Good afternoon, and welcome to Cadre Holdings' second quarter ended June 30, 2023 conference call. Today's call is being recorded. All lines have been placed on mute. If you would like to ask a question at the end of the prepared remarks, please press the star key, then the number 1 on your touchtone phone. At this time, I would like to turn the conference over to Matt Berkowitz of The IGB Group for introductions and the reading of the safe harbor statement. Please go ahead, sir. Thank you, and welcome to Cadre Holdings' second quarter conference call. Before we begin, I would like to remind everyone that during today's call, we will be making several forward-looking statements, and we make these statements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our best estimates and assumptions based on our understanding of information known to us today. These forward-looking statements are subject to the risks and uncertainties that face Cadre in the industries and markets in which we operate. More information on potential factors that could affect Cadre's financial results is included from time to time in Cadre's public reports filed with the Securities and Exchange Commission. Please also note that we have posted presentation materials on our website at www.cadre-holdings.com, which supplement our comments this evening and include a reconciliation of certain non-GAAP financial measures. I would like to remind everyone that this call will be available for replay through August 22, 2023, starting at 8:00 P.M. Eastern Time tonight. A webcast replay will also be available via the link provided in today's press release, as well as on Cadre's website. At this time, I would like to turn the call over to Cadre's Chairman and CEO, Warren Kanders. Good afternoon, and thank you for joining Cadre's earnings call to discuss our results for the second quarter of 2023. I'm joined today by our President, Brad Williams, and our Chief Financial Officer, Blaine Browers. My comments today will largely track the themes I have spoken about before on our earnings calls. Coming off the second quarter of 2023, I continue to be very pleased with the focus and execution our management team has brought to bear on our company, as demonstrated by record EBITDA margins and our efforts to capitalize on external growth opportunities, but our performance to date deserves particular focus. Brad, Blaine, and the team continue to demonstrate a relentless focus on the implementation of the Cadre Operating Model, which is an integral part of our business strategy of continuous improvement and the optimization of results. I talked about this last quarter, but it bears repeating. The Cadre Operating Model helps build a culture of creating value for customers and stakeholders. Driven by constant leadership, the implementation of enterprise-wide tools and processes, product innovation, and continuous productivity improvement. Here again, the focus comes through in the results. While revenues were up 2.5%, gross margin improved by 530 basis points, and gross profit increased 17.4%. We achieved record adjusted EBITDA margins of 18.8%, record quarterly adjusted EBITDA of $22.8 million. Adjusted EBITDA margin increased 320 basis points, adjusted EBITDA grew 23.9%. Fully diluted net income per share for the quarter increased 123%. This execution creates operating leverage by using superior operating tools and business processes to produce profitability improvements above our natural growth rate. Brad and Blaine will cover more of the details momentarily, but the trend you see is that within the realm of things we can control, our management team does an exceptional job of optimizing the outcomes. The approach always applies to acquired businesses. We acquired Cyalume in the second quarter of 2022, and the actions our team has taken there also help drive overall performance. I would like to reinforce our views on the macros driving our business. As you know, we have distribution and manufacturing capabilities covering a substantial part of the world, and we see no sign of the secular trends driving demand for our mission-critical, life-saving products are doing anything but going up. In almost every place we do business, the environment is either getting more difficult and dangerous or even flatlining at a level above what people had become accustomed to. Our ability to perform in this environment is a testament to the quality of our products, the strength of our brands, superior execution and deliveries, and the importance of Cadre's equipment to our customers and end users. Finally, some thoughts on our M&A program. While we would like to have something to announce by this point in the year, we remain confident, based on our activity, we should be able to announce or close 1 to 2 transactions this year. In the past 12 months, we have made formal proposals after completing significant diligence on 10 different businesses with enterprise, enterprise values ranging in size from $25 million to north of $200 million. This figure does not include opportunities we reviewed and declined to pursue. Interestingly, of those 10, most of which were proprietary, non-auction processes, none of them have traded away from us. Which indicates a few possibilities. 1, a valuation disconnect between seller expectations and the price that any buyer is willing to pay. 2, a lack of confidence on the seller's part, the business would hold up to due diligence scrutiny. 3, some combination of those two. Having said that, we are working our M&A pipeline hard and will remain disciplined in our approach. We continue to see new opportunities in our existing markets, as well as markets that would diversify our company. At the same time, we continue to generate cash and delever, with net debt to adjusted EBITDA presently at a very conservative level of just above 1 times, and a bank facility with increasing capacity to pursue more transactions as we lower our leverage profile. In conclusion, I am proud of our results for this quarter and for the first half of the year. We are happy to be able to increase our earnings guidance for the year as our performance exceeds our prior expectations, and the remainder of the year comes into better focus. While the overall macro environment that Brad will speak about still poses certain challenges, the businesses we are in are resilient against many of the uncertainties out there, and we are comfortable with how we think the remainder of this year will play out. With that, thank you for being with us today, and I will turn the call over to Brad. Brad, over to you. Thank you, Warren. On today's call, Blaine and I will provide a Q2 update and business overview, including recent trends and financial performance, followed by a Q&A session. We'll begin on slide 5. Cadre continued to deliver on strategic objectives in the second quarter, highlighted by increases in quarterly net sales, adjusted EBITDA, and net income, both sequentially and year-over-year. Consistent with our focus on continually improving gross and adjusted EBITDA margins, our results once again reflected our success managing our portfolio of premium products in the market, as well as productivity gains driven by the continued implementation of our Operating Model. Second quarter product mix was solid, and our adjusted EBITDA margin of 18.8% for the quarter was our highest since going public. Q2 mix reflected favorable duty gear channel mix, favorable armor mix, and favorable distribution product mix, offset by lower EOD volume. We maintain a strong orders backlog, which was $133.2 million as of June 30th, a $15.3 million increase since the start of the year. While the backlog total declined from the end of Q1, this was anticipated and is reflected in our significant Q2 revenue. As Warren discussed a moment ago, we continue to view our M&A pipeline of opportunities as robust, although the current environment has not been conducive to deal-making thus far in 2023. As we have reiterated previously, we'll remain steadfast in our patient and disciplined approach and do not mind waiting for the right transaction. We still remain confident that attractive opportunities will materialize this year in line with Cadre's key criteria, which Blaine will discuss more in a bit. It is important to highlight that Cadre continues to generate significant free cash flow that provides capacity not only to pursue acquisitions, but also return capital to shareholders. Last month, we declared our eighth consecutive quarterly dividend of $0.08. Next, on slide six, you'll see fundamental drivers of demand and visibility for our mission-critical products. These tailwinds remain intact and support a long-term, sustainable growth opportunity in both domestic and international markets. Turning to slide seven, we outline the latest market trends impacting our business. While police hiring remains a major challenge, we continue to see signs of increasing spend per officer. North American police budgets remain healthy, Departments consistently prioritize Cadre's mission-critical equipment. Particularly with increased public focus on crime and a push to refund the police, we anticipate further investments into public safety moving forward. Related to the geopolitical landscape, our expectation has not changed. As the conflict in Ukraine de-escalates, we'll see larger opportunities for Cadre's EOD category. What has become clear in recent months, however, is the vast scale of unexploded ordnance in Ukraine, which includes landmines, unexploded bombs, artillery shells, and other deadly byproducts. The extent and concentration of ordnance makes Ukraine's contamination greater than that of other heavily mined countries, such as Afghanistan and Syria. Whereas it was previously assumed the demining process in Ukraine could take several years, it is now expected to take decades, which expands the cycle of opportunity on the EOD side for Cadre. The largest constraint will be having enough mine-clearing and EOD technicians to perform this extremely dangerous job. Turning to trends in our supply chain, labor force, and consumer segment, I'll provide a brief update on incremental positives that we have seen to date. Of note, we are experiencing improvements when it comes to extended lead times for raw materials. Our team continues to do an excellent job being proactive, and these issues were less frequent in the second quarter. In terms of bringing on direct labor talent, we also saw improvements in Q2. We are pleased with the progress we've made here and continue to be comfortable with our ability to attract and retain talent to meet our needs. Regarding our commercial channel, we saw demand tick up in the second quarter versus Q1. The commercial market is congested and innovation is a key differentiator. The work we did to reorganize our engineering, selling, and back office teams couple years has positioned us to focus on innovation and better align with our various sub-channels and customer needs. The launch of our assortment of new commercial holsters, Solis, Schema, Species, and most recently, Incog X, a collaboration with Haley Strategic Partners, has helped drive growth in a crowded commercial marketplace. Within the duty gear commercial channel, sales were up 10% year-over-year. Turning to new products, we continue to hear positive feedback on our HyperX Tactical Armor platform, XpertFit 3D Body Sizing app, the SafariVault line of holsters introduced to the market in the past 9 months. HyperX has been a great success as a highly versatile design for law enforcement that value a lightweight, adaptable, and purpose-built tactical platform without compromising protection. The system offers a customizable fit that boasts individualized ballistic rifle protection while maintaining a thin and lightweight profile. We've experienced a 33% increase of tactical soft armor for the first half of 2023 compared to the same period of last year. This growth is directly attributed to HyperX, with the product also pulling through hard armor plates that is not included in that growth%. This innovative tactical armor platform has opened the eyes of operators around the country, leading to many new customer wins within tactical teams, but also opened the doors to federal law enforcement customers that we have not previously had in this product category. After two years of research, development, extensive life testing, we've officially launched our 3D Body Sizing app, XpertFit, to the market in June. At this point, we have trained nearly all sales teams for our reseller partners in the U.S. Our experience has been overwhelming, especially with those individuals that thought technology would never be able to replace the majority of manual measuring and sizing vest techniques that have been used in the industry for decades. As the buzz around XpertFit spreads within the industry, we are starting to get end customer law enforcement agencies contacting us, asking about the use of our technology. We've also seen instances where electronic sizing has been written into specifications. We're extremely pleased with our foresight and investment related to this emerging technology. Lastly, we are seeing increased interest in wins with the new SafariVault holster family that was launched in January of 2023. As our engineering team completes a broader range of gun fits for this new line of holsters, we expect to see growing interest in those agencies seeking a more robust holster design due to enhanced features, including the strongest holster body we have ever engineered, a self-clearing optic cover, magnetic holster guidance, and an open muzzle design. The new SafariVault family of holsters reflects over 55 years of innovative engineering experience and carries on our commitment to our mission of Together We Save Lives. I'll now turn the call over to our CFO, Blaine Browers. Thanks, Brad. I'll begin my remarks by discussing our M&A strategy in the general acquisition environment. Slide 8 summarizes the key criteria that drive Cadre's M&A process. Investors familiar with Cadre know that we assess potential transactions within 3 categories: those that will expand our suite of products, those that will enable us to enter new markets or verticals, and those that will grow our geographic footprint. As Brad and Warren have mentioned, our M&A funnel is still healthy, and we continue to actively evaluate targets consistent with our key criteria, which include high margins, leading market positions, and strong recurring revenue and cash flows. Our sense is there is a growing momentum to get deals to the market, and we anticipate bank-led processes to pick up late this year or early next year. The next 2 slides detail our second quarter financial performance. As you can see on slide 9, we increased net sales, gross margin, net income, adjusted EBITDA, and adjusted EBITDA margin in the second quarter, both on a sequential and year-over-year basis. The increase in net sales reflects our significant orders backlog and was mainly driven by strong armor and duty gear demand, in addition to the impact of the Cyalume acquisition. This was partially offset by shipment timing for our EOD products. Second quarter net income of $11 million or $0.29 per share increased 57% from Q1, and compared to last year's Q2, grew nearly 150%. As we continue to manage our portfolio of premium products and leverage productivity to drive margins up and offset inflation, we generated outstanding gross and adjusted EBITDA margins in the second quarter. These increased 530 and 330 basis points, respectively, versus the same period last year. Illustrated on Slide 10 is net sales and adjusted EBITDA growth year-over-year. As you can see, driven by increased net sales and improved gross profit margin, Cadre's first half, 2023 adjusted EBITDA was up 27% versus last year. Based on our second quarter performance and management's outlook for the remainder of the year, we have increased our full-year adjusted EBITDA guidance, which I'll discuss in a moment. On Slide 11, we present our capital structure. As of June 30th, our net debt was $87 million, and we have lowered our net leverage to 1 time. We maintain significant financial flexibility to grow both organically and inorganically through acquisitions. We provide updated 2023 guidance on Slide 15. We have tightened our full-year net sales guidance range, with the midpoint remaining the same. We expect 2023 net sales to be between $472 million and $484 million. Our upwardly revised adjusted EBITDA guidance range of between $80 million and $84 million implies approximately 8% annual growth versus our previous forecast of 4%. Additionally, we now anticipate capital expenditures in the range of $8 million-$9 million. Let me take a moment to dive a bit more deeply into our expectations for the remainder of the year. Q2 was a very strong quarter, coming off a solid start to the year in Q1. We did have some volume fall into Q2 that we had anticipated in the back half of the year. We do expect margin rates to be consistent to slightly down in the second half as compared to the first half, primarily due to mix. Q4 still appears to be the largest volume quarter of that year, driven by large domestic and international projects. In Q3, we expect volume to be down from Q2 due to timing in our distribution segment and EOD, but still be above our Q1 revenue. I would also like to reiterate that for most of our businesses, we only have 45 to 60 days of meaningful, meaningful backlog visibility. I'll now turn it over to Brad for concluding comments. Thank you, Blaine. In summary, we are highly pleased with our strategic execution in the year to date, which is reflected in our strong second quarter financial results. We generated record EBITDA margins and quarterly adjusted EBITDA as we continue to implement our operating model focused on attaining and sustaining exceptional results. Based on our second quarter performance and continued strong demand for mission-critical safety and survivability equipment, we have increased our full year 2023 adjusted EBITDA outlook. We're on track to deliver record full year net sales in 2023, and are excited about our prospects to capitalize on organic and inorganic opportunities ahead. M&A continues to be a focus, and we remain confident that attractive opportunities in line with our key criteria will materialize this year. Supported by macro tailwinds related to increasing public safety budgets and favorable industry dynamics, we believe Cadre is ideally positioned to grow our platform and further enhance our market leadership over the long term. With that, operator, please open up the lines for Q&A. At this time, I would like to remind everyone, in order to ask a question, press Star, then 1 on your telephone keypad. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Daniel Imbro from Stephens Inc. Your line is open. Yep. Hey, good evening, guys. Thanks for taking our questions. Absolutely. How are you doing? Doing well. I wanna start on the top line outlook. I think obviously the backlog kind of helped this quarter, but you also mentioned you've achieved pricing growth exceeding your targets again. I'm just curious, you know, is the market still accepting further price increases, or are these the past ones rolling through? How should the moderation in maybe some of the freight costs in the recent quarters affect pricing as we think about the back half of this year, maybe into next year? Does that give you less room to take up price, or kind of what are the implications of that as you think about passing through inflation at the top line? Yeah, I would say on the input side, inflation has certainly moderated from what we saw, you know, even as recent as a year ago. At this point, for the majority of our products, these are just price increases that came through in the first of the year. You know, this isn't the case, in, like, some years prior, where we've done multiple price increases on products. It's certainly become a more stable environment, around pricing and material inflation. That's just those rolling through. It's not incremental pricing that we launched, you know, since the last time we spoke. On the transportation side, it's not a, not a real significant cost for us, you know, somewhere in the, the 2-ish% of revenue, I think closer to 1.5% of revenue in a given period. you know, as we've talked, talked a little bit before, most of our supply chain is regional in nature, so it tends to be more LTL driven. So it will certainly have some impact, but it doesn't create a headwind around pricing. Typically, our products don't have, the price tend to be sticky on the way up, and we historically have not seen, you know, the business price down in certain economic cycles. Helpful. Then as a follow-up, just shifting over to Europe, you know, obviously, there's demand for your products. You talked about the long-term EOD opportunity. I'm curious, are you seeing those manifest into actual orders yet? I think you guys have owned Radar for what, 18 months, a little over that now. Have you won any new contracts or any new countries you can point to? Just curious how that has progressed organically versus your expectations. Yeah. I think it was kind of a, a mixed question there around EOD, and then also you'd mentioned radar. On the EOD side, you know, we have seen orders that are in size with-- in line with our normal sized orders for the EOD business, you know, come to us from, you know, for Ukraine, for example. On the radar side of things, where we have seen some improvements in, in the business there overall, have been around additional leverage that we have with the local team in Italy. We've had that team not only focusing on the holster side of the business, but we've also had them focusing on armor opportunities and other products within the local Italian marketplace, and we've seen some good traction there. Then also the second piece that we've seen good traction on are markets or countries that are Safariland of products that we've not been able to reach based on the premium features and price point of those products. We've been able to go in with radar and work in new countries that we've not gotten into in the past. Great. I'll hop back in the queue. I appreciate it. Best of luck. Thank you. Thank you. Your next question comes from the line of Ron Epstein of Bank of America. Your line is open. Hey, this is Jordan on for Ron. To hit on the international point again, for the opportunity in Ukraine- When would you guys think you would actually really see a major impact to sales? Do you really need to wait for the end of the war, or is there anything incremental that could come through in the next few years? Yeah, we are seeing smaller orders come through, focused on EOD, and they are destined for Ukraine. I think what changes, though, and doesn't really necessarily require the war to end, but certainly a de-escalation, that allows the focus then to turn to, to making Ukraine a safer place for EOD or, or mines. In order for it to really get moving and for them to really shift money from the offensive or defensive weapons and equipment, it's really that de-escalation, then it allows the more, the more focus on the safety side of things. Yeah, we certainly have operators in the business who, you know, are not only workforce, but former EOD operators, and some that have spent time in, in Bosnia. We're, yeah, we have some good examples of how this typically plays out and feel confident in that approach. There's still products being shipped, destined for Ukraine, via other, other governments. It's just not massive at this stage. Got it. Thank you. Absolutely. Thank you. Your next question comes from the line of Matt Koranda from ROTH MKM. Your line is open. Hey, guys. It's Mike Zabran from Matt. Distribution gross margins up about 500 BPS year-over-year, 23%. I think we had assumed something weaker around, you know, 20% range. I guess just kind of what's, what's feeding into that? A little bit more color on what's feeding into those, into the margin expansion. Are we selling higher gross margin products? Just how should we think about gross margins for distribution in the quarter, and then the rest of the year? Sure, sure. You know, sequentially, you know, margins are, are not that, that different, Q1 to Q2. You know, on a year-over-year basis, it is a combination of pricing that went into place last year as well as the beginning of this year. We are seeing some favorable mix as well in Q2, and also positive productivity. You know, Moore mentioned in his kind of opening comments, the teams have really been executing strongly across the board in the, you know, really the, the three areas that we want to see them execute in, and that's really fallen down to the bottom line. You know, as we look towards the back half, you know, we do expect margins to be slightly down for Q3 and Q4, just based on, on mix. You know, as Brad mentioned, and I mentioned, we've had very, very favorable mix in the first half of the year, and, and not just a product mix, but also channel mix, right? We've had some favorable channel mix within the duty or product line in this quarter, in particular, that's helped to, to lift margins. Got it. Okay. That would make sense. Then anything to call out on intercompany sales? Just seems like it's gone up quite a bit, year-over-year and sequentially. Just what's causing that to rise, and should we pull, you know, this run rate forward? Sorry, you broke up a little bit, and we missed the first, first part of your question. Yeah, sorry about that. Anything to call out on intercompany sales? Just seems like it's gone up a little bit, year-over-year. Oh ... sequentially. Just what's causing that to rise, and should we pull it forward? No, that's. The good news there is that intercompany is our distribution selling, you know, products in the product segment. The bigger movements in that, or the bigger dollar movements in that are, are generally armor-driven, so that is a positive. Brad mentioned in during his, his comments around HyperX, right? The really the ability of the pull-through in that channel, it's been very, very strong on that product. That is some of what you're seeing there. I think it is fair to model it in, probably a little more consistent with what we saw in the first half and the back half, but not, not any major variation from that. Got it. Last one for me. Maybe just an update on the blast sensor with SOCOM. Have we gotten any feedback yet? What are the next steps? Just anything incremental to call out. Yeah, absolutely. Few, few updates there. The final SOCOM sensor program delivery is due end of September. Delivery, meaning engineering deliverables, not, not product deliverables. That's the next step, September 2023. The SOCOM sensor program is expected to be completed and released with the final results in early Q1 of 2024, is what we're being told at this point by SOCOM. At that point, once the, the results released and feedback's been given on, on the program, they'll give guidance on what those next steps are. That's helpful. That's all from me, guys. Thanks. Thank you. Your next question comes from the line of Kyle G. Wanclawiak from Jefferies. Your line is open. Hi, guys. Thanks for the time. Absolutely. Thank you. Thanks for joining. Yeah, really nice performance here on the margin front in Q2, and I know you guys had previously said Q1 was probably going to be the high-water mark. If you can just dig into the mix equation into the back half, and just thinking about whether there's maybe opportunity to do better, given Q2 mix was, mix was pretty positive across pretty much all the channels. Yeah. Great question. I think there is, you know, coming out of Q1, it was very strong sequentially from Q4, and also, year-over-year. We were certainly pleased with that performance. You know, that performance did continue, but we saw some, some favorable channel mix, in particular, like the duty gear. You know, as we think about the back half of the year, things that could, could help or hurt sequentially, really, you need to think about it consumer side. You know, we've talked about before, and that for us, that commercial channel for duty gear is, you know, big box, our e-com website, and then online retailers. That is certainly a more favorable margin for us. And then, you know, the one that's a little more difficult to put your finger on is really the, the distribution segment. Right, that's driven, you know, in part by, certainly by customer demand, but, you know, in more recent times, it's much more driven by suppliers and their ability to ship. You know, while the market, I'd say our supply chain is, you know, internally is more stable on the product segment side, there's still a lot of variability on the distribution side. That's one that we'll kind of watch, and that can move around quite a bit and, and push or pull margins. You know, the, the armor margins have been favorable. You know, we've talked before about Brad mentioned soft tackle on the HyperX, which has really seen, seen some great traction. We've seen increased demand in shields, coming off Uvalde. That'll be one that if, if it continues to be very strong throughout the year, could keep us kind of more in line with Q2. Right now, we expect to be just slightly down and certainly above last year, but slightly from Q2. Great. Then just one on the M&A pipeline. Just curious, given the 10 proposals you guys talked about, and really appreciate the extra commentary there. Just trying to get a sense around confidence levels about closing something this year, given, you know, the comment about bank-led run processes, probably not starting towards the end of this year. Just thinking about what you're seeing, has there been any budging on valuations in, in the proposals you have out there, and anything else within that? Thanks. You know, as Warren mentioned, we haven't seen anything. Oh, go ahead, Warren. No, it's okay, Blaine, go ahead. I was going to say, we haven't seen anything come, come back to us from a valuation perspective. You know, Warren threw out a couple scenarios where that's, you know, either the, the sellers decide to pull it off the market, and, and, and wait. You know, we think that-- we do think that starts to come to an end. We do feel like there's a little bit of momentum in the marketplace with, you know, more inquiries out there. I think the, the number out there is very indicative of the effort and diligence the team takes and, and the seriousness of M&A and getting into it. I think you also have to appreciate, you know, the company's track record, as well as Warren's track record of being, you know, very diligent and not overpaying for assets. But we do feel like they'll get some momentum here in, in Q4 or Q3, Q4 to line up those 1 to 2 deals. Yeah, I would just add that, you know, we are looking for, for high-quality businesses. We're not looking to-- we're not looking for a Hamburger Helper here. We are looking for companies that have, you know, very strong, you know, margin performance, you know, both, you know, gross margin, EBITDA margin, and, you know, where we think our, you know, our operating teams can, can, you know, further drive, you know, the, the, the performance and the productivity. There's, there's, you know, there's more coming out now. Obviously, as interest rates remain elevated, there's just more coming out. We do expect to see more carve-out opportunities for us, as well as private companies, where within higher interest rates and so on and so forth, it might be a very good time for them to consider selling, selling their businesses. We are, we are careful, we're diligent, and we have, besides the 10, we have looked at a lot of businesses that come through. There's just a lot of stuff for sale now. It seems that it, it is beginning to pick up. We are excited about the opportunities towards the end of this year and certainly into next year. Appreciate it. Thank you, guys. I think the one other thing I should say is, you know, as, as, Brad and Blaine have refined our businesses, our operating models, our management teams throughout, you know, I think most importantly, you know, they have permission now to, you know, look at, you know, tuck in, you know, acquisitions as well as, you know, some transactions, which might be, a little larger, certainly given our, you know, you know, our, our great balance sheet. Your next question comes from the line of Jeff Van Sinderen of B. Riley. Your line is open. Hi, everyone, let me add my congratulations on terrific progress in Q2. Any more color on what you're seeing in terms of the new holster platform, I guess outlook there as you add more sizes to fit different weapons? Does it seem like we might be entering an early phase of an upward cycle there? No, I wouldn't call it an early phase of an upward cycle overall. I mean. You know, we still have various options, you know, plenty of options in the duty gear category. We've got our 6000 Series, 7000 Series, and then we have the new Vault holster, you know, overall. You know, some folks like to pivot to the Vault holster as we have fits, and others continue to move to, you know, different options within the 7000 Series. You know, we like how we're positioned with all three of those out there in the marketplace and gives us that wide range of options for us to provide to customers. I don't see it as like we've talked in the past, I don't see any of the holster products as kind of tripping or pulling forward that replacement cycle that we see typically every kind of 5 to 7 years for, for holsters. Okay, fair enough. Then just regarding the latest you're seeing on the M&A front, are you getting the sense that there's any thawing out around sort of the meeting of the minds on evaluation or maybe other elements that could help bring deals to fruition? I guess, and then also thoughts on probability around the size of deals that could come to fruition in the next couple of quarters for the next one to two deals. Should we assume that these would be percentage margin accretive deals or not necessarily? I'll, I'll take this. Yeah, I think the first two parts of this question are difficult to answer. Again, certainly with, you know, the cost of capital, you know, significantly higher than it was a year ago, I think there is some tempering of expectation right now in terms of, you know, what's, you know, what, what valuation should, should, should look like. We are optimistic that we will be able to, you know, buy companies that, you know, fit within our economic criteria. It's, you know, the sizes are all over the place for us. Some are, you know, as I said, smaller tuck-in, and some are larger ones. I think we gave some examples, you know, in my prepared remarks. You know, you know, finally, you know, I think, you know, we are, you know, we are actively looking at, at these businesses. I think you can expect that the margins, you know, would be, you know, at least where we are today, you know, if not, if not better. So to answer your question, I mean, our expectation is that, you know, ideally, we'd like to find companies where the margins would be accretive to our existing ones. Okay, terrific to hear. Thanks for taking my questions. I'll take the rest off line. Sure. Again, if you would like to ask a question, press Star and then the number one on your telephone keypad. Your next question comes from the line of Nelson Obus of Wynnefield Capital. Your line is open. Yeah, hi there. Nice quarter. It looks like you're stepping up CapEx the second half of the year. I'm just curious where that focus is going? Hi, Nelson. Yeah, great question. Hi there. The, the back half pickup in capital expenditures is really driven by the Stayner Road facility expansion. That is one of the facilities where we produce our holster products. It's a combination, building expansion, parking lot expansion. That is a facility that went from, and Brad, correct me if I say that's wrong, I think about 40 people to around a little over 200 people in the last 5 years, and is certainly in bad need of some upgrading and expansion. Okay, good enough. Thanks, Nelson. Your next question comes from the line of Mark Smith of Lake Street. Your line is open. Hey, guys, it's Alex Sturnieks on the line for Mark Smith today. Hi, how are you doing? Good. I guess, you know, the first question I have is, maybe kind of on the lines of consumer trends, maybe more so the mix of new products. You know, you talked a little bit about it in the remarks. Could you talk a little bit more, maybe provide a little bit more color on the mix of new products and sales, and how that might look into the remainder of the year? Your question was around the commercial channel for us? Yeah. Yep. Yeah. For us, keep just to put it in perspective, too, the commercial channel from a, you know, overall perspective is a little less than 10% of the revenue for us. As we've talked about in the past, you know, we see really healthy margins from that channel. For those who've been with us and, and kind of talked through this before, you know, the commercial channel for us was not a focus, which is predominantly holsters, when you look at that mix. 2 years ago, we worked on reorganizing everything from back office to engineering, to sales, to, you know, wake up every day and have a group of folks, you know, continue to dive into the, the various channel and subchannels that we have there, to understand various product needs for customers. That's just a little bit of the backstory and a little bit of history. What we're seeing now is, you know, we've got the momentum, with that group of folks, and, you know, we've been launching, you know, various products, to the marketplace so that we can, you know, stick with our high innovation, you know, high functionality, premium-type products in that space. We're about to launch, you know, various products that we've started to get some really great feedback and some really good traction on, on a lot of those, either outside the waistband or. Yeah, I think that's, that's very helpful, actually. Secondly, I kind of wanna go over, you guys talked about the uptick in demand from Q1 to Q2. You know, you're kind of monitoring the consumer environment as well. What are you currently seeing there as far as consumer business? Are you seeing any trends, you know, across geographies, you know, that type of thing? Not necessarily across geographies for us. Keep in mind, as Blaine had mentioned a little bit earlier, that channel, commercial channel for us, has various sub-channels in it that we combine. It's our e-commerce, it's, you know, it's our other web retailers that are out there. It's big box, and it's various dealers, brick-and-mortar type dealers that we have in that channel all combined together. You know, when we look at Q1 versus Q2, we did see, you know, in the market, just, you know, looking at various statistics and reports and working with various customers, you know, we've seen demand higher than Q1 in that gun accessory, kind of sporting, shooting sports-type segment, which is, you know, sometimes a good indicator overall for what we would end up seeing. When you look at that second half outlook in, in that commercial segment for us, thinking about the second half, a big part of the second half is, you know, as you get into the end of the year, with a lot of those sub-channels that I just talked about, and a lot of them will be focused on, you know, end-of-the-year holiday buying type season, you know, looking for those innovative products and, and, you know, to package up for customers for the end of the year. So, for us, we feel like we got, you know, the right pace of products out in, in time, for us to continue to take advantage of that time end of the year. Yeah. Thanks, guys. Congrats on the quarter. Thank you. Thank you. You're welcome. There are no further questions at this time. Brad Williams, I turn the call back over to you. Thank you, operator. I'd like to thank everyone again for joining us on today's call and for your continued interest in Cadre. Operator? This concludes today's conference call. Thank you, and have a great day.