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Cadre Holdings Inc (NYSE:CDRE) presented its first quarter 2025 financial results on May 7, showing a mixed performance with declining revenue but improved gross margins and net income. The company also highlighted its recent acquisition of Carr’s Engineering division, which expands its presence in the nuclear safety market.
Introduction & Market Context
Cadre Holdings, a global leader in safety and survivability equipment, reported first quarter results against a backdrop of continued industry tailwinds in both public safety and nuclear markets. The company’s stock has shown resilience, with shares closing at $29.78 on May 6, 2025, and showing a 4.49% gain in after-hours trading following the earnings presentation.
CEO Warren Kanders and his executive team emphasized the company’s strategic positioning to capitalize on favorable market trends, including increasing police protection expenditures and growing demand in nuclear safety markets spanning environmental remediation, national security, and clean energy.
Quarterly Performance Highlights
Cadre reported mixed financial results for Q1 2025, with revenue declining year-over-year but profitability metrics showing improvement.
As shown in the following financial highlights table:
Net sales for Q1 2025 were $130.1 million, down from $137.9 million in Q1 2024, representing a 5.7% decrease. The company attributed this decline to "less favorable mix driven by Alpha Safety and EOD volume."
Despite the revenue decline, Cadre improved its gross margin to 43.1% in Q1 2025, up 130 basis points from 41.8% in Q1 2024. Net income also increased to $9.2 million ($0.23 per diluted share) from $6.9 million ($0.18 per diluted share) in the prior-year period.
Adjusted EBITDA declined to $20.5 million (15.8% margin) from $24.5 million (17.8% margin) in Q1 2024. This trend is illustrated in the following chart:
The company’s backlog increased by $22.4 million during the quarter, primarily driven by EOD (Explosive Ordnance Disposal) and Cyalume demand, suggesting potential revenue growth in future quarters.
Strategic Initiatives
The most significant strategic development was Cadre’s acquisition of Carr’s Engineering division from Carr’s Group plc for an enterprise value of £75 million, completed in April 2025. This acquisition represents a major expansion of Cadre’s nuclear safety portfolio.
The following slide details the strategic rationale and expected contribution from this acquisition:
Carr’s Engineering brings a set of leading, niche global brands providing products and engineering services for nuclear safety and protection, with additional focus on nuclear medicine and nuclear fusion. The acquisition includes manufacturing and assembly facilities in the U.S., U.K., and Germany, expanding Cadre’s international presence.
The acquired business generated £51 million (approximately $64 million) in revenue for FY 2024 and is expected to contribute approximately $46 million in net sales and $6.5 million in EBITDA to Cadre’s 2025 results.
During the presentation, management emphasized how the acquisition aligns with Cadre’s M&A criteria, including:
Forward-Looking Statements
Cadre updated its full-year 2025 guidance to reflect the Carr’s Engineering acquisition while reaffirming its organic growth outlook:
The company now expects FY 2025 net sales of $618-648 million and adjusted EBITDA of $112-122 million. This guidance includes approximately $46 million in net sales and $6.5 million in EBITDA contribution from the Carr’s Engineering division.
Management noted that the guidance ranges reflect the estimated impact of tariffs and assume that mitigating actions will help offset potential future impacts. The company is monitoring several market trends, including:
1. North American law enforcement spending priorities under the new administration
2. Geopolitical landscape creating demand for EOD products
3. Weakening trends in the broader consumer market, though Cadre brands have shown resilience
4. New product innovations, including integration of Axon Signal Technology into holster and pouch/carrier fits
Detailed Financial Analysis
Cadre maintained a strong balance sheet with $133.4 million in cash and cash equivalents as of March 31, 2025. The company’s capital structure shows manageable leverage with total debt of $220.5 million and net debt of $87.1 million.
The following slide details the company’s capital structure:
The company’s net debt to adjusted EBITDA ratio stands at 0.9x, providing significant financial flexibility for future acquisitions and capital returns to shareholders. Cadre declared its 14th consecutive quarterly dividend, continuing its commitment to shareholder returns.
The company’s long-term financial performance shows steady growth, with a 14.5% CAGR in net sales from FY 2023 to FY 2025 (based on guidance midpoint) and a 16.8% CAGR in adjusted EBITDA over the same period.
Cadre’s financial health appears solid despite the quarterly revenue decline, with improving gross margins and continued focus on operational efficiency through the implementation of the Cadre operating model. The company’s strategic acquisition and strong backlog position it for potential growth in the coming quarters, though investors should monitor the impact of tariffs and changing market conditions on future performance.
Full presentation:
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