Executive Summary

Record quarter: Revenue $176.0M, gross margin 43.9%, Adjusted EBITDA $38.5M, and diluted EPS $0.32; strong YoY growth driven by acquisitions and robust Armor/Duty Gear shipments, with Q4 described as Cadre’s best quarter as a public company .
FY2025 guidance initiated: Net sales $572–$601M, Adjusted EBITDA $105–$115M, capex $7–$9M; excludes impacts from newly announced U.S. tariffs; management expects ~20% of annual revenue in Q1 with EBITDA margin ~12–14% before returning to high teens thereafter .
Tariffs risk and mitigation: Tariffs could have an annualized headwind of ~$18–$22M; management plans pricing actions, productivity gains, and potential production shifts to offset (offsets expected to lag ~3 months) .
M&A catalyst: Agreement to acquire Carr’s Engineering Division (£75M EV) expands nuclear safety vertical into robotics, nuclear medicine, and adds international scale; expected close in Q2 2025 pending approvals .
Capital structure and dividend: YE 2024 cash $124.9M, net debt $98.3M; quarterly dividend raised to $0.095/share (annualized $0.38, +~9%) .

What Went Well and What Went Wrong

What Went Well

Record Q4 across key metrics (revenue, gross margin, Adjusted EBITDA, margin) with positive mix driven by Duty Gear volume; CEO: “Cadre’s best quarter of financial results as a public company” .
Strategic momentum: Agreement to acquire Carr’s Engineering Division deepens nuclear exposure (remote handling/robotics) and broadens international reach; brands highly complementary to nuclear safety .
New product innovation: Launch of thinnest/lightest Level 3A ballistic panel and the Ballast holster with improved safety/adaptability; early feedback positive .

What Went Wrong

Q3 headwinds from cybersecurity incidents reduced revenue and margins (gross margin 36.6% vs 42.8% YoY; Adjusted EBITDA $13.5M vs $23.7M), causing revenue shift into Q4/Q1 and wider FY2025 ranges .
FY2024 net income modestly lower YoY ($36.1M vs $38.6M) amid higher SG&A from acquisitions, acquisition costs, higher interest expense, and lower productivity (partly cyber-related, inventory step-up) .
Macro/tariff uncertainty and potential federal procurement “rhythm” delays widened FY2025 ranges; offsets to tariffs expected to lag about three months .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$124.6	$109.4	$176.0
Gross Margin %	39.9%	36.6%	43.9%
Operating Income ($USD Millions)	$12.7	$5.4	$29.4
Net Income ($USD Millions)	$9.6	$3.7	$13.0
Diluted EPS ($)	$0.25	$0.09	$0.32
Adjusted EBITDA ($USD Millions)	$20.7	$13.5	$38.5
Adjusted EBITDA Margin %	16.6%	12.4%	21.9%

Segment breakdown (quarterly):

Segment Metric	Q4 2023	Q4 2024
Product Net Sales ($USD Millions)	$105.8	$153.9
Distribution Net Sales ($USD Millions)	$27.8	$33.8
Product Gross Profit ($USD Millions)	$43.0	$69.8
Distribution Gross Profit ($USD Millions)	$6.6	$7.4
Product Gross Margin %	40.7%	45.4%
Distribution Gross Margin %	23.9%	21.8%

KPIs and balance sheet highlights:

KPI	Q4 2023	Q4 2024
Cash and Cash Equivalents ($USD Millions)	$87.7	$124.9
Total Debt ($USD Millions)	$140.1	$223.2
Net Debt ($USD Millions)	$52.4	$98.3
Capital Expenditure ($USD Millions, Q4)	$2.7	$1.4

Notes:

Non-GAAP adjustments include restructuring/transaction costs, FX other expense/income, stock-based comp, inventory step-up amortization; Adjusted EBITDA reconciled in filings .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	FY2025	N/A	$572M–$601M	Initiated
Adjusted EBITDA	FY2025	N/A	$105M–$115M	Initiated
Capital Expenditures	FY2025	N/A	$7M–$9M	Initiated
Q1 Revenue Mix	Q1 2025	N/A	~20% of FY revenue	Provided
Q1 EBITDA Margin	Q1 2025	N/A	~12%–14%	Provided
Tariff Impact (annualized)	FY2025	N/A	Potential $18M–$22M headwind; not in guidance	New Risk Disclosure
Dividend	2025	$0.0875/qtr (annualized $0.35)	$0.095/qtr (annualized $0.38)	Raised

Additional notes: Management expects stronger 2H 2025 driven by EOD, Duty Gear, and Armor project timing; quarterly ranges widened due to macro procurement rhythm/tariffs uncertainty .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Cybersecurity incidents	Q2: July incident disclosed; guidance incorporated; Q3: incidents reduced Q3 margin (~5 pts) and revenue, some shift to Q4/Q1	Impact largely addressed; most shipments executed in Q4; minimal spillover to Q1	Improving, residual timing effects
Tariffs/macro	Limited in Q2/Q3; focus on acyclical demand/resilience and public safety tailwinds	New detail: $18–$22M annualized tariff headwind; mitigation actions planned; guidance excludes tariffs	Emerging headwind; actionable offsets
M&A/Nuclear expansion	Q2: ICOR/Alpha closed; pipeline robust; Q3: expected to announce transaction before YE	Agreement to acquire Carr’s Engineering (robotics/remote handling/nuclear medicine); expected Q2 close	Acceleration; strategic scale-up
Product performance/innovation	Q2/Q3: portfolio strength; new product launches gaining adoption	SHOT Show launches: Level 3A SX HP panel; Ballast holster; positive user feedback	Positive differentiation
Pricing	Q2: net ~1% price execution	2024 exceeded targets; blended ~1.5–2% gross to top-line, 2025 similar (~1.5%) excluding tariffs	Stable, targeted
Federal procurement rhythm	Q3: resilience across cycles; strong backlog	2025 uncertainty may delay processes; “rhythm offset” more than demand issue	Transitory timing risk
Regional trends	Q2/Q3: North America demand stable; consumer ~<10% of sales, mixed; Europe steady	Law enforcement spend per officer stable; nuclear optimism (DOE/NNSA priorities)	Stable demand backdrop

Management Commentary

“Q4…represented Cadre’s best quarter of financial results as a public company.” – Warren Kanders .
“We expect net sales to be between $572M and $601M…Adjusted EBITDA between $105M and $115M…ranges reflect the uncertain environment…guidance does not include any impact from the recently announced or implemented U.S. tariffs.” – Blaine Browers .
“Tariffs…would have an impact in the range of $18M to $22M…offsets…will lag about 3 months…we’re prepared with a long list of actions.” – Blaine Browers .
“We introduced…Safariland armor SX HP Level 3A ballistic panel…20% reduction in weight and 20% increase in ballistic performance…[and] Ballast…our most advanced duty-rated holster.” – Brad Williams .
“Agreement to acquire the Engineering Division…leading brands…remote handling and robotics…expected to close during the second quarter.” – Blaine Browers .

Q&A Highlights

Guidance cadence: Organic growth at midpoint ~2–5% for FY2025; stronger 2H profile; Q1 ~20% of FY revenue, EBITDA margin ~12–14% due to volume leverage/mix; margins return to high teens later in year .
Tariffs: Main exposure Mexico (~60%) and Canada (~40%); minimal China; offsets include targeted pricing, productivity acceleration, and production shifts; actions already underway .
SG&A baseline: Q4 SG&A (ex transaction fees) is baseline; incremental ~$3M vs Q3’24 around IT; Carr’s Engineering not included in 2025 guidance .
Federal procurement rhythm: Demand intact; potential timing delays in agency processes; viewed as “rhythm offset” vs structural demand change .
Segment specifics: Q4 drivers were Armor, Duty Gear, and EOD suits; cyber-related backlog unwind supported Q4 strength .

Estimates Context

Wall Street consensus estimates from S&P Global were unavailable at the time of this analysis due to API limits; therefore, beat/miss vs consensus cannot be determined, and no estimate comparisons are shown. Management’s FY2025 guidance and qualitative cadence are provided above .

Key Takeaways for Investors

Momentum into 2025 with record Q4 execution and initiated FY2025 guide; H2 weighting and project timing indicate intra-year cadence for trading setups .
Tariffs clarity is a near-term swing factor; management has defined offsets (pricing/productivity/production shifts), but expect a ~3-month lag—headline risk likely to move the stock .
Nuclear vertical scale-up (Carr’s Engineering) adds differentiated robotics/remote handling capabilities and international mix; Q2 close would be a catalyst and could re-rate margin/visibility .
Core law enforcement demand remains resilient across cycles; new ballistic panel and holster can support mix/gross margin improvements .
Balance sheet flexibility (cash $124.9M; net debt $98.3M; pro forma leverage ~1.75x after Carr’s close per management) supports M&A and dividend growth .
Watch Q1 margins (~12–14%) and revenue (~20% of FY) as a check on guidance cadence; expect margins to normalize back to high teens thereafter .
Non-GAAP adjustments (inventory step-up, FX, transaction costs) impacted 2024; continued focus on automation/productivity suggests medium-term gross margin trajectory toward mid/high-40s potential per management commentary .

Cadre Holdings, Inc. (CDRE)·Q4 2024 Earnings Summary