Cadre Holdings, Inc. (NYSE:CDRE) Q4 2022 Earnings Call Transcript

Mark Smith: Okay. And then any thoughts on kind of R&D spend and your new product development and pipeline? I know you can’t really tell us anything that’s not out there, but how do you feel your level of confidence around new products that you have in this pipeline?

Warren Kanders: Good. It’ll be consistent with what we’ve talked about before in terms of our R&D spend. We can’t get into details at this point, but we’ve got other products in these major categories that are under development right now, and there’s a couple of them that I’m really excited about as we go forward. Just keep in mind in the duty gear side of things, at least in for example, the US marketplace, things that we do there innovation wise are really there to maintain that high share position that we have. We want to continue to keep that spot that we’ve earned over 55 years. That’s where the company started. And then other categories where we have lower share, those products are there to position ourselves to gain share and pull it away from others and feel good about what we have.

Operator: We go next now to Bert Subin at Stifel.

Bert Subin: Hey, good afternoon and thank you for the questions. In you prepared remarks, Brad, you highlighted the police hiring remain a challenge. Are you seeing any areas from a geographic standpoint or hiring is improving or at least that you get the sense and is there a way to correlate that with how your product volumes are ebbing and flowing in certain categories?

Brad Williams: Yeah, there’s in the south is the short answer in terms of headcount improving, but don’t think that that’s from — they’re doing a better job in southern states of necessarily getting new recruits on board. A lot of what we’re hearing anecdotally, there are transfers happening from northern states going south and recruiting that’s happened there with bonuses and things like that to attract folks. What we have seen an increase in the opposite direction is some international customers that we have today and countries also having issues, recruiting talent in some of the projects and business that they have that’s recurring with us. So not anything that’s I would say overall material to the business based on how we’re diversified across product lines and around geographies. But it is a new one that’s popped up more than what we’ve seen in previous quarters.

Bert Subin: Got it. And, and just just to follow up on the EOD side, it sounds like that’s trending in line with your previous expectations for a ’23 trough. How should we think about the cadence of that trough and how fast could that snap bag? Could this be a material growth area in ’24 or is it sort of you trough out in ’23 and things sort of slowly step back up?

Brad Williams: It’s difficult to kind of go too far out on that Bert, but yeah, I think we’re 2023 is kind of near the bottom. At that point it becomes really kind of project based and there’s a couple R&D projects that have been, the teams have been working on for a number of years that when they go into production, we’ll drive that. And as we — as we all kind of know, determining when they pull the trigger is difficult. So that could be a 2024 pickup, could be a 2025 or ’26 pickup, just depends on the demand by the customer. But I wouldn’t expect this to continue to trail down for the coming years.

Bert Subin: Got it. And just one last quick one, there’s been a lot of discussion on the M&A side, back when you guys first went public, you noted you wanted to double your international footprint. Is that view — is that still your view?