Cadre Holdings at Jefferies Conference: Strategic Growth and Innovation

On Thursday, 04 September 2025, Cadre Holdings (NYSE:CDRE) presented at the Jefferies Mining and Industrials Conference 2025. The company highlighted its robust market position and outlined strategies for growth and innovation. While Cadre’s focus on organic and inorganic expansion presents promising opportunities, potential tariff impacts and competitive pressures remain challenges.

Key Takeaways

• Cadre Holdings has a dominant market share in EOD and duty gear, with 87-90% in MedInge bomb suits and 90% in SafariLand holsters.
• The company targets double-digit EBITDA expansion through pricing, SG&A leverage, and operational efficiencies.
• Cadre is expanding into the nuclear market, focusing on environmental safety, national security, and energy.
• A price increase was launched in Q2 to offset potential tariffs, with full effects expected by Q1 next year.
• The company is comfortable with leverage up to 3.75x for acquisitions, aiming to reduce it to 2x post-acquisition.

Financial Results

• Growth Algorithm:

- Public Safety Market: 3% growth.

- Nuclear Market: 4-6% growth.

- EBITDA Expansion: Double-digit growth through pricing (1% net of material inflation), SG&A leverage, and operational improvements (50 to 100 basis points).

• CapEx: Less than 2% of revenue.
• Leverage:

- Ended Q2 at 1.8x leverage.

- Comfortable increasing to 3.5-3.75x for acquisitions.

- Target to deleverage to 2x post-acquisition.

• Price Increase: Implemented in Q2 to mitigate potential 15% tariffs, with full impact by Q1 next year.
• Backlog:

- EOD and nuclear: 6-9 months.

- Armor and duty gear: 45 days.

Operational Updates

• Core Product Categories:

- EOD: 87-90% market share with MedInge bomb suits.

- Duty Gear: 90% share in US law enforcement with SafariLand holsters.

- Body Armor: 30-40% share in the US.

- Nuclear: New market entry for diversification.

• Tariff Mitigation:

- Regionalized supply chain reduces exposure.

- Manufacturing flexibility in the US, Canada, Mexico, UK, and Europe.

• Innovation:

- Introduced two new holster families and new body armor packages in the last 24 months.

• Nuclear Market:

- Focus on environmental safety, national security, and energy.

- Acquired Wallisch Miller, a leader in robotic arms for the nuclear industry.

- Plans to cross-sell Alpha Safety products.

Future Outlook

• EBITDA Margin: Aims for mid-20s long term.
• M&A Strategy: Prioritizes capital allocation for investor returns.

Q&A Highlights

• Public Safety Budgets: Consistent 2.8-3% CAGR, with rising average selling prices due to upgrades.
• USMCA: Minimal tariff exposure due to North American coverage.
• SMRs: Seen as an additional growth opportunity in the nuclear sector.

For a detailed understanding, readers are encouraged to refer to the full transcript provided below.

Full transcript - Jefferies Mining and Industrials Conference 2025:

Unidentified speaker: Very excited to have Kadri with us today and Brad Williams, President and COO, along with Blaine Browers, CFO. And maybe just to kick things off, if you can give us a high level overview of the core CADRE business, major product offerings, key end markets, what’s the comfortable long term growth algorithm and maybe split between organic and inorganic opportunities just given you’ve been pretty active around M and A.

Brad Williams, President and COO, Cadre Holdings: Okay. Absolutely. So thank you guys for coming today. I’ll give a quick overview of of all that, and then Blayne can talk about the growth algorithm. So for those who don’t know us, Cadre Holdings, fairly new publicly traded company, November 2021 is when we went public, but we’re an old company.

We’ve been around over fifty five years. We are a global leader in equipment, safety equipment for public safety and nuclear. Our core product categories are EOD, so explosive ordnance disposal. So think of that as bomb suits for technicians around the world with mainly our largest customer being militaries around the world. We do have high share in that category.

We estimate about 87 to 90% share of all militaries and law enforcement have our MedInge branded bomb suits around the world. Second main category for us is duty gear. That’s where the company started. Think of duty gear as anything on military or law enforcement belt with the main product category being the holster. We do have high share of that category in The US market, mainly law enforcement military.

So about 90% of the time you’ll see law enforcement officers that will have our SafariLand branded holster. So that’s the second category, major category for us. And then the third major category is body armor. So we are one of the leaders in the market from a body armor perspective, both hard armor and soft armor. Think of hard armor are things like helmets, plates, shields that have a higher level of threat protection and then soft body armor is our overall body armor category.

We do have a solid share in The US market also for body armor, which we estimate in the high 30, low 40% range in terms of share in that category. And then lastly of our product categories is nuclear. So when we went public in November 2021, we said we were gonna transform ourselves into more of a diversified industrial type company. So we were seeking that next vertical for us to go into. So it took us a while since 2021, but last year we decided to go into the nuclear segment and I’m sure we’ll spend some time on nuclear here in a little bit.

But you know, we had some very specific reasons why we went into nuclear and felt like that the macros around nuclear were as solid and consistent as we’ve seen in law enforcement. Blaine, you want to talk about the algorithm going forward?

Blaine Browers, CFO, Cadre Holdings: Absolutely. Thanks, Brad. So when we think about the growth algorithm, maybe first talking about just the end markets. So when we think about the public safety, law enforcement, military side, what we’ve seen historically is a pretty consistent 3% growth in that market. Nuclear, on the other hand, is really 4% to six So we have really GDP, maybe GDP plus like growth in the markets.

What we think is really exciting though about the businesses is the stability consistency of that and then what we’re able to translate that into. So one of the things Brad has a really industrial background with IDEXX and Danaher, myself IDEXX and GE, is really about the operating model and what can we do with that growth. So we really think about as three legs of the stool on how we translate that top line growth into double digit EBITDA expansion. The first leg is really around price. So where we sit competitively and the value of the products bring is we’re able to consistently get 1% price net of material inflation.

So we just stop there. That alone drives kind of 5% EBITDA expansion. The second component is really leveraging the growth on SG and A. So those with these mature markets, we don’t require significant SG and A investments. So we get not quite gross margin like flow through, but near gross margin like flow through.

And the third leg of the stool is really about the operating model. So the company has developed the CADRE operating model, leveraging some of the tools we’ve all learned along the way. And we target another, call it, 50 bps to 1% improvement there. So when you take a step back, you look at and say, you have 3% growth on public safety, you’re able to take that 3% and make it double digit EBITDA expansion. Incrementally from that, we’re a low CapEx business, generally less than 2% of revenue for CapEx, which allows us to generate cash and really fund the M and A.

So we view this we’ve always viewed CADRE as really a diversified industrial play with high free cash flow generation, which allows us to lever up for acquisitions and then pay down pretty quickly with the cash we generate.

Unidentified speaker: And then maybe if you can talk about competitors in the core duty gear and armor segment and kind of how you think about positioning relative to peers. I mean you called that pretty high market share in the opening, but maybe if you can just talk a little bit about how you kind of

Brad Williams, President and COO, Cadre Holdings: gained that position. Yeah. So we’ve gained that position over you can imagine the brand recognition is one, which is really important. When you’re providing products that are safety equipment like body armor, we’ve got over we’re up to twenty two fifty four saves in our saves club. So, you know, when you have that many men and women that have found themselves in a life threatening type situation and they’ve lived wearing or using our products, it’s really important.

So, you know, they’ve known this brand and the brand I’m talking about with Body Armor is Safari Land for many many years. And the same with holsters. So, you know, for those of you in the audience that don’t don’t know what a duty holster is, it’s it’s not like your everyday consumer holster where it has friction retention. So if I had a holster on on stage and I asked you guys to take the weapon from me, you likely wouldn’t be able to get the weapon out of the holster. So it locks the weapon in place.

So very important from a engineering perspective, high quality, the retention mechanisms are very very important. So that brand recognition and just knowing that if you used our products in the military and then you transitioned to law enforcement at some point, that somewhere along the way if you do have one of those experiences, know, we’re gonna save your life. So that’s critical. The other one has been innovation. So when I got here that was a very positive thing I found in this company which is just continuing to innovate and not just innovate to innovate, but really getting close to your customers and spending time to make sure that we can design products that are solving that next level problem for them.

So those are really the strengths that we have to continue to differentiate ourselves as we go forward. And you can imagine from a competitive standpoint, I talked about three of our four of our product categories. We have a bunch of other categories are just smaller. There’s a competitor for each of those categories. But typically, we’re the main product in the brand that everyone knows within the industry.

Unidentified speaker: And then we’ll get back to the innovation in the next question, but just wanted to touch on tariffs a little bit, which have come up on each of the calls. There’s obviously a lot of movement. Where do we kind of stand in terms of that, just given I think you’ve talked about some flexibility to navigate anything that does come through?

Blaine Browers, CFO, Cadre Holdings: Yes. No, I appreciate the question. Yes, obviously, it’s been a pretty dynamic year when it comes to tariffs. I’d say one of the great attributes of the business is we’re generally regional in our supply chain. And what I mean by that, even if you go back to COVID, pre tariffs, we don’t source a lot of goods from Asia.

Majority of our materials for The U. S. And, let’s say, the North American markets are really made here in North America. So I think that helps with that general exposure. And the same is true for Europe, right, generally sourced in Europe.

So there’s on the face of very limited exposure there. The one piece, we do a lot of goods movement within North America. We have a large manufacturing facility in Tijuana with multiple plants up in Canada. And we do movements across the border, from The U. S.

To Canada, U. S. To Mexico and vice versa. The great thing, and we’re happy to see it’s still in place, is really USMCA. So almost all of those goods movements are covered under USMCA.

So I’d say that the large impact we were concerned about coming into the year when USMCA was really up in the air has really disappeared. So I think that’s the great news out of the gates on that. For the remainder of the tariffs, when we talk about 15 possibly broad 15% tariffs, there’s certainly some exposure there. And we launched a price increase in Q2 really to help mitigate that. And going back to what Brad talked about that positioning of the products, we may able to get price.

We don’t have to, in those examples, get 10%, 15%, 20% increase on price. So we’re able to pass that through to our distributors and to our end users. The second piece is we have some flexibility in our manufacturing footprint. So when you think about body armor that Brad talked about, we have plants in The U. S, Canada, Mexico, UK and Europe.

So we do have some flexibility. I would tell you though, it’s not a flip of the switch. In some cases, there’s different sizes of facilities. So we do have some capability to ramp up and ramp down where needed. But if this was a real significant change, it would take some time to transfer, let’s say, majority of manufacturing from plant A to plant B.

But in the short term, we do have some mitigating impacts. And even within our supply chain going back to COVID, one of the things we I mentioned that large facility in Mexico is we realized we had a single point of failure during COVID with that large facility. And so we’ve opened up really a second source to help really move some of that volume outside of Mexico into another country, another vendor, which allows us to have that flexibility again. So even prior to tariffs, we’ve taken some opportunities to have a more flexible, more nimble supply chain. Again, there will be limitations on that, but we feel like we’re in a really good place when it comes to mitigating tariffs through leveraging our supply or leveraging our manufacturing footprint as well as price.

Unidentified speaker: And then maybe going back to the innovation point, I mean, you talked about R and D, innovation, proximity to the customer and just kind of the quality and share of the brands. I mean is there an algorithm when it comes to new products and how that kind of gets filtered into some of those growth rates that you talked about?

Brad Williams, President and COO, Cadre Holdings: I wouldn’t necessarily say there’s a algorithm for those growth rates because our share in those categories are so high. Most of our innovation you can imagine ends up being cannibalization of existing products. So that’s the way you have to think about it. You know, but it’s still a good thing because every time we come out with a new product, so we’ve come out with two holster new holster families in the last eighteen months. We’ve come out with a couple new body armor packages in the last twenty four months, etcetera etcetera.

All those packages always have something new and innovative built in that adds value to the customer. So you know typically we then charge obviously additional premium for those products even though they’re becoming cannibalized by some of the existing products. Now this industry, like a lot of other industries I’ve been in, is is a bit slow to change too. So it’s not like you turn on one product and then another product supersedes it and it’s gone at that point in time. It can take quite a few years for those products to work their way out for the new product to be there and fully 100% in place.

Unidentified speaker: And then maybe just kind of as it relates to you talked about public safety, 3% growth rate. I mean, if we think about how much of that is just budgets, what you’re seeing trending by agency, whether federal, state, local? And how sensitive is organic growth that maybe changes in funding?

Brad Williams, President and COO, Cadre Holdings: So we’ll talk you’re talking public safety. So on the public safety side, if you go back many years, 10 we’ve mapped these out ten, twelve, fourteen years. You look at budgets for public safety, law enforcement budgets specifically, and then you look at expenditures for safety equipment within those, you don’t see huge variations. It’s typically a 2.8, 3% type CAGR over a long period of time. And Blaine already expounded on and talked about what we can do with a 2.83 growth and what matters to us is what we can do with that through our operating model to the bottom line.

So it’s been very consistent over time. Even during COVID, defund the police, which headcount in law enforcement in The US dropped quite a bit and then now it’s stabilized, we didn’t see major major changes in our business and you might say, well why is that? Well, the average selling price per officer typically then just increased. Okay? Because you know at that point you’re doing upgrades that are needed, so they’re using budget money to do those upgrades for products that they they need.

There’s things like active shooter kits that become important now. Unfortunately here in The US and an active shooter kit, think of it as your normal everyday patrol officer if you’re wearing soft body armor. That round, if you’re if you’re shot with a round that’s a handgun round, it’ll stop a handgun round, but it’s not gonna stop a rifle round, which is typically what an active shooter will will have in that situation. So you know what we’ve seen over time when when there’s active shooter situations, agencies will stop, review, do we have our folks fully protected for an active shooter, and then that also ends up driving, you know, plate sales, shields, helmets, things like that, which gives you a high higher level of threat protection. Can you imagine being an officer or patrol officer, you’re the first to seen and there’s an active shooter and you don’t have a product that can stop a, you know, a a rifle round?

That’s pretty scary situation to be in. So, you if you throw up in the trunk of your car, you grab an active shooter kit, it could be a vest that goes over top of your vest with plates preloaded in it, you grab a helmet if you’ve got a helmet, you grab a shield, things like that. Those are just some of the trends that you end up seeing also in the market that you know that average selling price increases as you go forward. So you know the good news is we love the budgets. We love the consistency that we see in public safety.

That’s why we’re in the business and have been in the business for so long. And then we also think the same for the nuclear side of things as we go forward.

Blaine Browers, CFO, Cadre Holdings: And maybe just to add on the law enforcement side, I think the additional point that’s really compelling about our business is we’re not discretionary. And so we’ve Brad and I’ve been with this about eight or nine years, we’ve heard stories prior to that about the resiliency of our products because every officer needs them. Even during, let’s say, perceived or real budgetary constraints, we saw that during COVID where there was a perception that there was going to be some tax revenue shortfalls. And what really happens in those cases is they cut on discretionary. So in many cases, you may have an allotment for a given agency of three, I don’t know, three to five uniforms per year.

Well, they’ll cut that back, but every officer goes out in the street has to have body armor, has to have a holster for the gun. So going back to Brad’s earlier point about being tied to the personnel, that’s absolutely true. And even in those tougher times, you see that you’re not going send those officers without them. The body armor is not transferable. It’s a semi custom product, meaning if Brad was an officer and I’m retiring, he can’t take my body armor and wear it.

It’s not going to have the right level of You have to look in my belly when you say that. But it’s just very unique. So you have that recurring thing. So during COVID, when we talked with uniform makers,

Brad Williams, President and COO, Cadre Holdings: right,

Blaine Browers, CFO, Cadre Holdings: they were seeing changes in their volume, right, pretty dramatic, whereas we saw a pretty steady trend line on that, the armor and holster business.

Unidentified speaker: And then maybe just digging into the nuclear market a bit more. I mean, you’ve called out three core end markets, environmental safety, national security and nuclear energy. Can you maybe talk about the core growth drivers across those three markets and maybe exposure to those markets?

Brad Williams, President and COO, Cadre Holdings: Yes. So we did a lot of work upfront on the nuclear side. This was a bit before nuclear became such a hot hot discussion, let’s let’s call it overall. So a lot of people immediately start coming in and ask us questions about SMRs and, you know, thinking that’s why we got in the nuclear business. It’s it’s the icing on the cake.

Right? So that’s good as SMRs take off at some point. So within nuclear energy, you have SMRs that we’ve all read and spent time on and understand the the potential high growth rates there and the investments that are going on. But then you have just nuclear power in general. So you’ve got power plants that need to be decommissioned and then you have plants that the life of those plants are being extended.

Okay? Within the product categories that I’ll talk about here in a minute, our product categories work within the life cycle of of that nuclear power plant, which is good. Right? Because you wanna have no different than body armor every five years. I didn’t mention that before but the warranty on body armor in The US is five years.

Agencies like to have their folks in body armor that’s under warranty. So when the warranty expires you get a new set of body armor and it just recurs. Holsters, there’s a refresh cycle every five to seven years. We love that. Right?

So when you an agency adopts a new weapon because remember the holster is designed to fit the specific weapon, you’ll get a replacement cycle every five to seven years. When you add a light to a gun, it drives a replacement. When you add optics to a gun, drives a replacement. So we love that type of model. You If go over to the nuclear side of things, it’s similar where you know as that power plant is operating, there’s waste that’s being created and that waste needs to be identified, stored, transported so that the professionals that are working in in that world, know, they’re not getting exposed to radioactive materials.

Okay? So we look at that and we think the long term outlook when it comes to nuclear power, will continue to be strong and solid. You then add SMRs on top of it, it looks really good. Alright. So that was one of the three sub segments that we really like.

The second sub segment within nuclear that we liked and we made this decision to get into was because of modernization of of nuclear arsenals. Okay? When you when you think of military, especially the US military. The same thing is going on within The UK for example. And there’s a lot of money being spent in The US to restart what’s called pit production.

A pit is a core. Think of that as like a nuclear core. It’s kinda like a if you have a firecracker or fireworks, you need a fuse to make it go bang. Right? Same thing.

You need cores. If you don’t have the cores and those cores degrade over time, you’re gonna have issues with things like nuclear subs, warheads, etcetera etcetera. So there’s a a mandate in The US to go from zero pits produced a year up to, you know, it’s like 80 pits by like 2,037. So we look at that as billions of dollars being invested and spent in increasing pit production. That’s capital, that’s people, that’s equipment, you name it.

Same discussion that we just had about nuclear power. The type of products that we have work in that entire life cycle of beginning pit production through waste that’s created through the process, through taking a pit. You just can’t pick up a pit and move it and transport it, you know, someplace. You can’t put it on a FedEx truck and send it there. You have to have highly highly engineered specialized containers to be able to transport, store those materials.

You can’t touch those pits. Okay? A human can’t. Well, you could, but you don’t want to. Right?

So you need a robotic arm that a human can stand on one side of a protective wall, what’s called a cell, and work and move those radioactive materials around. So that’s why we bought Wallisch Miller, which is one of the global leaders in robotic arms in the nuclear industry globally. They have customers in almost every country when you look at their install base. So again, we love that type of product that’s involved in that entire life cycle. So that’s the second one.

And then the third one that we like is environmental cleanup. So The US alone has 520 some billion dollars of liability around Cold War, world war two cleanup that needs to be done. So materials that have been stored and you don’t know what the materials are, so they’ve gotta be classified, they’ve gotta be identified those materials. They’ve been stored improperly, so then you have to engineer and design containers to build the store and transport those in. I think you guys are seeing that common theme across all three of these.

So we always like to have backup plans, so we felt like if we’re going after nuclear, we’re gonna be in three sub segments of nuclear and then if anything happens from a demand generation standpoint within those three, it gives us a fallback plan within either a combination of two or one of those.

Unidentified speaker: And then maybe just going back to the pricing point you brought up before, I think you did plus 1% net pricing in Q2, early Q2 price increase. And how does that flow through Q3, Q4? How much is tied to kind of what’s in backlog? And how do you think about price mix and volume contribution into the second half of the year and into next year?

Blaine Browers, CFO, Cadre Holdings: Yes. So when we think about the price increase, we typically do, like a lot of businesses, a January price increase. One of the things is just the normal planning process is we’re able to start increasing price for quotes that are done well prior to January. So that when you enter the year, you generally have a backlog and existing quotes that reflect that new price. That April price increase or Q2 price increase was really reactive to tariffs.

So one thing we didn’t have is we had backlog that was already booked at previous pricing. We have quotes outstanding at our previous pricing. So that Q2 price increase will take some time to flow through. And to give you a feel for just the makeup of our backlog, when we think about EOD and nuclear, those businesses will generally have six to nine months of backlog on hand, plus quotes. So when you think about that funnel from beginning to end to get that price increase through, it looks like if you launch it in Q2, it looks like more six to nine months.

Contrast that with the armor and duty gear side of the business, where they only carry about forty five days of backlog. So when we think about the back half, you’ll see some of the price flow through in the very end of Q2. You’ll see some of the businesses, not all of them, but some of them have it in Q3. And then as you get into Q4, towards the tail end in early twenty twenty six, you’ll start to see those longer cycle businesses have that price flow through. So when you think about that price increase, it’s going to happen over time just because of the nature of that backlog, again, very different from how we do our annual price increase.

So by the time we get into Q1, we’d expect to see the full impact of that across all the businesses. When we think about that contribution in the back half, again, going back to my prior comment is the tariffs are not hugely significant impact to us. So we’re not talking about double digit price increases. We’re talking really single digit price increases. And when you kind of do the math on your layout, the single digit along with how it cycles through those businesses, you’re not talking a real significant uptick in price in the back half.

So based on our guide that I would think about that as mostly volume consistent with what we guided to. It won’t be dramatically different in that back half.

Unidentified speaker: And then maybe just sticking with backlog, flat sequentially organically in Q2. I think you saw some big funnel opportunities maybe push out a little bit. What are the milestones that we should watch as it relates to gauging conversion? And are there specific end markets or order timing that’s improving?

Blaine Browers, CFO, Cadre Holdings: Yes. One thing I talked just briefly about that backlog makeup and the differences between the businesses. Backlog is absolutely important, but you can never really look at it as absolute number just because of that makeup change. And a good example would be in the nuclear businesses, there’s some of those businesses that get their orders for the following year in December. So for those businesses, you really kind of expect that backlog to bleed throughout the year and then replenish in Q4, early Q1.

So when we look at the backlog, I think as you’re thinking about as an investor, Q3 is not really the point in time that’s going to be the make or break. It really comes to really to Q4 is when we a lot of those orders we expect to come in. So I think about it as backlog in Q3 is going to be a real telling indicator of Q4 just because of that mix. And we’ve already adjusted guidance for some of those order timing push out. So those really, I would expect more to land in Q4 backlog versus Q3.

And that’s just and that’s really, really typical of what we see in our business. There’s a pretty wide fluctuation because the customer base and products are very different when it comes to the replenishment ordering cycles.

Unidentified speaker: And then maybe just going back to nuclear, car engineering, you’ve outlined a phased integration playbook starting with finance, IT, legal, compliance first and then the operating model. Could you maybe provide an update on where integration stands and how maybe some of the KPIs are tracking over the first one hundred and twenty to one hundred and eighty days?

Blaine Browers, CFO, Cadre Holdings: Sure. Our initial focus really in that first ninety to one hundred and twenty days is really around the functional integration, so think legal, IT, finance and accounting. And one of the things we’ve been really pleased with is the strength of the teams in the cars businesses. So when we think about that back office integration, we are exactly where we want to be and honestly towards the tail end of that, which is exciting for us because that’s the work we have to get done and then we get to really, I would say, more of the fun stuff, the operating model. And this year, CADRE has done boot camps for the operating model.

So we’ve brought in all the leadership, so operational leadership, functional leadership into different geographic sites to really spend three to five days learning about how we operate. And we’ve been able to check that box for the European operations, which we’re excited for. A lot of enthusiasm, right? It’s fairly new to these individuals, to these teams. So we’re excited about the future on that.

And then KPIs, really the first step in that operating model and boot camp is really daily management and monthly business reviews. And we are not prescriptive I’d say on the specific KPIs that each business will use, right? It has to be to a degree molded to the way the business operates and the characteristics of that business. So right now the teams are working through daily management. They have it in place.

It will be a process though. Today’s daily management will look different from daily management a month. But I would say we have a lot of the basic KPIs around delivery and cost and safety in place that we’re happy with. We’ll continue to evolve over time, but we’ve seen I think really the most exciting thing has been the excitement from the teams around the operating model, around what it will mean to the business and how they can continue to push the business forward.

Unidentified speaker: I think maybe digging into that point a little bit, I mean, you’ve alluded to some of the opportunity to cross sell Alpha safety products into legacy car relationships and vice versa. I mean, how do you think about the first cross sell plays you’re executing? And when do you think those maybe show up in orders or revenues?

Brad Williams, President and COO, Cadre Holdings: So I mentioned on the public safety side that you know that segment is very slow to change. Nuclear is even longer. So when you look at the opportunities, you know we bought Alpha Safety. Part of the Alpha Safety strategy was 98% of their revenue is all US based. They only have like one customer in Europe, actually in The UK.

And so part of the strategy there was to take some of their products, especially their containers, their high end stainless steel containers that are used typically for plutonium and take those containers and then hopefully land customers outside The US, specifically in The UK. Because Bindles, which was part of the Cars acquisition, it’s a bespoke engineering company in The UK. They have a great relationship with Sellafield. And Sellafield, for those who don’t know, is a large storage location in The UK, one of the largest actually in the world. So a very important customer to us.

So Bindles has a great relationship, does a lot of work with that customer, Sellafield. Also through Wallisch Miller, which was another one of the businesses we bought in the cars acquisition. They also have a great relationship and we have a facility in The UK for that business also. So we have two inroads there and then the next step is just continuing to introduce the containers and the other products that we don’t have in The UK that we have from an Alpha safety perspective. But these are not short selling times.

These are typically what we’ve seen so far in the nuclear industry. You’re talking you know twelve plus months or even longer as they look at these opportunities. And if you think about it, we may be impatient about that you know as business leaders, but when you think of the type of products and solutions that they’re putting in place, they’ve really got to make sure that things are being engineered properly, fabricated properly, produced properly and they’re selecting the appropriate suppliers for those. So it’s definitely a longer sales cycle within nuclear versus public safety.

Unidentified speaker: And then maybe just two more. Just thinking about margin, I mean, the 2025 guide, 18.2%. There’s a little bit of an impact from car. And then I think you’ve talked about some H2 uplift from just mix given EOD and armor mix. Can you maybe talk about that path forward?

You talked a little bit about price, but what some of the largest opportunities are to kind of drive productivity and how mix plays into that?

Blaine Browers, CFO, Cadre Holdings: Longer term, we believe firmly, like from an EBITDA margin basis, we can be in the mid-20s. And Brad and I, again, have been with the company for a while, private and public. If you look back at the track record, it’s been very consistent pushing those margins forward. And we don’t view that as an end of the journey where there’s really no stopping. Even for the mature businesses, when you think about the opportunity there, it still exists.

And in fact, when you think about the operating model deployment, we would really view it as early innings, right? We’re not at a high maturity level on some of those tools. So even the businesses like armor and duty gear, we still think have room to expand margins and grow. And they have done. Even those mature businesses over the past five years, they’ve continued to expand.

So we don’t think about mix as a driver to that profitability. When we think about those that margin expansion, we really view it as what do we do to change the business, not how does the business change outside your control. So we want to focus on how are we producing in the floor, what are we doing really in the back office to support the businesses, how do we make that leaner and more efficient and improve those processes to drive the margin. So for us, it’s mix can always be an impact in our business. When you look across the portfolio, if you look at the average margin, there’s probably a plus and minus 5% across the different products.

So it can have an impact. But for us, it’s really more important excluding that mix impact, are we continuing to expand margins. As long as we continue to focus on what we’re good at and what we’ve historically done, which is focus on price and productivity, we believe there’s a clear path to get those margins, those EBITDA margins into the mid-20s. That doesn’t require mix change and it doesn’t require us to buy assets to lift that margin. We view even in the absence of M and A that CADRE is a really compelling story because of that margin expansion opportunity.

Unidentified speaker: And then maybe just sneaking in one last one as time comes to an end. I think you ended Q2 at 1.8% leverage. You’ve obviously been very active with M and A. I mean how do you kind of think about that going forward? Are there targets?

What are you seeing in the broader market? And maybe how does that kind of play into that playbook that you laid out in the beginning?

Blaine Browers, CFO, Cadre Holdings: Yes. I mean we’re obviously very comfortable at 1.8 times levered. Our range or let’s say our upper end is really 3.5, maybe 3.75 on leverage. And that would be for the right acquisition that makes a lot of sense. But then the plan is how do we quickly delever to kind of two.

So if you look over our history, actually this is probably the highest leverage we’ve been as a public company and 1.8 not being high. And that’s just been reflective of the M and A opportunity. So we’ll fluctuate in that. We think again two times is probably the right number for returns for investors long term, but it is going to fluctuate up and down depending on M and A markets. And when we think about that capital allocation, it is very focused on M and A.

That’s where we believe the biggest return for our investors is really so we’re not contemplating share buybacks or significant changes to dividend. It’s really going to be M and A and organic opportunities within the business.

Unidentified speaker: Thank you both and we’ll leave it at that. Thank you.

Blaine Browers, CFO, Cadre Holdings: Thank you.

Brad Williams, President and COO, Cadre Holdings: Thank you. You. Appreciate it. Yeah. Absolutely.

Appreciate it.

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