November 4, 2025 - 10-Q: Quarterly report [Sections 13 or 15(d)]

Form: 10-Q

Documents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: September 30, 2025

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________ to _________

Commission File Number: 001-40698

CADRE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

38-3873146

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)



13386 International Pkwy Jacksonville, Florida		32218
(Address of principal executive offices)		(Zip code)

(904) 741-5400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	CDRE	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☐	Non-accelerated filer	☐

Accelerated filer	☒	Smaller reporting company	☐

		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 3, 2025, there were 40,663,844 shares of common stock, par value $0.0001, outstanding.

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INDEX

CADRE HOLDINGS, INC.

PART I	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets –September 30, 2025 and December 31, 2024	5
	Condensed Consolidated Statements of Operations and Comprehensive Income – Three and nine months ended September 30, 2025 and 2024	6
	Condensed Consolidated Statements of Cash Flows – Nine months ended September 30, 2025 and 2024	7
	Condensed Consolidated Statements of Shareholders’ Equity – Three and nine months ended September 30, 2025 and 2024	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 5.	Other Information	46
Item 6.	Exhibits	47
Signature Page		48

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This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Except where the context otherwise requires or where otherwise indicated, the terms the “Company”, “Cadre”, “we,” “us,” and “our,” refer to the consolidated business of Cadre Holdings, Inc. and its consolidated subsidiaries. All statements in this Report, other than statements of historical fact, are forward-looking statements. These forward-looking statements are based on management’s current expectations, assumptions, hopes, beliefs, intentions, and strategies regarding future events and are based on currently available information as to the outcome and timing of future events. In some cases, you can identify forward-looking statements because they contain words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “could,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. The Company cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company, incidental to its business.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. These forward-looking statements are based on information available as of the date of this Report (or, in the case of forward-looking statements incorporated herein by reference, if any, as of the date of the applicable filed document), and any accompanying supplement, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date, and the Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Report. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. Our forward-looking statements do not reflect the potential impact of any future acquisitions, partnerships, mergers, dispositions, joint ventures, or investments we may make.

As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

●

the availability of capital to satisfy our working capital requirements;

●

anticipated trends and challenges in our business and the markets in which we operate;

●

our ability to anticipate market needs or develop new or enhanced products to meet those needs;

●

our expectations regarding market acceptance of our products;

●

the success of competing products by others that are or become available in the market in which we sell our products;

●

the impact of adverse publicity about the Company and/or its brands, including without limitation, through social media or in connection with brand damaging events and/or public perception;

●

changes in political, economic or regulatory conditions generally and in the markets in which we operate;

●

the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations;

●

our ability to maintain or broaden our business relationships and develop new relationships with strategic alliances, suppliers, customers, distributors or otherwise;

●

our ability to retain and attract senior management and other key employees;

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●

our ability to quickly and effectively respond to new technological developments;

●

the effect of an outbreak of disease or similar public health threat, such as the COVID-19 pandemic, on the Company’s business;

●

logistical challenges related to supply chain disruptions and delays;

●

the impact of inflationary pressures and our ability to mitigate such impacts with pricing and productivity;

●

the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors;

●

the ability of our information technology systems or information security systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes;

●

our ability to properly maintain, protect, repair or upgrade our information technology systems or information security systems, or problems with our transitioning to upgraded or replacement systems;

●

our ability to protect our trade secrets or other proprietary rights and operate without infringing upon the proprietary rights of others and prevent others from infringing on the proprietary rights of the Company;

●

our ability to maintain a quarterly dividend;

●

the expenses associated with being a public company, including but not limited to expenses associated with disclosure and reporting obligations;

●

any material differences in the actual financial results of the Company’s past and future acquisitions as compared with the Company’s expectations;

●

our ability to integrate the operations of the businesses we have acquired or may acquire in the future;

●

potential legal, reputational, operational and financial effects on the Company resulting from future cybersecurity incidents on the Company’s business, operations and financial results as well as the effectiveness of the Company’s response and mitigation efforts to any such cybersecurity incidents;

●

the impact of changes in tariffs, tax laws, global trade policies as well as instability and volatility in global markets; and

●

other risks and uncertainties set forth in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, which are incorporated herein by reference.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. Other risks and uncertainties are and will be disclosed in our prior and future filings with the Securities and Exchange Commission (“SEC”) and this information should be read in conjunction with the Condensed Consolidated Financial Statements included in this Report.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CADRE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)


	September 30, 2025		December 31, 2024
Assets
Current assets
Cash and cash equivalents	$	150,875	$	124,933
Accounts receivable, net of allowance for doubtful accounts of $826 and $876, respectively		99,426		93,523
Inventories		112,201		82,351
Prepaid expenses		12,474		19,027
Other current assets		11,240		7,737
Total current assets		386,216		327,571
Property and equipment, net of accumulated depreciation and amortization of $60,893 and $54,384, respectively		77,590		45,243
Operating lease assets		21,719		15,454
Deferred tax assets, net		4,857		4,552
Intangible assets, net		117,909		107,544
Goodwill		179,169		148,157
Other assets		4,595		4,192
Total assets	$	792,055	$	652,713

Liabilities, Mezzanine Equity and Shareholders' Equity
Current liabilities
Accounts payable	$	26,997	$	29,644
Accrued liabilities		61,363		46,413
Income tax payable		1,418		6,693
Current portion of long-term debt		16,266		11,375
Total current liabilities		106,044		94,125
Long-term debt		294,971		211,830
Long-term operating lease liabilities		16,033		10,733
Deferred tax liabilities		24,110		18,758
Other liabilities		10,523		5,752
Total liabilities		451,681		341,198

Commitments and contingencies (Note 8)

Mezzanine equity
Preferred stock ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2025 and December 31, 2024)		—		—

Shareholders' equity
Common stock ($0.0001 par value, 190,000,000 shares authorized, 40,681,668 and 40,607,988 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively)		4		4
Additional paid-in capital		312,910		306,821
Accumulated other comprehensive income (loss)		565		(1,389)
Accumulated earnings		26,895		6,079
Total shareholders’ equity		340,374		311,515
Total liabilities, mezzanine equity and shareholders' equity	$	792,055	$	652,713

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CADRE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(Unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net sales	$	155,869	$	109,408	$	443,084	$	391,577
Cost of goods sold		89,244		69,392		256,079		235,283
Gross profit		66,625		40,016		187,005		156,294
Operating expenses
Selling, general and administrative		45,627		33,981		132,509		113,277
Restructuring and transaction costs		2,216		515		6,240		3,621
Related party expense		108		94		1,345		2,038
Total operating expenses		47,951		34,590		140,094		118,936
Operating income		18,674		5,426		46,911		37,358
Other expense
Interest expense, net		(3,028)		(1,991)		(8,849)		(5,631)
Other (expense) income, net		(802)		1,555		6,599		(225)
Total other expense, net		(3,830)		(436)		(2,250)		(5,856)
Income before provision for income taxes		14,844		4,990		44,661		31,502
Provision for income taxes		(3,903)		(1,335)		(12,261)		(8,352)
Net income	$	10,941	$	3,655	$	32,400	$	23,150

Net income per share:
Basic	$	0.27	$	0.09	$	0.80	$	0.58
Diluted	$	0.27	$	0.09	$	0.79	$	0.58
Weighted average shares outstanding:
Basic		40,666,861		40,607,988		40,649,339		39,723,702
Diluted		40,977,677		40,949,461		40,964,737		40,118,729

Net income	$	10,941	$	3,655	$	32,400	$	23,150
Other comprehensive income:
Unrealized holding gains (losses) on derivative instruments, net of tax⁽¹⁾		107		(1,509)		(730)		320
Reclassification adjustments for gains included in net income, net of tax⁽²⁾		(1,012)		(849)		(1,872)		(2,577)
Total unrealized loss on derivative instruments, net of tax		(905)		(2,358)		(2,602)		(2,257)
Foreign currency translation adjustments, net of tax⁽³⁾		(1,070)		1,053		4,556		544
Other comprehensive (loss) income		(1,975)		(1,305)		1,954		(1,713)
Comprehensive income, net of tax	$	8,966	$	2,350	$	34,354	$	21,437

(1) Net of income tax of $36 and $504 for the three months ended September 30, 2025 and 2024, respectively, and $244 and $106 for the nine months ended September 30, 2025 and 2024, respectively.

(2) Amounts reclassified to net income relate to gains on interest rate swaps and foreign currency hedges and are included in interest expense, net above. Amounts are net of income tax of $177 and $283 for the three months ended September 30, 2025 and 2024, respectively, and $709 and $861 for the nine months ended September 30, 2025 and 2024, respectively.

(3) Net of income tax of $135 and $240 for the three months ended September 30, 2025 and 2024, respectively, and $340 and $114 for the nine months ended September 30, 2025 and 2024, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CADRE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Nine Months Ended September 30,
	2025		2024
Cash Flows From Operating Activities:
Net income	$	32,400	$	23,150
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,908		12,325
Amortization of original issue discount and debt issue costs		1,075		787
Amortization of inventory step-up		826		3,851
Deferred income taxes		(4,163)		(11,627)
Stock-based compensation		6,840		6,255
Remeasurement of contingent consideration		1,489		685
(Recoveries from) provision for losses on accounts receivable		(190)		757
Unrealized foreign exchange transaction gain		(2,275)		(788)
Other loss		268		355
Changes in operating assets and liabilities, net of impact of acquisitions:
Accounts receivable		19,360		162
Inventories		(14,748)		(2,589)
Prepaid expenses and other assets		4,607		(4,161)
Accounts payable and other liabilities		(16,942)		(21,096)
Net cash provided by operating activities		42,455		8,066
Cash Flows From Investing Activities:
Purchase of property and equipment		(3,582)		(4,381)
Proceeds from disposition of property and equipment		6		74
Business acquisitions, net of cash acquired		(89,590)		(141,813)
Net cash used in investing activities		(93,166)		(146,120)
Cash Flows From Financing Activities:
Proceeds from revolving credit facilities		—		5,500
Principal payments on revolving credit facilities		—		(5,500)
Proceeds from term loans		97,500		80,000
Principal payments on term loans		(9,723)		(9,562)
Principal payments on insurance premium financing		—		(2,187)
Payments for debt issuance costs		—		(844)
Taxes paid in connection with employee stock transactions		(1,185)		(5,311)
Proceeds from secondary offering, net of underwriter discounts		—		91,776
Deferred offering costs		—		(683)
Dividends distributed		(11,584)		(10,395)
Other		344		37
Net cash provided by financing activities		75,352		142,831
Effect of foreign exchange rates on cash and cash equivalents		1,301		521
Change in cash and cash equivalents		25,942		5,298
Cash and cash equivalents, beginning of period		124,933		87,691
Cash and cash equivalents, end of period	$	150,875	$	92,989
Supplemental Disclosure of Cash Flows Information:
Cash paid for income taxes, net	$	22,545	$	22,761
Cash paid for interest	$	13,075	$	10,523
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Accruals and accounts payable for capital expenditures	$	16	$	112

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CADRE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(In thousands, except per share amounts)


				Additional		Accumulated
	Common Stock			Paid-In		Other Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Income (Loss)		Earnings		Equity
Balance, December 31, 2024	40,607,988	$	4	$	306,821	$	(1,389)	$	6,079	$	311,515
Net income	—		—		—		—		9,248		9,248
Dividends declared ($0.095 per share)	—		—		—		—		(3,859)		(3,859)
Stock-based compensation	—		—		1,968		—		—		1,968
Common stock issued under employee compensation plans	86,006		—		—		—		—		—
Common stock withheld related to net share settlement of stock-based compensation	(34,409)		—		(1,164)		—		—		(1,164)
Foreign currency translation adjustments	—		—		—		867		—		867
Change in fair value of derivative instruments	—		—		—		(1,013)		—		(1,013)
Balance, March 31, 2025	40,659,585	$	4	$	307,625	$	(1,535)	$	11,468	$	317,562
Net income	—		—		—		—		12,211		12,211
Dividends declared ($0.095 per share)	—		—		—		—		(3,862)		(3,862)
Stock-based compensation	—		—		2,425		—		—		2,425
Common stock issued under employee compensation plans	2,000		—		—		—		—		—
Common stock withheld related to net share settlement of stock-based compensation	(710)		—		(21)		—		—		(21)
Exercise of stock options	2,969		—		70		—		—		70
Foreign currency translation adjustments	—		—		—		4,759		—		4,759
Change in fair value of derivative instruments	—		—		—		(684)		—		(684)
Balance, June 30, 2025	40,663,844	$	4	$	310,099	$	2,540	$	19,817	$	332,460
Net income	—		—		—		—		10,941		10,941
Dividends declared ($0.095 per share)	—		—		—		—		(3,863)		(3,863)
Stock-based compensation	—		—		2,447		—		—		2,447
Exercise of stock options	17,824		—		364		—		—		364
Foreign currency translation adjustments	—		—		—		(1,070)		—		(1,070)
Change in fair value of derivative instruments	—		—		—		(905)		—		(905)
Balance, September 30, 2025	40,681,668	$	4	$	312,910	$	565	$	26,895	$	340,374

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CADRE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - CONTINUED

(Unaudited)

(In thousands, except per share amounts)


				Additional		Accumulated
	Common Stock			Paid-In		Other Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balance, December 31, 2023	37,587,436	$	4	$	212,630	$	634	$	(16,106)	$	197,162
Net income	—		—		—		—		6,928		6,928
Dividends declared ($0.0875 per share)	—		—		—		—		(3,289)		(3,289)
Issuance of common stock in secondary offering, net of underwriter discounts and issuance costs	2,200,000		—		72,813		—		—		72,813
Stock-based compensation	—		—		2,044		—		—		2,044
Common stock issued under employee compensation plans	423,688		—		—		—		—		—
Common stock withheld related to net share settlement of stock-based compensation	(150,680)		—		(5,311)		—		—		(5,311)
Foreign currency translation adjustments	—		—		—		(412)		—		(412)
Change in fair value of derivative instruments	—		—		—		766		—		766
Balance, March 31, 2024	40,060,444	$	4	$	282,176	$	988	$	(12,467)	$	270,701
Net income	—		—		—		—		12,567		12,567
Issuance of common stock in secondary offering, net of underwriter discounts and issuance costs	545,719		—		18,280		—		—		18,280
Dividends declared ($0.0875 per share)	—		—		—		—		(3,553)		(3,553)
Stock-based compensation	—		—		2,110		—		—		2,110
Exercise of stock options	1,825		—		37		—		—		37
Foreign currency translation adjustments	—		—		—		(97)		—		(97)
Change in fair value of derivative instruments	—		—		—		(665)		—		(665)
Balance, June 30, 2024	40,607,988	$	4	$	302,603	$	226	$	(3,453)	$	299,380
Net income	—		—		—		—		3,655		3,655
Dividends declared ($0.0875 per share)	—		—		—		—		(3,553)		(3,553)
Stock-based compensation	—		—		2,104		—		—		2,104
Foreign currency translation adjustments	—		—		—		1,053		—		1,053
Change in fair value of derivative instruments	—		—		—		(2,358)		—		(2,358)
Balance, September 30, 2024	40,607,988	$	4	$	304,707	$	(1,079)	$	(3,351)	$	300,281

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CADRE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(in thousands, except share and per share amounts)

1. SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Basis of Presentation

Cadre Holdings, Inc., D/B/A The Safariland Group (the “Company”, “Cadre”, “we”, “us”, and “our”), a Delaware corporation, began operations on April 12, 2012. The Company, headquartered in Jacksonville, Florida, is a global leader in manufacturing and distributing safety equipment and other related products for the law enforcement, first responder, military and nuclear markets. The business operates through 20 manufacturing plants within the U.S., Mexico, Canada, the United Kingdom, Italy, France, and Lithuania, and sells its products worldwide through its direct sales force, distribution channel and distribution partners, online stores, and third-party resellers.

Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP" or “U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and include the accounts of the Company, its wholly owned subsidiaries, and other entities consolidated as required by GAAP. Accordingly, they do not include all of the information and footnotes required by GAAP for annual audited financial statements. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and include all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s most recently completed annual consolidated financial statements. All adjustments considered necessary for a fair presentation have been included. All intercompany balances and transactions have been eliminated in consolidation.

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 $72,813 after underwriter discounts and commissions, fees and expenses of $4,187.

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 $18,280 after underwriter discounts and commissions, fees and expenses of $820.

Emerging Growth Company

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements.

In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. 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 condensed 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.

Use of Estimates

The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates.

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CADRE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

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Fair Value Measurements

The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This guidance also establishes the following three-level hierarchy based upon the transparency of inputs to the valuation of an asset or liability on the measurement date:

Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Unobservable inputs that reflect assumptions about what market participants would use in pricing assets or liabilities based on the best information available.

The Company’s financial instruments consist principally of cash and cash equivalents (which consist of money market funds), accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, income taxes payable and debt. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities and income taxes payable approximate their current fair value due to the relatively short-term nature of these accounts.

The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis:


	September 30, 2025								December 31, 2024
	Carrying		Fair Value						Carrying		Fair Value
	Amount			Level 1		Level 2		Level 3	Amount			Level 1		Level 2		Level 3
Assets:
Money market funds	$	114,030	$	114,030	$	—	$	—	$	110,671	$	110,671	$	—	$	—
Derivative instruments (Note 7)	$	2,202	$	—	$	2,202	$	—	$	4,465	$	—	$	4,465	$	—

Liabilities:
Derivative instruments (Note 7)	$	2,120	$	—	$	2,120	$	—	$	—	$	—	$	—	$	—
Contingent consideration (Note 2)	$	4,804	$	—	$	—	$	4,804	$	3,211	$	—	$	—	$	3,211

There were no transfers of assets or liabilities between levels during the nine months ended September 30, 2025 and 2024.

There have not been material changes in the fair value of debt (Level 2), as compared to the carrying value, as of September 30, 2025 and December 31, 2024.

Revenue Recognition

The Company derives revenue primarily from the sale of physical products. The Company recognizes such revenue at point-in-time when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied by transferring the goods or service to the customer. The performance obligation is considered satisfied when control transfers, which is generally determined when products are shipped or delivered to the customer. Sales are made on normal and customary short-term credit terms or upon delivery for point-of-sale transactions.

The Company enters into contractual arrangements primarily with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms.

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The Company has certain long-term contracts that contain performance obligations that are satisfied over time. 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. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.

At the time of revenue recognition, the Company also provides for estimated sales returns and miscellaneous claims from customers as reductions to revenues. The estimates are based on historical rates of product returns and claims. The Company accrues for such estimated returns and claims with an estimated accrual and associated reduction of revenue. Additionally, the Company records inventory that it expects to be returned as part of inventories, with a corresponding reduction to cost of goods sold.

Charges for shipping and handling fees billed to customers are included in net sales and the corresponding shipping and handling expenses are included in cost of goods sold in the accompanying condensed consolidated statements of operations and comprehensive income. We consider our costs related to shipping and handling after control over a product has transferred to a customer to be a cost of fulfilling the promise to transfer the product to the customer.

Sales commissions paid to employees as compensation are expensed as incurred for contracts with service periods less than a year. For contracts with service periods greater than a year, these costs have historically been immaterial and are capitalized and amortized over the life of the contract. Commission costs are recorded in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income.

Product Warranty

Some of the Company’s manufactured products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements, and is recorded in cost of goods sold in the Company’s condensed consolidated statements of operations and comprehensive income.

The following table sets forth the changes in the Company’s accrued warranties, which are recorded in accrued liabilities in the condensed consolidated balance sheets:


	Three Months Ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Beginning accrued warranty expense	$	1,733	$	1,614	$	1,760	$	1,610
Current period recoveries (claims)		79		(232)		(5)		(346)
Provision for current period sales		257		334		314		452
Ending accrued warranty expense	$	2,069	$	1,716	$	2,069	$	1,716

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Net Income per Share

Basic income per share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. Diluted income per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. The calculation of weighted average shares outstanding and net income per share are as follows:


	Three Months Ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Net income	$	10,941	$	3,655	$	32,400	$	23,150

Weighted average shares outstanding - basic		40,666,861		40,607,988		40,649,339		39,723,702
Effect of dilutive securities:
Stock-based awards		310,817		341,473		315,398		395,027
Weighted average shares outstanding - diluted		40,977,677		40,949,461		40,964,737		40,118,729
Net income per share:
Basic	$	0.27	$	0.09	$	0.80	$	0.58
Diluted	$	0.27	$	0.09	$	0.79	$	0.58

For the three months ended September 30, 2025 and 2024, equity awards of 709,694 and 328,474 respectively, and for the nine months ended September 30, 2025 and 2024, equity awards of 709,694 and 328,474, respectively, were outstanding and anti-dilutive and therefore not included in the calculation of net income per share for these periods.

Recent Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires a public entity to disclose in its rate reconciliation table additional categories of information about federal, state and foreign income taxes and provide more details about the reconciling items in some categories if items meet a quantitative threshold. The guidance will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. All entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The guidance is effective for public business entities for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the enhanced disclosure requirements, however, we do not anticipate a material change to our financial position, results of operations or cash flows.

In November 2024, the FASB issued ASU 2024-03, Comprehensive Income (Topic 220) – Disaggregation of Income Statement Expenses, to improve financial reporting by requiring disclosures in the notes to financial statements about specific types of expenses included in the expense captions presented on the face of the statement of operations. The requirements of the ASU are effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements are able to be applied prospectively with the option for retrospective application. The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements and related disclosures.

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2. ACQUISITIONS

Zircaloy Acquisition

On April 22, 2025, the Company completed the acquisition of Carr’s Engineering Limited (excluding Chirton Engineering) and Carr's Engineering (US), Inc. (collectively “Zircaloy”), each a subsidiary of Carr’s Group plc.

The acquisition was accounted for as a business combination. Total acquisition-related costs for the acquisition of Zircaloy were $4,520 (including $1,000 paid to a related party as discussed in Note 11), which were incurred and recognized during the nine months ended September 30, 2025.

Total consideration, net of cash acquired, was $89,590 for 100% of the equity interests in Zircaloy. The total consideration was as follows:


Cash paid	$	98,895
Less: cash acquired		(9,305)
Total consideration, net	$	89,590

The following table summarizes the total purchase price consideration and the preliminary amounts recognized for the assets acquired and liabilities assumed, which have been estimated at their fair values. Since our initial purchase price allocation, we have increased goodwill by $5,300 for changes in assumptions used to fair value intangible assets, property, plant and equipment and deferred tax liabilities. The fair value measurements of identifiable assets and liabilities, and the resulting goodwill related to the Zircaloy acquisition are subject to change and the final purchase price allocation could be different from the amounts presented below. We expect to finalize the valuations as soon as practicable, but no later than one year from the date of the acquisition. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for the Zircaloy acquisition is included in the Product segment and reflects synergies and additional legacy growth and profitability expected from this acquisition through expansion into new markets and customers.


Total consideration, net	$	89,590

Accounts receivable	$	24,099
Inventories		14,482
Prepaid expenses and other current assets		4,444
Property and equipment		34,305
Operating lease assets		5,146
Intangible assets		15,400
Goodwill		29,103
Total assets acquired		126,979
Accounts payable		3,028
Accrued liabilities		17,347
Long-term operating lease liabilities		4,564
Deferred tax liabilities		9,835
Other liabilities		2,615
Total liabilities assumed		37,389
Net assets acquired	$	89,590

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In connection with the acquisition, the Company acquired exclusive rights to Zircaloy’s trademarks, customer relationships, and product technologies. The amounts assigned to each class of intangible asset and the related average useful lives are as follows:

The full amount of goodwill is expected to be non-deductible for tax purposes. No pre-existing relationships existed between the Company and Zircaloy prior to the acquisition. Zircaloy revenue is included in the Product segment from the date of acquisition and amounted to $31,513 for the period ended September 30, 2025. It is not practical to determine the amount of earnings related to Zircaloy from the date of acquisition. The acquisition is not expected to be material to our operations and consequently we have not included any pro-forma information.

ICOR Acquisition

On January 9, 2024, Med-Eng, ULC, a wholly-owned subsidiary of the Company, completed the acquisition of ICOR Technology Inc. (“ICOR”), a trusted global supplier of high-quality, reliable, innovative, and cost-effective explosive ordnance disposal robots.

Total consideration, net of cash acquired, was $39,282 for 100% of the equity interests in ICOR. The total consideration was as follows:


Cash paid	$	40,350
Less: cash acquired		(1,068)
Plus: Contingent consideration		2,226
Total consideration, net	$	41,508

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The following table summarizes the final purchase price consideration and the amounts recognized for the assets acquired and liabilities assumed, which have been estimated at their fair values. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for the ICOR acquisition is included in the Product segment and reflects synergies and additional legacy growth and profitability expected from this acquisition through expansion into new markets and customers.


Total consideration, net	$	41,508

Accounts receivable	$	2,352
Inventories		8,086
Prepaid expenses and other current assets		612
Property and equipment		239
Operating lease assets		1,369
Intangible assets		17,200
Goodwill		18,602
Total assets acquired		48,460
Accounts payable		635
Accrued liabilities		1,455
Long-term operating lease liabilities		967
Deferred tax liabilities		3,895
Total liabilities assumed		6,952
Net assets acquired	$	41,508

In connection with the acquisition, the Company acquired exclusive rights to ICOR’s trademarks, customer relationships, and product technologies. The amounts assigned to each class of intangible asset and the related average useful lives are as follows:

The full amount of goodwill of $18,602 is expected to be non-deductible for tax purposes.

As part of the ICOR acquisition, the purchase agreement with respect to the acquisition provided for the payment of contingent consideration of up to CDN$8,000 (approximately $5,797) based upon future cumulative net sales during the three-year period ended January 9, 2027. Using a Monte-Carlo pricing model, the Company estimated the fair value of the contingent consideration to be $2,225 as of January 9, 2024. Significant unobservable inputs used in the valuation include a discount rate of 6.2% and the probability adjusted net sales during the contingency period. The contingent consideration liability is remeasured at the estimated fair value at the end of each reporting period with the change in fair value recognized within operating income in the condensed consolidated statements of operations and comprehensive income for such period. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements.

As the contingent consideration liability, which is recorded in other liabilities in the condensed consolidated balance sheets, is remeasured to fair value each reporting period, significant increases or decreases in projected sales, discount rates or the time until payment is made could result in a significantly lower or higher fair value measurement. Our determination of fair value of the contingent consideration liabilities could change in future periods based on our ongoing evaluation of these significant unobservable inputs.

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The following table summarizes the changes in the contingent consideration liability for the three and nine months ended September 30, 2025:


Balance, December 31, 2024	$	3,211
Fair value adjustment		331
Foreign currency translation adjustments		17
Balance, March 31, 2025	$	3,559
Fair value adjustment		526
Foreign currency translation adjustments		164
Balance, June 30, 2025	$	4,249
Fair value adjustment		632
Foreign currency translation adjustments		(77)
Balance, September 30, 2025	$	4,804

Alpha Safety Acquisition

On February 29, 2024, Safariland, LLC, a wholly-owned subsidiary of the Company, completed the acquisition of Alpha Safety Intermediate, LLC (“Alpha Safety”), a provider of highly engineered technical products and services spanning the nuclear value chain.

Total consideration, net of cash acquired, was $102,531 for 100% of the equity interests in Alpha Safety. The total consideration was as follows:


Cash paid	$	107,138
Less: cash acquired		(4,607)
Total consideration, net	$	102,531

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The following table summarizes the final purchase price consideration and the amounts recognized for the assets acquired and liabilities assumed, which have been estimated at their fair values. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for the Alpha Safety acquisition is included in the Product segment and reflects synergies and additional legacy growth and profitability expected from this acquisition through expansion into new markets and customers.


Total consideration, net	$	102,531

Accounts receivable	$	9,189
Inventories		8,527
Prepaid expenses and other current assets		1,889
Property and equipment		2,189
Operating lease assets		2,262
Intangible assets		57,800
Goodwill		49,133
Total assets acquired		130,989
Accounts payable		1,896
Accrued liabilities		12,570
Long-term operating lease liabilities		1,573
Deferred tax liabilities		12,419
Total liabilities assumed		28,458
Net assets acquired	$	102,531

In connection with the acquisition, the Company acquired exclusive rights to Alpha Safety’s trademarks, customer relationships, and product technologies. The amounts assigned to each class of intangible asset and the related average useful lives are as follows:

The full amount of goodwill of $49,133 is expected to be non-deductible for tax purposes.

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3. REVENUE RECOGNITION

The following tables disaggregate net sales by channel and geography:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
U.S. state and local agencies (a)	$	76,399	$	56,678	$	227,408	$	204,481
Commercial		12,285		7,209		35,191		30,385
U.S. federal agencies		23,918		20,737		74,424		62,611
International		40,549		19,065		100,289		83,691
Other		2,718		5,719		5,772		10,409
Net sales	$	155,869	$	109,408	$	443,084	$	391,577

(a) Includes all Distribution sales


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
United States	$	115,320	$	90,343	$	342,795	$	307,886
International		40,549		19,065		100,289		83,691
Net sales	$	155,869	$	109,408	$	443,084	$	391,577

Revenue by product is not disclosed, as it is impractical to do so.

Contract Assets and Liabilities

Contract assets represent unbilled amounts resulting from certain long-term contracts that contain performance obligations that are satisfied over time. In these contracts, the revenue recognized exceeds the amount billed to the customer. Contract assets are included in accounts receivable, net in the Company’s condensed consolidated balance sheets and totaled $23,416 and $9,550 as of September 30, 2025 and December 31, 2024, respectively.

Contract liabilities are recorded as a component of other liabilities when customers are billed or remit cash payments in advance of the Company satisfying performance obligations. Contract liabilities are recognized into revenue when the performance obligation is satisfied. Contract liabilities are included in accrued liabilities in the Company’s condensed consolidated balance sheets and totaled $10,168 and $7,470 as of September 30, 2025 and December 31, 2024, respectively. Revenue recognized during the three and nine months ended September 30, 2025 from amounts included in contract liabilities as of December 31, 2024 was $2,513 and $5,889, respectively.

Remaining Performance Obligations

As of September 30, 2025, we had $69,945 of remaining unfulfilled performance obligations, which include amounts that will be invoiced and recognized in future periods. The remaining performance obligations are limited only to arrangements that meet the definition of a contract under ASC Topic 606, Revenue from Contracts with Customers, as of September 30, 2025. We expect to recognize approximately 51% of this balance over the next twelve months and expect the remainder to be recognized in the following two years.

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4. INVENTORIES

The following table sets forth a summary of inventories, stated at lower of cost or net realizable value, as of September 30, 2025 and December 31, 2024:


	September 30, 2025		December 31, 2024
Finished goods	$	38,283	$	31,209
Work-in-process		16,718		8,321
Raw materials and supplies		57,200		42,821
Total	$	112,201	$	82,351

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table summarizes the changes in goodwill for the three and nine months ended September 30, 2025:


	Product		Distribution		Total
Balance, December 31, 2024	$	145,541	$	2,616	$	148,157
Foreign currency translation adjustments		454		—		454
Balance, March 31, 2025	$	145,995	$	2,616	$	148,611
Zircaloy acquisition		23,803		—		23,803
Foreign currency translation adjustments		2,048		—		2,048
Balance, June 30, 2025	$	171,846	$	2,616	$	174,462
Measurement period adjustments		5,300		—		5,300
Foreign currency translation adjustments		(593)		—		(593)
Balance, September 30, 2025	$	176,553	$	2,616	$	179,169

Gross goodwill and accumulated impairment losses were $186,754 and $7,585, respectively, as of September 30, 2025 and $155,742 and $7,585, respectively, as of December 31, 2024.

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Intangible Assets

Intangible assets such as certain customer relationships and patents on core technologies and product technologies are amortizable over their estimated useful lives. Certain trade names and trademarks which provide exclusive and perpetual rights to manufacture and sell their respective products are deemed indefinite-lived and are therefore not subject to amortization.

Intangible assets consisted of the following as of September 30, 2025 and December 31, 2024:


	September 30, 2025
							Weighted
				Accumulated			Average
	Gross			Amortization		Net	Useful Life
Definite-lived intangibles:
Customer relationships	$	112,956	$	(72,575)	$	40,381	17
Technology		69,532		(19,495)		50,037	13
Tradenames		18,114		(7,818)		10,296	12
Non-compete agreements		1,035		(1,035)		—	-
	$	201,637	$	(100,923)	$	100,714
Indefinite-lived intangibles:
Tradenames		17,195		—		17,195	Indefinite
Total	$	218,832	$	(100,923)	$	117,909


	December 31, 2024
							Weighted
				Accumulated			Average
	Gross			Amortization		Net	Useful Life
Definite-lived intangibles:
Customer relationships	$	105,060	$	(69,118)	$	35,942	17
Technology		64,600		(15,819)		48,781	13
Tradenames		12,596		(6,941)		5,655	9
Non-compete agreements		996		(996)		—	-
	$	183,252	$	(92,874)	$	90,378
Indefinite-lived intangibles:
Tradenames		17,166		—		17,166	Indefinite
Total	$	200,418	$	(92,874)	$	107,544

Amortization expense for the three months ended September 30, 2025 and 2024 was $2,574 and $1,968, respectively, of which $1,234 and $1,073 was included in cost of goods sold in the condensed consolidated statements of operations and comprehensive income for the respective periods. Amortization expense for the nine months ended September 30, 2025 and 2024 was $7,100 and $7,012, respectively, of which $3,506 and $2,837 was included in cost of goods sold in the condensed consolidated statements of operations and comprehensive income for the respective periods.

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The estimated amortization expense for definite-lived intangible assets for the remaining three months of 2025, the next four years and thereafter is as follows:


Remainder of 2025	$	2,419
2026		9,380
2027		9,200
2028		9,200
2029		9,098
Thereafter		61,417
Total	$	100,714

6. DEBT

The Company’s debt is as follows:


	September 30, 2025		December 31, 2024
Short-term debt:
Current portion of term loan	$	16,125	$	11,250
Current portion of other		141		125
	$	16,266	$	11,375
Long-term debt:
Term loan		296,719		213,750
Other		211		251
	$	296,930	$	214,001
Unamortized debt discount and debt issuance costs		(1,959)		(2,171)
Total long-term debt, net	$	294,971	$	211,830

The following summarizes the aggregate principal payments of our long-term debt, excluding debt discount and debt issuance costs, for the remaining three months of 2025, the next four years and thereafter:


Remainder of 2025	$	4,101
2026		16,266
2027		16,266
2028		16,125
2029		260,438
Total principal payments	$	313,196

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”). The 2024 Credit Agreement amends and restates the prior credit agreement in its entirety.

Pursuant to the 2024 Credit Agreement, the 2024 Borrower (i) borrowed $225,000 under a term loan facility (the “2024 Term Loans”), (ii) may borrow up to $175,000 under a revolving credit facility (the “2024 Revolving Loan”), including up to $30,000 for letters of

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credit and up to $10,000 for swingline loans, (iii) may borrow up to $115,000 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 $75,000 under a delayed draw term loan A-2 facility (the “DDTL A-2 Facility”) available through June 20, 2026. Each of these facilities matures on December 20, 2029. The proceeds of the 2024 Term Loans were used to refinance the outstanding term loans under the 2021 Credit Agreement and to pay fees and expenses incurred in connection with entering into the 2024 Credit Agreement. The 2024 Credit Agreement also permits the 2024 Borrower, subject to certain requirements, to arrange with lenders for an aggregate of $100,000 (or more if certain leverage ratios are met) of additional revolving and/or term loan commitments (both of which are currently uncommitted).

The 2024 Borrower may elect to have borrowings under the 2024 Credit Agreement bear interest at either (i) a base rate plus an applicable margin ranging from 0.50% to 1.50% per annum or (ii) a term SOFR rate plus an applicable margin ranging from 1.50% to 2.50% per annum, in each case based on the Company’s consolidated total net leverage ratio. The 2024 Borrower is also required to pay a commitment fee on the unused portion of the 2024 Revolving Loan, the DDTL A-1 Facility, and the DDTL A-2 Facility, ranging from 0.175% to 0.25% per annum, based on the Company’s consolidated total net leverage ratio.

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.

The 2024 Credit Agreement is guaranteed, jointly and severally, by the 2024 Guarantors and, subject to certain exceptions, secured by a first-priority security interest in substantially all of the assets of the 2024 Borrower and the 2024 Guarantors pursuant to an Amended and Restated Security and Pledge Agreement and an Amended and Restated Guaranty and Suretyship Agreement, each dated as of the 2024 Credit Agreement Closing Date.

The 2024 Credit Agreement contains customary representations and warranties, and affirmative and negative covenants, including limitations on additional indebtedness, dividends, and other distributions, entry into new lines of business, use of loan proceeds, capital expenditures, restricted payments, restrictions on liens on the assets of the 2024 Borrower or any 2024 Guarantor, transactions with affiliates, amendments to organizational documents, accounting changes, sale and leaseback transactions, dispositions, and mandatory prepayments in connection with certain liquidity events. 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. Furthermore, the 2024 Credit Agreement also includes customary events of default, including non-payment of principal, interest, or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payments on other material indebtedness, bankruptcy and insolvency events, material judgments, and change of control provisions. Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the 2024 Credit Agreement may be accelerated, and the Lenders could foreclose on their security interests in the assets of the 2024 Borrower and the Guarantors.

In April 2025, in connection with the Zircaloy acquisition, the Company drew $97,500 of the $115,000 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.

There were no amounts outstanding under the 2024 Revolving Loan as of September 30, 2025 and December 31, 2024. As of September 30, 2025, there were $1,958 in outstanding letters of credit and $173,042 of availability.

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CADRE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

(in thousands, except share and per share amounts)

Canadian Credit Facility

On October 14, 2021, Med-Eng Holdings ULC and Pacific Safety Products Inc., the Company’s Canadian subsidiaries, as borrowers (the “Canadian Borrowers”), and Safariland, LLC, as guarantor (the “Canadian Guarantor”), closed on a line of credit pursuant to a Loan Agreement (the “Canadian Loan Agreement”) and a Revolving Line of Credit Note (the “Note”) with PNC Bank Canada Branch (“PNC Canada”), as lender pursuant to which the Canadian Borrowers may borrow up to CDN$10,000 under a revolving line of credit (including up to $3,000 for letters of credit) (the “Revolving Canadian Loan”). The Revolving Canadian Loan matures on July 23, 2026. The Canadian Loan Agreement is guaranteed by the Canadian Guarantor pursuant to a Guaranty and Suretyship Agreement (the “Canadian Guaranty Agreement”).

The Canadian Borrowers may elect to have borrowings either in United States dollars or Canadian dollars under the Canadian Loan Agreement, which will bear interest at a base rate or SOFR, in each case, plus an applicable margin, in the case of borrowings in United States dollars, or at a Canadian Prime Rate (as announced from time to time by PNC Canada) or a Canadian deposit offered rate (“CDOR”) as determined from time to time by PNC Canada in accordance with the Canadian Loan Agreement. The applicable margin for these borrowings range from 0.50% to 1.50% per annum, in the case of base rate borrowings and Canadian Prime Rate borrowings, and 1.50% to 2.50% per annum, in the case of SOFR borrowings and CDOR borrowings. The Canadian Loan Agreement also requires the Canadian Borrowers to pay (i) an unused line fee on the unused portion of the loan commitments in an amount ranging between 0.175% and 0.25% per annum, based upon the level of the Company’s consolidated total net leverage ratio, and (ii) an upfront fee equal to 0.25% of the principal amount of the Note.

The Canadian Loan Agreement also contains customary representations and warranties, and affirmative and negative covenants, including, among others, limitations on additional indebtedness, entry into new lines of business, entry into guarantee agreements, making of any loans or advances to, or investments in, any other person, restrictions on liens on the assets of the Canadian Borrowers and mergers, transfers of assets and acquisitions. The Canadian Loan Agreement and Note also contain customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain other material indebtedness, bankruptcy and insolvency events, material judgments and change of control provisions.

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.

There were no amounts outstanding under the Revolving Canadian Loan as of September 30, 2025 and December 31, 2024.

7. DERIVATIVE INSTRUMENTS

Interest Rate Swaps

We entered into interest rate swap agreements to hedge forecasted monthly interest rate payments on our floating rate debt. Under the terms of the interest rate swap agreements (“Swap Agreements”), we receive payments based on the 1-month SOFR (4.16% as of September 30, 2025). We had the following Swap Agreements as of September 30, 2025:


Effective Date	Notional Amount		Fixed Rate
September 30, 2021 through July 23, 2026	$	80,000	0.812	%
May 31, 2023 through July 23, 2026	$	43,750	3.905	%
February 14, 2025 through December 20, 2029	$	37,898	4.080	%
April 7, 2025 through December 20, 2029	$	48,750	3.545	%
July 31, 2025 through December 20, 2029	$	98,750	3.449	%

During the nine months ended September 30, 2025, there were no Swap Agreements that expired.

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(Unaudited)

(in thousands, except share and per share amounts)

We designated the Swap Agreements as cash flow hedges. A portion of the amount included in accumulated other comprehensive income (loss) is reclassified into interest expense, net as a yield adjustment as interest is either paid or received on the hedged debt. The fair value of our Swap Agreements is based upon Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements.

It is our policy to execute such instruments with creditworthy banks and not to enter into derivative financial instruments for speculative purposes. We believe our interest rate swap counterparty will be able to fulfill its obligations under our agreements, and we believe we will have debt outstanding through the expiration date of the swap agreements such that the occurrence of future cash flow hedges remains probable.

The estimated fair value of our Swap Agreements in the condensed consolidated balance sheets was as follows:


Balance Sheet Accounts	September 30, 2025		December 31, 2024
Other current assets	$	1,951	$	2,749
Other assets	$	—	$	1,298
Accrued liabilities	$	266	$	—
Other liabilities	$	1,854	$	—

A cumulative loss, net of tax, of $187 and a cumulative gain, net of tax, of $2,917 is recorded in accumulated other comprehensive income (loss) as of September 30, 2025 and December 31, 2024, respectively.

The Company recognized a loss, net of tax, of $139 and $1,415 in other comprehensive (loss) income for the three months ended September 30, 2025 and 2024, respectively. There was a gain, net of tax, of $772 and $849 reclassified from accumulated other comprehensive income (loss) into earnings for the three months ended September 30, 2025 and 2024, respectively.

The Company recognized a loss, net of tax, of $1,103 and a gain, net of tax, of $658 in other comprehensive (loss) income for the nine months ended September 30, 2025 and 2024, respectively. There was a gain, net of tax, of $2,001 and $2,577 reclassified from accumulated other comprehensive income (loss) into earnings for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, approximately $1,602 is expected to be reclassified from accumulated other comprehensive income (loss) into interest expense, net over the next 12 months.

Foreign Currency Hedge

We entered into forward contracts to hedge forecasted Mexican Peso (“MXN”) denominated costs associated with our Mexican subsidiary. These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and reported as current assets or current liabilities in the condensed consolidated balance sheets. 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 income (loss) into earnings in the period the hedged item impacts earnings.

As of September 30, 2025, the Company had outstanding contracts with a total notional amount of $116,438 MXN and recognized a cumulative gain, net of tax, of $188 in accumulated other comprehensive income (loss).

The Company recognized a gain, net of tax, of $246 and a loss, net of tax, of $95 in other comprehensive (loss) income for the three months ended September 30, 2025 and 2024, respectively. There was a gain, net of tax, of $240 reclassified from accumulated other comprehensive income (loss) into earnings for the three months ended September 30, 2025.

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(in thousands, except share and per share amounts)

The Company recognized a gain, net of tax, of $373 and a loss, net of tax, of $338 in other comprehensive (loss) income for the nine months ended September 30, 2025 and 2024, respectively. There was a loss, net of tax, of $129 reclassified from accumulated other comprehensive income (loss) into earnings for the nine months ended September 30, 2025.

As of September 30, 2025, approximately $188 is expected to be reclassified from accumulated other comprehensive income (loss) into earnings over the next 12 months.

8. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is also involved in various legal disputes and other legal proceedings and claims that arise from time to time in the ordinary course of business. The Company vigorously defends itself against all lawsuits and evaluates the amount of reasonably possible losses that the Company could incur as a result of these matters. While any litigation contains an element of uncertainty, the Company believes that the reasonably possible losses that the Company could incur in excess of insurance coverage would not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.

Insurance

The Company has various insurance policies, including product liability insurance, covering risks and in amounts it considers adequate. There can be no assurance that the insurance coverage maintained by the Company is sufficient or will be available in adequate amounts or at a reasonable cost.

International

As an international company, we are, from time to time, the subject of investigations related to the Company’s international operations, including under U.S. export control laws (such as ITAR), the FCPA and other similar U.S. and foreign laws. To the best of the Company’s knowledge, there are not any potential or pending investigations at this time.

9. INCOME TAXES

The Company and its subsidiaries file income tax returns in the U.S. federal, various state and local, and certain foreign jurisdictions. As of September 30, 2025, the Company’s tax years subsequent to 2017 are subject to examination by tax authorities with few exceptions.

The effective tax rate was 26.3% and 27.5% for the three and nine months ended September 30, 2025, respectively, and was higher than the statutory rate primarily due to state taxes and non-deductible executive compensation, partially offset by a decrease in the reserve for uncertain tax positions during the three months ended September 30, 2025. The effective tax rate was 26.8% and 26.5% for the three and nine months ended September 30, 2024, respectively, and was higher than the statutory rate primarily due to non-deductible executive compensation.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have assessed the impact on our consolidated financial statements and determined it to not be material.

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(Unaudited)

(in thousands, except share and per share amounts)

10. LEASES

The Company has operating leases for certain manufacturing and office space, retail locations, and equipment and finance leases for certain buildings and equipment. Lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company has elected the practical expedient and does not recognize a lease liability or right-of-use (“ROU”) asset for short-term leases (leases with a term of twelve months or less). The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate is the rate for collateralized borrowings based on the current economic environment, credit history, credit rating, value of leases, currency in which the lease obligation is satisfied, rate sensitivity, lease term and materiality.

Our operating leases have remaining contractual terms of up to five years, some of which include options to extend the leases for up to five years. Our finance leases range from 4 to 39 years.

The amount of assets and liabilities related to our leases were as follows:


	Balance Sheet Accounts	September 30, 2025		December 31, 2024
Assets:
Operating lease assets	Operating lease assets	$	21,719	$	15,454
Finance lease assets	Property and equipment, net		2,717		—
Total lease assets		$	24,436	$	15,454

Liabilities:
Current:
Operating lease liabilities	Accrued liabilities	$	5,872	$	4,824
Finance lease liabilities	Accrued liabilities		252		—
Long-term:
Operating lease liabilities	Long-term operating lease liabilities		16,033		10,733
Finance lease liabilities	Other liabilities		2,514		—
Total lease liabilities		$	24,671	$	15,557

The components of lease expense are recorded to cost of sales and selling, general and administration expenses in the condensed consolidated statements of operations and comprehensive income. The components of lease expense were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Finance lease cost:
Amortization of right-of-use assets	$	56	$	—	$	112	$	—
Interest on lease liabilities		37		—		75		—
Fixed operating lease costs⁽¹⁾		1,856		1,481		4,927		3,895
Variable operating lease costs		488		546		1,503		1,200
Total lease cost	$	2,437	$	2,027	$	6,617	$	5,095

(1) Includes short-term leases, which are immaterial.

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(Unaudited)

(in thousands, except share and per share amounts)

The weighted average remaining lease term and weighted average discount rate is as follows:


	September 30, 2025		December 31, 2024
Weighted average remaining lease term (years):
Operating leases		5.9		3.1
Finance leases		26.7		—

Weighted average discount rate:
Operating leases		3.36%		3.14%
Finance leases		5.31%		—

The estimated future minimum lease payments under leases for the remaining nine months of 2025, the next four years and thereafter is as follows:


	Finance Leases		Operating Leases
Remainder of 2025	$	99	$	1,756
2026		395		6,343
2027		395		5,017
2028		395		3,907
2029		366		2,924
Thereafter		4,319		5,685
Total future lease payments		5,969		25,632
Less: Amount representing interest		(3,203)		(3,727)
Present value of lease liabilities	$	2,766	$	21,905

Supplemental cash flow information related to leases is as follows:


	Nine Months Ended September 30,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	4,991	$	3,838
Financing cash flows - finance leases	$	172	$	—

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	10,424	$	10,095
Finance leases	$	2,863	$	—

11. RELATED PARTY TRANSACTIONS

The Company leases some distribution warehouses and retail stores from certain employees. The Company recorded rent expense related to these leases of $108 and $94 for the three months ended September 30, 2025 and 2024, respectively, and $345 and $288 for the nine months ended September 30, 2025 and 2024, respectively. Rent expense related to these leases is included in related party expense in the Company’s condensed consolidated statements of operations and comprehensive income.

During the nine months ended September 30, 2025, the Company paid $1,000 to Kanders & Company, Inc., a company controlled by Warren Kanders, our Chief Executive Officer, for services related to the acquisition of Zircaloy, which is included in related party expense in the Company’s condensed consolidated statements of operations and comprehensive income.

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(Unaudited)

(in thousands, except share and per share amounts)

During the nine months ended September 30, 2024, the Company paid $1,750 to Kanders & Company, Inc., a company controlled by Warren B. Kanders, our Chief Executive Officer, for services related to the acquisition of Alpha Safety, which is included in related party expense in the Company’s condensed consolidated statements of operations and comprehensive income.

12. SEGMENT DATA

Our segment disclosure is intended to provide the users of our consolidated financial statements with a view of the business that is consistent with the management of the Company.

Our operations are comprised of two operating and reportable segments: Product and Distribution. The Product segment is comprised of components that manufacture and sell products, while the Distribution segment is comprised of our business that serves as a one-stop shop for law enforcement agencies that sells goods produced by the Product segment, as well as other third-party products. Segment information is consistent with how the chief operating decision maker (“CODM”), our chief executive officer, reviews the business, makes investing and resource allocation decisions and assesses operating performance. The CODM evaluates segment performance and decides how to allocate resources based on segment gross profit. The CODM is not regularly provided asset information or operating expenses by segment as that information is not available.


	Three Months Ended September 30, 2025
					Reconciling
	Product		Distribution		Items⁽¹⁾		Total
Net sales	$	138,789	$	26,483	$	(9,403)	$	155,869
Cost of goods sold		77,862		20,843		(9,461)		89,244
Gross profit	$	60,927	$	5,640	$	58	$	66,625


	Three Months Ended September 30, 2024
					Reconciling
	Product		Distribution		Items⁽¹⁾		Total
Net sales	$	96,493	$	17,836	$	(4,921)	$	109,408
Cost of goods sold		60,386		13,936		(4,930)		69,392
Gross profit	$	36,107	$	3,900	$	9	$	40,016


	Nine Months Ended September 30, 2025
					Reconciling
	Product		Distribution		Items⁽¹⁾		Total
Net sales	$	391,659	$	79,853	$	(28,428)	$	443,084
Cost of goods sold		222,189		62,293		(28,403)		256,079
Gross profit	$	169,470	$	17,560	$	(25)	$	187,005


	Nine Months Ended September 30, 2024
					Reconciling
	Product		Distribution		Items⁽¹⁾		Total
Net sales	$	343,711	$	71,615	$	(23,749)	$	391,577
Cost of goods sold		203,771	$	55,216	$	(23,704)		235,283
Gross profit	$	139,940	$	16,399	$	(45)	$	156,294

⁽¹⁾ Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments.

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(Unaudited)

(in thousands, except share and per share amounts)

13. SUBSEQUENT EVENTS

In October 2025, the Company signed a definitive agreement to acquire Tyr Tactical, LLC, a leading global manufacturer of tactical gear and equipment for military, law enforcement, and government agencies worldwide.

The total consideration is $175,000, including $150,000 of cash at closing and $25,000 of Cadre common stock, of which $1,000 will be in the form of restricted stock unit awards to be granted to certain employees of Tyr Tactical, LLC. In addition, the seller will be eligible to receive up to $25,000 in additional contingent earn-out consideration, payable in cash, unregistered shares of common stock, or a combination thereof, at the Company’s discretion, based on the achievement of specified net revenue targets for the calendar years 2026, 2027, and 2028. As part of the transaction, the Company will acquire certain real property owned by an affiliate of Tyr Tactical, LLC.

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of operations of Cadre Holdings, Inc. (D/B/A The Safariland Group) (“Cadre,” “the Company” “we,” “us” and “our”) should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside of Cadre’s control. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward- looking statements include, but are not limited to, those discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024 and the section entitled “Cautionary Statement Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q.

Our Business

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. 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. 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. 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.

We service the ever-changing needs of our end users by investing in research and development for new product innovation and technical advancements that continually raise the standards for safety equipment. 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 the U.S. Department of State, U.S. Department of Defense, U.S. Department of Interior, U.S. Department of Justice, U.S. Department of Homeland Security, U.S. Department of Corrections and numerous foreign government agencies in over 100 countries.

In April 2025, the Company acquired Zircaloy for $98.9 million.

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

The following table sets forth a summary of our financial highlights for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Net sales	$	155,869	$	109,408	$	443,084	$	391,577
Net income	$	10,941	$	3,655	$	32,400	$	23,150
Adjusted EBITDA⁽¹⁾	$	29,815	$	13,525	$	77,306	$	66,335

(1)	Adjusted EBITDA is a non-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. GAAP financial measure.

Net sales increased by $46.5 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily as a result of the Zircaloy acquisition, the impact of the 2024 cybersecurity incident on the comparable period, and increased demand for North American armor and duty gear products, partially offset by decreases in the existing nuclear safety business.

Net income increased by $7.3 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily as a result of increased gross profit, partially offset by Zircaloy selling, general and administrative expenses and increases in compensation expense, transaction costs and interest expense.

Net sales increased by $51.5 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily as a result of the Zircaloy acquisition, the impact of the 2024 cybersecurity incident on the comparable period, and increased demand for existing nuclear safety products and crowd control products.

Net income increased by $9.3 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily as a result of increased gross profit and gains from foreign currency fluctuations, partially offset by increases in compensation expense, interest expense and provision for taxes.

KEY PERFORMANCE METRICS

Orders backlog

We monitor our orders backlog, which we believe is a forward-looking indicator of potential sales. Our orders backlog for products includes all orders that have been received and are believed to be firm. Due to municipal government procurement rules, in certain cases orders included in backlog are subject to budget appropriation or other contract cancellation clauses. Consequently, our orders backlog may differ from actual future sales. Orders backlog can be helpful to investors in evaluating the performance of our business and identifying trends over time.

The following table presents our orders backlog as of the periods indicated:


	September 30, 2025		December 31, 2024
Orders backlog	$	204,293	$	128,814

Orders comprising backlog as of a given balance sheet date are typically invoiced in subsequent periods. 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. Our orders backlog could experience volatility between periods, including as a result of customer order volumes and the speed of our order fulfillment, which in turn may be impacted by the nature of products ordered, the amount of inventory on hand and the necessary manufacturing lead time.

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

Orders backlog increased by $75.5 million as of September 30, 2025 compared to December 31, 2024, primarily due to increases of $54.3 million from the Zircaloy acquisition, $9.4 million from U.S. government and international channels for duty gear holsters, $7.3 million from chemiluminescent products and $3.8 million from structural armor products, partially offset by reductions of $6.5 million from existing nuclear safety products.

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

RESULTS OF OPERATIONS

In order to reflect the way our chief operating decision maker reviews and assesses the performance of the business, Cadre has determined that it has two reportable segments — the Product segment, which is comprised of components that manufacture and sell products, and the Distribution segment, which is comprised of our business that serves as a one-stop shop for law enforcement agencies that sells goods produced by the Product segment, as well as other third-party products. Segment 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.

The following table presents data from our results of operations for the three and nine months ended September 30, 2025 and 2024 (in thousands unless otherwise noted):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025		2024		% Chg		2025		2024		% Chg
Net sales	$	155,869	$	109,408	42.5	%	$	443,084	$	391,577	13.2	%
Cost of goods sold		89,244		69,392	28.6	%		256,079		235,283	8.8	%
Gross profit		66,625		40,016	66.5	%		187,005		156,294	19.6	%

Operating expenses
Selling, general and administrative		45,627		33,981	34.3	%		132,509		113,277	17.0	%
Restructuring and transaction costs		2,216		515	330.3	%		6,240		3,621	72.3	%
Related party expense		108		94	14.9	%		1,345		2,038	(34.0)	%
Total operating expenses		47,951		34,590	38.6	%		140,094		118,936	17.8	%
Operating income		18,674		5,426	244.2	%		46,911		37,358	25.6	%

Other expense
Interest expense, net		(3,028)		(1,991)	52.1	%		(8,849)		(5,631)	57.1	%
Other (expense) income, net		(802)		1,555	(151.6)	%		6,599		(225)	(3,032.9)	%
Total other expense, net		(3,830)		(436)	778.4	%		(2,250)		(5,856)	(61.6)	%

Income before provision for income taxes		14,844		4,990	197.5	%		44,661		31,502	41.8	%
Provision for income taxes		(3,903)		(1,335)	192.4	%		(12,261)		(8,352)	46.8	%

Net income	$	10,941	$	3,655	199.3	%	$	32,400	$	23,150	40.0	%

The following tables present segment data for the three and nine months ended September 30, 2025 and 2024 (in thousands):


	Three Months Ended September 30, 2025
					Reconciling
	Product		Distribution		Items⁽¹⁾		Total
Net sales	$	138,789	$	26,483	$	(9,403)	$	155,869
Cost of goods sold		77,862		20,843		(9,461)		89,244
Gross profit	$	60,927	$	5,640	$	58	$	66,625


	Three Months Ended September 30, 2024
					Reconciling
	Product		Distribution		Items⁽¹⁾		Total
Net sales	$	96,493	$	17,836	$	(4,921)	$	109,408
Cost of goods sold		60,386		13,936		(4,930)		69,392
Gross profit	$	36,107	$	3,900	$	9	$	40,016

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)


	Nine Months Ended September 30, 2025
					Reconciling
	Product		Distribution		Items⁽¹⁾		Total
Net sales	$	391,659	$	79,853	$	(28,428)	$	443,084
Cost of goods sold		222,189		62,293		(28,403)		256,079
Gross profit	$	169,470	$	17,560	$	(25)	$	187,005


	Nine Months Ended September 30, 2024
					Reconciling
	Product		Distribution		Items⁽¹⁾		Total
Net sales	$	343,711	$	71,615	$	(23,749)	$	391,577
Cost of goods sold		203,771	$	55,216	$	(23,704)		235,283
Gross profit	$	139,940	$	16,399	$	(45)	$	156,294

⁽¹⁾ Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments.

Comparison of Three months Ended September 30, 2025 to Three months Ended September 30, 2024

Net sales. Product segment net sales increased by $42.3 million, or 43.8%, from $96.5 million to $138.8 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to an increase of $18.1 million from the Zircaloy acquisition and increases of $14.9 million from North American armor products and $14.1 million from duty gear products – both a result of stronger demand in the current period and the impact of the 2024 cybersecurity incident on the comparable period, partially offset by a decrease of $5.5 million due to large order timing in the existing nuclear safety products. Distribution segment net sales increased by $8.7 million, or 48.5%, from $17.8 million to $26.5 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to stronger demand for hard goods and the impact of the 2024 cybersecurity incident on the comparable period. Reconciling items consist primarily of intercompany eliminations.

Cost of goods sold and gross profit. Product segment cost of goods sold increased by $17.5 million, or 28.9%, from $60.4 million to $77.9 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to the Zircaloy acquisition, increased volume, and increased costs to manufacture products, partially offset by amortization of inventory step up adjustments related to 2024 acquisitions and continuous improvement projects. Product segment gross profit as a percentage of net sales increased by 650 basis points to 43.9% for the three months ended September 30, 2025 from 37.4% for the three months ended September 30, 2024, mainly driven by increased volume, favorable pricing net of material inflation, and a decrease in inventory step-up amortization. Distribution segment cost of goods sold increased by $6.9 million, or 49.6%, from $13.9 million to $20.8 million for the three months ended September 30, 2025 as compared to the same period in 2024, primarily due to increased volume. Distribution segment gross profit as a percentage of net sales decreased by 60 basis points to 21.3% for the three months ended September 30, 2025 from 21.9% for the three months ended September 30, 2024, mainly driven by a one-time inventory charge. Reconciling items consist primarily of intercompany eliminations.

Selling, general and administrative. Selling, general and administrative increased by $11.6 million, or 34.3%, for the three months ended September 30, 2025 as compared to the same period in 2024, primarily due to the Zircaloy acquisition, and increases in payroll expense and associated benefits, and professional services expenses.

Restructuring and transaction costs. Restructuring and transaction costs increased by $1.7 million for the three months ended September 30, 2025 primarily due to increased transaction costs associated with the acquisition of Tyr Tactical, LLC.

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MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

Interest expense, net. Interest expense, net increased by $1.0 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to the debt assumed as part of the Zircaloy acquisition in April 2025.

Other (expense) income, net. Other expense, net was $0.8 million for the three months ended September 30, 2025 as compared to Other income, net of $1.6 million for the three months ended September 30, 2024, primarily due to changes in foreign currency exchange rates.

Provision for income taxes. Provision for income taxes was $3.9 million for the three months ended September 30, 2025 compared to $1.3 million for the three months ended September 30, 2024. The effective tax rate was 26.3% for the three months ended September 30, 2025 and was higher than the statutory rate primarily due to state taxes and non-deductible executive compensation, partially offset by a decrease in the reserve for uncertain tax positions during the quarter. The effective tax rate was 26.8% for the three months ended September 30, 2024 and was higher than the statutory rate primarily due to non-deductible executive compensation.

Comparison of Nine months Ended September 30, 2025 to Nine months Ended September 30, 2024

Net sales. Product segment net sales increased by $48.0 million, or 14.0%, from $343.7 million to $391.7 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to an increase of $31.5 million from the Zircaloy acquisition and increases of $16.5 million from duty gear products and $6.2 million from North American armor products – both a result of stronger demand in the current period and the impact of the 2024 cybersecurity incident on the comparable period, $3.9 million from existing nuclear safety products, and $2.4 million from higher demand for crowd control products, partially offset by a decrease of $12.0 million from EOD as a result of large orders delivered in the nine months ended September 30, 2024. Distribution segment net sales increased by $8.3 million, or 11.5%, from $71.6 million to $79.9 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to stronger demand for hard goods and the impact of the 2024 cybersecurity incident on the comparable period. Reconciling items consist primarily of intercompany eliminations.

Cost of goods sold and gross profit. Product segment cost of goods sold increased by $18.4 million, or 9.0%, from $203.8 million to $222.2 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 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 increased by 256 basis points to 43.3% for the nine months ended September 30, 2025 from 40.7% for the nine months ended September 30, 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. Distribution segment cost of goods sold increased by $7.1 million, or 12.8%, from $55.2 million to $62.3 million for the nine months ended September 30, 2025 as compared to the same period in 2024, primarily due to increased volume. Distribution segment gross profit as a percentage of net sales decreased by 91 basis points to 22.0% for the nine months ended September 30, 2025 from 22.9% for the nine months ended September 30, 2024, mainly driven by unfavorable mix. Reconciling items consist primarily of intercompany eliminations.

Selling, general and administrative. Selling, general and administrative increased by $19.2 million, or 17.0%, for the nine months ended September 30, 2025 as compared to the same period in 2024, primarily due to the Zircaloy acquisition, payroll expense and associated benefits, and professional services expenses.

Restructuring and transaction costs. Restructuring and transaction costs increased by $2.6 million for the nine months ended September 30, 2025 primarily due to increased transaction costs associated with the acquisition of Tyr Tactical, LLC.

Related party expense. Related party expense, which ordinarily consists of rent expense related to distribution warehouses and retail stores that we lease from related parties, decreased by $0.7 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 primarily due to a prior year $1.8 million transaction fee offset by a current year $1.0 million transaction fee paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, in connection with the acquisitions of Alpha Safety and Zircaloy, respectively.

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

Interest expense, net. Interest expense, net increased by $3.2 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to the debt assumed as part of the Zircaloy acquisition in April 2025.

Other (expense) income, net. Other income, net was $6.6 million for the nine months ended September 30, 2025 as compared to Other expense, net of $0.2 million for the nine months ended September 30, 2024, primarily due to changes in foreign currency exchange rates.

Provision for income taxes. Provision for income taxes was $12.3 million for the nine months ended September 30, 2025 compared to $8.4 million for the nine months ended September 30, 2024. The effective tax rate was 27.5% for the nine months ended September 30, 2025 and was higher than the statutory rate primarily due to state taxes and non-deductible executive compensation, partially offset by a decrease in the reserve for uncertain tax positions during the quarter. The effective tax rate was 26.5% for the nine months ended September 30, 2024 and was higher than the statutory rate primarily due to non-deductible executive compensation.

NON-GAAP MEASURES

This Quarterly Report on Form 10-Q includes EBITDA and Adjusted EBITDA, which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. EBITDA is defined as net income before depreciation and amortization expense, interest expense and provision for income tax. 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.

EBITDA and Adjusted EBITDA are performance measures that we believe are useful to investors and analysts because they illustrate the underlying financial and business trends relating to our core, recurring results of operations and enhance comparability between periods. Adjusted EBITDA is considered by our board of directors and management as an important factor in determining performance-based compensation.

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. 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.

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

The table below presents our EBITDA and Adjusted EBITDA reconciled to the most comparable GAAP financial measures for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Net income	$	10,941	$	3,655	$	32,400	$	23,150
Add back:
Depreciation and amortization		5,376		3,763		13,908		12,325
Interest expense, net		3,028		1,991		8,849		5,631
Provision for income taxes		3,903		1,335		12,261		8,352
EBITDA	$	23,248	$	10,744	$	67,418	$	49,458
Add back:
Restructuring and transaction costs⁽¹⁾		2,216		515		7,240		5,371
Other expense (income), net⁽²⁾		802		(1,555)		(6,599)		225
Stock-based compensation expense⁽³⁾		2,447		2,104		6,840		6,255
Stock-based compensation payroll tax expense⁽⁴⁾		—		—		92		441
LTIP bonus⁽⁵⁾		—		—		—		49
Amortization of inventory step-up⁽⁶⁾		470		1,541		826		3,851
Contingent consideration expense⁽⁷⁾		632		176		1,489		685
Adjusted EBITDA	$	29,815	$	13,525	$	77,306	$	66,335

(1)

Reflects the “Restructuring and transaction costs” line item on our condensed consolidated statements of operations and comprehensive income, which primarily includes transaction costs composed of legal and consulting fees. In addition, this line item reflects a $1.0 million fee paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, for services related to the acquisition of Zircaloy for the nine months ended September 30, 2025 and a $1.8 million fee paid to Kanders & Company, Inc. for services related to the acquisition of Alpha Safety for the nine months ended September 30, 2024, which are included in related party expense in the Company’s condensed consolidated statements of operations and comprehensive income.

(2)	Reflects the “Other (expense) income, net” line item on our condensed consolidated statement of operations and comprehensive income, and primarily includes 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.

(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.

Adjusted EBITDA increased by $16.3 million for the three months ended September 30, 2025 as compared to 2024, primarily due to an increase in gross profit and the Zircaloy acquisition, partially offset by an increase in selling, general and administrative expenses. Adjusted EBITDA increased by $11.0 million for the nine months ended September 30, 2025 as compared to 2024, primarily due to an increase in gross profit and the Zircaloy acquisition, partially offset by an increase in selling, general and administrative expenses.

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

LIQUIDITY AND CAPITAL RESOURCES

Liquidity refers to our ability to generate sufficient cash flows to meet the cash requirements of our business operations, including working capital needs, capital expenditures, debt service, acquisitions and other commitments. Our principal sources of liquidity have been cash provided by operating activities, cash on hand and amounts available under our revolving loans.

For the nine months ended September 30, 2025, net cash provided by operating activities totaled $42.5 million and as of September 30, 2025, cash and cash equivalents totaled $150.9 million. We believe that our cash flows from operations and cash on hand, and available borrowing capacity under our existing credit facilities (as described below) will be adequate to meet our liquidity requirements for at least the 12 months following the date of this Quarterly Report on Form 10-Q. 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.

Debt

As of September 30, 2025 and December 31, 2024, we had $311.2 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

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. Each of these facilities matures on December 20, 2029. The proceeds of the 2024 Term Loans were used to refinance the outstanding term loans under the 2021 Credit Agreement and to pay fees and expenses incurred in connection with entering into the 2024 Credit Agreement. The 2024 Credit Agreement also permits the 2024 Borrower, subject to certain requirements, to arrange with lenders for an aggregate of $100.0 million (or more if certain leverage ratios are met) of additional revolving and/or term loan commitments (both of which are currently uncommitted).

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.

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(in thousands, except share and per share amounts)

and Restated Security and Pledge Agreement and an Amended and Restated Guaranty and Suretyship Agreement, each dated as of the 2024 Credit Agreement Closing Date.

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.

There were no amounts outstanding under the 2024 Revolving Loan as of September 30, 2025 and December 31, 2024. As of September 30, 2025, there were $2.0 million in outstanding letters of credit and $173.0 million of availability.

Canadian Credit Facility

On October 14, 2021, Med-Eng Holdings ULC and Pacific Safety Products Inc., the Company’s Canadian subsidiaries, as borrowers (the “Canadian Borrowers”), and Safariland, LLC, as guarantor (the “Canadian Guarantor”), closed on a line of credit pursuant to a Loan Agreement (the “Canadian Loan Agreement”) and a Revolving Line of Credit Note (the “Note”) with PNC Bank Canada Branch (“PNC Canada”), as lender pursuant to which the Canadian Borrowers may borrow up to CDN$10.0 million under a revolving line of credit (including up to $3.0 million for letters of credit) (the “Revolving Canadian Loan”). The Revolving Canadian Loan matures on July 23, 2026. The Canadian Loan Agreement is guaranteed by the Canadian Guarantor pursuant to a Guaranty and Suretyship Agreement.

The Canadian Borrowers may elect to have borrowings either in United States dollars or Canadian dollars under the Canadian Loan Agreement, which will bear interest at a base rate or SOFR, in each case, plus an applicable margin, in the case of borrowings in United States dollars, or at a Canadian Prime Rate (as announced from time to time by PNC Canada) or a Canadian deposit offered rate (“CDOR”) as determined from time to time by PNC Canada in accordance with the Canadian Loan Agreement. The applicable margin for these borrowings will range from 0.50% to 1.50% per annum, in the case of base rate borrowings and Canadian Prime Rate borrowings, and 1.50% to 2.50% per annum, in the case of SOFR borrowings and CDOR borrowings. The Canadian Loan Agreement also requires the Canadian Borrowers to pay (i) an unused line fee on the unused portion of the loan commitments in an amount ranging

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MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

between 0.175% and 0.25% per annum, based upon the level of the Company’s consolidated total net leverage ratio, and (ii) an upfront fee equal to 0.25% of the principal amount of the Note.

There were no amounts outstanding under the Revolving Canadian Loan as of September 30, 2025 and December 31, 2024.

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.

Cash Flows

The following table presents a summary of our cash flows for the periods indicated:


	Nine Months Ended September 30,
(in thousands)	2025		2024
Net cash provided by operating activities	$	42,455	$	8,066
Net cash used in investing activities		(93,166)		(146,120)
Net cash provided by financing activities		75,352		142,831
Effects of foreign exchange rates on cash and cash equivalents		1,301		521
Change in cash and cash equivalents		25,942		5,298
Cash and cash equivalents, beginning of period		124,933		87,691
Cash and cash equivalents, end of period	$	150,875	$	92,989

Net cash provided by operating activities

During the nine months ended September 30, 2025, net cash provided by operating activities of $42.5 million resulted primarily from net income of $32.4 million, add-backs to net income of a $13.9 million for depreciation and amortization, and $6.8 million for stock-based compensation, primarily offset by deductions to net income of $4.2 million for deferred income taxes, $2.3 million for unrealized foreign currency transaction gains and $7.7 million for changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by a decrease in accounts receivable of $19.4 million, an increase in inventories of $14.8 million and a decrease in accounts payable and other liabilities of $16.9 million.

During the nine months ended September 30, 2024, net cash provided by operating activities of $8.1 million resulted primarily from net income of $23.2 million, a $12.3 million add back to net income for depreciation and amortization, a $6.3 million add back to net income for stock-based compensation, a deduction to net income of $11.6 million for deferred income taxes and a net deduction to net income of $27.7 million for changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by a decrease in accounts payable and other liabilities of $21.1 million and an increase in prepaid expenses and other assets of $4.2 million.

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

Net cash used in investing activities

During the nine months ended September 30, 2025, we used $93.2 million of cash in investing activities, primarily consisting of $89.6 million for the acquisition of Zircaloy.

During the nine months ended September 30, 2024, we used $146.1 million of cash in investing activities, primarily consisting of $141.8 million for the acquisition of ICOR and Alpha Safety.

Net cash provided by financing activities

During the nine months ended September 30, 2025, net cash provided by financing activities of $75.4 million resulted primarily from proceeds from term loans of $97.5 million, partially offset by principal payments on term loans of $9.7 million and dividends distributed of $11.6 million.

During the nine months ended September 30, 2024, net cash provided by financing activities of $142.8 million resulted primarily from proceeds from term loans of $80.0 million and proceeds from the secondary offering, including option exercise, of $91.8 million, partially offset by principal payments on term loans of $9.6 million, taxes paid in connection with employee stock transactions of $5.3 million and dividends distributed of $10.4 million.

Contractual Obligations

Our long-term contractual obligations generally include our debt and related interest payments and operating and finance lease payments for our property and equipment, and are expected to be funded from cash-on-hand, cash from operations and availability under our existing credit facilities. There were no significant changes to our contractual obligations from those disclosed in the Quarterly Report on Form 10-Q for the three and six months ended June 30, 2025.

Off-Balance Sheet Arrangements

We do not engage in off-balance sheet financing arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

Our condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. Preparation of the financial statements requires us to make judgments, estimates and assumptions that impact the reported amount of net sales and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when the estimate or assumption is complex in nature or requires a high degree of judgment and when the use of different judgments, estimates and assumptions could have a material impact on our condensed consolidated financial statements. While our significant accounting policies are described in more detail in notes in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

There have been no significant changes to our critical accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recently Adopted and Issued Accounting Pronouncements

Recently issued and adopted accounting pronouncements are described in notes to our audited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

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MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

Emerging Growth Company

ITEM 3. 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. Market risk represents the risk of loss that may impact our financial condition or results of operations due to adverse changes in financial market prices and rates. These risks are not significant to our results of operations, but they may be in the future. We do not hold or issue financial instruments for speculative or trading purposes. There have not been material changes in market risk exposures as of September 30, 2025.

Interest rate risk

Changes in interest rates affect the amount of interest expense we are required to pay on our floating rate debt. As of September 30, 2025, we had $312.8 million in outstanding floating rate debt, which bears interest at one-month SOFR (4.16% as of September 30, 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. 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 as interest is either paid or received on the hedged debt. The fair value of our Swap Agreements is based upon Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements.

We performed a sensitivity analysis on the principal amount of debt as of September 30, 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. 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 a $0.1 million change in interest expense when including the effect of our Swap Agreements.

As of September 30, 2025, we had the following Swap Agreements (in thousands):


Effective Date	Notional Amount		Fixed Rate
September 30, 2021 through July 23, 2026	$	80,000	0.812	%
May 31, 2023 through July 23, 2026	$	43,750	3.905	%
February 14, 2025 through December 20, 2029	$	37,898	4.080	%
April 7, 2025 through December 20, 2029	$	48,750	3.545	%
July 31, 2025 through December 20, 2029	$	98,750	3.449	%

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(in thousands, except share and per share amounts)

During the nine months ended September 30, 2025, there were no interest rate swap agreements that expired.

Foreign currency exchange rate risk

Our operations are geographically diverse and we are exposed to foreign currency exchange risk, primarily the Canadian dollar and Mexican peso, related to our transactions and our subsidiaries’ balances that are denominated in currencies other than the U.S. dollar, our functional currency.

The Company has entered into forward contracts to hedge forecasted Mexican peso denominated costs associated with our Mexican subsidiary. These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and reported as current assets or current liabilities in the condensed consolidated balance sheets. 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 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. 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 $0.5 million and $1.3 million for the three and nine months ended September 30, 2025, respectively. 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 and $0.3 million for the three and nine months ended September 30, 2025, respectively, 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 $0.6 million and $1.7 million for the three and nine months ended September 30, 2025, respectively, excluding unrealized gains or losses from remeasurement and the impact of cash flow hedges.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, its principal executive officer and principal financial officer, respectively, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) as of September 30, 2025. Such disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports the Company files or submits under the Exchange Act is (i) recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to the appropriate management on a basis that permits timely decisions regarding disclosure. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of September 30, 2025 were effective.

Changes in Internal Control over Financial Reporting

The Company acquired Zircaloy on April 22, 2025. The Company is currently in the process of integrating the internal controls over financial reporting. Except for the continued integration of Zircaloy, there have been no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) or Rule 15d-15(f)) that occurred during the three months ended September 30, 2025, that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls can prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. There are inherent limitations in all control systems, including the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of one or more persons. The design of any system of controls also is based in part

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CADRE HOLDINGS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS

(in thousands, except share and per share amounts)

upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential conditions. Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to Note 8 of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 5. OTHER INFORMATION

During the three months ended September 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K, nor did the Company during such fiscal quarter adopt or terminate any “Rule 10b5-1 trading arrangement”.

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ITEM 6. EXHIBITS

Exhibit No.		Description
31.1*		Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Filed herewith

Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	CADRE HOLDINGS, INC.
Date: November 4, 2025	By:	/s/ Warren B. Kanders
	Name:	Warren B. Kanders
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: November 4, 2025	By:	/s/ Blaine Browers
	Name:	Blaine Browers
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

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