Cadre Holdings, Inc. (operating as The Safariland Group) reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting a mixed performance influenced by recent acquisitions and operational challenges.
For the three months ended September 30, 2024, net sales decreased to $109.4 million from $125.1 million in the same period of 2023, marking a 12.6% decline. This drop was attributed primarily to cybersecurity incidents that impacted productivity. However, for the nine months ended September 30, 2024, net sales increased to $391.6 million, up from $357.9 million, reflecting a 9.4% growth driven by acquisitions and heightened demand for armor and duty gear products.
Gross profit for the third quarter fell to $40.0 million, down 25.3% from $53.6 million year-over-year, while for the nine-month period, gross profit rose to $156.3 million from $151.0 million, a 3.5% increase. Operating income for the third quarter also saw a significant decline, dropping to $5.4 million from $16.7 million, a 67.6% decrease. For the nine months, operating income decreased to $37.4 million from $43.8 million, a 14.8% decline.
Net income for the third quarter was $3.7 million, down 66.9% from $11.1 million in the prior year. For the nine months, net income decreased to $23.2 million from $29.0 million, a 20.3% decline. The effective tax rate for the nine months was 26.5%, slightly lower than the 28.3% in the previous year, influenced by non-deductible executive compensation.
Cadre Holdings completed two significant acquisitions in early 2024: ICOR Technology Inc. for $40.4 million and Alpha Safety Intermediate, LLC for $107.1 million. These acquisitions contributed to an increase in total assets, which rose to $616.6 million as of September 30, 2024, compared to $431.2 million at the end of 2023. Goodwill increased significantly, reflecting the acquisitions, with total goodwill reported at $148.9 million.
The company also reported a substantial increase in long-term debt, which rose to $194.9 million from $127.8 million, primarily due to financing for the acquisitions. Cash and cash equivalents increased to $93.0 million from $69.4 million year-over-year, supported by a secondary offering that generated net proceeds of $72.8 million.
Overall, while Cadre Holdings experienced revenue growth over nine months, the third quarter reflected challenges that impacted profitability, primarily due to cybersecurity issues and increased operational costs associated with recent acquisitions.
About Cadre Holdings, Inc.
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