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What changed in Cadre Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Cadre Holdings, Inc.'s 2024 and 2025 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 2025 report.

+273 added−275 removedSource: 10-K (2026-03-10) vs 10-K (2025-03-11)

Top changes in Cadre Holdings, Inc.'s 2025 10-K

273 paragraphs added · 275 removed · 218 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

59 edited+12 added−5 removed47 unchanged
Biggest changeThe 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.
Biggest changeOur material registered trademarks include SAFARILAND ® and MED-ENG ® . 11 Table of Contents 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 39 2026 – 2043 10 2042 – 2045 Duty Gear Safariland, LLC 197 2026 – 2049 54 2039 – 2045 Duty Gear ​ Radar Leather Division S.r.l. ​ 56 ​ 2028 – 2039 ​ — ​ — EOD Med-Eng, LLC 86 2026 – 2045 1 2045 Crowd Control Defense Technology, LLC 53 2026 – 2048 2 2042 – 2048 Crowd Control ​ Safariland, LLC ​ 1 ​ 2032 ​ — ​ — Crowd Control ​ Radar Leather Division S.r.l. ​ 5 ​ 2029 – 2031 ​ — ​ — Other – Diversified Safariland, LLC 33 2026 – 2048 1 2045 Other – Diversified ​ Cyalume Technologies ​ 38 2027 – 2042 25 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.
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.
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 sites across North America and Europe. Each site has capacity to scale up without significant further material investment in machinery and equipment.
We are also committed to increasing our market share internationally. Given our leading domestic market position and our products’ high-quality standards and performance, we believe we are well positioned to take advantage of the growth in international demand for safety equipment for first responders.
International Market Expansion. We are also committed to increasing our market share internationally. Given our leading domestic market position and our products’ high-quality standards and performance, we believe we are well positioned to take advantage of the growth in international demand for safety equipment for first responders.
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 own patents and pending patent applications in the United States, Australia, Austria, Belgium, Brazil, Canada, the People’s Republic of China, Croatia, Czech Republic, Denmark, France, Germany, Hong Kong, India, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, and the United Kingdom, as well as in the European Union.
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.
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 DoW.
In our law enforcement and military focused brands, we are committed to honoring those who put their lives in danger through the SAVES CLUB ® , which pays homage to first responders who experience a life-threatening incident in the line of work in which our armor or duty gear contribute to saving their lives.
In our law enforcement and military focused brands, we are committed to honoring those who put their lives in danger through the SAVES CLUB ® , which pays homage to first responders who experience a life-threatening incident in the line of work in which our armor or duty gear contributes to saving their lives.
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.
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 18 transactions to date.
The end user base for our holster products includes state and local law enforcement, federal agencies including the DoS, DoD, DoI, DHS, and DoC, foreign police and military agencies, and the commercial concealed carry market. We also offer a complementary line of officer duty gear including belts and accessories.
The end user base for our holster products includes state and local law enforcement, federal agencies including the DoS, DoW, DoI, DHS, and DoC, foreign police and military agencies, and the commercial concealed carry market. We also offer a complementary line of officer duty gear including belts and accessories.
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.
The SAVES CLUB ® currently has over 2,274 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.
Our strong profitability combined with minimal capital expenditure requirements result in high free cash flow generation, which is a key driver for our internal research and development initiatives and targeted M&A program. Tenured management with significant public company platforms.
Our strong profitability combined with low capital expenditure requirements result in high free cash flow generation, which is a key driver for our internal research and development initiatives and targeted M&A program. Tenured management with significant public company platforms.
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.
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 2025, we launched a new family of duty holsters, the Ballast.
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.
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. 8 Table of Contents Nuclear Safety.
Our target end user base includes state, local, and international law enforcement, fire and rescue, explosive ordnance disposal technicians, commercial nuclear power plants, emergency medical technicians (“EMT”), fishing and wildlife enforcement and departments of corrections, as well as federal agencies including the U.S. Department of State (“DoS”), U.S. Department of Defense (“DoD”), U.S. Department of Interior (“DoI”), U.S.
Our target end user base includes state, local, and international law enforcement, fire and rescue, explosive ordnance disposal technicians, commercial nuclear power plants, emergency medical technicians (“EMT”), fishing and wildlife enforcement and departments of corrections, as well as federal agencies including the U.S. Department of State (“DoS”), U.S. Department of War (“DoW”), U.S. Department of Interior (“DoI”), U.S.
We plan to utilize our free cash flow generation and historical success in acquisitions to drive favorable acquisition structures and efficient integration. Our operating model, passion around connecting with customers and expansive channel help maximize the value created from our acquisitions. Continuous Margin Improvement Initiatives.
We plan to utilize our free cash flow generation and historical success in acquisitions to drive favorable acquisition structures and efficient integration. Our operating model, passion around connecting with customers and expansive channel help maximize the value created from our acquisitions. 9 Table of Contents Continuous Margin Improvement Initiatives.
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”).
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”).
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.
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.
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.
In total, we have 71 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.
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.
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. U.S. Federal Agencies. We sell to a variety of federal agencies including the DoS, DoW, DoI, DoJ, DHS, and DoE.
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.
The three key end markets, which 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.
Our management estimates our addressable number of total law enforcement personnel outside the U.S. to be approximately 9.7 million, representing a substantial market opportunity. Nuclear Safety Products The demand drivers for our highly engineered technical products centers around a global effort to ensure safe nuclear operations and material handling.
Our management estimates our addressable number of total law enforcement personnel outside the U.S. to be approximately 6.1 million, representing a substantial market opportunity. Nuclear Safety Products The demand drivers for our highly engineered technical products center around a global effort to ensure safe nuclear operations and material handling.
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.
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 priorities and processes changed in 2025, as discussed in further detail under Item 1A.
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.
We maintain clear market-leadership positions in certain core product categories including body armor, explosive ordnance disposal equipment and duty gear. Over 60% 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.
“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.
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.
Government, including without limitation, the U.S Nuclear Regulatory Commission (“NRC”), the DoE as well as the states of New Mexico, Colorado and Connecticut where its operations are located.
The operations of our Alpha Safety business are highly regulated by the U.S. Government, including without limitation, the U.S Nuclear Regulatory Commission (“NRC”), the DoE as well as the states of New Mexico, Colorado and Connecticut where its operations are located.
Our overall strategy is to drive growth by leveraging our leading market shares and competitively differentiated offerings in each of our core product categories, including: Body Armor. We offer a full range of field-proven advanced armor solutions.
Our remaining revenue is split between consumable products and products intended for the nuclear market. Our overall strategy is to drive growth by leveraging our leading market shares and competitively differentiated offerings in each of our core product categories, including: Body Armor. We offer a full range of field-proven advanced armor solutions.
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.
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 60% of the equipment we supply via our Product segment. Demand associated with these refresh cycles drives a highly predictable recurring revenue stream.
Competition We compete in the large public safety and outdoor and recreation markets amongst other ancillary addressable markets. Competition in the public safety markets depends on the specific product in question but is generally based on a number of factors including product quality, safety performance, fit, price, and brand recognition.
Competition in the public safety markets depends on the specific product in question but is generally based on a number of factors including product quality, safety performance, fit, price, and brand recognition.
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.
Of these employees, 1,805 were engaged in manufacturing, 236 in sales, marketing, product management and customer support, 211 in corporate functions (IT, Finance, HR, Legal and Compliance, etc.), 219 in R&D, technical engineering, manufacturing engineering and project management, 27 retail store associates and 35 in various executive and administrative functions.
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.
The significant increase (70%) in active shooter incidents from 2020 to 2024 compared to the prior five-year period, 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.
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.
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 occurred regularly since 1989.
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.
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.
Although in some cases substitutable alternative materials and components may be obtained from other commercially available sources, any change in the materials and components that we utilize in manufacturing our ballistic resistant garments may require additional research and development, recertification as well as customer acceptance.
Although in some cases substitutable alternative materials and components may be obtained from other commercially available sources, any change in the materials and components that we utilize in manufacturing our ballistic resistant garments may require additional research and development, recertification as well as customer acceptance. 10 Table of Contents Competition We compete in the large public safety and outdoor and recreation markets amongst other ancillary addressable markets.
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.
We own a total of 607 patents and pending patent applications worldwide, of which 514 are patents granted and 93 are pending patent applications, with expiry dates ranging from 2026 to 2049 in 36 jurisdictions. Of those 607 patents and pending patent applications, 378 are for utility patents and 229 are for design patents.
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 ® .
The loss of patent protection for patents expiring in 2026 is not expected to have a material effect on our business.
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.
Certain of our products cross over into the broader outdoor and recreation market, which is highly fragmented and highly competitive. 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 2,533 employees.
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.
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 $534 billion liability that exists from energy research and nuclear weapons production dating back decades.
Demand pertaining to environmental safety is fueled by DoE mandated cleanup that exists from energy research and nuclear weapons production dating back to World War II and the Cold War, where the liability is estimated at $545 billion.
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.
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.
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.
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.
Competitive Strengths Leading, independent global provider of safety equipment. Our history as a leading provider of high-quality safety equipment dates back to 1964. Our differentiated value proposition is built on superior quality combined with an unwavering focus on critical safety standards, making us a trusted brand name. Strong market positions.
Our differentiated value proposition is built on superior quality combined with an unwavering focus on critical safety standards, making us a trusted brand name. Strong market positions.
Our management team believes that the safety equipment industry represents a stable and growing market with long-term opportunities. Given our strong market standing, direct connection to the end users, extensive distribution network, long history of innovations and high-quality standards, we believe we are well positioned to capitalize on the positive market dynamics.
Given our strong market standing, direct connection to the end users, extensive distribution network, long history of innovations and high-quality standards, we believe we are well positioned to capitalize on the positive market dynamics. Competitive Strengths Leading, independent global provider of safety equipment. Our history as a leading provider of high-quality safety equipment dates back to 1964.
This 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.
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. We also sell products in partnership with industry leading developer Hardwire LLC.
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.
Finally, agencies routinely audit and review government contractors for performance and compliance with applicable laws, regulations, and standards. 12 Table of Contents 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.
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.
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.
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.
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.
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.
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 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.
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.
Our primary competitors include, but are not limited to, Point Blank Enterprises, Inc., Avon Protection Systems, Inc., Central Lake Armor Express, Inc. (d/b/a Armor Express), Alien Gear Holsters, as well as the Blackhawk division of Vista Outdoor Inc.
Our primary competitors include, but are not limited to, Point Blank Enterprises, Inc., Avon Protection Systems, Inc., Central Lake Armor Express, Inc. (d/b/a Armor Express), Alien Gear Holsters, and Blackhawk a division of Revelyst. None of our competitors compete effectively in all of our product verticals, making us the only one-stop provider of critical safety equipment solutions in the market.
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.
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. A substantial portion of our diversified product offering is governed by rigorous safety standards and regulations.
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.
The majority of our remaining revenue is associated with 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 first responder budgets, and relatively unaffected by economic cycles.
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.
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.
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.
Examples of recent product innovation include the development of Safariland SXHP, the thinnest, lightest, and most protective hybrid ballistic armor ever developed, the next generation Ballast holster, the H.O.L.E. duty belt system for direct attachment mounting, a variety of consumer-focused holsters, and working with key suppliers on the use of emerging materials for utilization in new armor products.
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.
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. Our management team believes that the safety equipment industry represents a stable and growing market with long-term opportunities.
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.
Item 1. Business BUSINESS Business Overview We are 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.
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.
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.
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 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.
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.
TYR derives approximately 66% of its revenue from customers outside of the U.S., expanding the global reach of our portfolio of products. Our body armor panels manufactured in the United States are designed to meet applicable ballistic performance standards established by the NIJ.
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.
For example, the DoW implements the FAR through the Defense Federal Acquisition Regulation Supplement.
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.
Bureau of Labor Statistics projects that the number of 5 Table of Contents openings for law enforcement personnel in the U.S. to grow by 3% annually from 2024 to 2034. Demand for first responder safety equipment is also fueled by increasing law enforcement budgets and increases in expenditures per officer.
Removed
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.
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We sell a wide range of products including body armor, explosive ordnance disposal equipment , duty gear, remote handling solutions, containers for the storage of radioactive materials, and ventilation and containment solutions through both direct and indirect channels.
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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.
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Lastly, demand pertaining to nuclear energy is driven by ongoing nuclear plant operation, the decommissioning of nuclear plants, as well as the push by the DOE to expand US nuclear capacity.
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None of our competitors across individual product categories compete in each of our product verticals, making us the only one-stop provider of critical safety equipment solutions in the market. Certain of our products cross over into the broader outdoor and recreation market, which is highly fragmented and highly competitive.
Added
In January 2026, we completed the acquisition of TYR Tactical, LLC (“TYR”), a leading provider of mission-critical tactical gear and related technologies, including soft armor, tactical vests, plate carriers, and ballistic plates and shields, for military and law enforcement globally . TYR is headquartered in Peoria, Arizona, with additional facilities in Texas, Canada and Denmark.
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None of our employees are represented by a union in collective bargaining with us. We believe that our employee relations are good.
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We believe that the 7 Table of Contents acquisition of TYR will enable Cadre to expand its product portfolio, add attractive new international customers, particularly in Europe, and capitalize on operational synergies while advancing product development and manufacturing technologies to deliver best-in-class solutions to customers.
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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.
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We also manufacture body armor in Canada, England and Lithuania that is certified to meet applicable U.S. and 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.
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In 2025, we announced a $50M IDIQ contract with the DoW to provide blast sensors to service members. These sensors will measure and record blast overpressure exposures experienced in training operations as part of a DoW brain health program. Med-Eng has a fielded installed base of bomb suits in over 100 countries, yielding predictable, recurring replacement cycles.
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Select customers include the DoE, LANL, BWXT and Veolia. In April 2025, we completed our acquisition of Carr’s Engineering Limited (excluding Chirton Engineering) and Carr's Engineering (US), Inc. (collectively, “Zircaloy”). T he Zircaloy businesses are comprised of Wälischmiller, CarrsMSM, Bendalls Engineering, NW Total Engineered Solutions, and NuVision Engineering, Inc.
Added
With operations in the U.K., Germany, and the U.S., Zircaloy designs, manufactures, and services engineered equipment, vessels, precision components, process systems, large-scale fabrications, and remote handling systems for nuclear markets, enhancing safety and operational efficiency by reducing human exposure to hazardous environments.
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Zircaloy serves customers globally, including in the U.S., Europe, and Asia, providing us with a more balanced geographical revenue split. Zircaloy complements Alpha Safety and broadens Cadre’s nuclear safety offerings, expanding Cadre’s product portfolio and international presence across nuclear power generation, waste management, research, and related clean energy applications.
Added
Alpha Safety supplies ventilation and containment, radiometric instrumentation, engineered and advanced containers, and field services with long-term recurring revenue, while Zircaloy provides complementary hard engineering and remote-handling products; together they deliver an integrated equipment-and-services platform and deepen access to multi-year nuclear projects across waste management, defense, decommissioning, and medical fields. Other Protective Equipment.
Added
“Risk Factors,” under the heading “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.” The transportation of certain of our products is subject to U.S.
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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

73 edited+25 added−31 removed183 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, $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.
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, $309.1 million of which was outstanding as of December 31, 2025. ● The concentration of our capital stock ownership with insiders may 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. ● Cybersecurity incidents, IT outages, and evolving privacy and cybersecurity requirements could disrupt operations and expose us to liability and reputational harm. ● Climate and ESG related stakeholder expectations and regulatory requirements are evolving and uncertain and may result in increased compliance costs, litigation, and reputational harm. ● Changes in tariffs, tax laws, global trade policies and instability and volatility in global markets could adversely affect our business and results of operations. ​ ● If we fail to adequately protect our intellectual property rights, competitors may manufacture and market products similar to ours, which could adversely affect our market share and results of operations.
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.
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 our manufacturing facilities. Over the past several years, prices for electricity and natural gas have fluctuated significantly.
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.
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; 28 Table of Contents ● 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.
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.
We are also subject to routine audits to ensure 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.
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.
Thus, if our supply of any of these materials or components were materially reduced or cut off or if there was 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.
Risk Factor Summary ● The products we sell are inherently risky and could give rise to product liability, product warranty claims, and other loss contingencies. ● Our markets are highly competitive, and if we are unable to compete effectively, we will be adversely affected. ● Technological advances, the introduction of new products, and new design and manufacturing techniques could adversely affect our operations unless we are able to adapt to the resulting change in conditions. ● We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing capital stock that would dilute your ownership. ● We may be unsuccessful in our future acquisition endeavors, if any, which may have an adverse effect on our business; in addition, some of the businesses we acquire may incur significant losses from operations. ● Our business and growth may suffer if we are unable to attract and retain key officers or employees, including our Chief Executive Officer, Warren B.
Risk Factor Summary ● The products we sell are inherently risky and could give rise to product liability, product warranty claims, and other loss contingencies. ● Our markets are highly competitive, and if we are unable to compete effectively, we will be adversely affected. ● Technological advances, the introduction of new products, and new design and manufacturing techniques could adversely affect our operations unless we are able to adapt to the resulting change in conditions. 13 Table of Contents ● We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing capital stock that would dilute your ownership. ● We may be unsuccessful in our future acquisition endeavors, if any, which may have an adverse effect on our business; in addition, some of the businesses we acquire may incur significant losses from operations. ● Our business and growth may suffer if we are unable to attract and retain key officers or employees, including our Chief Executive Officer, Warren B.
In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: ● permitting the board of directors, and not stockholders, to establish the number of directors and fill any vacancies and newly created directorships; ● authorizing the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; ● restricting the forum for certain litigation against us to Delaware; ● establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings; ● preventing stockholders from taking any action except at a formal meeting of stockholders; ● requiring certain amendments to our amended and restated certificate of incorporation to be approved by the holders of at least 66 2/3% of our then-outstanding common stock; and/or ● requiring that any special meeting of our stockholders will only be able to be called by a majority of our board of directors, the chairperson of our board of directors, our Chief Executive Officer, or our President.
In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: ● permitting the board of directors, and not stockholders, to establish the number of directors and fill any vacancies and newly created directorships; ● authorizing the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; ● restricting the forum for certain litigation against us to Delaware; ● establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings; ● preventing stockholders from taking any action except at a formal meeting of stockholders; ● requiring certain amendments to our amended and restated certificate of incorporation to be approved by the holders of at least 66 2/3% of our then-outstanding common stock; and/or 30 Table of Contents ● requiring that any special meeting of our stockholders will only be able to be called by a majority of our board of directors, the chairperson of our board of directors, our Chief Executive Officer, or our President.
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.
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; 16 Table of Contents ● economic downturns; and ● uncertainty of sustained revenue growth outside of the United States.
The target end users of the products that we sell, which include firearms, ammunition and body armor, are licensed professionals that include state and local law enforcement, federal agencies, foreign police, military agencies as well as private security firms. However, if any misuse of our products were to occur, the Company’s reputation could be harmed.
The target end users of the products that we sell, which include firearms, ammunition and body armor, include licensed professionals such as state and local law enforcement, federal agencies, foreign police, military agencies as well as private security firms. However, if any misuse of our products were to occur, the Company’s reputation could be harmed.
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.
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 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.
If we or our existing third-party cloud-based solution providers experience interruptions in service regularly or for a prolonged basis, or other similar issues, our business could be seriously harmed and, in some instances, our consumers may not be able to purchase our products, which could significantly and negatively affect our sales.
If we or our existing third-party cloud-based solution providers experience interruptions in service regularly or for a prolonged basis, or other similar issues, our business could be seriously harmed and, in some instances, our customers may not be able to purchase our products, which could significantly and negatively affect our sales.
The extent and duration of the effect of these labor market challenges are subject to numerous factors, including the availability of qualified persons in the markets where we and our vendors and customers operate and unemployment levels within these markets, behavioral changes, prevailing wage rates and other benefits, inflation, adoption of new or revised employment and labor laws and regulations (including increased minimum wage requirements) or government programs, safety levels of our operations, and our reputation within the labor market.
The extent and duration of the effect of these labor market challenges are subject to numerous factors, including the availability of qualified persons in the markets where we and our vendors and customers operate and unemployment levels within these markets, behavioral changes, prevailing wage rates and other benefits, inflation, adoption of new or revised employment and 24 Table of Contents labor laws and regulations (including increased minimum wage requirements) or government programs, safety levels of our operations, and our reputation within the labor market.
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.
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.
Certain government contracts, particularly those issued by the U.S. federal government, require multiple competitive bidding rounds, further increasing the risk of losing business to competitors, some of whom have greater financial resources, specialized expertise, or more extensive operational capabilities. 17 Table of Contents Additionally, the competitive bidding process requires substantial investment of time and resources, with no guarantee of success.
Certain government contracts, particularly those issued by the U.S. federal government, require multiple competitive bidding rounds, further increasing the risk of losing business to competitors, some of whom have greater financial resources, specialized expertise, or more extensive operational capabilities. Additionally, the competitive bidding process requires substantial investment of time and resources, with no guarantee of success.
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.
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” employees, which could result in a substantial increase in store payroll expense.
In addition, if we bring or become subject to litigation to defend against claimed infringement of our rights or of the rights of others or to determine the scope and validity of our intellectual property rights, such litigation could result in substantial costs and diversion of our resources, which could have a material adverse effect on our business, financial condition, results of operations and liquidity.
In addition, if we bring or become subject to litigation to defend against claimed infringement of our rights or 19 Table of Contents of the rights of others or to determine the scope and validity of our intellectual property rights, such litigation could result in substantial costs and diversion of our resources, which could have a material adverse effect on our business, financial condition, results of operations and liquidity.
The success of our business depends significantly on our ability to hire and retain quality team members, which include but are not limited to managers and other personnel. Competition for non-entry-level personnel, particularly those with experience in our industry, is highly competitive.
The success of our business depends significantly on our ability to hire and retain quality employees, which include but are not limited to managers and other personnel. Competition for non-entry-level personnel, particularly those with experience in our industry, is highly competitive.
As of the date hereof, our executive officers, directors and stockholders who own more than 5% of our outstanding common stock and their respective affiliates beneficially owned, in the aggregate, 57.3% of the Company, accounting for the shares of common stock and derivatives exercisable for shares of common stock within sixty days that they own.
As of the date hereof, our executive officers, directors and stockholders who own more than 5% of our outstanding common stock and their respective affiliates beneficially owned, in the aggregate, 59.5% of the Company, accounting for the shares of common stock and derivatives exercisable for shares of common stock within sixty days that they own.
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.
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. ​ 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. 22 Table of Contents 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. Misuse of our products may adversely affect the Company’s reputation.
Kanders, our CEO and Chairman of the Board, and his affiliates, of which he has 28 Table of Contents 3,750,000 shares pledged as security for loans from financial institutions and that may be sold by such financial institutions in the event of a foreclosure of these loans.
Kanders, our CEO and Chairman of the Board, and his affiliates, of which he has 3,750,000 shares pledged as security for loans from financial institutions and that may be sold by such financial institutions in the event of a foreclosure of these loans.
The supply of the materials and components that we use to manufacture our products may be constrained by a number of factors, including a supplier’s need to prioritize the manufacture of rated orders issued under the Defense Production Act of 1950 (the “DPA”).
The supply of the materials and components that we use to 18 Table of Contents manufacture our products may be constrained by a number of factors, including a supplier’s need to prioritize the manufacture of rated orders issued under the Defense Production Act of 1950 (the “DPA”).
Further, foreign providers of competing products and services may have a substantial advantage over us in attracting consumers and businesses in their countries due to earlier established businesses in those countries, greater knowledge with respect to the cultural differences of consumers and businesses residing in those countries and/or their focus on a single market.
Further, foreign providers of competing products and services may have a substantial advantage over us in attracting customers and businesses in their countries due to earlier established businesses in those countries, greater knowledge with respect to the cultural differences of customers and businesses located in those countries and/or their focus on a single market.
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.
Our significant payment obligations under the terms of our long-term debt, $309.1 million of which was outstanding as of December 31, 2025, 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.
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 our Company or its employees lose or are unable to obtain necessary 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.
We are an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including: ● not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”); ● reduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 10-K; and ● exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We are an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including: ● not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”); 29 Table of Contents ● reduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 10-K; ● the ability to delay adoption of new or revised accounting standards; and ● exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
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.
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.
As federal or state minimum wage rates increase, we may need to increase not only the wage rates of our minimum wage team members, but also the wages paid to our other hourly team members as well.
As federal or state minimum wage rates increase, we may need to increase not only the wage rates of our minimum wage employees, but also the wages paid to our other hourly employees as well.
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.
We also may be subject to liability if contamination is discovered at a landfill or other location where we have disposed of waste, notwithstanding that historic disposal practices may have been in accordance with all applicable requirements.
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 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.
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.
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 18% and 65% of 2025 Product and Distribution segment net sales, respectively.
These potential negative impacts to our business could negatively impact our financial results and thereby reduce our operating results and borrowing capacity, which could limit our ability to operate our business.
These potential negative impacts to our business could negatively 17 Table of Contents impact our financial results and thereby reduce our operating results and borrowing capacity, which could limit our ability to operate our business.
We have experienced such failures in the past, and remain exposed to such failures. In some cases, product redesigns and/or rework may be required to correct a defect, and such occurrences could adversely impact future business with affected customers. Our business, financial condition, results of operations and liquidity could be materially and adversely affected by any unexpected significant warranty costs.
In some cases, product redesigns and/or rework may be required to correct a defect, and such occurrences could adversely impact future business with affected customers. Our business, financial condition, results of operations and liquidity could be materially and adversely affected by any unexpected significant warranty costs.
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.
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.
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.
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.
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.
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.
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.
Compliance with changing laws, regulations and standards of corporate governance and public disclosure may result in additional expenses. 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 NYSE rules, are creating uncertainty for companies such as ours.
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.
On January 20, 2026, the Company announced that its board of directors approved the continuation of a quarterly cash dividend policy of $0.10 per share of the Company’s common stock (the “Quarterly Cash Dividend”) or $0.40 per share on an annualized basis, representing an increase of 2 cents over the previous annualized dividend of $0.38 per share.
The effects of climate change and increased focus by governmental and non-governmental organizations, customers, consumers and investors on sustainability issues, including those related to climate change and socially responsible activities, may adversely affect our business and financial results and damage our reputation. ​ Climate change is occurring around the world and may impact our business in numerous ways.
The effects of climate change, together with increased focus by governmental and non-governmental organizations, customers and investors on sustainability issues, including evolving climate and sustainability related disclosure expectations, may adversely affect our business and financial results and damage our reputation. ​ Climate change is occurring around the world and may impact our business in numerous ways.
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.
Our nuclear operations subject us to various environmental, regulatory, financial , and other risks. 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.
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.
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.
While the DoE has provided indemnification pursuant to the Price-Anderson Act, there could be delays in obtaining reimbursement for costs from the DoE, and the DoE may determine that some or all costs are not reimbursable under the indemnification.
This indemnity protects subcontractors in work that entails radiological risk. 25 Table of Contents While the DoE has provided indemnification pursuant to the Price-Anderson Act, there could be delays in obtaining reimbursement for costs from the DoE, and the DoE may determine that some or all costs are not reimbursable under the indemnification.
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.
The uncertain consequences and duration of these conflicts, and the risk that they may expand in scope, escalate, or result in broader regional or global instability, including through the emergence of additional conflicts or heightened tensions in other regions, 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.
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.
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, the inability to obtain product liability coverage would prohibit us from bidding for orders from certain governmental customers because, at present, many bids from governmental entities require such coverage, and any such inability would have a material adverse effect on our business, financial condition, results of operations and liquidity.
In addition, the inability to obtain product liability coverage would prohibit us from bidding for orders from certain governmental customers because, at present, many bids from governmental entities require such coverage, and any such inability would have a material adverse effect on our business, financial condition, results of operations and liquidity. 14 Table of Contents Furthermore, while our products are rigorously tested for quality, our products nevertheless do, and may continue to, fail to meet customer expectations from time-to-time.
Furthermore, reductions in federal funding or shifts in spending priorities could place financial strain on state and local governments, which often rely on federal grants, matching funds, and other support to sustain their own programs.
Decisions on federal budget allocations are beyond our control and may have long-term consequences for our business. Furthermore, reductions in federal funding or shifts in spending priorities could place financial strain on state and local governments, which often rely on federal grants, matching funds, and other support to sustain their own programs.
We cannot predict if investors will find our common stock less attractive if we choose to rely on any of the exemptions afforded emerging growth companies.
Our status as an emerging growth company will cease no later than December 31, 2026. We cannot predict if investors will find our common stock less attractive if we choose to rely on any of the exemptions afforded emerging growth companies.
We rely on information technology systems, including third-party cloud-based solutions, and any failure of these systems, including, without limitation, due to outages and/or cyberattacks, may result in disruptions or outages, loss of processing capabilities, and/or loss of data, any of which may have a material adverse effect on our business, operations, and financial results .
We rely on information technology systems, including third-party cloud-based solutions, and any failure of these systems, including, without limitation, due to outages and/or cyberattacks, may result in disruptions or outages, loss of processing capabilities, and/or loss of data, any of which may have a material adverse effect on our business, operations, and financial results. 22 Table of Contents Our reputation and ability to attract, retain and serve customers is dependent upon the reliable performance of our underlying technology infrastructure and external service providers, including third-party cloud-based solutions.
Substantial future sales of shares of our common stock could cause the market price of our common stock to decline. We have outstanding an aggregate of 40,607,988 shares of our common stock as of March 6, 2025. This includes 12,619,284 shares of common stock that are owned by Mr.
Substantial future sales of shares of our common stock could cause the market price of our common stock to decline. We have outstanding an aggregate of 42,726,564 shares of our common stock as of March 6, 2026. This includes 11,447,685 shares of common stock that are owned by Mr.
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.
An outbreak or escalation of hostilities between the United States and any foreign power, or between foreign powers, including conflicts or heightened tensions in regions that are significant producers, processors or transit routes for energy supplies, or a natural disaster, or the emergence of additional conflicts or heightened tensions in other regions, 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.
The due diligence process that we undertake in connection with acquisitions may not reveal all facts that may be relevant in connection with an investment. Before making acquisitions and other investments, we conduct due diligence of the target company that we deem reasonable and appropriate based on the facts and circumstances applicable to each acquisition.
Before making acquisitions and other investments, we conduct due diligence of the target company that we deem reasonable and appropriate based on the facts and circumstances applicable to each acquisition. The objective of the due diligence process is to assess the investment opportunities based on the facts and circumstances surrounding an investment or acquisition.
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.
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.
Adverse publicity could also damage our reputation and the image of our brands, undermine consumer confidence in us and reduce long-term demand for our products, even if such adverse publicity is unfounded or not material to our operations.
Congressional scrutiny and other similar inquiries by governmental bodies may damage our reputation and may also result in potential legislation designed to regulate the various products sold by our brands. 23 Table of Contents Adverse publicity could also damage our reputation and the image of our brands, undermine consumer confidence in us and reduce long-term demand for our products, even if such adverse publicity is unfounded or not material to our operations.
We may not be able to execute our growth strategy through organic expansion, and if we are unable to identify and successfully acquire new businesses complementary to ours, we may not be able to offer new products in line with industry trends.
We may not be able to execute our growth strategy through organic expansion, and if we are unable to identify and successfully acquire new businesses complementary to ours, we may not be able to offer new products in line with industry trends. 26 Table of Contents The due diligence process that we undertake in connection with acquisitions may not reveal all facts that may be relevant in connection with an investment.
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.
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.
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.
In addition, increased energy costs negatively impact our freight costs due to higher fuel prices. Future limitations on the availability, transportation, distribution 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.
We could be subject to securities class action litigation. In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.
We could be subject to securities class action litigation. In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities.
For example, instances of fraud, accounting irregularities and other deceptive practices can be difficult to detect. Executive officers, directors and employees may be named as defendants in litigation involving a company we are acquiring or have acquired.
Executive officers, directors and employees may be named as defendants in litigation involving a company we are acquiring or have acquired.
Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our common stock.
Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our common stock. 27 Table of Contents Risks Related to Ownership of Our Common Stock Our executive officers, directors and principal stockholders, if they choose to act together, will continue to have the ability to control all matters submitted to stockholders for approval.
Furthermore, while our products are rigorously tested for quality, our products nevertheless do, and may continue to, fail to meet customer expectations from time-to-time. Also, not all defects are immediately detectible. Failures could result from faulty design or problems in manufacturing. In either case, we could incur significant costs to repair and/or replace defective products under warranty.
Also, not all defects are immediately detectible. Failures could result from faulty design or problems in manufacturing. In either case, we could incur significant costs to repair and/or replace defective products under warranty. We have experienced such failures in the past, and remain exposed to such failures.
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.
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.
We may be subject to disruptions, failures or cyber-attacks in our information technology systems and network infrastructures that could disrupt our operations, damage our reputation and adversely affect our business, operations, and financial results. We maintain and rely extensively on information technology systems and network infrastructures for the effective operation of our business.
Kanders will fail to devote the necessary time to our Company which could have a material adverse effect on our business, financial condition, results of operations and liquidity. 21 Table of Contents We may be subject to disruptions, failures or cyber-attacks in our information technology systems and network infrastructures that could disrupt our operations, damage our reputation and adversely affect our business, operations, and financial results.
We may face difficulty with the integration of the businesses we acquire, such as coordinating geographically dispersed organizations, 26 Table of Contents integrating personnel with disparate business backgrounds and combining different corporate cultures.
We may face difficulty with the integration of the businesses we acquire, such as coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures. Furthermore, we may fail in implementing our policies and procedures, or the policies and procedures may not be effective or provide the results we anticipate for a particular business.
The due diligence process may at times be subjective with respect to newly-organized companies for which only limited information is available. Accordingly, we cannot be certain that the due diligence investigation that we conduct with respect to any investment or acquisition opportunity will reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity.
Accordingly, we cannot be certain that the due diligence investigation that we conduct with respect to any investment or acquisition opportunity will reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. For example, instances of fraud, accounting irregularities and other deceptive practices can be difficult to detect.
Our U.S. federal government programs must compete not only with other government contractors but also with broader policy initiatives for limited resources within the budget and appropriations process. Decisions on federal budget allocations are beyond our control and may have long-term consequences for our business.
Changes in federal spending often have a cascading effect, influencing not only federally funded programs but also state and local government budgets that rely on federal support. Our U.S. federal government programs must compete not only with other government contractors but also with broader policy initiatives for limited resources within the budget and appropriations process.
Kanders’ employment agreement does not require him to devote any specific amount of time to the Company. Accordingly, it is possible that Mr. Kanders will fail to devote the necessary time to our Company which could have a material adverse effect on our business, financial condition, results of operations and liquidity.
Kanders’ employment agreement does not require him to devote any specific amount of time to the Company. Accordingly, it is possible that Mr.
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.
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 DoW. Responding to governmental audits, inquiries or investigations may involve significant expense and divert management’s attention.
The objective of the due diligence process is to assess the investment opportunities based on the facts and circumstances surrounding an investment or acquisition. When conducting due diligence, we may be required to evaluate important and complex business, financial, tax, accounting, environmental and legal issues.
When conducting due diligence, we may be required to evaluate important and complex business, financial, tax, accounting, environmental and legal issues. The due diligence process may at times be subjective with respect to newly-organized companies for which only limited information is available.
A reduction in U.S. federal government funding or a shift in spending priorities could have a significant impact on our business, financial condition, results of operations, cash flows, and equity. Changes in federal spending often have a cascading effect, influencing not only federally funded programs but also state and local government budgets that rely on federal support.
In addition, certain incidents may trigger public disclosure or notification obligations, and public reporting could increase our legal exposure and the cost and complexity of responding to such incidents. A reduction in U.S. federal government funding or a shift in spending priorities could have a significant impact on our business, financial condition, results of operations, cash flows, and equity.
Our amended and restated certificate of incorporation authorizes the issuance of shares of blank check preferred stock.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. 31 Table of Contents Our amended and restated certificate of incorporation authorizes the issuance of shares of blank check preferred stock.
Techniques used to gain unauthorized access to private networks are constantly evolving, and we may be unable to anticipate or prevent unauthorized access to data pertaining to our customers, including credit card and debit card information and other personally identifiable information.
We maintain and rely extensively on information technology systems and network infrastructures for the effective operation of our business, including manufacturing, order fulfillment, financial reporting, and communications with customers and suppliers. Techniques used to gain unauthorized access to networks, compromise systems, or obtain data are constantly evolving, and we may be unable to anticipate or prevent all incidents.
Our reputation and ability to attract, retain and serve consumers is dependent upon the reliable performance of our underlying technology infrastructure and external service providers, including third-party cloud-based solutions. These systems are vulnerable to damage or interruption and we have experienced interruptions in the past.
These systems are vulnerable to damage or interruption and we have experienced interruptions in the past.
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.
Like other companies operating internationally, we are subject to the Foreign Corrupt Practices Act (the “FCPA”) and other anti-corruption, anti-money laundering, and sanctions laws that prohibit improper payments and other misconduct by us, our employees, agents, distributors, and other third parties with whom we do business.
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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.
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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 products that we manufacture are typically used in applications and situations that involve high levels of risk of personal injury.
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Our extensive operations in such countries create risk of an unauthorized payment by one of our employees or agents, which would be in violation of various laws including the FCPA. Traditionally, violations of the FCPA can result in severe criminal penalties, which could have a material adverse effect on our business, financial condition, results of operations and liquidity.
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In those instances where we have identified actual or potential non-compliance, we may incur remediation costs, reputational harm, and could be subject to enhanced oversight, penalties, suspension, or debarment, even where we take corrective actions.
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However, on February 10, 2025, President Trump issued Executive Order 14209, mandating a 180-day pause on new FCPA investigations and enforcement by the DoJ, with limited exceptions. The order also directs a review of FCPA guidelines, potentially altering enforcement practices. While the SEC enforces the FCPA, it may also scale back enforcement during this review.
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We operate, and may seek to expand, in markets where corruption and bribery risks may be heightened, and we rely on third parties in certain jurisdictions.
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Despite these changes, we remain committed to ethical business practices and our anti-corruption compliance program. However, reduced compliance by competitors could create an uneven playing field, potentially impacting our revenue and market share. In addition, we are subject to governmental laws, regulations and other legal obligations related to privacy, data protection, and cybersecurity.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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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.
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.
For additional information regarding cybersecurity threats that may materially affect the Company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Annual Report on Form 10-K , including the risk factors entitled “We may be subject to disruptions, failures or cyber-attacks in our information technology systems and network infrastructures that could disrupt our operations, damage our reputation and adversely affect our business, operations, and financial results,” and “We rely on information technology systems, including third-party cloud-based solutions, and any failure of these systems due to outages and/or cyberattacks may result in disruptions or outages, loss of processing capabilities, and/or loss of data, any of which may have a material adverse effect on our business, operations, and financial results.” Governance One of the functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats.
For additional information regarding cybersecurity threats that may materially affect the Company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Annual Report on Form 10-K , including the risk factors entitled “We may be subject to disruptions, failures or cyber-attacks in our information technology systems and network infrastructures that could disrupt our operations, damage our reputation and adversely affect our business, operations, and financial results,” and “We rely on information technology systems, including third-party cloud-based solutions, and any failure of these systems, including, without limitation, due to outages and/or cyberattacks, may result in disruptions or outages, loss of processing capabilities, and/or loss of data, any of which may have a material adverse effect on our business, operations, and financial results.” Governance One of the functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats.
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.
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 together or individually, were not material to our financial condition or results of operations.
Our Board of Directors is responsible for overseeing and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face. Our Board of Directors administers its cybersecurity risk oversight function directly as a whole and through its committees.
Our Board of Directors is responsible for overseeing and assessing strategic risk exposure, and our executive 33 Table of Contents officers are responsible for the day-to-day management of the material risks we face. Our Board of Directors administers its cybersecurity risk oversight function directly as a whole and through its committees.
Item 1C. Cybersecurity Risk Management and Strategy We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and processes.
Item 1C. Cybersecurity Risk Management and Strategy We have established policies and processes for assessing, identifying, and managing cybersecurity risks, including risks from cybersecurity threats that could be material to the Company, and have integrated these processes into our overall risk management systems and processes.
We believe that we have allocated adequate resources to address the cybersecurity threats that may affect the Company. Our Vice President of Information Technology and our Information Security Officer manage the Company’s cybersecurity risk assessment as well as mitigation process and also oversee our Incident Response Team which also includes Vice Presidents of Legal, Human Resources and Tax.
Our cybersecurity team, consisting of our Vice President of Information Technology and our Information Security Officer manage the Company’s cybersecurity risk assessment as well as mitigation process and also oversee our Incident Response Team which also includes Vice Presidents of Legal, Human Resources and Tax.
We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein. We conduct annual risk assessments to identify cybersecurity threats.
We routinely assess cybersecurity threats, including any potential unauthorized occurrence on or conducted 32 Table of Contents through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein and the data we process, store, or transmit.
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.
The Company also participates in a cybersecurity risk insurance policy, intended to help mitigate certain losses and expenses associated with cybersecurity incidents; however, such insurance may not cover all losses or all types of claims. In July 2024, we experienced a cybersecurity incident involving unauthorized access to certain systems, which required us to implement containment and mitigation measures.
As part of our risk management process, we may engage third party experts to help identify and assess risks from cybersecurity threats. Following these risk assessments, we design, implement, and maintain reasonable safeguards to minimize the identified risks; reasonably address any identified gaps in existing safeguards; update existing safeguards as necessary; and monitor the effectiveness of our safeguards.
As part of our risk management process, we may engage third party experts to help identify and assess risks from cybersecurity threats. Our risk management and assessment process also encompasses cybersecurity risks associated with our use of third-party service providers.
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.
Material cybersecurity matters are escalated to the Board and/or the Audit Committee based on their nature, scope, and potential impact . Our Vice President of Information Technology and our Information Security Officer are primarily responsible for assessment and management of material risks from cybersecurity threats.
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We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF and AI Risk Management Framework) and seek to follow industry best practices to identify, assess, and manage cybersecurity risks relevant to our business.
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While we use these frameworks to help evaluate and enhance our controls and processes, we do not represent that our program fully satisfies any particular technical standard, specification, or requirement. We conduct annual risk assessments to identify cybersecurity threats to our critical systems, information, services, and our broader enterprise IT environment.
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As part of our overall risk management and assessment program, we design, implement, and maintain reasonable safeguards to minimize potential risks, including cybersecurity risks; reasonably address any identified gaps in existing safeguards; update existing safeguards as necessary; and monitor the effectiveness of our safeguards which may include, as appropriate: (i) vulnerability management (including patching, configuration management, and remediation tracking); (ii) security monitoring and detection designed to identify anomalous activity; (iii) access controls and identity management practices intended to support least-privilege access; (iv) data protection practices (including, where appropriate, encryption and backup processes); (v) incident response planning and readiness activities, including tabletop exercises and lessons-learned reviews; and (vi) business continuity and disaster recovery planning for certain systems and processes.
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We also regularly provide cybersecurity awareness training to our employees at all levels and departments across the Company. The Company believes that we have allocated adequate resources to address the cybersecurity threats that may reasonably affect us.
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We evaluate our resourcing and investments in cybersecurity on an ongoing basis in light of our risk profile, business needs, and the evolving threat landscape.
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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.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 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.
Biggest changeItem 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. As of December 31, 2025, we operate facilities in the U.S., Canada, Mexico, United Kingdom, Lithuania, Italy, France, and Germany.
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Additionally, we lease retail locations across the East Coast that service our Distribution segment.
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Additionally, we lease retail locations across the East Coast that service our Distribution segment. In total, we operate approximately 41 facilities (9 owned) spanning approximately 1,658,448 square feet. Our properties are well maintained, and we consider them to be sufficient for our existing capacity requirements.
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Our 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 ​ ​
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The following table summarizes our facilities by segment as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ ​ ​ ​ Location ​ Owned/Leased ​ ​ ​ ​ Total ​ ​ ​ Domestic ​ ​ ​ International ​ ​ ​ Owned ​ Leased Products ​ 1,600,924 ​ 702,670 ​ 898,254 ​ 573,714 ​ 1,027,210 Distribution ​ 57,524 ​ 57,524 ​ — ​ — ​ 57,524 ​ ​ 1,658,448 ​ 760,194 ​ 898,254 ​ 573,714 ​ 1,084,734 ​ ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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.
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. 35 Table of Contents Historical stock price performance should not be relied on as indicative of future stock price performance. Recent Sales of Unregistered Securities None.
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.
In 2025, our total cash dividends were $15.4 million. We expect to continue to pay a quarterly cash dividend of $0.10 per share, or $0.40 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 6, 2025, there were 13 holders of record of our common stock.
Prior to that date, there was no public trading market for our common stock. ​ 34 Table of Contents Holders of Record As of March 6, 2026, there were 9 holders of record of our common stock.
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.
Dividend Policy On January 20, 2026, the Company announced that its board of directors approved the continuation of a quarterly cash dividend policy of $0.10 per share of the Company’s common stock or $0.40 per share on an annualized basis, representing an increase of 2 cents over the previous annualized dividend of $0.38 per share.
Item 6. [Reserved] ​ 35 Table of Contents
Issuer Repurchases of Equity Securities None. Item 6. [Reserved] ​ ​ 36 Table of Contents

Item 6. [Reserved]

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

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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 ​ ​ ​
Biggest changeItem 6. [Reserved] ​ 36 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 37 ​ ​ ​ 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

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Biggest changeSegment 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.
Biggest changeSegment 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 . 39 Table of Contents The following table presents data from our results of operations for the years ended December 31, 2025 and 2024 (in thousands unless otherwise noted): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ 2025 ​ 2024 ​ % Chg ​ Net sales ​ $ 610,308 ​ $ 567,561 ​ 7.5 % Cost of goods sold ​ 350,680 ​ 334,080 ​ 5.0 % Gross profit ​ 259,628 ​ 233,481 ​ 11.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 183,128 ​ 158,323 ​ 15.7 % Restructuring and transaction costs ​ 7,696 ​ 6,007 ​ 28.1 % Related party expense ​ 1,453 ​ 2,390 ​ (39.2) % Total operating expenses ​ 192,277 ​ 166,720 ​ 15.3 % Operating income ​ 67,351 ​ 66,761 ​ 0.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expense ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net ​ (12,480) ​ (7,822) ​ 59.5 % Other income (expense), net ​ 7,455 ​ (4,721) ​ (257.9) % Total other expense, net ​ (5,025) ​ (12,543) ​ (59.9) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before provision for income taxes ​ 62,326 ​ 54,218 ​ 15.0 % Provision for income taxes ​ (18,187) ​ (18,085) ​ 0.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 44,139 ​ $ 36,133 ​ 22.2 % ​ The following table presents segment data for the years ended December 31, 2025 and 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ Reconciling ​ ​ ​ ​ ​ ​ ​ ​ ​ ​Product ​ ​ ​ Distribution ​ ​ ​ Items (1) ​ ​ ​ ​ ​ ​ ​ ​Total Net sales ​ ​ ​ $ 543,713 ​ $ 104,904 ​ $ (38,309) ​ ​ ​ $ 610,308 Cost of goods sold ​ ​ 307,056 ​ ​ 81,846 ​ ​ (38,222) ​ ​ 350,680 Gross profit ​ $ 236,657 ​ $ 23,058 ​ $ (87) ​ $ 259,628 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 (1) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments.
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.
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.
Additionally, the 2024 Credit Agreement contains certain restrictive debt covenants, which require us to: (i) maintain a minimum fixed charge coverage ratio of 1.25 to 1.00, starting with the quarter ended December 31, 2024, which is to be determined for each quarter end on a trailing four quarter basis and (ii) maintain a quarterly maximum consolidated total net leverage ratio of 4.00 to 1.00 from the quarter ended December 31, 2024 until the quarter ended March 31, 2026, and thereafter 3.50 to 1.00, which is in each case to be determined on a trailing four quarter basis; provided that under certain circumstances and subject to certain limitations, in the event of a material acquisition, we may temporarily increase the consolidated total net leverage ratio by up to 0.50 to 1.00 for four fiscal quarters following such acquisition, subject to a maximum consolidated total net leverage ratio of 4.00 to 1.00.
Additionally, the 2024 Credit Agreement contains certain restrictive debt covenants, which require us to: (i) maintain a minimum fixed charge coverage ratio of 1.25 to 1.00, starting with the quarter ended December 31, 2024, which is to be determined for each quarter end on a trailing four quarter basis and (ii) maintain a quarterly maximum consolidated total net leverage ratio of 4.00 to 1.00 from the quarter ended December 31, 2024 until the quarter ended March 31, 2026, and thereafter 3.50 to 1.00, which is in each case to be determined on a trailing four quarter basis; provided that under certain circumstances and subject to certain limitations, in the event of a material acquisition, we may temporarily increase the consolidated total net leverage ratio by up to 0.50 to 1.00 for four fiscal quarters following such acquisition, subject to a maximum 43 Table of Contents consolidated total net leverage ratio of 4.00 to 1.00.
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.
Overview and 2025 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.
(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.
(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, 2025; (b) applicable margins remain constant; (c) only mandatory debt repayments are made; and (d) no refinancing occurs at debt maturity.
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 .
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, 2026, there were no amounts outstanding under the Revolving Canadian Loan.
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 .
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, DoW, DoI, DoJ, DHS, DoC, DoE and numerous foreign government agencies in over 100 countries .
See “ Non-GAAP Measures ” below for our definition of, and additional information about, Adjusted EBITDA, and for a reconciliation to net income, the most directly comparable U.S. GAAP financial measure.
See “ Non-GAAP Measures ” below for our definition of, and additional information about, Adjusted EBITDA, and for a reconciliation to net income, the most directly comparable U.S.
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 .
Adjusted EBITDA represents EBITDA that excludes restructuring and transaction costs, other (income) expense, net, stock-based compensation expense, stock-based compensation payroll tax expense, long-term incentive plan (“LTIP”) bonus, amortization of inventory step-up, and contingent consideration expense as these items do not represent our core operating performance .
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.
A discussion of changes in our financial condition and the results of operations from the year ended December 31, 2024 to December 31, 2023 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, 2024, filed on March 11, 2025.
There were no amounts outstanding under the Revolving Canadian Loan as of December 31, 2024 and 2023.
There were no amounts outstanding under the Revolving Canadian Loan as of December 31, 2025 and 2024.
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.
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.
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.
Other income, net was $7.5 million for the year ended December 31, 2025 compared to Other expense, net of $4.7 million for the year ended December 31, 2024, primarily due to changes in foreign currency exchange rates . Provision for income taxes.
Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023 Net sales.
Comparison of Year Ended December 31, 2025 to Year Ended December 31, 2024 Net sales.
(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.
(5) Reflects the cost of a cash-based long-term incentive plan awarded to employees that vests over three years . (6) Reflects amortization expense related to the step-up inventory adjustment recorded as a result of our recent acquisitions. (7) Reflects contingent consideration expense related to the acquisition of ICOR.
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.
The following table presents our orders backlog as of the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 Orders backlog ​ $ 189,799 ​ $ 128,814 ​ Orders comprising backlog as of a given balance sheet date are typically invoiced in subsequent periods.
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 .
In addition, this line item reflects a $1.0 million fee paid to Kanders & Company, Inc. for services related to the acquisition of Zircaloy for the year ended December 31, 2025 and fees of $1.8 million and $0.3 million paid to Kanders & Company, Inc. for services related to the acquisition of Alpha Safety and execution of our debt refinancing, respectively, for the year ended December 31, 2024, which are included in related party expense in the Company’s consolidated statements of operations and comprehensive income.
Provision for income taxes increased by $3.8 million for the year ended December 31, 2024 as compared to 2023. The effective tax rate was 33.4% for the year ended December 31, 2024 and was higher than the statutory rate due to state taxes, transaction expenses and executive compensation, partially offset by research and development tax credits.
For the year ended December 31, 2024, the effective tax rate was 33.4% and was higher than the statutory rate due to state taxes, transaction expenses and executive compensation, partially offset by research and development tax credits.
(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 .
(2) Reflects the “Other income (expense), 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 . (3) Reflects compensation expense related to equity classified stock-based compensation plans . (4) Reflects payroll taxes associated with vested stock-based compensation awards .
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.
Interest expense . Interest expense consists primarily of interest on outstanding debt. Other income (expense), net . Other income (expense), 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 majority of our products are generally processed and shipped within one to three weeks of an order being placed, though the fulfillment time for certain products, for example, explosive ordnance disposal equipment, may take three months or longer.
A substantial portion of our products are processed and shipped within 60 days of an order being placed, though the fulfillment time for certain products, for example, explosive ordnance disposal equipment, may take three months or longer.
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.
Related party expense decreased by $0.9 million for the year ended December 31, 2025 as compared to 2024 and primarily consisted of a $1.0 million fee paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, in connection with the acquisition of Zircaloy for the year ended December 31, 2025, and a $1.8 million fee paid to Kanders & Company, Inc. in connection with the acquisition of Alpha Safety for the year ended December 31, 2024, in each case the expense is related to transaction services.
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 following table sets forth a summary of our financial highlights for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) ​ 2025 ​ 2024 Net sales ​ ​ ​ $ 610,308 ​ ​ ​ $ 567,561 Net income ​ $ 44,139 ​ $ 36,133 Adjusted EBITDA (1) ​ $ 111,708 ​ $ 104,840 (1) Adjusted EBITDA is a non-GAAP financial measure.
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.
GAAP . 41 Table of Contents The table below presents our EBITDA and Adjusted EBITDA reconciled to the most directly comparable GAAP financial measures for the periods indicated : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Net income ​ $ 44,139 ​ $ 36,133 Add back: ​ ​ ​ ​ Depreciation and amortization ​ 18,633 ​ 16,420 Interest expense, net ​ 12,480 ​ 7,822 Provision for income taxes ​ 18,187 ​ 18,085 EBITDA ​ $ 93,439 ​ $ 78,460 Add back: ​ ​ ​ ​ Restructuring and transaction costs (1) ​ 8,696 ​ 7,757 Other (income) expense, net (2) ​ (7,455) ​ 4,721 Stock-based compensation expense (3) ​ ​ 12,239 ​ ​ 8,369 Stock-based compensation payroll tax expense (4) ​ ​ 1,566 ​ ​ 441 LTIP bonus (5) ​ — ​ 49 Amortization of inventory step-up (6) ​ ​ 1,296 ​ ​ 3,858 Contingent consideration expense (7) ​ ​ 1,927 ​ ​ 1,185 Adjusted EBITDA ​ $ 111,708 ​ $ 104,840 (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.
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.
EBITDA and Adjusted EBITDA are not recognized measures under U.S. GAAP and are not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly-titled measures of performance of other companies. Investors should exercise caution in comparing our non-GAAP measures to any similarly titled measures used by other companies.
Investors should exercise caution in comparing our non-GAAP measures to any similarly titled measures used by other companies. These non-GAAP financial measures exclude certain items required by U.S. GAAP and should not be considered as alternatives to information reported in accordance with U.S. GAAP .
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.
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.
SG&A increased by $24.8 million, or 15.7%, for the year ended December 31, 2025 as compared to 2024 primarily due to the Zircaloy acquisition, increased employee compensation and associated benefits, and professional services expenses . Restructuring and transaction costs.
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.
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. 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) ​ ​ ​ 2025 ​ ​ ​ 2024 Net cash provided by operating activities ​ ​ ​ $ 63,705 ​ $ 31,777 Net cash used in investing activities ​ (96,369) ​ (147,426) Net cash provided by (used in) financing activities ​ 31,586 ​ 152,667 Effects of foreign exchange rates on cash, cash equivalents and restricted cash ​ 1,472 ​ 224 Change in cash, cash equivalents and restricted cash ​ 394 ​ 37,242 Cash, cash equivalents and restricted cash, beginning of period ​ 124,933 ​ 87,691 Cash, cash equivalents and restricted cash, end of period ​ $ 125,327 ​ $ 124,933 ​ Net cash provided by operating activities During the year ended December 31, 2025, net cash provided by operating activities of $63.7 million resulted primarily from net income of $44.1 million, a $18.6 million add back to net income for depreciation and amortization, a $12.2 million add back to net income for stock-based compensation, a $2.4 million deduction for unrealized foreign exchange transaction gains and a $16.2 million deduction from net income from changes in operating assets and liabilities.
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 .
Adjusted EBITDA increased by $6.9 million for the year ended December 31, 2025 as compared to 2024, primarily due to recent acquisitions and favorable pricing net of material inflation, partially offset by an increase in selling, general and administrative expenses .
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.
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.
Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The benefit or provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year.
The provision or benefit for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.
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 .
Net cash used in investing activities During the year ended December 31, 2025, we used $96.4 million of cash in investing activities, primarily consisting of $89.6 million for the acquisition of Zircaloy and $6.9 million for purchases of property and equipment.
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.
Interest expense. Interest expense increased by $4.7 million for the year ended December 31, 2025 as compared to 2024 primarily due to the addition of the incremental debt related to recent acquisitions . Other income (expense), net.
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 .
Net cash provided by (used in) financing activities During the year ended December 31, 2025, net cash provided by financing activities of $31.6 million resulted primarily from proceeds from term loans of $97.5 million and proceeds from option exercises of $3.4 million, partially offset by principal payments on term loans of $13.8 million, taxes paid in connection with employee stock transactions of $40.2 million and dividends distributed of $15.4 million .
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 .
Distribution segment cost of goods sold increased by $0.2 million, or 0.3%, from $81.6 million to $81.8 million for the year ended December 31, 2025 as compared to 2024 primarily due to driven by unfavorable mix .
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 .
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.
Through our dedication to superior quality, we establish a direct covenant with end users that our products will perform and keep them safe when they are most needed. We sell a wide range of products including body armor, explosive ordnance disposal equipment and duty gear through both direct and indirect channels.
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.
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 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.
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.
Distribution segment gross profit as a percentage of net sales decreased by 57 basis points to 22.0% in 2025 from 22.5% in 2024 mainly driven by unfavorable mix. Reconciling items consist primarily of intercompany eliminations. Selling, general and administrative.
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.
Restructuring and transaction costs increased by $1.7 million for the year ended December 31, 2025 as compared to 2024 primarily due to the Zircaloy and TYR acquisitions . Related party expense.
The 2024 Term Loans require scheduled quarterly principal payments of 1.25% of the original aggregate principal amount, beginning March 31, 2025, with the balance due at maturity. There were no amounts outstanding under the 2024 Revolving Loan, the DDTL A-1 Facility, or the DDTL A-2 Facility as of December 31, 2024.
The 2024 Term Loans require scheduled quarterly principal payments of 1.25% of the original aggregate principal amount, beginning March 31, 2025, with the balance due at maturity.
Changes in operating assets and liabilities were primarily driven by a decrease in accounts receivable of $6.6 million and an increase in accounts payable and other liabilities of $14.0 million, partially offset by an increase in inventories of $10.2 million .
Changes in operating assets and liabilities were driven by a $16.4 million decrease in accounts payable and other liabilities, a $3.6 million increase in inventory, and a $4.5 million increase in prepaid expenses and other assets, partially offset by a decrease in accounts receivable of $8.4 million.
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 .
Distribution segment net sales decreased by $0.5 million or 0.5%, from $105.4 million to $104.9 million for the year ended December 31, 2025 as compared to 2024, primarily due to decreased agency demand for hard goods . Reconciling items consist primarily of intercompany eliminations. 40 Table of Contents Cost of goods sold.
Product segment cost of goods sold increased by $54.0 million, or 23.1%, from $233.9 million to $287.9 million for the year ended December 31, 2024 as compared to 2023 primarily due to increased volume, increased costs to manufacture product (principally material and labor), and increases from the amortization of inventory step up adjustments related to 2024 acquisitions, partially offset by product mix.
Product segment cost of goods sold increased by $19.2 million, or 6.7%, from $287.9 million to $307.1 million for the year ended December 31, 2025 as compared to 2024 primarily due to the Zircaloy acquisition, increased volume, and increased costs to manufacture product, partially offset by a decrease in inventory step-up amortization and continuous improvement projects.
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.
Product segment gross profit as a percentage of net sales increased by 137 basis points to 43.5% in 2025 from 42.2% in 2024 mainly driven by increased volume, favorable pricing net of material inflation, and a decrease in inventory step-up amortization, partially offset by labor and overhead inflation.
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”).
Debt As of December 31, 2025 and December 31, 2024, we had $307.3 million and $223.2 million in outstanding debt, net of debt discounts and debt issuance costs, respectively, primarily related to the term loan facilities. 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”).
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.
Net income increased by $8.0 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily as a result of higher gross profit partially offset by an increase in selling, general and administrative expenses from acquisitions, acquisition related costs, higher interest expense, and higher stock compensation expense.
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.
The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms. For long-term contracts, the Company recognizes revenue using the input method based on costs incurred, as this method is an appropriate measure of progress toward the complete satisfaction of the performance obligation.
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.
Product segment net sales increased by $46.1 million, or 9.3%, from $497.6 million to $543.7 million for the year ended December 31, 2025 as compared to 2024, primarily due to increases of $49.2 million from the Zircaloy acquisition and $19.0 million from stronger demand for global duty gear products, partially offset by decreases of $15.5 million from EOD and $6.7 million from existing nuclear safety products.
See Note 16 “Income Taxes” in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. See Note 16 “Income Taxes” in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Deferred taxes result from differences between the book and tax bases of assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.
The benefit or provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the book and tax bases of assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.
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.
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. Related party expense primarily consists of one-time fees paid to related parties for transaction related services.
As of December 31, 2024, the Company was in compliance with all applicable covenants under the 2024 Credit Agreement.
There were no amounts outstanding under the 2024 Revolving Loan or the DDTL A-2 Facility as of December 31, 2025 and 2024. As of March 6, 2026, there was $62.5 million outstanding under the 2024 Revolving Loan. As of December 31, 2025, the Company was in compliance with all applicable covenants under the 2024 Credit Agreement.
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.
For the year ended December 31, 2025, net cash provided from operating activities was $63.7 million and as of December 31, 2025, cash and cash equivalents totaled $122.9 million.
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 .
Provision for income taxes increased by $0.1 million for the year ended December 31, 2025 as compared to 2024. The effective tax rate was 29.2% for the year ended December 31, 2025 and was higher than the statutory rate due to state taxes, acquisition related expenses and executive compensation, partially offset by equity-based compensation.
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 . 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.
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 . 45 Table of Contents Contractual Obligations The following table summarizes our significant contractual obligations as of December 31, 2025 by period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ More than (in thousands) ​ ​ ​ Total ​ ​ ​ 1 year ​ ​ ​ 1-3 Years ​ ​ ​ 3-5 Years ​ ​ ​ 5 Years Lease obligations (1) ​ $ 29,975 ​ $ 6,856 ​ $ 9,689 ​ $ 4,888 ​ $ 8,542 Debt (2) ​ 309,095 ​ 16,266 ​ 32,391 ​ 260,438 ​ — Interest on debt (3) ​ 53,542 ​ 14,380 ​ ​ 26,498 ​ 12,664 ​ — Total contractual obligations ​ $ 392,612 ​ $ 37,502 ​ $ 68,578 ​ $ 277,990 ​ $ 8,542 (1) Includes future minimum lease payments required under non-cancelable operating and capital leases.
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.
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.
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.
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. 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.
Removed
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.
Added
We sell a wide range of products including body armor, explosive ordnance disposal equipment, duty gear, remote handling solutions, containers for the storage of radioactive materials, and ventilation and containment solutions through both direct and indirect channels.
Removed
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.
Added
In April 2025, the Company acquired Zircaloy for $98.9 million. In January 2026, the Company acquired TYR Tactical, LLC for $174.0 million.
Removed
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.
Added
GAAP financial measure. 37 Table of Contents Net sales increased by $42.7 million for the year ended December 31, 2025 as compared to December 31, 2024 , primarily as a result of the recent acquisitions and higher demand for duty gear products, partially offset by a decline in EOD products and existing nuclear safety products.
Removed
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.
Added
Orders backlog increased by $61.0 million as of December 31, 2025 compared to December 31, 2024 , primarily due to increases of $51.3 million from the Zircaloy acquisition, $12.5 million from global EOD, $3.7 million from chemiluminescent products and $1.6 million from U.S. government and international channels for duty gear holsters, partially offset by reductions of $7.7 million from existing nuclear safety products.
Removed
The Company invoices the customer once the billing milestone is reached and collects under customary short-term credit terms.
Added
See Note 1 “Significant Accounting Policies — Revenue Recognition” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 38 Table of Contents 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 .
Removed
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 .
Added
Our principal sources of liquidity have been cash provided by operating activities, cash on hand and amounts available under our revolving loans and other available borrowings under our existing credit facilities .
Removed
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.
Added
Our future capital requirements will depend on several factors, including (i) the timing and extent of capital expenditures, including investments in our manufacturing facilities and 42 Table of Contents equipment, (ii) the size and timing of acquisitions and other strategic investments, (iii) the timing of debt service requirements, and (iv) general economic conditions and other factors affecting our business.
Removed
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”).
Added
If we raise additional funds through the issuance of equity or convertible debt securities, our existing stockholders may experience dilution, and any new indebtedness could include restrictive covenants that limit our operating flexibility .
Removed
Each of the Term Loan and the Revolving Loan mature on July 23, 2026. Commencing December 31, 2021, the New Term Loan requires scheduled quarterly payments in amounts equal to 1.25% per quarter of the original aggregate principal amount of the Term Loan, with the balance due at maturity.
Added
The 2024 Credit Agreement amends and restates the 2021 Credit Agreement in its entirety.
Removed
The 2021 Credit Agreement is guaranteed, jointly and severally, by the Guarantors and, subject to certain exceptions, secured by a first-priority security interest in substantially all of the assets of the Borrower and the Guarantors pursuant to a Security and Pledge Agreement and a Guaranty and Suretyship Agreement, each dated as of the Closing Date .
Added
In April 2025, in connection with the Zircaloy acquisition, the Company drew $97.5 million of the $115.0 million available under the DDTL- A-1 Facility. The DDTL- A-1 Facility has the same terms and conditions as the 2024 Term Loan, including such items as interest rate, quarterly amortization payment requirements, and maturity date.
Removed
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 .
Removed
The Borrower may elect to have the Revolving Loan and Term Loan under the 2021 Credit Agreement bear interest at a base rate or LIBOR, in each case, plus an applicable margin.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+0 added−0 removed4 unchanged
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.
Biggest changeAs of December 31, 2025, we had the following Swap Agreements (in thousands): ​ ​ ​ ​ ​ ​ ​ Effective Date ​ ​ ​ Notional Amount ​ ​ ​ Fixed Rate September 30, 2021 through July 23, 2026 ​ $ 78,750 ​ 0.812 % May 31, 2023 through July 23, 2026 ​ $ 43,125 ​ ​ ​ 3.905 % February 14, 2025 through December 20, 2029 ​ $ 37,406 ​ ​ ​ 4.080 % April 7, 2025 through December 20, 2029 ​ $ 48,125 ​ ​ ​ 3.545 % July 31, 2025 through December 20, 2029 ​ ​ ​ $ 97,500 ​ ​ ​ 3.449 % ​ During the year ended December 31, 2025, there were no interest rate swap agreements that expired.
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.
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 (loss) is reclassified into interest expense, net as a yield adjustment when interest is either paid or received on the hedged debt.
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.
Any changes in the fair value of designated cash flow hedges are recorded in other comprehensive income (loss) and are reclassified from accumulated other comprehensive income (loss) into earnings in the period the hedged item impacts earnings . Significant currency fluctuations could impact the comparability of our results of operations between periods.
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 performed a sensitivity analysis on the principal amount of debt as of December 31, 2025, 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.
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.
There have not been material changes in market risk exposures as of December 31, 2025. 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.
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.
On an annual basis, a change of 100 basis points in the applicable interest rate would cause a change in interest expense of $3.1 million on the principal amount of debt and $0.4 million when including the effect of our Swap Agreements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have in the past and may in the future be exposed to certain market risks, including interest rate, foreign currency exchange in the ordinary course of our business.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have in the past and may in the future be exposed to certain market risks, including fluctuations in interest rates and foreign currency exchange rates, in the ordinary course of our business.
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.
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 $0.4 million for the year ended December 31, 2025, excluding unrealized gains or losses from remeasurement.
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
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 $1.9 million for the year ended December 31, 2025, excluding unrealized gains or losses from remeasurement and the impact of cash flow hedges. ​ ​ ​ ​ 47 Table of Contents
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.
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 $1.8 million for the year ended December 31, 2025.
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.
As of December 31, 2025, we had $308.8 million in outstanding floating rate debt, which bears interest at one-month SOFR (3.72% as of December 31, 2025) plus applicable margin. 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.

Other CDRE 10-K year-over-year comparisons