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

If that did accelerate faster than we expected, that could certainly drive it. And another piece that is out there is just internationally, and this is not exclusive to EOD, but we have a robust funnel internationally of large projects, those tend to see a lot of movement. So we’re careful about our assumptions around those, but, as those projects, they come in better timing wise and we expected that between those two could certainly drive us to the high end.

Operator: And we’ll hear next now from Scott Forbes of Jefferies.

Scott Forbes: Hey guys, thanks for taking my question. You’ve talked about some of the extended lead times and raw materials continuing. Just as we think about what’s baked into 2023 guidance, how do you think about the supply chain within that?

Warren Kanders: Yeah, I think on the supply chain, one of the areas we’re seeing increased demand is around our hard armor products. We’re also seeing some supply chain constraints in hard armor as that demand’s picked up. So I think we’re taking — in our guidance, we’re taking a realistic view on kind of both sides of the outcome. We’re not — we’re not assuming, I would say holistically that it gets worse, but we would say where hard armor is today, there’s incremental volume next year and they will likely face some increased constraints. But on the whole, our view on supply chain is, it kind of stays the way it is. It’s gotten, when I say stay and to be clear, when I say stays the way it is, we’re thinking more really the last quarter or two, not if we went back into the first half of the year where we saw significantly more constraints.

Scott Forbes: And then maybe just on the blast sensor opportunity, any update on how that’s progressed through the quarter and where that stands today?

Brad Williams: Yeah, hey, this is Brad. I can give you, an update on it. So a few things going on there. We finished up phase two testing, it concluded in October. And overall we’re pleased with the results of the testing by our customer on that testing that went through. We’re currently in phase three with a couple deliveries of sensors due to the customer in April to support blast testing and human factors type testing. And then SOCOM has 180 days to complete that phase three testing, which would be really no later than October type timing. There is some additional funding discussions that have happened with this project with SOCOM. And what we’ve learned recently is that the house committee has required that SOCOM permit or present findings for the blast sensor project before funding will move forward. So overall for the project, we’re looking at potentially a push from 2024 to 2025 regardless of that funding overall. That’s where we’re at today.

Operator: Thank you. We go next now to Jeff Van Sinderen at B. Riley.

Jeff Van Sinderen: Hi everyone, and I know you touched on some of these things in your prepared comments, but just wanted to see if there’s more maybe to add on the new holster platform launch, how that’s gone so far, and at this juncture, what do you think the potential is for that to drive the upgrade cycle? And then also if you could maybe speak a little bit more about the latest you’re seeing in the new lightweight tactical armor that provides a more custom fit, how that’s being received, just wondering if there’s more to characterize there and speak about potential market share gains.