have acquired and may acquire in the future.
Increased competition for acquisition opportunities may impede our ability to acquire these companies because they choose another acquirer. It could also increase the price that we must pay for these companies.
Increased competition for acquisition opportunities may impede our ability to acquire these companies because they choose another acquirer. It could also increase the price that we must pay for these companies. Either of these outcomes could reduce our growth, harm our business and adversely impact our ability to consummate acquisitions.
This would harm the prospects of the businesses they manage, potentially causing us to lose money on our investment and harming our growth and financial results. 26 Table of Contents We may be required to take write downs or write-offs, restructuring, and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.
We may be required to take write downs or write-offs, restructuring, and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.
Foreign Corrupt Practices Act and other laws that prohibit improper payments to foreign governments and their officials by U.S. and other business entities. We operate in countries known to experience endemic corruption.
Like other companies operating internationally, we are subject to the FCPA and other laws that prohibit improper payments to foreign governments and their officials by U.S. and other business entities. We operate in countries known to experience endemic corruption.
A reduction of funding for state, local, municipal as well as federal and foreign governmental agencies could have a material adverse effect on sales of our products and our business, financial condition, results of operations and liquidity. Our markets are highly competitive, and if we are unable to compete effectively, we will be adversely affected.
A reduction of funding for state, local, municipal as well as federal and foreign governmental agencies could have a material adverse effect on sales of our products and our business, financial condition, results of operations and liquidity.
Additionally, our existing cloud-based solution providers have broad discretion to change and interpret their terms of service and other policies with respect to us, and they may take actions beyond our control that could harm 21 Table of Contents our business.
Additionally, our existing cloud-based solution providers have broad discretion to change and interpret their terms of service and other policies with respect to us, and they may take actions beyond our control that could harm our business. We also may not be able to control the quality of the systems and services we receive from our third-party cloud-based solution providers.
Alpha Safety also supplies equipment and services to operators of nuclear energy facilities including, facilities operated by the DOE. Pursuant to the Price-Anderson Act, the DoE has provided PAA indemnification by incorporating its Nuclear Hazards Indemnity Agreement into contracts deemed to involve a risk of nuclear liability, which such indemnity protects subcontractors in work that entails radiological risk.
Pursuant to the Price-Anderson Act, the DoE has provided indemnification by incorporating its Nuclear Hazards Indemnity Agreement into contracts deemed to involve a risk of nuclear liability. This indemnity protects subcontractors in work that entails radiological risk.
Our products include: body armor and plates designed to protect against ballistic and sharp instrument penetration; explosive ordnance disposal products; police duty gear; and crowd control products.
Given this potential risk of injury, proper maintenance of our products is critical. Our products include, among others: body armor and plates designed to protect against ballistic and sharp instrument penetration; explosive ordnance disposal products; police duty gear; and crowd control products.
In addition to organic growth, our future growth will be driven by our selective acquisition of additional businesses, our competitors and complementary businesses. Our growth through acquisitions, to date, has consisted of 16 acquisitions and two divestitures.
We may be unsuccessful in identifying suitable acquisition candidates, which may negatively impact our competitive position and our growth strategy. In addition to organic growth, our future growth will be driven by our selective acquisition of additional businesses, our competitors and complementary businesses. Our growth through acquisitions, to date, has consisted of 17 acquisitions and two divestitures.
Some of our operations are conducted or products are sold in countries where economic growth has slowed, or where economies have suffered economic, social and/or political instability or hyperinflation.
Some of our operations are conducted or products are sold in countries where economic growth has slowed, or where economies have suffered economic, social and/or political instability or hyperinflation. A particularly significant risk is the ongoing and potential future impact of tariffs and trade restrictions.
In addition, increased energy costs negatively impact our freight costs due to higher fuel prices. Future limitations on the availability or consumption of petroleum products and/or an increase in energy costs, particularly electricity for plant operations, could have a material adverse effect upon our business, financial condition, results of operations and liquidity.
Future limitations on the availability or consumption of petroleum products and/or an increase in energy costs, particularly electricity for plant operations, could have a material adverse effect upon our business, financial condition, results of operations and liquidity. 24 Table of Contents Our nuclear operations subject us to various environmental, regulatory, financial , and other risks.
Like all Internet services, our direct-to-consumer service, which is supported by our own systems and those of third-party vendors, is vulnerable to computer viruses, Internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service or other attacks and similar disruptions from unauthorized use of our and third-party vendor computer systems, any of which could lead to system interruptions, delays or shutdowns, causing loss of critical data or the unauthorized access to personally identifiable information.
Like all Internet services, our direct-to-consumer service, which is supported by our own systems and those of third-party vendors, is vulnerable to computer viruses, Internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service or other attacks, and similar disruptions and malicious activities.
We also may not be able to control the quality of the systems and services we receive from our third-party cloud-based solution providers. Any transition of the cloud-based solutions currently provided to different cloud providers would be difficult to implement and may cause us to incur significant time and expense.
Any transition of the cloud-based solutions currently provided to different cloud providers would be difficult to implement and may cause us to incur significant time and expense.
Electricity and natural gas are used to operate equipment at manufacturing facilities. Over the past several years, prices for electricity and natural gas have fluctuated significantly.
Reductions in the availability of energy supplies or an increase in energy costs may increase our operating costs. Electricity and natural gas are used to operate equipment at manufacturing facilities. Over the past several years, prices for electricity and natural gas have fluctuated significantly.
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 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.
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.
In addition, global economic uncertainty relating to the effects of fiscal and political crises and political and economic disputes, current or future ‘trade wars,’ changes in consumer spending, foreign currency exchange rate fluctuations, political unrest, wars, terrorist acts, and/or military operations, could have a material adverse effect on our financial condition, results of operations and cash flows.
Additionally, global economic uncertainty relating to the effects of fiscal and political crises and political and economic disputes, current or future ‘trade wars,’ changes in consumer spending, foreign currency exchange rate fluctuations, political unrest, wars, terrorist acts, and/or military operations, could have a material adverse effect on our financial condition, results of operations and cash flows. 16 Table of Contents The conflicts between Russia and Ukraine and Palestine and Israel, respectively, could have a material adverse effect on our operations, results of operations, financial condition, liquidity and business outlook. ​ There is continued, sustained military conflict between Russia and Ukraine as well as Palestine and Israel, and continued disruption in these regions and the broader global economic environment is likely.
Alpha Safety’s operations involve the design and manufacture of nuclear waste and/or radioactive materials handling, transportation, and storage products, as well as radioactive material identification, protection, and alarms systems and services, including onsite support services, for commercial and governmental sectors. A release of nuclear waste and/or radioactive material could pose a health risk to humans or animals.
Our nuclear operations involve the design and manufacture of nuclear material handling, transportation, and storage products, as well as radioactive material identification, protection, and alarm systems and services, including onsite support services, for commercial and governmental sectors.
Bureau of Alcohol, Tobacco and Firearms, Nuclear Regulatory Commission, U.S. Department of Energy, and the Equal Employment Opportunity Commission. The U.S. Bureau of Alcohol, Tobacco and Firearms also regulates our manufacturing and distribution of certain destructive devices, firearms, and explosives. We also ship toxic, hazardous and radioactive materials, and in doing so, must comply with the regulations of the U.S.
Environmental Protection Agency, the ATF, the NRC, the DoE, and the Equal Employment Opportunity Commission. The ATF also regulates our manufacturing and distribution of certain destructive devices, firearms, and explosives. We also ship toxic, hazardous and radioactive materials, and in doing so, must comply with the regulations of the DoT for packaging and labeling.
Russia’s potential response to such sanctions, as well as prolonged unrest, intensified military activities and/or the implementation of more extensive sanctions impacting the region could have a material adverse effect on our operations, results of operations, financial condition, liquidity and business outlook.
The uncertain consequences and duration of these conflicts, including the potential effects of any sanctions and countersanctions against officials, individuals and industries relating to these regions, including Russia, and the potential response to any such sanctions, as well as prolonged unrest and/or intensified military activities impacting these regions could have a material adverse effect on our operations, results of operations, financial condition, liquidity and business outlook.
We have significant international operations and assets and, therefore, are subject to additional financial and regulatory risks. We sell our products in foreign countries and seek to increase our level of international business activity.
We sell our products in foreign countries and seek to increase our level of international business activity.
Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders cannot waive our compliance with federal securities laws and the rules and regulations thereunder.
Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable.
One or more of these factors could adversely affect our future international operations and, consequently, could have a material adverse effect on our business, financial condition, results of operation and liquidity. Changes in global cultural, political, and financial market conditions could impair our international operations and financial performance. ​ We are subject to risks generally associated with doing business internationally.
One or more of these factors could adversely affect our future international operations and, consequently, could have a material adverse effect on our business, financial condition, results of operation and liquidity.
The accuracy and appropriateness of certain costs and expenses used to substantiate our direct and indirect costs for the U.S. government under both cost-plus and fixed-price contracts are subject to extensive regulation and audit by the Defense Contract Audit Agency, an arm of the U.S. Department of Defense.
For example, these regulations and laws include provisions that subject contracts we have been awarded to: ● protest or challenge by unsuccessful bidders; and ● unilateral termination, reduction or modification by the government without penalty. 20 Table of Contents The accuracy and appropriateness of certain costs and expenses used to substantiate our direct and indirect costs for the U.S. government under both cost-plus and fixed-price contracts are subject to extensive regulation and audit by the Defense Contract Audit Agency, an arm of the U.S.
As a result, our efforts to comply with evolving laws, regulations, and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. 29 Table of Contents Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock, which may also have the consequence of depressing the market price of our common stock.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock, which may also have the consequence of depressing the market price of our common stock.
Failure to use our products for their intended purposes, failure to use or care for them properly, or their malfunction, or, in some limited circumstances, even correct use of our products, could result in serious bodily injury or death. Given this potential risk of injury, proper maintenance of our products is critical.
The products that we manufacture are typically used in applications and situations that involve high levels of risk of personal injury. Failure to use our products for their intended purposes, failure to use or care for them properly, or their malfunction, or, in some limited circumstances, even correct use of our products, could result in serious bodily injury or death.
Risks Related to our Acquisition Strategy A number of other companies are seeking to make acquisitions in our industry, which may make our acquisition strategy more difficult or expensive to pursue.
To the extent our Company cannot obtain or maintain the required clearances, our results of operations and financial condition could be materially and adversely affected. Risks Related to our Acquisition Strategy A number of other companies are seeking to make acquisitions in our industry, which may make our acquisition strategy more difficult or expensive to pursue.
Although we typically seek to sign employment agreements with the managers of acquired businesses, it remains possible that these individuals will leave our organization.
Although we typically seek to sign employment agreements with the managers of acquired businesses, it remains possible that these individuals will leave our organization. This would harm the prospects of the businesses they manage, potentially causing us to lose money on our investment and harming our growth and financial results.

… 61 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+5 added−2 removed7 unchanged
Biggest changeOur VP of Information Technology oversees key cybersecurity policies and processes, including those described in “Risk Management and Strategy” above. Our Board of Directors and Audit Committee are informed at least annually about the Company’s policies and processes to monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents.
Biggest changeOur Board of Directors and Audit Committee are informed at least annually about the Company’s policies and processes to monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents. In addition, the VP of Information Technology will also report any cybersecurity risks and activities including but not limited to any cybersecurity threats and related responses and any cybersecurity systems testing.
In particular, the Audit Committee of our Board of Directors plays a large role in overseeing and assessing our financial, legal and operational risks, and receives reports from the management team regarding organizational risk as well as particular areas of concern, which includes, but is not limited to cybersecurity risks, related mitigation, and other related responses and activities. 32 Table of Contents Our Vice President of Information Technology and our Information Security Officer are primarily responsible for assessment and management of material risks from cybersecurity threats.
In particular, the Audit Committee of our Board of Directors plays a large role in overseeing and assessing our financial, legal and operational risks, and receives reports from the management team regarding organizational risk as well as particular areas of concern, which includes, but is not limited to cybersecurity risks, related mitigation, and other related responses and activities.
Removed
The Company also participates in a cybersecurity risk insurance policy.
Added
The Company also participates in a cybersecurity risk insurance policy. In July 2024, we experienced a cybersecurity incident involving unauthorized access to certain systems, which required us to implement containment and mitigation measures.
Removed
In addition, the VP of Information Technology will also report any cybersecurity risks and activities including but not limited to any cybersecurity threats and related responses and any cybersecurity systems testing. ​
Added
Although we acted promptly and effectively to address the issue, the incident led to temporary interruptions in our business operations, including impacts to production and order fulfillment at some of our facilities. Additionally, in September 2024, we experienced another, albeit negligible, cybersecurity incident that similarly required containment actions out of an abundance of caution.
Added
Although the September incident had a minimal impact on our operations, it underscores the persistent and evolving nature of cybersecurity risks we face. We believe the impacts of these cybersecurity incidents, either measured 32 Table of Contents together or individually, were not material to our financial condition or results of operations.
Added
In addition, we do not believe that risks from cybersecurity threats have materially affected our business strategy, financial condition, or results of operations. However, there is no guarantee that future cybersecurity incidents will not have a material impact in the future.
Added
Our Vice President of Information Technology and our Information Security Officer are primarily responsible for assessment and management of material risks from cybersecurity threats. Our VP of Information Technology oversees key cybersecurity policies and processes, including those described in “Risk Management and Strategy” above.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeThe following table identifies and provides certain information regarding our facilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Primary Activity Location Country Owned/Leased Sq Ft Corporate HQ and Manufacturing ​ Jacksonville, Florida ​ USA ​ Owned ​ 132,224 Manufacturing and R&D Jacksonville, Florida USA Owned 63,000 Warehouse and Distribution Jacksonville, Florida USA Leased 27,405 Manufacturing and R&D Ontario, California USA Leased 41,475 Sales and R&D Casper, Wyoming USA Owned 44,000 Manufacturing and R&D ​ Casper, Wyoming USA Owned ​ 10,500 Manufacturing ​ Casper, Wyoming USA Owned ​ 21,000 Manufacturing Dalton, Massachusetts USA Leased 33,862 Manufacturing Dover, Tennessee USA Leased 87,652 Manufacturing Ogdensburg, New York USA Leased 23,220 Manufacturing and R&D ​ West Springfield, Massachusetts ​ USA ​ Owned ​ 200,000 Manufacturing, Sales and R&D ​ Golden, Colorado ​ USA ​ Leased ​ 27,000 Manufacturing ​ Carlsbad, New Mexico ​ USA ​ Leased ​ 40,000 Manufacturing and Sales ​ Santa Fe, New Mexico ​ USA ​ Leased ​ 15,000 Manufacturing and Sales ​ Groton, Connecticut ​ USA ​ Leased ​ 9,899 Manufacturing Tijuana, Baja California Mexico Leased 158,614 Sales and R&D Ottawa, Ontario Canada Leased 39,273 Manufacturing Pembroke, Ontario Canada Leased 26,154 Manufacturing Arnprior, Ontario Canada Leased 48,853 Manufacturing, Sales and R&D ​ Ottawa, Ontario ​ Canada Leased ​ 27,500 Manufacturing Warrington, Cheshire UK Leased 21,958 Manufacturing Kaunas Lithuania Leased 19,160 Manufacturing, Sales and R&D ​ Fucecchio ​ Italy ​ Leased/Owned ​ 30,375 Manufacturing and Sales ​ Aix-en-Provence ​ France ​ Owned ​ 20,387 ​ ​
Biggest changeOur properties are well maintained, and we consider them to be sufficient for our existing capacity requirements. 33 Table of Contents The following table identifies and provides certain information regarding our facilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Primary Activity Location Country Owned/Leased Sq Ft Corporate HQ and Manufacturing ​ Jacksonville, Florida ​ USA ​ Owned ​ 132,224 Manufacturing and R&D Jacksonville, Florida USA Owned 63,000 Manufacturing and R&D Ontario, California USA Leased 41,475 Sales and R&D Casper, Wyoming USA Owned 44,000 Manufacturing and R&D ​ Casper, Wyoming USA Owned ​ 10,500 Manufacturing ​ Casper, Wyoming USA Owned ​ 21,000 Manufacturing Dalton, Massachusetts USA Leased 33,862 Manufacturing Ogdensburg, New York USA Leased 23,220 Manufacturing and R&D ​ West Springfield, Massachusetts ​ USA ​ Owned ​ 200,000 Manufacturing, Sales and R&D ​ Golden, Colorado ​ USA ​ Leased ​ 27,000 Manufacturing ​ Carlsbad, New Mexico ​ USA ​ Leased ​ 40,000 Manufacturing and Sales ​ Santa Fe, New Mexico ​ USA ​ Leased ​ 15,000 Manufacturing and Sales ​ Groton, Connecticut ​ USA ​ Leased ​ 9,899 Manufacturing Tijuana, Baja California Mexico Leased 158,614 Sales and R&D Ottawa, Ontario Canada Leased 39,273 Manufacturing Pembroke, Ontario Canada Leased 26,154 Manufacturing Arnprior, Ontario Canada Leased 48,853 Manufacturing, Sales and R&D ​ Ottawa, Ontario ​ Canada Leased ​ 27,500 Manufacturing Warrington, Cheshire UK Leased 21,958 Manufacturing Kaunas Lithuania Leased 19,160 Manufacturing, Sales and R&D ​ Fucecchio ​ Italy ​ Leased/Owned ​ 30,375 Manufacturing and Sales ​ Aix-en-Provence ​ France ​ Owned ​ 20,387 ​ ​
Item 2. Properties We own our corporate headquarters located at 13386 International Parkway, Jacksonville, FL 32218 where we occupy approximately 36,941 square feet of office space and 95,283 square feet of manufacturing space. In total, we operate 24 facilities (8 owned) across the U.S., Canada, Mexico and Europe, spanning more than 1,000,000 square feet.
Item 2. Properties We own our corporate headquarters located at 13386 International Parkway, Jacksonville, FL 32218 where we occupy approximately 36,941 square feet of office space and 95,283 square feet of manufacturing space. In total, we operate 22 facilities (8 owned) across the U.S., Canada, Mexico and Europe, spanning more than 1,000,000 square feet.
Additionally, we lease retail locations across the East Coast that service our Distribution segment. Our properties are well maintained, and we consider them to be sufficient for our existing capacity requirements.
Additionally, we lease retail locations across the East Coast that service our Distribution segment.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings Refer to Note 14 of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference . ​ Item 4. Mine Safety Disclosures Not applicable. 33 Table of Contents ​ PART II
Biggest changeItem 3. Legal Proceedings Refer to Note 15 of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference . ​ Item 4. Mine Safety Disclosures Not applicable. ​ PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+0 added−1 removed3 unchanged
Biggest changeData for the S&P 500 index and the S&P SmallCap 600 Index assume an initial investment of $100 at market close on October 31, 2021 and the reinvestment of dividends.
Biggest changeData for the S&P 500 Index and the S&P 500 Industrials Index assume an initial investment of $100 at market close on October 31, 2021 and the reinvestment of dividends. Historical stock price performance should not be relied on as indicative of future stock price performance. Recent Sales of Unregistered Securities None. Issuer Repurchases of Equity Securities None.
Any determination to pay dividends in the future will be at the discretion of our board of directors and will be dependent on a number of factors, including the terms of our 2021 Credit Agreement, our earnings, capital requirements, our overall financial condition and other factors that our board of directors considers relevant .
Any determination to pay dividends in the future will be at the discretion of our board of directors and will be dependent on a number of factors, including the terms of our 2024 Credit Agreement, our earnings, capital requirements, our overall financial condition and other factors that our board of directors considers relevant .
Performance Graph The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Index and the S&P SmallCap 600 Index.
Performance Graph The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Index and the S&P 500 Industrials Index.
In 2023, our total quarterly cash dividends were $12.0 million. We expect to continue to pay a quarterly cash dividend of $0.0875 per share, or $0.35 on an annualized basis, on our common stock for the foreseeable future, but we may elect to retain all of our future earnings, if any, to finance the growth and development of our business.
In 2024, our total quarterly cash dividends were $13.9 million. We expect to continue to pay a quarterly cash dividend of $0.095 per share, or $0.38 on an annualized basis, on our common stock for the foreseeable future, but we may elect to retain all of our future earnings, if any, to finance the growth and development of our business.
Prior to that date, there was no public trading market for our common stock. ​ Holders of Record As of March 8, 2024, there were 12 holders of record of our common stock.
Prior to that date, there was no public trading market for our common stock. ​ Holders of Record As of March 6, 2025, there were 13 holders of record of our common stock.
Dividend Policy On January 23, 2024, the Company announced that its board of directors approved the initiation of a quarterly cash dividend policy of $0.0875 per share of the Company’s common stock or $0.35 per share on an annualized basis, representing an increase of 3 cents over the previous annualized dividend of $0.32 per share.
Dividend Policy On January 21, 2025, the Company announced that its board of directors approved the continuation of a quarterly cash dividend policy of $0.095 per share of the Company’s common stock or $0.38 per share on an annualized basis, representing an increase of 3 34 Table of Contents cents over the previous annualized dividend of $0.35 per share.
Issuer Repurchases of Equity Securities None. ​ Item 6. [Reserved] ​ 35 Table of Contents
Item 6. [Reserved] ​ 35 Table of Contents
Removed
Historical stock price performance should not be relied on as indicative of future stock price performance. 34 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 11/4/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Cadre Holdings, Inc. ​ $ 100.00 ​ $ 166.89 $ 161.83 $ 130.02 ​ $ 159.57 ​ $ 133.94 $ 143.74 $ 146.05 ​ $ 179.16 ​ $ 221.73 S&P 500 ​ $ 100.00 ​ $ 103.76 $ 98.99 $ 83.05 ​ $ 78.99 ​ $ 84.97 $ 91.34 $ 99.32 ​ $ 96.07 ​ $ 107.30 S&P SmallCap 600 ​ $ 100.00 ​ $ 102.14 $ 96.39 $ 82.79 ​ $ 78.48 ​ $ 85.69 $ 87.90 $ 90.86 ​ $ 86.39 ​ $ 99.45 ​ Recent Sales of Unregistered Securities None.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 6. [Reserved] ​ 35 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 36 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ 45 ​ ​ ​ Item 8. Financial Statements and Supplementary Data ​ 47 ​ ​ ​
Biggest changeItem 6. [Reserved] ​ 35 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 36 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ 46 ​ ​ ​ Item 8. Financial Statements and Supplementary Data ​ 48 ​ ​ ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

65 edited+17 added−8 removed34 unchanged
Biggest changeNet cash (used in) provided by financing activities During the year ended December 31, 2023, we used $24.7 million of cash in financing activities, primarily consisting principal payments on term loans of $10.0 million, taxes paid in connection with employee stock transactions of $2.7 million and dividends distributed of $12.0 million.
Biggest changeDuring the year ended December 31, 2023, we used $24.7 million of cash in financing activities, primarily consisting principal payments on term loans of $10.0 million, taxes paid in connection with employee stock transactions of $2.7 million and dividends distributed of $12.0 million . 45 Table of Contents Contractual Obligations The following table summarizes our significant contractual obligations as of December 31, 2024 by period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ More than (in thousands) Total 1 year 1-3 Years 3-5 Years 5 Years Lease obligations (1) ​ $ 16,582 $ 5,267 $ 7,624 $ 3,491 $ 200 Debt (2) ​ 225,376 11,375 22,751 191,250 — Interest on debt (3) ​ 47,071 10,532 ​ ​ 19,454 17,085 — Total contractual obligations ​ $ 289,029 $ 27,174 $ 49,829 $ 211,826 $ 200 (1) Includes future minimum lease payments required under non-cancelable operating and capital leases.
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 .
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 .
(2) Reflects gains from long-lived asset sales. (3) Reflects the “Other income (expense), net” line item on our consolidated statements of operations and comprehensive income and primarily includes gains and losses due to fluctuations in foreign currency exchange rates . (4) Reflects compensation expense related to equity and liability classified stock-based compensation plans .
(2) Reflects gains from long-lived asset sales. (3) Reflects the “Other (expense) income, net” line item on our consolidated statements of operations and comprehensive income and primarily includes transaction gains and losses due to fluctuations in foreign currency exchange rates . (4) Reflects compensation expense related to equity and liability classified stock-based compensation plans .
Business Combinations 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.
Business Combinations 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.
Net cash used in investing activities During the year ended December 31, 2023, we used $6.5 million of cash in investing activities, primarily consisting of $6.7 million for purchases of property and equipment.
During the year ended December 31, 2023, we used $6.5 million of cash in investing activities, primarily consisting of $6.7 million for purchases of property and equipment .
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.
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 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 .
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 .
Debt 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. 2021 Credit Agreement On August 20, 2021 (the “Closing Date”), the Company refinanced its existing credit facilities and entered into a new credit agreement whereby Safariland, LLC, as borrower (the “Borrower”), the Company and certain domestic subsidiaries of the Borrower, as guarantors (the “Guarantors”), closed on and received funding under a credit agreement (initially entered into on July 23, 2021), pursuant to a First Amendment to Credit Agreement (collectively, the “2021 Credit Agreement”) with PNC Bank, National Association (“PNC”), as administrative agent, and the several lenders from time to time party thereto (together with PNC, the “Lenders”) pursuant to which the Borrower (i) borrowed $200.0 million under a term loan (the “Term Loan”), and (ii) may borrow up to $100.0 million under a revolving credit facility (including up to $15.0 million for letters of credit and up to $10.0 million for swing line loans) (the “Revolving Loan”).
Debt 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. 2021 Credit Agreement On August 20, 2021 (the “Closing Date”), the Company refinanced its existing credit facilities and entered into a new credit agreement whereby Safariland, LLC, as borrower (the “Borrower”), the Company and certain domestic subsidiaries of the Borrower, as guarantors (the “Guarantors”), closed on and received funding under a credit agreement (initially entered into on July 23, 2021), pursuant to a First Amendment to Credit Agreement (collectively, the “2021 Credit Agreement”) with PNC Bank, National Association (“PNC”), as administrative agent, and the several lenders from time to time party thereto (together with PNC, the “Lenders”) pursuant to which the Borrower (i) borrowed $200.0 million under a term loan (the “Term Loan”), and (ii) may borrow up to $100.0 million under a revolving credit facility (including up to $15.0 million for letters of credit and up to $10.0 million for swing line loans) (the “Revolving Loan”).
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 41 Table of Contents 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 .
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 .
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.
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 40 Table of Contents companies.
Investors should exercise caution in comparing our non-GAAP measures to any similarly titled measures used by other 40 Table of Contents 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 .
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 .
(5) Reflects payroll taxes associated with vested stock-based compensation awards . (6) Reflects the cost of a cash-based long-term incentive plan awarded to employees that vests over three years . (7) Reflects amortization expense related to the step-up inventory adjustment recorded as a result of our recent acquisitions.
(5) Reflects payroll taxes associated with vested stock-based compensation awards . (6) Reflects the cost of a cash-based long-term incentive plan awarded to employees that vests over three years . (7) Reflects amortization expense related to the step-up inventory adjustment recorded as a result of our recent acquisitions. (8) Reflects contingent consideration expense related to the acquisition of ICOR.
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.
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.
There were no amounts outstanding under the Revolving Canadian Loan as of December 31, 2023 and 2022.
There were no amounts outstanding under the Revolving Canadian Loan as of December 31, 2024 and 2023.
Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the Canadian Loan Agreement may be accelerated. As of March 8, 2024, there were no amounts outstanding under the Revolving Canadian Loan .
Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the Canadian Loan Agreement may be accelerated. As of March 6, 2025, there were no amounts outstanding under the Revolving Canadian Loan .
A discussion of changes in our financial condition and the results of operations from the year ended December 31, 2022 to December 31, 2021 can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 15, 2022.
A discussion of changes in our financial condition and the results of operations from the year ended December 31, 2023 to December 31, 2022 can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023, filed on March 12, 2024.
All other material terms of the 2021 Credit Agreement remained unchanged. 42 Table of Contents The foregoing description of the 2021 Credit Agreement, as amended, does not purport to be complete and is qualified in its entirety by reference to exhibits 10.15 , 10.16 and 10.17 to our Annual Report on Form 10-K for the year ended December 31, 2022, exhibit 10.1 attached to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, as well as exhibit 10.1 attached to our Current Report on Form 8-K filed on March 6, 2024, and are incorporated herein by reference as though fully set forth herein .
The foregoing description of the 2021 Credit Agreement, as amended, does not purport to be complete and is qualified in its entirety by reference to exhibits 10.15 , 10.16 and 10.17 to our Annual Report on Form 10-K for the year ended December 31, 2022, exhibit 10.1 attached to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, as well as exhibit 10.1 attached to our Current Report on Form 8-K filed on March 6, 2024, and are incorporated herein by reference as though fully set forth herein .
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 to changes in foreign currency exchange rates . Provision for income taxes.
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 . Provision for income taxes.
Comparison of Year Ended December 31, 2023 to Year Ended December 31, 2022 Net sales.
Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023 Net sales.
Reconciling items consisting primarily of intercompany eliminations were $30.7 million and $24.7 million for year ended December 31, 2023 and 2022, respectively. 39 Table of Contents Cost of goods sold.
Reconciling items consisting primarily of intercompany eliminations were $35.5 million and $30.7 million for year ended December 31, 2024 and 2023, respectively. 39 Table of Contents Cost of goods sold.
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 to increased volume, partially offset by costs to acquire products .
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 to increased volume, partially offset by costs to acquire products .
The following table presents our orders backlog as of the periods indicated: ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ December 31, 2023 ​ December 31, 2022 Orders backlog ​ $ 126,683 ​ $ 117,873 ​ Orders comprising backlog as of a given balance sheet date are typically invoiced in subsequent periods.
The following table presents our orders backlog as of the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) ​ 2024 2023 Orders backlog ​ $ 128,814 ​ $ 126,683 ​ Orders comprising backlog as of a given balance sheet date are typically invoiced in subsequent periods.
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 to increased agency demand for hard goods .
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 to increased agency demand for hard goods .
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.
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 .
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 to increased 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 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.
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 .
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 .
Overview and 2023 Financial Highlights 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.
Overview and 2024 Financial Highlights Cadre is a global leader in the manufacturing and distribution of safety equipment and 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.
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.
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.
The following table sets forth a summary of our financial highlights for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, (in thousands) ​ 2023 ​ 2022 Net sales $ 482,532 $ 457,837 Net income ​ $ 38,641 ​ $ 5,820 Adjusted EBITDA (1) ​ $ 85,818 ​ $ 75,731 36 Table of Contents (1) Adjusted EBITDA is a non-GAAP financial measure.
The following table sets forth a summary of our financial highlights for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) ​ 2024 ​ 2023 Net sales $ 567,561 $ 482,532 Net income ​ $ 36,133 ​ $ 38,641 Adjusted EBITDA (1) ​ $ 104,840 ​ $ 85,818 (1) Adjusted EBITDA is a non-GAAP financial measure.
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.
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. The Company also has certain long-term contracts that contain performance obligations that are satisfied over time.
The table below presents our EBITDA and Adjusted EBITDA reconciled to the most comparable GAAP financial measures for the periods indicated : ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Net income ​ $ 38,641 ​ $ 5,820 ​ Add back: ​ ​ Depreciation and amortization ​ 15,737 15,651 ​ Interest expense ​ 4,531 6,206 ​ Provision for income taxes ​ 14,283 3,553 ​ EBITDA ​ $ 73,192 $ 31,230 ​ Add back: ​ ​ Restructuring and transaction costs (1) ​ 3,192 5,355 ​ Other general income (2) ​ ​ (92) ​ ​ (159) ​ Other (income) expense, net (3) ​ (936) 1,137 ​ Stock-based compensation expense (4) ​ ​ 9,368 ​ ​ 32,239 ​ Stock-based compensation payroll tax expense (5) ​ ​ 234 ​ ​ 305 ​ LTIP bonus (6) ​ 860 1,369 ​ Amortization of inventory step-up (7) ​ ​ — ​ ​ 4,255 ​ Adjusted EBITDA ​ $ 85,818 $ 75,731 ​ (1) Reflects the “Restructuring and transaction costs” line item on our consolidated statements of operations and comprehensive income, which primarily includes transaction costs composed of legal and consulting fees.
The table below presents our EBITDA and Adjusted EBITDA reconciled to the most comparable GAAP financial measures for the periods indicated : ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2024 2023 Net income ​ $ 36,133 ​ $ 38,641 Add back: ​ Depreciation and amortization ​ 16,420 15,737 Interest expense ​ 7,822 4,531 Provision for income taxes ​ 18,085 14,283 EBITDA ​ $ 78,460 $ 73,192 Add back: ​ Restructuring and transaction costs (1) ​ 7,757 3,192 Other general income (2) ​ ​ — ​ ​ (92) Other expense (income), net (3) ​ 4,721 (936) Stock-based compensation expense (4) ​ ​ 8,369 ​ ​ 9,368 Stock-based compensation payroll tax expense (5) ​ ​ 441 ​ ​ 234 LTIP bonus (6) ​ 49 860 Amortization of inventory step-up (7) ​ ​ 3,858 ​ ​ — Contingent consideration expense (8) ​ ​ 1,185 ​ ​ — Adjusted EBITDA ​ $ 104,840 $ 85,818 (1) Reflects the “Restructuring and transaction costs” line item on our consolidated statements of operations and comprehensive income, which primarily includes transaction costs composed of legal and consulting fees.
In addition, this line item reflects $1.0 million transaction fees paid to Kanders & Company, Inc. for services related to the acquisition of ICOR and Cyalume for the years ended December 31, 2023 and 2022, respectively, which is included in related party expense in the Company’s consolidated statements of operations and comprehensive income .
In addition, this line item reflects a $1.8 million fee paid to Kanders & Company, Inc. for services related to the acquisition of Alpha Safety for the year ended December 31, 2024 and a $1.0 million fee paid to Kanders & Company, Inc. for services related to the acquisition of ICOR for the year ended December 31, 2023, which are included in related party expense in the Company’s consolidated statements of operations and comprehensive income .
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.
During the year ended December 31, 2023, net cash provided by operating activities of $73.2 million resulted primarily from net income of $38.6 million, a $15.7 million add back to net income for depreciation and amortization, a $9.4 million add back to net income for stock-based compensation and a $10.1 million add back to net income from changes in operating assets and liabilities.
A provision or benefit for income tax is calculated for each of the jurisdictions in which we operate. The provision or benefit for income taxes is determined using the asset and liability approach of accounting for income taxes.
Other (expense) income, net primarily consists of gains and losses from foreign currency transactions. Provision for income taxes . A provision or benefit for income tax is calculated for each of the jurisdictions in which we operate. The provision or benefit for income taxes is determined using the asset and liability approach of accounting for income taxes.
Restructuring and transaction costs decreased by $2.2 million for the year ended December 31, 2023 as compared to 2022 primarily due to costs incurred in 2022 associated with acquisitions . Related party expense.
Restructuring and transaction costs increased by $3.8 million for the year ended December 31, 2024 as compared to 2023 primarily due to costs incurred associated with the ICOR and Alpha Safety acquisitions . 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. Interest expense . Interest expense consists primarily of interest on outstanding debt. Other expense, net . Other expense, net primarily consists of gains and losses from foreign currency transactions. Provision for income taxes .
Transaction costs consist of legal fees and consulting costs related to one-time transactions. 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. Interest expense . Interest expense consists primarily of interest on outstanding debt. Other (expense) income, net .
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 by favorable 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. Selling, general and administrative.
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. Selling, general and administrative.
LIQUIDITY AND CAPITAL RESOURCES Liquidity refers to our ability to generate sufficient cash flows to meet the cash requirements of our business operations, including working capital needs, capital expenditures, debt service, acquisitions and other commitments. Our principal sources of liquidity have been cash provided by operating activities, cash on hand and amounts available under our revolving loans .
LIQUIDITY AND CAPITAL RESOURCES Liquidity refers to our ability to generate sufficient cash flows to meet the cash requirements of our business operations, including working capital needs, capital expenditures, debt service, acquisitions and other commitments.
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 .
Net cash provided (used in) financing activities 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 .
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.
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 .
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 .
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.
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.
On April 1, 2024, the underwriters exercised the full amount of their over-allotment option and purchased an additional 545,719 shares of common stock at 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.
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 . 38 Table of Contents The following table presents data from our results of operations for the years ended December 31, 2023 and 2022 (in thousands unless otherwise noted): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ 2023 ​ 2022 ​ % Chg ​ Net sales ​ $ 482,532 ​ $ 457,837 ​ 5.4 % Cost of goods sold ​ 281,806 ​ 282,159 ​ (0.1) % Gross profit ​ 200,726 ​ 175,678 ​ 14.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 140,519 ​ 153,129 ​ (8.2) % Restructuring and transaction costs ​ 2,192 ​ 4,355 ​ (49.7) % Related party expense ​ 1,496 ​ 1,478 ​ 1.2 % Total operating expenses ​ 144,207 ​ 158,962 ​ (9.3) % Operating income ​ 56,519 ​ 16,716 ​ 238.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ (4,531) ​ (6,206) ​ (27.0) % Other income (expense), net ​ 936 ​ (1,137) ​ (182.3) % Total other expense, net ​ (3,595) ​ (7,343) ​ (51.0) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before provision for income taxes ​ 52,924 ​ 9,373 ​ 464.6 % Provision for income taxes ​ (14,283) ​ (3,553) ​ 302.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 38,641 ​ $ 5,820 ​ 563.9 % ​ The following table presents segment data for the years ended December 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Reconciling ​ ​ ​ ​ Product Distribution Items (1) Total Net sales $ 410,825 ​ $ 102,371 ​ $ (30,664) $ 482,532 Cost of goods sold ​ ​ 233,937 ​ $ 78,335 ​ $ (30,466) ​ ​ 281,806 Gross profit ​ $ 176,888 ​ $ 24,036 ​ $ (198) ​ $ 200,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Reconciling ​ ​ ​ ​ Product Distribution Items (1) Total Net sales $ 385,423 $ 97,106 ​ $ (24,692) $ 457,837 Cost of goods sold ​ ​ 230,245 ​ ​ 76,633 ​ ​ (24,719) ​ ​ 282,159 Gross profit ​ $ 155,178 ​ $ 20,473 ​ $ 27 ​ $ 175,678 (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments.
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 . 38 Table of Contents The following table presents data from our results of operations for the years ended December 31, 2024 and 2023 (in thousands unless otherwise noted): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ 2024 ​ 2023 ​ % Chg ​ Net sales ​ $ 567,561 ​ $ 482,532 ​ 17.6 % Cost of goods sold ​ 334,080 ​ 281,806 ​ 18.5 % Gross profit ​ 233,481 ​ 200,726 ​ 16.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 158,323 ​ 140,519 ​ 12.7 % Restructuring and transaction costs ​ 6,007 ​ 2,192 ​ 174.0 % Related party expense ​ 2,390 ​ 1,496 ​ 59.8 % Total operating expenses ​ 166,720 ​ 144,207 ​ 15.6 % Operating income ​ 66,761 ​ 56,519 ​ 18.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ (7,822) ​ (4,531) ​ 72.6 % Other (expense) income, net ​ (4,721) ​ 936 ​ (604.4) % Total other expense, net ​ (12,543) ​ (3,595) ​ 248.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before provision for income taxes ​ 54,218 ​ 52,924 ​ 2.4 % Provision for income taxes ​ (18,085) ​ (14,283) ​ 26.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 36,133 ​ $ 38,641 ​ (6.5) % ​ The following table presents segment data for the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ Reconciling ​ ​ ​ ​ Product Distribution Items (1) Total Net sales $ 497,624 ​ $ 105,397 ​ $ (35,460) $ 567,561 Cost of goods sold ​ ​ 287,864 ​ ​ 81,631 ​ ​ (35,415) ​ ​ 334,080 Gross profit ​ $ 209,760 ​ $ 23,766 ​ $ (45) ​ $ 233,481 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Reconciling ​ ​ ​ ​ Product Distribution Items (1) Total Net sales $ 410,825 ​ $ 102,371 ​ $ (30,664) $ 482,532 Cost of goods sold ​ ​ 233,937 ​ ​ 78,335 ​ ​ (30,466) ​ ​ 281,806 Gross profit ​ $ 176,888 ​ $ 24,036 ​ $ (198) ​ $ 200,726 (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments.
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 .
Product segment net sales increased by $86.8 million, or 21.1%, from $410.8 million to $497.6 million for the year 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.
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 .
Net cash used in investing activities 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.
Critical Accounting Policies and Significant Judgements and Estimates Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. Preparation of the financial statements requires us to make judgments, estimates and assumptions that impact the reported amount of net sales and expenses, assets and liabilities and the disclosure of contingent assets and liabilities.
Preparation of the financial statements requires us to make judgments, estimates and assumptions that impact the reported amount of net sales and expenses, assets and liabilities and the disclosure of contingent assets and liabilities.
SG&A decreased by $12.6 million, or 8.2%, for the year ended December 31, 2023 as compared to 2022 primarily due to a $22.9 million decrease in stock-based compensation expense, partially offset by an increase in employee compensation and related benefits. Restructuring and transaction costs.
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 . Restructuring and transaction costs.
In connection with the Borrower’s acquisition of Alpha Safety on March 1, 2024, the Borrower and the Guarantors entered into an Incremental Facility Amendment to the 2021 Credit Agreement, whereby the Lenders made an incremental term loan to the Borrower in the principal amount of $80 million for the purpose of funding the acquisition of Alpha Safety.
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. 42 Table of Contents In connection with the Borrower’s acquisition of Alpha Safety on February 29, 2024, the Borrower and the Guarantors entered into an Incremental Facility Amendment to the 2021 Credit Agreement, whereby the Lenders made an incremental term loan to the Borrower in the principal amount of $80 million for the purpose of funding the acquisition of Alpha Safety.
Cash Flows The following table presents a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Net cash provided by operating activities ​ $ 73,209 $ 46,409 Net cash used in investing activities ​ (6,520) (59,626) Net cash (used in) provided by financing activities ​ (24,722) 24,463 Effects of foreign exchange rates on cash and cash equivalents ​ 438 183 Change in cash and cash equivalents ​ 42,405 11,429 Cash and cash equivalents, beginning of period ​ 45,286 33,857 Cash and cash equivalents, end of period ​ $ 87,691 $ 45,286 ​ 43 Table of Contents Net cash provided by operating activities During the year ended December 31, 2023, net cash provided by operating activities of $73.2 million resulted primarily from net income of $38.6 million, a $15.7 million add back to net income for depreciation and amortization, a $9.4 million add back to net income for stock-based compensation and a $10.1 million add back to net income from changes in operating assets and liabilities.
The foregoing description of the 2024 Credit Agreement does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 23, 2024, and is incorporated herein by reference as though fully set forth herein. 44 Table of Contents Cash Flows The following table presents a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2024 2023 Net cash provided by operating activities ​ $ 31,777 $ 73,209 Net cash used in investing activities ​ (147,426) (6,520) Net cash provided by (used in) financing activities ​ 152,667 (24,722) Effects of foreign exchange rates on cash and cash equivalents ​ 224 438 Change in cash and cash equivalents ​ 37,242 42,405 Cash and cash equivalents, beginning of period ​ 87,691 45,286 Cash and cash equivalents, end of period ​ $ 124,933 $ 87,691 ​ Net cash provided by operating activities 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 $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 .
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.
(3) Includes the effect of our interest rate swap and assumes (a) one-month SOFR rate in effect as of December 31, 2023; (b) applicable margins remain constant; (c) only mandatory debt repayments are made; and (d) no refinancing occurs at debt maturity. 44 Table of Contents Off-Balance Sheet Arrangements We do not engage in off-balance sheet financing arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.
(2) Includes scheduled cash principal payments on our debt, excluding interest, original issuance discount and debt issuance costs. (3) Includes the effect of our interest rate swap and assumes (a) one-month SOFR rate in effect as of December 31, 2024; (b) applicable margins remain constant; (c) only mandatory debt repayments are made; and (d) no refinancing occurs at debt maturity.
Adjusted EBITDA increased by $10.1 million for the year ended December 31, 2023 as compared to 2022, primarily due to an increase in net sales, an increase in gross profit margin and recent acquisitions.
Adjusted EBITDA increased by $19.0 million for the year ended December 31, 2024 as compared to 2023, primarily due to recent acquisitions, partially offset by the impact of the 2024 cybersecurity incidents and an increase in selling, general and administrative expenses .
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 by favorable pricing, product mix and productivity, partially offset by inflation and pressure from a stronger Mexican peso .
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.
Orders backlog increased by $8.8 million as of December 31, 2023 compared to December 31, 2022 , primarily due to $13.6 million from international demand for explosive ordnance disposal products and $1.3 million from international orders for crowd control, partially offset by reductions of $3.6 million from the Distribution segment and $3.0 million from chemiluminescent payloads . 37 Table of Contents DESCRIPTION OF CERTAIN COMPONENTS OF FINANCIAL DATA Net sales 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.
DESCRIPTION OF CERTAIN COMPONENTS OF FINANCIAL DATA Net sales 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 foregoing description of the Canadian Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the Canadian Loan Agreement, which is exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2022, and is incorporated herein by reference as though fully set forth herein .
The foregoing description of the Canadian Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the Canadian Loan Agreement, which is exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2022, and is incorporated herein by reference as though fully set forth herein . 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”).
Restructuring and transaction costs. Restructuring costs consist primarily of termination benefits and relocation of employees, termination of operating leases and other contracts related to consolidating or closing facilities. Transaction costs consist of legal fees and consulting costs related to one-time transactions. Related party expense.
Selling, general and administrative. Selling, general and administrative (“SG&A”) expense includes personnel-related costs, professional services, marketing and advertising expense, research and development, depreciation and amortization, and impairment charges. Restructuring and transaction costs. Restructuring costs consist primarily of termination benefits and relocation of employees, termination of operating leases and other contracts related to consolidating or closing facilities.
Secondary Offering 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.
Secondary Offering 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.
In March 2024, the Company acquired Alpha Safety Intermediate, LLC (“Alpha Safety”) for approximately $106.5 million, net of cash acquired .
In January 2024, the Company acquired ICOR Technology Inc. (“ICOR”) for $40.4 million. In February 2024, the Company acquired Alpha Safety Intermediate, LLC (“Alpha Safety”) for $107.1 million.
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.
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.
Net sales increased by $24.7 million for the year ended December 31, 2023 as compared to December 31, 2022 , primarily as a result of higher 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 .
Orders backlog increased by $2.1 million as of December 31, 2024 compared to December 31, 2023 , primarily due to an increase of $27.6 million from recent acquisitions, partially offset by reductions of $15.2 million from explosive ordnance disposal products and $8.9 million from armor products, both due to large orders delivered in 2024.
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.
Our principal sources of liquidity have been cash provided by operating activities, cash on hand and amounts available under our revolving loans . 41 Table of Contents 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.
See Note 15 “Income Taxes” in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. RESULTS OF OPERATIONS 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.
RESULTS OF OPERATIONS 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.
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.
Interest expense. Interest expense increased by $3.3 million for the year ended December 31, 2024 as compared to 2023 primarily due to the addition of the incremental term loan in 2024 . Other (expense) income, net.
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. Selling, general and administrative. Selling, general and administrative (“SG&A”) expense includes personnel-related costs, professional services, marketing and advertising expense, research and development, depreciation and amortization, and impairment charges.
We generate sales primarily through our four main sales channels: U.S. state and local agencies, international, U.S. federal agencies, and commercial. Costs and Expenses 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.
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. ​
The unobservable factors we use are based upon assumptions believed to be reasonable, but are subject to estimation uncertainty. ​
Removed
Department of Homeland Security, U.S. Department of Corrections and numerous foreign government agencies in over 100 countries . In January 2022, the Company acquired Radar Leather Division S.r.l. (“Radar”) for $19.4 million, net of cash acquired.
Added
Net sales increased by $85.0 million for the year ended December 31, 2024 as compared to December 31, 2023 , primarily as a result of higher demand for armor, duty gear and crowd control products, as well as recent acquisitions, partially offset by a decline in accessories. 36 Table of Contents 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 productivity as a result of the cybersecurity incidents that we reported in 2024, partially offset by favorable pricing and volume.
Removed
In May 2022, the Company acquired Cyalume Technologies, Inc., CT SAS Holdings, Inc. and Cyalume Technologies SAS (collectively “Cyalume”) for $36.2 million, net of cash acquired. In January 2024, the Company acquired ICOR Technology Inc. (“ICOR”) for approximately CDN $52.0 million (approximately $38.8 million), net of cash acquired.
Added
The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms.
Removed
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 .
Added
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. 37 Table of Contents At the time of revenue recognition we also provide for estimated sales returns and miscellaneous claims from customers as reductions to revenues.
Removed
See Note 1 “Significant Accounting Policies — Revenue Recognition” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. We generate sales primarily through our four main sales channels: U.S. state and local agencies, international, U.S. federal agencies, and commercial. Costs and Expenses Cost of goods sold .
Added
See Note 16 “Income Taxes” in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Removed
We also recorded rent expense relating to distribution warehouses and retail stores that we lease from related parties. Interest expense. Interest expense decreased by $1.7 million, or 27.0%, for the year ended December 31, 2023 as compared to 2022 as a result of a decrease in outstanding borrowings . Other income (expense), net.
Added
All other material terms of the 2021 Credit Agreement remained unchanged.
Removed
As of March 8, 2024, there were no amounts outstanding under the Revolving Loan .
Added
The 2024 Credit Agreement amends and restates the 2021 Credit Agreement in its entirety. 43 Table of Contents Pursuant to the 2024 Credit Agreement, the 2024 Borrower (i) borrowed $225.0 million under a term loan facility (the “2024 Term Loans”), (ii) may borrow up to $175.0 million under a revolving credit facility (the “2024 Revolving Loan”), including up to $30.0 million for letters of credit and up to $10.0 million for swingline loans, (iii) may borrow up to $115.0 million 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 $75.0 million under a delayed draw term loan A-2 facility (the “DDTL A-2 Facility”) available through June 20, 2026.
Removed
Contractual Obligations The following table summarizes our significant contractual obligations as of December 31, 2023 by period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ More than (in thousands) Total 1 year 1-3 Years 3-5 Years 5 Years Lease obligations (1) ​ $ 6,988 $ 3,438 $ 3,004 $ 515 $ 31 Debt (2) ​ 139,095 10,133 128,830 132 — Interest on debt (3) ​ 11,766 4,894 6,872 — — Total contractual obligations ​ $ 157,849 $ 18,465 $ 138,706 $ 647 $ 31 (1) Includes future minimum lease payments required under non-cancelable operating and capital leases.
Added
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.
Removed
(2) Includes scheduled cash principal payments on our debt, excluding interest, original issuance discount and debt issuance costs.

… 10 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+3 added−1 removed2 unchanged
Biggest changeOn an annual basis, a change of 100 basis points in the applicable interest rate would cause a change in interest expense of $1.4 million on the principal amount of debt and would have an immaterial effect when including the effect of our Swap Agreements. 45 Table of Contents As of December 31, 2023, we had the following Swap Agreements (in thousands): ​ ​ ​ ​ ​ ​ ​ Effective Date Notional Amount Fixed Rate September 30, 2021 through July 23, 2026 ​ $ 88,750 ​ 0.812 % May 31, 2023 through July 23, 2026 $ 48,125 3.905 % ​ During the year ended December 31, 2023, there were no interest rate swap agreements that expired.
Biggest changeAs of December 31, 2024, we had the following Swap Agreements (in thousands): ​ ​ ​ ​ ​ ​ ​ Effective Date Notional Amount Fixed Rate September 30, 2021 through July 23, 2026 ​ $ 83,750 ​ 0.812 % May 31, 2023 through July 23, 2026 $ 45,625 3.905 % ​ During the year ended December 31, 2024, there were no interest rate swap agreements that expired.
Foreign currency exchange rate risk Our operations are geographically diverse and we are exposed to foreign currency exchange risk primarily for the Canadian dollar and Mexican peso, related to our transactions and our subsidiaries’ balances that are denominated in currencies other than the U.S. dollar, our functional currency.
Foreign currency exchange rate risk Our operations are geographically diverse and we are exposed to foreign currency exchange risk, primarily the Canadian dollar and Mexican peso, related to our transactions and our subsidiaries’ balances that are denominated in currencies other than the U.S. dollar, which is our functional currency .
A 10% increase or decrease in the value of the Canadian dollar to the U.S. dollar would have caused our reported net income to increase or decrease by approximately $0.2 million for the year ended December 31, 2023, excluding unrealized gains or losses from remeasurement.
A 10% increase or decrease in the value of the Canadian dollar to the U.S. dollar would have caused our reported net income to increase or decrease by approximately $0.1 million for the year ended December 31, 2024, excluding unrealized gains or losses from remeasurement.
There have not been material changes in market risk exposures as of December 31, 2023. Interest rate risk Changes in interest rates affect the amount of interest expense we are required to pay on our floating rate debt.
There have not been material changes in market risk exposures as of December 31, 2024. 46 Table of Contents Interest rate risk Changes in interest rates affect the amount of interest expense we are required to pay on our floating rate debt.
A 10% increase or decrease in the value of the Canadian dollar to the U.S. dollar would have caused our reported net sales to increase or decrease by approximately $1.3 million for the year ended December 31, 2023.
A 10% increase or decrease in the value of the Canadian dollar to the U.S. dollar would have caused our reported net sales to increase or decrease by approximately $0.9 million for the year ended December 31, 2024.
Under the terms of the Swap Agreements, we receive payments based on the 1-month SOFR. A portion of the amount included in accumulated other comprehensive 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.
Under the terms of the Swap Agreements, we receive payments based on the 1-month SOFR. A portion of the amount included in accumulated other comprehensive (loss) income is reclassified into interest expense, net as a yield adjustment when interest is either paid or received on the hedged debt.
As of December 31, 2023, we had $138.6 million in outstanding floating rate debt, which bears interest at one-month SOFR (5.36% as of December 31, 2023) plus 1.60%. We entered into the Swap Agreements to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed and designated them as cash flow hedges.
As of December 31, 2024, we had $225.0 million in outstanding floating rate debt, which bears interest at one-month SOFR (4.38% as of December 31, 2024) plus 1.75%. We entered into the Swap Agreements to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed and designated them as cash flow hedges.
A 10% increase or decrease in the value of the Mexican peso to the U.S. dollar would have caused our reported net income to increase or decrease by approximately $0.7 million for the year ended December 31, 2023, excluding unrealized gains or losses from remeasurement. ​ ​ ​ ​ 46 Table of Contents
A 10% increase or decrease in the value of the Mexican peso to the U.S. dollar would have caused our reported net income to increase or decrease by approximately $2.5 million for the year ended December 31, 2024, excluding unrealized gains or losses from remeasurement and the impact of cash flow hedges. ​ ​ ​ ​ 47 Table of Contents
Further, in this sensitivity analysis, the change in interest rates is assumed to be applicable for an entire year.
We performed a sensitivity analysis on the principal amount of debt as of December 31, 2024, as well as the effect of our Swap Agreements. Further, in this sensitivity analysis, the change in interest rates is assumed to be applicable for an entire year.
We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements. We performed a sensitivity analysis on the principal amount of debt as of December 31, 2023, as well as the effect of our Swap Agreements.
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.
Removed
We do not currently hedge our foreign currency transaction or translation exposure, though we have done so in the past and may do so in the future. Significant currency fluctuations could impact the comparability of our results of operations between periods.
Added
On an annual basis, a change of 100 basis points in the applicable interest rate would cause a change in interest expense of $2.3 million on the principal amount of debt and $1.0 million when including the effect of our Swap Agreements.
Added
The Company has entered into forward contracts to hedge forecasted Mexican peso 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 consolidated balance sheets.
Added
Any changes in the fair value of designated cash flow hedges are recorded in other comprehensive (loss) income and are reclassified from accumulated other comprehensive (loss) income into earnings in the period the hedged item impacts earnings . Significant currency fluctuations could impact the comparability of our results of operations between periods.

Other CDRE 10-K year-over-year comparisons