CDRE US Equity☆

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

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 together with our audited consolidated financial statements together with related notes thereto, included elsewhere in this Annual Report on Form 10-K. A discussion of changes in our financial condition and the results of operations from the year ended December 31, 2024 to December 31, 2023 can be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 11, 2025. 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 the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K. Certain total amounts may not foot due to rounding.

Overview and 2025 Financial Highlights

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, duty gear, remote handling solutions, containers for the storage of radioactive materials, and ventilation and containment solutions 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 DoS, DoW, DoI, DoJ, DHS, DoC, DoE and numerous foreign government agencies in over 100 countries.

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

In January 2026, the Company acquired TYR Tactical, LLC for $174.0 million.

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

​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended December 31,

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Net sales increased by $42.7 million for the year ended December 31, 2025 as compared to December 31, 2024, primarily as a result of the recent acquisitions and higher demand for duty gear products, partially offset by a decline in EOD products and existing nuclear safety products.

Net income increased by $8.0 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily as a result of higher gross profit partially offset by an increase in selling, general and administrative expenses from acquisitions, acquisition related costs, higher interest expense, and higher stock compensation expense.

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:

​ ​ ​ ​ ​ ​ ​

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Orders comprising backlog as of a given balance sheet date are typically invoiced in subsequent periods. A substantial portion of our products are processed and shipped within 60 days 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.

Orders backlog increased by $61.0 million as of December 31, 2025 compared to December 31, 2024, primarily due to increases of $51.3 million from the Zircaloy acquisition, $12.5 million from global EOD, $3.7 million from chemiluminescent products and $1.6 million from U.S. government and international channels for duty gear holsters, partially offset by reductions of $7.7 million from existing nuclear safety products.

DESCRIPTION OF CERTAIN COMPONENTS OF FINANCIAL DATA

Net sales

We recognize revenue 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 but could be delayed until the receipt of customer acceptance, depending on the terms of the contract. The Company also 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.

At the time of revenue recognition, we also provide for estimated sales returns and miscellaneous claims from customers as reductions to revenues. Charges for shipping and handling fees billed to customers are included in net sales. Taxes collected from customers and remitted to government authorities are reported on a net basis and are excluded from sales. See Note 1 “Significant Accounting Policies — Revenue Recognition” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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We generate sales primarily through our four main sales channels: U.S. state and local agencies, international, U.S. federal agencies, and commercial.

Costs and Expenses

Cost of goods sold. Cost of goods sold includes raw material purchases, manufacturing-related labor costs, contracted labor, project costs, shipping costs, allocated manufacturing overhead, facility costs, depreciation and amortization, and product warranty costs.

Selling, general and administrative. Selling, general and administrative (“SG&A”) expense includes personnel-related costs, professional services, marketing and advertising expense, research and development, depreciation and amortization, and impairment charges.

Restructuring and transaction costs. Restructuring costs consist primarily of termination benefits and relocation of employees, termination of operating leases and other contracts related to consolidating or closing facilities. Transaction costs consist of legal fees and consulting costs related to one-time transactions.

Related party expense. Related party expense primarily consists of one-time fees paid to related parties for transaction related services.

Interest expense. Interest expense consists primarily of interest on outstanding debt.

Other income (expense), net. Other income (expense), net primarily consists of gains and losses from foreign currency transactions.

Provision for income taxes. A provision or benefit for income tax is calculated for each of the jurisdictions in which we operate. The provision or benefit for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The benefit or provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the book and tax bases of assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. See Note 16 “Income Taxes” in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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.

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The following table presents data from our results of operations for the years ended December 31, 2025 and 2024 (in thousands unless otherwise noted):

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended December 31, ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​

Restructuring and transaction costs ​ 7,696 ​ 6,007 ​ 28.1 %

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Other expense ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income before provision for income taxes ​ 62,326 ​ 54,218 ​ 15.0 %

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The following table presents segment data for the years ended December 31, 2025 and 2024 (in thousands):

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Year Ended December 31, 2025

​ ​ ​ ​ ​ ​ ​ ​ Reconciling ​ ​ ​

​ ​ ​ ​ ​ ​ ​Product ​ ​ ​ Distribution ​ ​ ​ Items(1) ​ ​ ​ ​ ​ ​ ​ ​Total

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​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Year Ended December 31, 2024

​ ​ ​ ​ ​ ​ ​ ​ Reconciling ​ ​ ​

​ ​ ​ ​ ​ ​ ​Product ​ ​ ​ Distribution ​ ​ ​ Items(1) ​ ​ ​ ​ ​ ​ ​ ​Total

Comparison of Year Ended December 31, 2025 to Year Ended December 31, 2024

Net sales. Product segment net sales increased by $46.1 million, or 9.3%, from $497.6 million to $543.7 million for the year ended December 31, 2025 as compared to 2024, primarily due to increases of $49.2 million from the Zircaloy acquisition and $19.0 million from stronger demand for global duty gear products, partially offset by decreases of $15.5 million from EOD and $6.7 million from existing nuclear safety products. Distribution segment net sales decreased by $0.5 million or 0.5%, from $105.4 million to $104.9 million for the year ended December 31, 2025 as compared to 2024, primarily due to decreased agency demand for hard goods. Reconciling items consist primarily of intercompany eliminations.

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Cost of goods sold. Product segment cost of goods sold increased by $19.2 million, or 6.7%, from $287.9 million to $307.1 million for the year ended December 31, 2025 as compared to 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 137 basis points to 43.5% in 2025 from 42.2% in 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 $0.2 million, or 0.3%, from $81.6 million to $81.8 million for the year ended December 31, 2025 as compared to 2024 primarily due to driven by unfavorable mix. Distribution segment gross profit as a percentage of net sales decreased by 57 basis points to 22.0% in 2025 from 22.5% in 2024 mainly driven by unfavorable mix. Reconciling items consist primarily of intercompany eliminations.

Selling, general and administrative. SG&A increased by $24.8 million, or 15.7%, for the year ended December 31, 2025 as compared to 2024 primarily due to the Zircaloy acquisition, increased employee compensation and associated benefits, and professional services expenses.

Restructuring and transaction costs. Restructuring and transaction costs increased by $1.7 million for the year ended December 31, 2025 as compared to 2024 primarily due to the Zircaloy and TYR acquisitions.

Related party expense. Related party expense decreased by $0.9 million for the year ended December 31, 2025 as compared to 2024 and primarily consisted of a $1.0 million fee paid to Kanders & Company, Inc., a company controlled by our Chief Executive Officer, in connection with the acquisition of Zircaloy for the year ended December 31, 2025, and a $1.8 million fee paid to Kanders & Company, Inc. in connection with the acquisition of Alpha Safety for the year ended December 31, 2024, in each case the expense is related to transaction services.

Interest expense. Interest expense increased by $4.7 million for the year ended December 31, 2025 as compared to 2024 primarily due to the addition of the incremental debt related to recent acquisitions.

Other income (expense), net. Other income, net was $7.5 million for the year ended December 31, 2025 compared to Other expense, net of $4.7 million for the year ended December 31, 2024, primarily due to changes in foreign currency exchange rates.

Provision for income taxes.Provision for income taxes increased by $0.1 million for the year ended December 31, 2025 as compared to 2024. The effective tax rate was 29.2% for the year ended December 31, 2025 and was higher than the statutory rate due to state taxes, acquisition related expenses and executive compensation, partially offset by equity-based compensation. For the year ended December 31, 2024, the effective tax rate was 33.4% and was higher than the statutory rate due to state taxes, transaction expenses and executive compensation, partially offset by research and development tax credits.

NON-GAAP MEASURES

This Annual Report on Form 10-K 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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The table below presents our EBITDA and Adjusted EBITDA reconciled to the most directly comparable GAAP financial measures for the periods indicated:

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Year Ended December 31,

Add back: ​ ​ ​ ​

Add back: ​ ​ ​ ​

Restructuring and transaction costs(1) ​ 8,696 ​ 7,757

Other (income) expense, net(2) ​ (7,455) ​ 4,721

Stock-based compensation expense(3) ​ ​ 12,239 ​ ​ 8,369

Stock-based compensation payroll tax expense(4) ​ ​ 1,566 ​ ​ 441

LTIP bonus(5) ​ — ​ 49

Amortization of inventory step-up(6) ​ ​ 1,296 ​ ​ 3,858

Contingent consideration expense(7) ​ ​ 1,927 ​ ​ 1,185

Adjusted EBITDA increased by $6.9 million for the year ended December 31, 2025 as compared to 2024, primarily due to recent acquisitions and favorable pricing net of material inflation, partially offset by an increase in selling, general and administrative expenses.

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 and other available borrowings under our existing credit facilities.

For the year ended December 31, 2025, net cash provided from operating activities was $63.7 million and as of December 31, 2025, cash and cash equivalents totaled $122.9 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 twelve months following the date of this Annual Report on Form 10-K. Our future capital requirements will depend on several factors, including (i) the timing and extent of capital expenditures, including investments in our manufacturing facilities and

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equipment, (ii) the size and timing of acquisitions and other strategic investments, (iii) the timing of debt service requirements, and (iv) general economic conditions and other factors affecting our business. 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. If we raise additional funds through the issuance of equity or convertible debt securities, our existing stockholders may experience dilution, and any new indebtedness could include restrictive covenants that limit our operating flexibility.

Debt

As of December 31, 2025 and December 31, 2024, we had $307.3 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

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 2021 Credit Agreement in its entirety.

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 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

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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 Borrower and the Guarantors.

In April 2025, in connection with the Zircaloy acquisition, the Company drew $97.5 million of the $115.0 million 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 or the DDTL A-2 Facility as of December 31, 2025 and 2024. As of March 6, 2026, there was $62.5 million outstanding under the 2024 Revolving Loan.

As of December 31, 2025, the Company was in compliance with all applicable covenants under the 2024 Credit Agreement.

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.

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 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 December 31, 2025 and 2024.

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. As of March 6, 2026, there were no amounts outstanding under the Revolving Canadian Loan.

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.

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Cash Flows

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

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Year Ended December 31,

Net cash provided by operating activities ​ ​ ​ $ 63,705 ​ $ 31,777

Net cash used in investing activities ​ (96,369) ​ (147,426)

Net cash provided by (used in) financing activities ​ 31,586 ​ 152,667

Change in cash, cash equivalents and restricted cash ​ 394 ​ 37,242

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Net cash provided by operating activities

During the year ended December 31, 2025, net cash provided by operating activities of $63.7 million resulted primarily from net income of $44.1 million, a $18.6 million add back to net income for depreciation and amortization, a $12.2 million add back to net income for stock-based compensation, a $2.4 million deduction for unrealized foreign exchange transaction gains and a $16.2 million deduction from net income from changes in operating assets and liabilities. Changes in operating assets and liabilities were driven by a $16.4 million decrease in accounts payable and other liabilities, a $3.6 million increase in inventory, and a $4.5 million increase in prepaid expenses and other assets, partially offset by a decrease in accounts receivable of $8.4 million.

During the year ended December 31, 2024, net cash provided by operating activities of $31.8 million resulted primarily from net income of $36.1 million, a $16.4 million add back to net income for depreciation and amortization, a $8.4 million add back to net income for stock-based compensation, a $3.9 million add back for amortization of inventory step-up and a $36.4 million deduction from net income from changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by an increase in accounts receivable of $24.9 million and a decrease in accounts payable and other liabilities of $15.6 million, partially offset by a decrease in inventories of $10.0 million.

Net cash used in investing activities

During the year ended December 31, 2025, we used $96.4 million of cash in investing activities, primarily consisting of $89.6 million for the acquisition of Zircaloy and $6.9 million for purchases of property and equipment.

During the year ended December 31, 2024, we used $147.4 million of cash in investing activities, primarily consisting of $141.8 million for the acquisition of ICOR and Alpha Safety and $5.7 million for purchases of property and equipment.

Net cash provided by (used in) financing activities

During the year ended December 31, 2025, net cash provided by financing activities of $31.6 million resulted primarily from proceeds from term loans of $97.5 million and proceeds from option exercises of $3.4 million, partially offset by principal payments on term loans of $13.8 million, taxes paid in connection with employee stock transactions of $40.2 million and dividends distributed of $15.4 million.

During the year ended December 31, 2024, net cash provided by financing activities of $152.7 million resulted primarily from proceeds from term loans of $129.4 million and proceeds from the secondary offering, including option exercise, of $91.8 million, partially offset by principal payments on term loans of $43.3 million, payments for debt issuance costs of $3.1 million, taxes paid in connection with employee stock transactions of $5.3 million and dividends distributed of $13.9 million.

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Contractual Obligations

The following table summarizes our significant contractual obligations as of December 31, 2025 by period:

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ More than

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 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 consolidated financial statements. While our significant accounting policies are described in more detail in Note 1 of our consolidated financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Business Combinations

We allocate the purchase price, including our estimate of contingent consideration, of our acquisitions to the assets and liabilities acquired, including identifiable intangible assets, based on their fair values at the date of acquisition. The fair values are primarily based on third-party valuations using our management assumptions that require significant judgments and estimates. The purchase price allocated to intangibles is based on unobservable factors, including but not limited to, projected revenues, expenses, customer attrition rates, royalty rates, and weighted average cost of capital, among others. The weighted average cost of capital uses a market participant’s cost of equity and after-tax cost of debt and reflects the risks inherent in the cash flows. The unobservable factors we use are based upon assumptions believed to be reasonable but are subject to estimation uncertainty.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We have in the past and may in the future be exposed to certain market risks, including fluctuations in interest rates and foreign currency exchange rates, 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 December 31, 2025.

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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 December 31, 2025, we had $308.8 million in outstanding floating rate debt, which bears interest at one-month SOFR (3.72% as of December 31, 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 when 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 December 31, 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 $0.4 million when including the effect of our Swap Agreements.

As of December 31, 2025, we had the following Swap Agreements (in thousands):

​ ​ ​ ​ ​ ​ ​

Effective Date ​ ​ ​ Notional Amount ​ ​ ​ Fixed Rate

​

During the year ended December 31, 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, which is 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 consolidated balance sheets. Any changes in the fair value of designated cash flow hedges are recorded in other comprehensive income (loss) 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 $1.8 million for the year ended December 31, 2025. 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 $0.4 million for the year ended December 31, 2025, 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 $1.9 million for the year ended December 31, 2025, excluding unrealized gains or losses from remeasurement and the impact of cash flow hedges.

​

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Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

​ ​

​ Page

Report of Independent Registered Public Accounting Firm (PCAOB ID 185) 49

Consolidated Balance Sheets as of December 31, 2025 and 2024 50

Notes to the Consolidated Financial Statements 54

​

​

​

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors

Cadre Holdings, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Cadre Holdings, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2014.

Jacksonville, Florida

March 10, 2026

​

​

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CADRE HOLDINGS, INC.

Consolidated Balance Sheets

(In thousands, except for share and per share amounts)

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ December 31,

Assets ​ ​ ​ ​

Current assets ​ ​ ​ ​

Restricted cash ​ ​ 2,429 ​ ​ —

​ ​ ​ ​ ​ ​ ​

Liabilities, Mezzanine Equity and Shareholders' Equity ​ ​ ​ ​

Current liabilities ​ ​ ​ ​

Current portion of long-term debt ​ 16,266 ​ 11,375

Long-term operating lease liabilities ​ ​ 15,039 ​ ​ 10,733

​ ​ ​ ​ ​ ​ ​

Commitments and contingencies (Note 15) ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​

Mezzanine equity ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​

Shareholders' equity ​ ​ ​ ​

Accumulated other comprehensive income (loss) ​ 460 ​ (1,389)

​

​

​

​

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

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CADRE HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income

(In thousands, except for share and per share amounts)

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended December 31,

Operating expenses ​ ​ ​ ​ ​ ​

Other expense ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income per share: ​ ​ ​ ​ ​ ​

Weighted average shares outstanding: ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other comprehensive income: ​ ​ ​ ​ ​ ​

Foreign currency translation adjustments, net of tax(3) ​ 4,758 ​ (269) ​ 929

Other comprehensive income (loss) ​ ​ 1,849 ​ ​ (2,023) ​ ​ (1,453)

​

(1) Net of income tax of $95, $501 and $258 for the years ended December 31, 2025, 2024 and 2023, respectively.

(2) Amounts reclassified to net income relate to gains on interest rate swaps and foreign currency hedges and are included in interest expense above. Amounts are net of income tax of $874, $1,089 and $1,052 for the years ended December 31, 2025, 2024 and 2023, respectively.

(3) Net of income tax of $409, $303 and $257 for the years ended December 31, 2025, 2024 and 2023, respectively.

​

​

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

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CADRE HOLDINGS, INC.

Consolidated Statements of Cash Flows

(In thousands)

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended December 31,

Cash Flows From Operating Activities: ​ ​ ​ ​ ​ ​

Amortization of inventory step-up ​ ​ 1,296 ​ ​ 3,858 ​ ​ —

Remeasurement of contingent consideration ​ ​ 1,927 ​ ​ 1,185 ​ ​ —

(Recoveries from) provision for losses on accounts receivable ​ (108) ​ 764 ​ 66

Unrealized foreign exchange transaction (gain) loss ​ (2,356) ​ 1,880 ​ (602)

Prepaid expenses and other assets ​ (4,503) ​ (5,866) ​ (302)

Cash Flows From Investing Activities: ​ ​ ​ ​ ​ ​

Purchase of property and equipment ​ (6,856) ​ (5,668) ​ (6,727)

Proceeds from disposition of property and equipment ​ ​ 77 ​ ​ 55 ​ ​ 207

Business acquisitions, net of cash acquired ​ (89,590) ​ (141,813) ​ —

Cash Flows From Financing Activities: ​ ​ ​ ​ ​ ​

Proceeds from revolving credit facilities ​ — ​ 5,500 ​ —

Principal payments on revolving credit facilities ​ — ​ (5,500) ​ —

Proceeds from insurance premium financing ​ ​ — ​ ​ — ​ ​ 3,949

Principal payments on insurance premium financing ​ — ​ (2,187) ​ (3,973)

Payments for debt issuance costs ​ ​ — ​ ​ (3,105) ​ ​ —

Proceeds from exercise of stock options ​ ​ 3,377 ​ ​ — ​ ​ —

Deferred offering costs ​ ​ — ​ ​ (683) ​ ​ —

Change in cash, cash equivalents and restricted cash ​ 394 ​ 37,242 ​ 42,405

Supplemental Disclosure of Cash Flows Information: ​ ​ ​ ​ ​ ​ ​ ​ ​

Accruals and accounts payable for capital expenditures ​ $ 139 ​ $ 176 ​ $ 234

​

​

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

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CADRE HOLDINGS, INC.

Consolidated Statements of Shareholders’ Equity

(In thousands, except for share amounts)

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​

​ ​ Common Stock ​ Paid-In ​ Comprehensive ​ Accumulated ​ Shareholders’

Stock-based compensation ​ — ​ ​ — ​ ​ 8,782 ​ ​ — ​ ​ — ​ ​ 8,782

Exercise of stock options ​ 1,405 ​ ​ — ​ ​ 33 ​ ​ — ​ ​ — ​ ​ 33

Foreign currency translation adjustments — ​ — ​ — ​ 929 ​ — ​ 929

Stock-based compensation ​ — ​ ​ — ​ ​ 8,372 ​ ​ — ​ ​ — ​ ​ 8,372

Exercise of stock options ​ 1,825 ​ ​ — ​ ​ 37 ​ ​ — ​ ​ — ​ ​ 37

Foreign currency translation adjustments — ​ — ​ — ​ (269) ​ — ​ (269)

Stock-based compensation ​ — ​ ​ — ​ ​ 12,599 ​ ​ — ​ ​ — ​ ​ 12,599

Exercise of stock options ​ 141,662 ​ ​ — ​ ​ 3,377 ​ ​ — ​ ​ — ​ ​ 3,377

Foreign currency translation adjustments — ​ — ​ — ​ 4,758 ​ — ​ 4,758

​

​

​

​

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

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CADRE HOLDINGS, INC.

Notes to Consolidated Financial Statements

(In thousands, except for share amounts)

1. SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Basis of Presentation

Cadre Holdings, Inc. (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 manufacturing plants within the U.S., Mexico, Canada, the United Kingdom, Germany, 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 consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) and include the accounts of Cadre Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

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, 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 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. We will cease to be an emerging growth company no later than December 31, 2026, the last day of the fiscal year in which the fifth anniversary of our initial public offering occurs. Following that date, we will no longer be entitled to rely on the reduced disclosure and other accommodations available to emerging growth companies.

Use of Estimates

The preparation of these 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 could differ from these estimates.

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.

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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), restricted cash, 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, restricted cash, 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.

Cash and Cash Equivalents and Restricted Cash

Cash equivalents are defined as highly-liquid, short-term investments having an original maturity of three months or less. Included in cash and cash equivalents are deposits with banks, cash on hand in stores, amounts due from credit card transactions and money market funds. Restricted cash consists of cash balances held by financial institutions as collateral for letters of credit. These balances are reclassified to cash and cash equivalents when the underlying obligation is satisfied. Restricted cash balances expected to become unrestricted during the next twelve months are recorded as current assets. As of December 31, 2025, the Company had $2,944 in outstanding letters of credits that were collateralized by restricted cash.

The following table provides a reconciliation of cash and cash equivalents and restricted cash presented in our consolidated balance sheets to the total cash, cash equivalents and restricted cash presented in our consolidated statements of cash flows:

​

​ ​ ​ ​ ​ ​ ​

​ ​ Year ended December 31,

Restricted cash ​ 2,429 ​ —

Total cash, cash equivalents and restricted cash ​ $ 125,327 ​ $ 124,933

​

Accounts Receivable

Trade accounts receivable consists of amounts owed to the Company and is stated net of allowances for known and potential losses. The Company’s outstanding accounts receivable balances are exposed to credit risk and valuation allowances are established for estimated losses resulting from non-collection of outstanding amounts due from customers.

The estimate of expected credit losses is based on the Company’s historical loss experience, adjusted for current and reasonable and supportable forecasts of economic conditions and other pertinent factors affecting the Company’s customers such as known credit risk or industry trends. In addition, specific reserves are established for customer accounts as known collection problems occur due to insolvency, disputes, or other collection issues. The amounts of these specific reserves are estimated by management based on the customer’s financial position, the age of the customer’s receivables and the reasons for any disputes. The allowance for doubtful accounts is reduced by any write-off of uncollectible customer accounts.

Inventories

Inventories are stated at the lower of cost, determined using the first-in, first-out (“FIFO”) or average cost methods, or net realizable value. Elements of cost in the Company’s manufactured inventories generally include raw materials, direct labor, indirect labor, manufacturing overhead and freight-in. The Company periodically reviews its inventories considering sales forecasts and historical experience to identify excess, close-out, or slow-moving items and makes provisions as necessary to properly reflect inventory value at the lower of cost or net realizable value.

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Property and Equipment

Property and equipment, including those acquired under capital lease agreements, is stated at cost less accumulated depreciation and amortization, except for assets acquired using acquisition accounting, which are initially recorded at fair value. Depreciation is computed using the straight-line method over the following estimated useful lives:

​

​ ​ ​

Buildings and improvements ​ ​ 5 to 39 years

Furniture and fixtures ​ 2 to 10 years

Computer hardware and software ​ 3 to 5 years

Machinery and equipment ​ 3 to 8 years

​

Leasehold improvements are amortized over the lesser of the estimated useful life of the improvement or the life of the lease. Major replacements, which extend the useful lives of property and equipment, are capitalized and depreciated over the remaining useful life of the asset. Normal repair and maintenance items are expensed as incurred.

The recoverability of the carrying amount of property and equipment is assessed when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If it is determined that the carrying amount of an asset or asset group is not recoverable based upon expected undiscounted future cash flows of the asset or asset group, an impairment loss equal to the excess of the carrying amount over the estimated fair value of the asset or asset group is recorded.

Cloud Computing Arrangements

The Company capitalizes implementation costs incurred in cloud computing arrangements that are service contracts. The short-term portion of deferred implementation costs is included in prepaid expenses in the consolidated balance sheets, which is the same line as the prepaid hosting fees, while the long-term portion of these deferred costs is included in other assets in the consolidated balance sheets. Capitalized costs are amortized on a straight-line basis over the term of the related hosting agreement, taking into consideration renewal options. Amortization expense is recorded within selling, general, and administrative expenses in the Company's consolidated statements of operations and comprehensive income, which is within the same line item as the related hosting fees. Unamortized deferred implementation costs were $3,758 and $2,075 as of December 31, 2025 and 2024, respectively, of which $943 and $592 was recorded in prepaid expenses for the respective years. The Company recorded amortization expense of $321, $218 and $16 for the years ended December 31, 2025, 2024 and 2023, respectively.

Leases

Lease assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised.

Variable lease payments are generally expensed as incurred and include certain non-lease components, such as common area maintenance and other services provided by the lessor, and other charges such as utilities, insurance and property taxes included in the lease. Leases with an initial term of twelve months or less are not recorded on the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term. Non-lease components are excluded from the right-of-use (“ROU”) asset and lease liability present value computations. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Goodwill and Intangible Assets

The Company classifies intangible assets into three categories: i) intangible assets with definite lives subject to amortization, ii) intangible assets with indefinite lives not subject to amortization and iii) goodwill. The Company determines the useful lives of its identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact

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the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized on a straight-line basis over their useful lives.

The Company tests goodwill and intangible assets determined to have indefinite useful lives for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. The Company performs these annual impairment tests as of October 31st each year. Goodwill is evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment.

In evaluating goodwill and indefinite-lived intangible assets for impairment, qualitative factors can be considered to determine whether it is more likely than not that the fair value of a reporting unit or intangible asset is less than its respective carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, or entity-specific events. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit or intangible asset’s fair value is less than its respective carrying amount, the Company performs a quantitative analysis to compare the fair value of a reporting unit or intangible asset to its respective carrying value.

If a quantitative analysis is performed, the Company determines the fair value of reporting units based on a combination of the income approach and market approach, weighted based on the circumstances. Under the income approach, the discounted cash flow model determines fair value based on the present value of projected cash flows over a specific projection period and a residual value related to future cash flows beyond the projection period. Both values are discounted using a rate that reflects the Company’s best estimate of the weighted average cost of capital of a market participant and is adjusted for appropriate risk factors. The Company performs sensitivity tests with respect to growth rates and discount rates used in the income approach. Under the market approach, valuation multiples are derived based on a selection of comparable companies and acquisition transactions and applied to projected operating data for each reporting unit to arrive at an indication of fair value.

The Company tests definite-lived intangible assets for recoverability when changes in circumstances indicate the carrying value may not be recoverable. Events that trigger a test for recoverability include:

● material adverse changes in projected revenues and expenses;

● significant negative industry or economic trends; and,

Future adverse changes in these or other unforeseeable factors could result in an impairment charge that could materially impact future results of operations and financial position in the reporting period identified.

When a triggering event occurs, a test for recoverability is performed by comparing projected undiscounted future cash flows to the carrying value of the asset group. If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured relying primarily on a discounted cash flow method. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. When an impairment loss is recognized for assets to be held and used, the adjusted carrying amount of those assets is depreciated over their remaining useful life. We did not have any events or circumstances indicating impairment of our long-lived assets for the years presented.

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.

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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.

The Company has certain long-term contracts that contain performance obligations that are satisfied over time. The Company invoices the customer once billing milestones are 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. 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 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 one year. For contracts with service periods greater than one 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 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 consolidated statements of operations and comprehensive income.

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

​

​ ​ ​ ​ ​ ​ ​

​ ​ Year ended December 31,

Beginning accrued warranty expense ​ $ 1,760 ​ $ 1,610

Current period claims ​ (96) ​ (647)

Provision for current period sales ​ 408 ​ 797

Ending accrued warranty expense ​ $ 2,072 ​ $ 1,760

​

Cost of Goods Sold

Cost of goods sold includes raw material purchases, manufacturing-related labor costs, contracted labor, project costs, shipping costs, allocated manufacturing overhead, facility costs, depreciation and amortization, and product warranty costs.

Selling, General & Administrative Expenses

Selling, general and administrative expense includes personnel-related costs, including stock-based compensation, professional services, marketing and advertising expense, research and development, and depreciation and amortization.

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Advertising Expenses

Advertising costs are expensed in the period incurred. Advertising expenses primarily consist of marketing, promotions, catalog, and trade show expenses and were $6,762, $5,936 and $6,145 for the years ended December 31, 2025, 2024 and 2023, respectively. Advertising expenses are included in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income.

Research and Development

Research and development expenses are expensed as incurred and included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income. Total research and development costs were $11,396, $8,380 and $6,954 for the years ended December 31, 2025, 2024 and 2023, respectively.

Debt Issuance Costs

TheCompanycapitalizescostsrelatedtotheissuanceofdebtundertheprovisionsofASCSubtopic835-30, Interest — Imputation of Interest. Debt issuance costs related to a recognized debt liability are presented in the consolidated balance sheets as a direct deduction from the carrying amount of that debt liability and subsequently amortized on a straight-line method which approximates the effective interest methodover the life of the related loan. Debt issuance costs related to line-of-credits are presented in the consolidated balance sheets as an asset and subsequently amortized ratably over the term of the respective arrangement. Debt issuance costs related to unfunded delayed draw facilities are presented in the consolidated balance sheets as an asset and amortized ratably over the availability period. If a delayed draw facility is funded, the proportionate amount of unamortized debt issuances costs is reclassed as a direct deduction from the carrying amount of that debt liability and subsequently amortized over the life of the related loan. Amortization of debt issuance costs is included as a component of interest expense in the Company’s consolidated statements of operations and comprehensive income.

Stock-Based Compensation

The Company records compensation expense for all stock-based awards granted based on the fair value of the award at the time of the grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions and estimates that the Company believes are reasonable. The fair value of restricted stock awards is measured based on the closing market value of the Company’s common stock on the date of the grant. For restricted stock awards subject to market conditions, the fair value of each restricted stock award has been estimated as of the date of grant using a Monte-Carlo pricing model. The Company recognizes the cost of the stock-based awards on a straight-line basis over the requisite service period of the award and recognizes forfeitures in the period they occur. Stock options granted have contractual terms of up to ten years. Upon vesting of restricted stock awards, the Company issues shares from those authorized and reserved for issuance.

Derivatives

The Company mitigates the impact of changes in interest rates with interest rate swaps and foreign currency transaction risk with forward contracts, both of which are accounted for as designated hedges pursuant to ASC Topic 815, Derivatives and Hedging ("ASC 815"). ASC 815 requires that an entity recognize all derivatives as either assets or liabilities on the balance sheet, measure those instruments at fair value and recognize changes in the fair value of derivatives in earnings in the period of change unless the derivative qualifies as a designated cash flow hedge that offsets certain exposures. Certain criteria must be satisfied in order for derivative financial instruments to be classified and accounted for as a cash flow hedge. Changes in the fair value of derivatives that are not elected for hedge accounting treatment are recorded immediately into earnings.

The Company would discontinue hedge accounting prospectively (i) if it is determined that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item, (ii) when the derivative expires or is sold, terminated, or exercised, (iii) if it becomes probable that the forecasted transaction being hedged by the derivative will not occur, (iv) if a hedged firm commitment no longer meets the definition of a firm commitment, or (v) if it is determined that designation of the derivative as a hedge instrument is no longer appropriate.

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Restructuring Costs

Restructuring costs consist primarily of termination benefits and relocation of employees, termination of operating leases and other contracts related to consolidating or closing facilities. The Company applies the provisions of ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”) and ASC Topic 712, Nonretirement Postemployment Benefits (“ASC 712”) in the recording of severance costs. Severance costs accounted for under ASC 420 are recognized when management with the proper level of authority commits to a restructuring plan and communicates those actions to employees and other applicable criteria. Severancecostsaccounted for underASC712arerecognizedwhenitis probable thatemployeesareentitled to benefits and the amount could be reasonably estimated. Other exit costs are accounted for under ASC 420 and are either deferred or expensed as incurred based on the nature of theexpense.

Income Taxes

The Company accounts for income taxes under the provisions of ASC Topic 740, Income Taxes. Deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities and are classified as noncurrent in the consolidated balance sheets.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect ofchangesintaxratesondeferredtaxassetsandliabilitiesisrecognizedinincomeintheperiodthatincludes the enactment date. Changes in tax laws and rates could have a material impact on the deferred tax assets and liabilitiesrecorded.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likelythannotthatsomeportionorallofthedeferredtaxassetswillnotberealized.Significantestimatesare used in the evaluation of the need for a valuation allowance including estimates regarding future taxable income.Changestothoseestimatescouldimpactmanagement’sconclusionsregardingtheneedfor valuation allowances on some or all of the deferred tax assets. The Company releases the income tax effects of deferred tax balances that have a valuation allowance from accumulated other comprehensive income once the reason the tax effects were established ceases toexist.

The Company is subject to income taxes in the United States and several foreign jurisdictions. In the United States, the Company files a consolidated income tax return with its domestic subsidiaries. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by taxingauthorities,whileothersaresubjecttouncertaintyaboutthemeritsofthepositiontakenortheamount of the position that would be ultimately sustained. The benefit of a tax position is recognized inthe consolidated financial statements in the period during which, based on all available evidence, it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigationprocesses,ifany. Taxpositionstakenarenotoffsetoraggregatedwithotherpositions.Taxpositions that meet the more-likely than-not threshold are measured as the largest amount of tax benefit thatis more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Further information regarding the Company’s tax positions is included in Note 16, Income Taxes.

Accumulated Other Comprehensive Income (Loss)

Comprehensive income represents all changes in equity of the Company that result from recognized transactions and other economic events during the period. Other comprehensive income (loss) refers to revenues, expenses, gains, and losses that under GAAP are included in comprehensive income but excluded from net income.

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Foreign Currency

Translation

Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. Dollars are translated into U.S. Dollars using the exchange rates in effect at the balance sheet date. Results of operations are translated using the average exchange rate prevailing throughout the period. The effects of unrealized exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are accumulated as the cumulative translation adjustment included in accumulated other comprehensive (loss) income in the consolidated balance sheets.

Transaction

Transactions denominated in foreign currency are recorded at the exchange rate on the date of each transaction. Realized gains and losses on foreign currency transactions are included in other income (expense), net in the consolidated statements of operations and comprehensive income, except on certain intercompany balances which the Company has determined are of a long-term investment nature, which are included in accumulated other comprehensive (loss) income in the consolidated balance sheets. Monetary assets and liabilities are remeasured at the balance sheet date at end-of-period exchange rates. Unrealized gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in other income (expense), net in the consolidated statements of operations and comprehensive income in the period in which they occur.

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:

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Year ended December 31,

​ ​ ​ ​ ​ ​ ​

Effect of dilutive securities: ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income per share: ​ ​ ​ ​ ​ ​

​

For the years ended December 31, 2025, 2024, and 2023, equity awards of 644,823, 328,474, and 649,459, respectively, were outstanding and anti-dilutive and therefore not included in the calculation of net income per share for these periods.

Risk and Uncertainties

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and accounts receivable. Risks associated with cash within the United States and foreign countries are mitigated by banking with federally insured, creditworthy institutions, although certain of our cash deposits exceed the federally insured limits. As of December 31, 2025 and 2024, the Company had deposits of $32,462 and $10,002, respectively, at foreign financial institutions.

Accounts receivable are financial instruments that also expose the Company to concentration of credit risk. Such exposure is limited by the large number of customers comprising the Company’s customer base and their dispersion across different geographic areas. In addition, the Company routinely assesses the financial strength of its customers and maintains an allowance for doubtful

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accounts that management believes will adequately provide for credit losses. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses as considered necessary by management.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

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 requires 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. The Company adopted this standard in the current fiscal year on a prospective basis. See Note 16 for further information.

Accounting Pronouncements Not Yet Adopted

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.

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 18.

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

​

​ ​ ​ ​

Less: cash and cash equivalents acquired ​ (6,896)

Less: restricted cash acquired ​ ​ (2,409)

Total consideration, net ​ $ 89,590

​

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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 $7,144 for changes in assumptions used to fair value intangible assets, property, plant and equipment, and current and deferred tax liabilities. The fair value measurements of identifiable assets and liabilities, specifically deferred tax 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

Prepaid expenses and other current assets ​ ​ 2,403

Property and equipment ​ ​ 34,431

Operating lease assets ​ ​ 5,146

Intangible assets ​ ​ 14,400

Total assets acquired ​ ​ 125,451

Accounts payable ​ ​ 3,028

Accrued liabilities ​ ​ 16,446

Long-term operating lease liabilities ​ ​ 4,564

Deferred tax liabilities ​ ​ 9,208

Other liabilities ​ ​ 2,615

Total liabilities assumed ​ ​ 35,861

Net assets acquired ​ $ 89,590

​

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:

​

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Gross ​ ​ ​ Average Useful Life

Customer relationships ​ $ 5,600 ​ ​ 17

​

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 $49,220 for the year ended December 31, 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.

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

​

​ ​ ​ ​

Less: cash acquired ​ ​ (1,068)

Plus: Contingent consideration ​ ​ 2,226

Total consideration, net ​ $ 41,508

​

The following table summarizes the total 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

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:

​

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Gross ​ ​ ​ Average Useful Life

Customer relationships ​ $ 1,496 ​ ​ 10

​

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 on the acquisition date) 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

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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 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 have resulted 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.

The following table summarizes the changes in the contingent consideration liability for the years ended December 31, 2025 and 2024:

​

​ ​ ​ ​

Balance, December 31, 2023 ​ $ —

ICOR acquisition ​ ​ 2,226

Fair value adjustment ​ ​ 1,185

Foreign currency translation adjustments ​ ​ (200)

Fair value adjustment ​ ​ 1,927

Foreign currency translation adjustments ​ 188

​

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:

​

​ ​ ​ ​

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

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:

​

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Gross ​ ​ ​ Average Useful Life

Customer relationships ​ $ 17,900 ​ ​ 20

​

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

3. ACCOUNTS RECEIVABLE, NET

The following is a reconciliation of the changes in our allowance for doubtful accounts during 2025 and 2024:

​

​ ​ ​ ​ ​ ​ ​

​ ​ Year ended December 31,

Beginning allowance for doubtful accounts ​ $ 876 ​ $ 635

(Recoveries) provision ​ (108) ​ 764

Ending allowance for doubtful accounts ​ $ 273 ​ $ 876

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