Executive Summary

Q1 2025 delivered above-expectations execution: net sales $130.1M, GAAP diluted EPS $0.23, gross margin 43.1%, and adjusted EBITDA $20.5M; gross margin expanded 130 bps year-over-year supported by pricing, mix, and absence of inventory step-up amortization .
Revenue and EPS beat Wall Street: consensus revenue $121.5M* vs actual $130.1M and consensus EPS $0.12* vs actual $0.23; adjusted EBITDA also exceeded consensus ($16.2M* vs $18.7M actual on SPGI Primary EBITDA) as pricing actions and faster shipments in Armor/EOD aided performance .
Guidance raised post Carr’s Engineering acquisition: FY25 net sales to $618–$648M and adjusted EBITDA to $112–$122M, with ~$46M net sales and ~$6.5M EBITDA contribution expected from the Engineering Division; capex guided to $8–$10M .
Catalysts: raised FY25 outlook, backlog up $22.4M driven by EOD and Cyalume, and nuclear platform expansion (remote handling/robotics) enhancing medium-term growth visibility .

What Went Well and What Went Wrong

What Went Well

Gross margin expanded 130 bps YoY to 43.1% on favorable pricing/mix and absence of inventory step-up; management noted ~60 bps of the lift was from the lack of step-up amortization, with the rest from price/productivity .
Backlog increased $22.4M in the quarter, primarily from EOD and Cyalume demand; Armor and EOD shipments executed faster than expected, lifting revenue vs internal plan .
Strategic M&A: closed Carr’s Engineering Division (£75M EV), deepening nuclear exposure and expanding international footprint; management highlighted remote handling/robotics capabilities positioning Cadre uniquely in nuclear markets .

Quote: “We are pleased to have delivered another quarter of financial results above expectations, highlighted by gross margins that increased 130 basis points year-over-year.” – Warren Kanders, CEO

What Went Wrong

Net sales declined 5.6% YoY on shipment timing in EOD and armor, partly reflecting tough comps (large Q1 2024 Armor shipment) and project timing lumpiness inherent in these categories .
Adjusted EBITDA margin compressed to 15.8% from 17.8% YoY, reflecting lower volumes and mix (Alpha Safety/EOD) despite price/productivity offsets .
Distribution segment gross margin declined to 21.6% (from 23.5%) on mix; management also flagged broader consumer market softness (consumer channel ~7% of contract sales post-acquisition) .

Financial Results

Core Metrics vs Prior Year, Prior Quarter, and Estimates

Metric	Q1 2024	Q4 2024	Q1 2025
Net Sales ($USD Millions)	$137.9	$176.0	$130.1
GAAP Diluted EPS ($)	$0.18	$0.32	$0.23
Gross Margin (%)	41.8%	43.9%	43.1%
Adjusted EBITDA ($USD Millions)	$24.5	$38.5	$20.5
Adjusted EBITDA Margin (%)	17.8%	21.9%	15.8%

Q1 2025 Actual vs Wall Street Consensus (S&P Global)

Metric	Consensus	Actual	Δ vs Consensus
Revenue ($USD Millions)	$121.5*	$130.1	+$8.6M (+7.1%)
Primary EPS ($)	$0.12*	$0.23 (GAAP diluted)	+$0.11
EBITDA ($USD Millions)	$16.2*	$18.7 (EBITDA per SPGI actual)*/$20.5 adj.	+$2.5 vs SPGI EBITDA*

Note: Estimates and SPGI “actual” primary EBITDA marked with * are values retrieved from S&P Global.

Segment Breakdown (Net Sales and Gross Profit)

Segment	Q1 2024 Net Sales ($M)	Q1 2025 Net Sales ($M)	Q1 2024 Gross Profit ($M)	Q1 2025 Gross Profit ($M)
Product	$118.8	$112.7	$51.0	$50.1
Distribution	$28.2	$27.9	$6.6	$6.0
Reconciling Items	$(9.1)	$(10.5)	$(0.03)	$0.00
Total	$137.9	$130.1	$57.6	$56.1

Segment gross margin: Product 44.4% in Q1 2025 vs 43.0% in Q1 2024; Distribution 21.6% vs 23.5% .

KPIs and Balance Sheet Highlights

KPI	Q1 2025	Context
Backlog change ($M)	+$22.4	Driven by EOD and Cyalume demand
Cash and Equivalents ($M)	$133.4	+$8.5M vs 12/31/24
Total Debt ($M)	$220.5	-$2.7M vs 12/31/24
Net Debt ($M)	$87.1	-$11.2M vs 12/31/24
Capex ($M)	$1.3	In-line YoY ($1.3M Q1 2024)
Dividend per share ($)	$0.095 declared Apr 22	Paid May 16, 2025

Guidance Changes

Metric	Period	Previous Guidance (Mar 11, 2025)	Current Guidance (May 6, 2025)	Change
Net Sales ($M)	FY 2025	$572–$601	$618–$648	Raised
Adjusted EBITDA ($M)	FY 2025	$105–$115	$112–$122	Raised
Capex ($M)	FY 2025	$7–$9	$8–$10	Raised
Nuclear Engineering Division Contribution	FY 2025	N/A	~$46 Net Sales / ~$6.5 EBITDA	Added
Tariffs Assumptions	FY 2025	Not included	Included with mitigation	Updated

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Cybersecurity impact	Two incidents limited production; adjusted FY24 outlook	“Best quarter” execution, record FY; reset FY25 base	No new incidents discussed; focus on tariff/macro navigation	Improving operations; issue contained
Tariffs/macro	Not a focus	FY25 guide excluded tariffs initially	Tariffs now included; USMCA exemption reduces impact; countermeasures to fully offset current tariffs	Uncertainty persists; mitigation in place
Nuclear platform	Building category; Alpha Safety integration	Announced agreement to acquire Carr’s Engineering	Closed Carr’s Engineering; remote handling/robotics; global footprint	Expanding vertical; margin lift potential over time
Product performance (Armor/EOD)	EOD/Armor timing drove quarterly lumpiness	Strong Q4 Armor/Duty Gear shipments	Less favorable mix; but faster shipments vs internal plan; Q2 up, Q4 likely largest	Timing sensitivity remains
Consumer channel	Not emphasized	Not emphasized	Consumer softness; ~7% of contract sales post acquisition; brand resilience	Cautious
Innovation	Not emphasized	Not emphasized	Axon Signal Technology integrated into new holsters/pouches	Positive product cycle

Management Commentary

Strategy and outlook: “Cadre’s performance has been resilient through economic, political, geopolitical and other cycles… another quarter of financial results above expectations, highlighted by gross margins that increased 130 basis points year-over-year.” – Warren Kanders .
Nuclear expansion: “Addition of the Engineering division represents a critical next step… remote handling and robotics uniquely position Cadre to deliver unparalleled capabilities to a global customer base.” – Warren Kanders .
Backlog/pricing: “Orders backlog increased $22.4M… achieved pricing growth that exceeded target.” – Brad Williams .
Tariff mitigation: “With the current exemption, the anticipated impact… is significantly less… we can fully offset any pressure generated by tariffs that are in place today.” – Blaine Browers .

Q&A Highlights

Pricing/tariffs: Annual pricing implemented; countermeasures offset China tariffs; USMCA exemptions reduced initial impact; company expects full offset of tariffs in place today .
Carr’s integration/margins: Near-term adjusted gross margins ~40% ex D&A, slightly dilutive initially; expect gross margin-led improvement via operating model; limited SG&A stripping as businesses are well-run .
Shipment timing: Q2 revenue expected up ~17% sequentially with adj. EBITDA margin ~17%; Q4 likely biggest quarter driven by Armor/EOD project timing .
Production footprint: Optionality to shift product lines across facilities (e.g., bomb suits in US/Canada) and productivity acceleration projects; happy with nuclear facility placements in UK/Germany .
Nuclear demand: Multi-silo tailwinds (environmental safety, national security, commercial nuclear); tech companies’ AI power needs driving nuclear power support .

Estimates Context

Q1 2025 beats: Revenue $130.1M vs $121.5M consensus* and EPS $0.23 vs $0.12 consensus*; EBITDA beat consensus ($18.7M actual per SPGI primary EBITDA*/$20.5M adj.) aided by pricing and faster Armor/EOD shipments .
FY25 outlook raised with Carr’s contribution, suggesting upward estimate revisions for revenue, EBITDA, and capex; guidance incorporates tariff assumptions and mitigation .
Commentary implies H2 stronger than H1; Q4 largest quarter, supporting back-half weighted revenue/EBITDA expectations .

Note: All consensus values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

Q1 quality beat: revenue/EPS/gross margin beat driven by pricing discipline and earlier-than-planned Armor/EOD shipments; margin expansion sustainable via price/productivity .
FY25 raised guide post-acquisition: net sales $618–$648M and adjusted EBITDA $112–$122M, with Carr’s ~~$46M sales/~~$6.5M EBITDA contribution; capex $8–$10M .
Nuclear vertical is a multiyear growth driver: remote handling/robotics capabilities and international footprint broaden TAM; expect gross margin improvement as operating model scales .
Tariff risk contained (for now): USMCA exemptions and countermeasures in place; current tariffs expected to be fully offset, but policy remains fluid—monitor continuation/expansion risk .
Backlog strength and project timing imply back-half skew: Q2 up sequentially; Q4 likely peak quarter, aiding trading setups around EOD/Armor shipment windows .
Balance sheet flexibility: net debt $87.1M, LTM adj. EBITDA ~$100.8M, net leverage <1.75x pro forma—capacity to pursue disciplined M&A while maintaining dividends .
Watch consumer softness and distribution margins: mix pressures persist; maintain focus on price/productivity levers and product innovation (Axon integration) to protect profitability .

Cadre Holdings, Inc. (CDRE)·Q1 2025 Earnings Summary