What Cadre (CDRE) Said on Its Q3 Earnings Call

Key Points

• Cadre raised its 2026 outlook for the second consecutive quarter after Q3 sales climbed 30% to $202.9 million and adjusted EBITDA rose 38% to $41 million. It now expects sales of $756 million to $769 million and adjusted EBITDA of $140 million to $144 million, while maintaining organic revenue growth guidance of 3% to 4%.
• Earlier-than-expected work on an explosives-disposal project boosted Q3 results, but contributed to a roughly $29 million sequential decline in backlog as shipments moved forward. The company said backlog in its domestic and international armor businesses and duty gear increased just under 10%.
• Cadre authorized its first share repurchase program, allowing up to $100 million in buybacks, while executives said acquisitions remain a capital-allocation priority. Recent business wins include an estimated $25 million ballistic-shield opportunity with the Royal Canadian Mounted Police and a $3.6 million U.S. military program order.

Cadre NYSE: CDRE raised its full-year 2026 outlook for the second consecutive quarter after third-quarter sales rose 30%, helped by acquisitions and an explosives-disposal project that moved into the quarter earlier than expected.

The safety equipment company reported net sales of $202.9 million and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, of $41 million. Net income increased 46% from a year earlier, while the adjusted EBITDA margin expanded 110 basis points to 20.2%, executives said on the earnings call.

Cadre also announced its first share repurchase authorization, allowing it to buy back up to $100 million of stock. Chief Financial Officer Blaine Browers said the program adds a capital-allocation tool but does not change the company’s focus on acquisitions.

Earlier Project Work Boosts Third-Quarter Sales

Third-quarter sales grew 10% organically, excluding distribution, Browers said. Growth in the explosive ordnance disposal, or EOD, business was partially offset by lower distribution revenue.

Browers attributed much of the quarter’s outperformance to work on the Next Generation Advanced Bomb Suit, or NGABS, research and development program, which occurred one quarter earlier than expected. Gross profit rose 32% to $88.1 million, and gross margin expanded 70 basis points, helped by pricing and product mix. Adjusted EBITDA increased 38%.

The timing of the EOD work also affected backlog. Browers said total backlog fell about $29 million sequentially, driven by EOD and TYR Tactical shipments, though it remained slightly ahead of the company’s expectations. Backlog for Safariland’s domestic and international armor businesses, excluding TYR, rose just under 10%, with a similar increase in duty gear, he said.

Cadre now expects 2026 sales of $756 million to $769 million and adjusted EBITDA of $140 million to $144 million. It maintained its forecast for full-year organic revenue growth of 3% to 4%. At the midpoint of its guidance, the company expects fourth-quarter revenue of about $197 million and an adjusted EBITDA margin of roughly 19%.

Acquisitions and Contract Wins

Chairman and Chief Executive Officer Warren Kanders said Cadre acquired the business and real estate of a supplier of custom precision metal fabrication and other products for its EOD business. The transaction is intended to bring those capabilities in-house and expand capacity.

Browers estimated the small acquisition would contribute about $4 million to $5 million in external annual revenue and $1 million to $1.5 million in adjusted EBITDA. Including the deal, Cadre has deployed more than $475 million across eight acquisitions since its November 2021 initial public offering, he said.

The company’s earlier 2026 acquisitions of TYR Tactical and Alien Gear performed in line with expectations during the third quarter, executives said. Browers said TYR was trending toward approximately $120 million in revenue on a full-year basis, compared with an initial expectation of $100 million. He cautioned that the company was taking a measured view of the fourth quarter because of the holiday period and TYR’s international exposure.

President Brad Williams said TYR had been awarded an estimated $25 million opportunity to provide ballistic shields to the Royal Canadian Mounted Police. He also said Cadre received a third purchase order, valued at $3.6 million, under its U.S. military Blast Exposure Monitoring program. Orders received under that five-year, $50 million contract now total more than $20 million.

For Alien Gear, Williams said Cadre expects the transition from its manufacturing facility into Safariland facilities to take about 12 months. The full savings and profit improvements associated with the closure and commercial synergies are expected to take effect in 2028, he said.

Margins and Market Outlook

Browers said Cadre expects adjusted EBITDA to grow faster than revenue over time, although the lower-margin Zircaloy acquisition and unfavorable mix in the Alpha business have presented recent headwinds. He said the company is working to improve Zircaloy’s margins from the mid-teens toward 20% and the low 20s.

Williams said the company sees demand across public safety and nuclear safety markets. He pointed to orders for nuclear criticality alarm systems and increased activity in bags and filters used in defense applications. In public safety, he said international opportunities offer higher growth potential than the domestic market.

Cadre’s net leverage stood at 2.2 times as of Sept. 30. Browers said that level gives the company capacity to consider both smaller acquisitions and larger deals while continuing its quarterly dividend.

About Cadre (NYSE:CDRE)

Cadre Holdings, Inc is a manufacturer and supplier of equipment used by law enforcement, military personnel, first responders and other public-safety professionals. The company develops products designed to protect personnel, support mission readiness and improve operational performance in demanding environments.

Cadre's product portfolio includes body armor, tactical equipment, duty gear, holsters, helmets, protective apparel, restraints and related accessories. Its brands also provide equipment for explosive-ordnance disposal, emergency rescue and water-safety applications.

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