CPI Card Group Inc. Reports Second Quarter 2022 Results
CPI Card Group reported a 22% increase in net sales to $113.3 million for Q2 2022, driven by strong demand for contactless cards and SaaS instant issuance solutions. However, net income slightly decreased by 1% to $6.2 million, while Adjusted EBITDA rose by 2% to $19.7 million. The company has raised its 2022 outlook, projecting high teens net sales growth and low double-digit Adjusted EBITDA growth. Despite inflationary pressures affecting costs, CPI continues to highlight strong market growth for eco-focused payment cards and instant issuance services.
- Net sales increased 22% year-over-year to $113.3 million.
- Adjusted EBITDA rose by 2% to $19.7 million.
- Company raised its 2022 outlook for net sales growth to high teens.
- Net income decreased by 1% to $6.2 million.
- Gross profit margin fell to 35.8% from 39.8% year-over-year.
Net Sales Increased
Strong Demand for Eco-focused Cards and SaaS-based Instant Issuance Solutions Drove Second Quarter Sales Growth
Company Increases 2022 Outlook for
Second quarter net sales increased
“Strong customer demand for our portfolio of high-quality payment offerings drove outstanding sales growth in the second quarter” said
The Company now expects high teens net sales growth and low double-digit Adjusted EBITDA growth for the full year, an increase from the previous outlook of low double-digit growth for net sales and mid-to-high single-digit growth for Adjusted EBITDA. The full-year Adjusted EBITDA margin is still expected to be slightly below
CPI is a top payment solutions provider in the
The Company expects long-term market growth to be aided by the gradual transition to higher-priced contactless cards, including eco-focused cards, as well as continued financial payment card growth.
Year-to-date 2022 Business Highlights
-
Generated incremental net sales from customer demand for higher-priced contactless cards, as the
U.S. payment card market continues its gradual transition to contactless solutions. -
Continued to be a leading provider of eco-focused payment card solutions in the
U.S. Through the end of the second quarter of 2022, the Company has sold nearly 80 million eco-focused cards since launch in late 2019. -
Experienced ongoing high demand for Card@Once® Software-as-a-Service-based instant issuance solutions. The Company has nearly 14,000 Card@Once® installations across approximately 1,900 financial institutions in the
U.S. -
Reduced the outstanding balance on the Company’s
8.625% senior secured notes by redeeming of notes and increased its ABL revolving credit facility from$20 million to$50 million in the first quarter. The Company’s Net Leverage Ratio was 4x at$75 million June 30, 2022 .
Second Quarter 2022 Financial Highlights
Net sales increased
-
Debit and Credit segment net sales increased
29% to . Growth was primarily driven by increased sales of higher-priced contactless cards, including eco-focused cards and the related personalization, and Card@Once® instant issuance solutions.$94.2 million -
Prepaid Debit segment net sales declined
6% to . Prior year sales benefited from the onboarding of new customer portfolios and retail inventory replenishment.$19.2 million
Second quarter gross profit increased
Year-over-year, income from operations decreased
Profitability benefited from higher net sales and the resulting operating leverage, with offsets from increased materials costs and higher SG&A expenses, including higher compensation-related expenses. Net income also benefited from a lower effective tax rate in the quarter.
First Half 2022 Financial Highlights
Net sales increased
-
Debit and Credit segment net sales increased
31% to . Growth was primarily driven by increased sales of higher-priced contactless cards, including eco-focused cards; Card@Once® instant issuance solutions; and personalization services related to contactless cards.$186.2 million -
Prepaid Debit segment net sales declined
3% to . Prior year sales benefited from the onboarding of new customer portfolios and retail inventory replenishment.$38.7 million
First half gross profit increased
Year-over-year, income from operations declined
Profitability benefited from higher net sales and the resulting operating leverage, partially offset by increased materials and labor costs and higher SG&A expenses, including increased compensation-related expenses and compliance costs related to Sarbanes-Oxley. The increase in net income was aided by the comparison to significant debt refinancing costs incurred in the 2021 first quarter.
Balance Sheet, Liquidity, and Cash Flow
As of
The Company had
The Company’s capital structure and allocation priorities are to maintain ample liquidity; invest in the business, including strategic acquisitions; deleverage the balance sheet; and return funds to stockholders.
“We delivered sound profitability despite persistent inflationary pressures on costs,” said
Conference Call and Webcast
Toll-Free Dial-In Number,
International: (929) 526-1599
Conference ID: 182167
Webcast Link: Q2 2022 Webcast
(https://investor.cpicardgroup.com)
Participants are advised to login for the webcast 10 minutes prior to the scheduled start time.
A replay of the conference call will be available until
US dial-in number (toll free): (866) 813-9403
All other locations: 44-204-525-0658
Conference ID: 038358
A webcast replay of the conference call will also be available on CPI Card Group Inc.’s Investor Relations web site: https://investor.cpicardgroup.com
Non-GAAP Financial Measures
In addition to financial results reported in accordance with
Adjusted EBITDA
Adjusted EBITDA is presented on a continuing operations basis and is defined as EBITDA (which represents earnings before interest, taxes, depreciation and amortization) adjusted for litigation; stock-based compensation expense; estimated sales tax expense, restructuring and other charges; loss on debt extinguishment; foreign currency gain or loss; litigation settlement gain; and other items that are unusual in nature, infrequently occurring or not considered part of our core operations, as set forth in the reconciliation in Exhibit E. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, unusual or non-recurring losses or gains. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses or the cash requirements necessary to service interest or principal payments on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; (f) the impact of earnings or charges resulting from matters that we and the lenders under our credit agreement may not consider indicative of our ongoing operations; or (g) the impact of any discontinued operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-operating, unusual or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results. In addition, certain of these expenses represent the reduction of cash that could be used for other purposes. Adjusted EBITDA margin percentage as shown in Exhibit E is computed as Adjusted EBITDA divided by total net sales.
We define LTM Adjusted EBITDA as Adjusted EBITDA (defined previously) for the last twelve months. LTM Adjusted EBITDA is used in the computation of Net Leverage Ratio, and is reconciled in Exhibit E.
Free Cash Flow
We define Free Cash Flow as cash flow provided by (used in) operating activities (continuing operations) less capital expenditures. We use this metric in analyzing our ability to service and repay our debt. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service our debt, nor does it reflect the cash impacts of our discontinued operations. Free Cash Flow should not be considered in isolation, or as a substitute for, cash (used in) provided by operating activities or any other measures of liquidity derived in accordance with GAAP.
Financial Expectations for 2022
We have provided Adjusted EBITDA and Adjusted EBITDA Margin expectations for 2022 on a non-GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled or cannot be reliably predicted because they are not part of the Company’s routine activities, any of which could be significant.
Net Leverage Ratio
Management and various investors use the ratio of debt principal outstanding, plus finance lease obligations, less cash, divided by LTM Adjusted EBITDA, or “Net Leverage Ratio”, as a measure of our financial strength when making key investment decisions and evaluating us against peers.
About
CPI Card Group® is a payment technology company and leading provider of credit, debit and prepaid solutions delivered physically, digitally and on-demand. CPI helps our customers foster connections and build their brands through innovative and reliable solutions, including financial payment cards, personalization and Software-as-a-Service (SaaS) instant issuance. CPI has more than 20 years of experience in the payments market and is a trusted partner to financial institutions and payments services providers. Serving customers from locations throughout
Forward-Looking Statements
Certain statements and information in this release (as well as information included in other written or oral statements we make from time to time) may contain or constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe,” “estimate,” “project,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” “continue,” “committed,” “attempt,” “target,” “objective,” “guides,” “seek,” “focus,” “provides guidance,” “provides outlook” or other similar expressions are intended to identify forward-looking statements, which are not historical in nature. These forward-looking statements, including statements about our strategic initiatives and market opportunities and our guidance for full-year 2022 results, are based on our current expectations and beliefs concerning future developments and their potential effect on us and other information currently available. Such forward-looking statements, because they relate to future events, are by their very nature subject to many important risks and uncertainties that could cause actual results or other events to differ materially from those contemplated.
These risks and uncertainties include, but are not limited to: the potential effects of COVID-19 and responses thereto on our business, including our supply chain, customer demand, workforce, operations and ability to comply with certain covenants related to our indebtedness; our transition to being an accelerated filer and complying with Section 404 of the Sarbanes-Oxley Act of 2002 and the costs associated with such compliance and implementation of procedures thereunder; our failure to maintain effective internal control over financial reporting or remediate material weaknesses; our inability to recruit, retain and develop qualified personnel, including key personnel; a disruption or other failure in our supply chain, including as a result of the
We caution and advise readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof. These statements are based on assumptions that may not be realized and involve risks and uncertainties that could cause actual results or other events to differ materially from the expectations and beliefs contained herein. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
For more information:
CPI encourages investors to use its investor relations website as a way of easily finding information about the Company. CPI promptly makes available on this website the reports that the Company files or furnishes with the
Exhibit A |
Condensed Consolidated Statements of Operations and Comprehensive Income - Unaudited for the three and six months ended |
|
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|
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Exhibit B |
Condensed Consolidated Balance Sheets – Unaudited as of |
|
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|
|
Exhibit C |
Condensed Consolidated Statements of Cash Flows - Unaudited for the six months ended |
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Exhibit D |
Segment Summary Information – Unaudited for the three and six months ended |
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Exhibit E |
Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three and six months ended |
EXHIBIT A |
||||||||||||||||
|
||||||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income |
||||||||||||||||
(in thousands, except share and per share amounts) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
2022 |
2021 |
2022 |
2021 |
||||||||||||
Net sales: |
|
|
|
|
||||||||||||
Products |
$ |
68,945 |
|
$ |
47,156 |
|
$ |
137,261 |
|
$ |
94,169 |
|
||||
Services |
|
44,363 |
|
|
46,063 |
|
|
87,471 |
|
|
88,142 |
|
||||
Total net sales |
|
113,308 |
|
|
93,219 |
|
|
224,732 |
|
|
182,311 |
|
||||
Cost of sales: |
|
|
|
|
||||||||||||
Products (exclusive of depreciation and amortization shown below) |
|
43,055 |
|
|
27,928 |
|
|
86,149 |
|
|
55,215 |
|
||||
Services (exclusive of depreciation and amortization shown below) |
|
27,578 |
|
|
25,939 |
|
|
54,435 |
|
|
49,607 |
|
||||
Depreciation and amortization |
|
2,124 |
|
|
2,264 |
|
|
4,319 |
|
|
4,680 |
|
||||
Total cost of sales |
|
72,757 |
|
|
56,131 |
|
|
144,903 |
|
|
109,502 |
|
||||
Gross profit |
|
40,551 |
|
|
37,088 |
|
|
79,829 |
|
|
72,809 |
|
||||
Operating expenses: |
|
|
|
|
||||||||||||
Selling, general and administrative (exclusive of depreciation and amortization shown below) |
|
24,050 |
|
|
19,748 |
|
|
43,932 |
|
|
35,894 |
|
||||
Depreciation and amortization |
|
1,447 |
|
|
1,553 |
|
|
2,862 |
|
|
3,359 |
|
||||
Total operating expenses |
|
25,497 |
|
|
21,301 |
|
|
46,794 |
|
|
39,253 |
|
||||
Income from operations |
|
15,054 |
|
|
15,787 |
|
|
33,035 |
|
|
33,556 |
|
||||
Other expense, net: |
|
|
|
|
||||||||||||
Interest, net |
|
(7,146 |
) |
|
(7,037 |
) |
|
(15,011 |
) |
|
(16,013 |
) |
||||
Other (expense) income, net |
|
(15 |
) |
|
4 |
|
|
(16 |
) |
|
29 |
|
||||
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
(395 |
) |
|
(5,048 |
) |
||||
Total other expense, net |
|
(7,161 |
) |
|
(7,033 |
) |
|
(15,422 |
) |
|
(21,032 |
) |
||||
Income before income taxes |
|
7,893 |
|
|
8,754 |
|
|
17,613 |
|
|
12,524 |
|
||||
Income tax expense |
|
(1,742 |
) |
|
(2,522 |
) |
|
(5,460 |
) |
|
(3,882 |
) |
||||
Net income |
$ |
6,151 |
|
$ |
6,232 |
|
$ |
12,153 |
|
$ |
8,642 |
|
||||
|
|
|
|
|
||||||||||||
Basic and diluted earnings per share: |
|
|
|
|
||||||||||||
Basic earnings per share |
$ |
0.55 |
|
$ |
0.55 |
|
$ |
1.08 |
|
$ |
0.77 |
|
||||
Diluted earnings per share |
$ |
0.52 |
|
$ |
0.53 |
|
$ |
1.04 |
|
$ |
0.74 |
|
||||
|
|
|
|
|
||||||||||||
Basic weighted-average shares outstanding |
|
11,257,733 |
|
|
11,233,002 |
|
|
11,256,600 |
|
|
11,231,742 |
|
||||
Diluted weighted-average shares outstanding |
|
11,721,744 |
|
|
11,762,481 |
|
|
11,718,836 |
|
|
11,720,148 |
|
||||
|
|
|
|
|
||||||||||||
Comprehensive income: |
|
|
|
|
||||||||||||
Net income |
$ |
6,151 |
|
$ |
6,232 |
|
$ |
12,153 |
|
$ |
8,642 |
|
||||
Total comprehensive income |
$ |
6,151 |
|
$ |
6,232 |
|
$ |
12,153 |
|
$ |
8,642 |
|
EXHIBIT B |
||||||||
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(in thousands, except share and per share amounts) |
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
|
|
||||||
|
2022 |
2021 |
||||||
Assets |
|
|
||||||
Current assets: |
|
|
||||||
Cash and cash equivalents |
$ |
9,051 |
|
$ |
20,683 |
|
||
Accounts receivable, net of allowances of |
|
73,157 |
|
|
60,953 |
|
||
Inventories |
|
75,797 |
|
|
58,009 |
|
||
Prepaid expenses and other current assets |
|
5,070 |
|
|
5,522 |
|
||
Income taxes receivable |
|
278 |
|
|
534 |
|
||
Total current assets |
|
163,353 |
|
|
145,701 |
|
||
Plant, equipment, leasehold improvements and operating lease right-of-use assets, net |
|
52,203 |
|
|
47,251 |
|
||
Intangible assets, net |
|
19,921 |
|
|
21,854 |
|
||
|
|
47,150 |
|
|
47,150 |
|
||
Other assets |
|
7,057 |
|
|
6,184 |
|
||
Total assets |
$ |
289,684 |
|
$ |
268,140 |
|
||
|
|
|
||||||
Liabilities and stockholders’ deficit |
|
|
||||||
Current liabilities: |
|
|
||||||
Accounts payable |
$ |
28,815 |
|
$ |
26,443 |
|
||
Accrued expenses |
|
34,288 |
|
|
37,150 |
|
||
Deferred revenue and customer deposits |
|
834 |
|
|
1,182 |
|
||
Total current liabilities |
|
63,937 |
|
|
64,775 |
|
||
Long-term debt |
|
309,739 |
|
|
303,626 |
|
||
Deferred income taxes |
|
5,558 |
|
|
5,253 |
|
||
Other long-term liabilities |
|
17,415 |
|
|
15,506 |
|
||
Total liabilities |
|
396,649 |
|
|
389,160 |
|
||
Commitments and contingencies |
|
|
||||||
Series A Preferred Stock; |
|
— |
|
|
— |
|
||
Stockholders’ deficit: |
|
|
||||||
Common stock; |
|
11 |
|
|
11 |
|
||
Capital deficiency |
|
(108,880 |
) |
|
(110,782 |
) |
||
Accumulated earnings (loss) |
|
1,904 |
|
|
(10,249 |
) |
||
Total stockholders’ deficit |
|
(106,965 |
) |
|
(121,020 |
) |
||
Total liabilities and stockholders’ deficit |
$ |
289,684 |
|
$ |
268,140 |
|
EXHIBIT C |
||||||||
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(in thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
Six Months Ended |
|||||||
|
2022 |
2021 |
||||||
Operating activities |
|
|
||||||
Net income |
$ |
12,153 |
|
$ |
8,642 |
|
||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
|
|
||||||
Depreciation and amortization expense |
|
7,181 |
|
|
8,039 |
|
||
Stock-based compensation expense |
|
1,962 |
|
|
98 |
|
||
Amortization of debt issuance costs and debt discount |
|
967 |
|
|
1,393 |
|
||
Loss on debt extinguishment |
|
395 |
|
|
5,048 |
|
||
Deferred income taxes |
|
305 |
|
|
38 |
|
||
Other, net |
|
788 |
|
|
142 |
|
||
Changes in operating assets and liabilities: |
|
|
||||||
Accounts receivable |
|
(12,280 |
) |
|
(1,384 |
) |
||
Inventories |
|
(17,853 |
) |
|
(15,600 |
) |
||
Prepaid expenses and other assets |
|
(409 |
) |
|
(752 |
) |
||
Income taxes, net |
|
256 |
|
|
7,989 |
|
||
Accounts payable |
|
1,690 |
|
|
2,548 |
|
||
Accrued expenses and other liabilities |
|
(2,955 |
) |
|
7,260 |
|
||
Deferred revenue and customer deposits |
|
(348 |
) |
|
(715 |
) |
||
Cash (used in) provided by operating activities |
|
(8,148 |
) |
|
22,746 |
|
||
Investing activities |
|
|
||||||
Capital expenditures for plant, equipment and leasehold improvements |
|
(8,179 |
) |
|
(3,703 |
) |
||
Other |
|
15 |
|
|
156 |
|
||
Cash used in investing activities |
|
(8,164 |
) |
|
(3,547 |
) |
||
Financing activities |
|
|
||||||
Principal payments on First Lien Term loan |
|
— |
|
|
(312,500 |
) |
||
Principal payments on Senior Credit Facility |
|
— |
|
|
(30,000 |
) |
||
Principal payments on Senior Notes |
|
(20,000 |
) |
|
— |
|
||
Principal payments on ABL Revolver |
|
(10,000 |
) |
|
(15,000 |
) |
||
Proceeds from Senior Notes |
|
— |
|
|
310,000 |
|
||
Proceeds from ABL Revolver, net of discount |
|
35,000 |
|
|
14,750 |
|
||
Proceeds from exercises of stock options |
|
— |
|
|
34 |
|
||
Debt issuance costs |
|
(262 |
) |
|
(9,452 |
) |
||
Payments on debt extinguishment and other |
|
(660 |
) |
|
(2,685 |
) |
||
Proceeds from finance lease financing |
|
2,074 |
|
|
— |
|
||
Payments on finance lease obligations |
|
(1,435 |
) |
|
(1,287 |
) |
||
Cash provided by (used in) financing activities |
|
4,717 |
|
|
(46,140 |
) |
||
Effect of exchange rates on cash |
|
(37 |
) |
|
5 |
|
||
Net decrease in cash and cash equivalents |
|
(11,632 |
) |
|
(26,936 |
) |
||
Cash and cash equivalents, beginning of period |
|
20,683 |
|
|
57,603 |
|
||
Cash and cash equivalents, end of period |
$ |
9,051 |
|
$ |
30,667 |
|
||
Supplemental disclosures of cash flow information |
|
|
||||||
Cash paid during the period for: |
|
|
||||||
Interest |
$ |
13,985 |
|
$ |
8,604 |
|
||
Income taxes paid |
$ |
5,746 |
|
$ |
2,284 |
|
||
Income taxes (refunded) |
$ |
(449 |
) |
$ |
(6,003 |
) |
||
Right-of-use assets obtained in exchange for lease obligations: |
|
|
||||||
Operating leases |
$ |
816 |
|
$ |
3,363 |
|
||
Financing leases |
$ |
3,077 |
|
$ |
484 |
|
||
Accounts payable and accrued expenses for capital expenditures for plant, equipment and leasehold improvements |
$ |
3,110 |
|
$ |
399 |
|
EXHIBIT D |
|||||||||||||||
|
|||||||||||||||
Segment Summary Information |
|||||||||||||||
For the Three and Six Months Ended |
|||||||||||||||
(dollars in thousands) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
|
|||||||||||
|
|
|
|
|
|||||||||||
|
Three Months Ended |
||||||||||||||
|
2022 |
2021 |
$ Change |
% Change |
|||||||||||
Net sales by segment: |
|
|
|
|
|||||||||||
Debit and Credit |
$ |
94,181 |
|
$ |
72,860 |
|
$ |
21,321 |
|
29.3 |
% |
||||
Prepaid Debit |
|
19,214 |
|
|
20,383 |
|
|
(1,169 |
) |
(5.7 |
)% |
||||
Eliminations |
|
(87 |
) |
|
(24 |
) |
|
(63 |
) |
* |
% |
||||
Total |
$ |
113,308 |
|
$ |
93,219 |
|
$ |
20,089 |
|
21.6 |
% |
||||
* Calculation not meaningful |
|
|
|
|
|||||||||||
|
|
|
|
|
|||||||||||
|
Six Months Ended |
||||||||||||||
|
2022 |
2021 |
$ Change |
% Change |
|||||||||||
Net sales by segment: |
|
|
|
|
|||||||||||
Debit and Credit |
$ |
186,196 |
|
$ |
142,677 |
|
$ |
43,519 |
|
30.5 |
% |
||||
Prepaid Debit |
|
38,675 |
|
|
39,841 |
|
|
(1,166 |
) |
(2.9 |
)% |
||||
Eliminations |
|
(139 |
) |
|
(207 |
) |
|
68 |
|
* |
% |
||||
Total |
$ |
224,732 |
|
$ |
182,311 |
|
$ |
42,421 |
|
23.3 |
% |
Gross Profit |
|
|
|
|
|
|
|||||||||||||
|
Three Months Ended |
||||||||||||||||||
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||
Gross profit by segment: |
|
|
|
|
|
|
|||||||||||||
Debit and Credit |
$ |
34,088 |
36.2 |
% |
$ |
28,263 |
38.8 |
% |
$ |
5,825 |
|
20.6 |
% |
||||||
Prepaid Debit |
|
6,463 |
33.6 |
% |
|
8,825 |
43.3 |
% |
|
(2,362 |
) |
(26.8 |
)% |
||||||
Total |
$ |
40,551 |
35.8 |
% |
$ |
37,088 |
39.8 |
% |
$ |
3,463 |
|
9.3 |
% |
||||||
|
|
|
|
|
|
|
|||||||||||||
|
Six Months Ended |
||||||||||||||||||
|
2022 |
% of Net
|
2021 |
% of Net
|
$ Change |
% Change |
|||||||||||||
Gross profit by segment: |
|
|
|
|
|
|
|||||||||||||
Debit and Credit |
$ |
66,318 |
35.6 |
% |
$ |
55,812 |
39.1 |
% |
$ |
10,506 |
|
18.8 |
% |
||||||
Prepaid Debit |
|
13,511 |
34.9 |
% |
|
16,997 |
42.7 |
% |
|
(3,486 |
) |
(20.5 |
)% |
||||||
Total |
$ |
79,829 |
35.5 |
% |
$ |
72,809 |
39.9 |
% |
$ |
7,020 |
|
9.6 |
% |
Income from Operations |
|
|
|
|
|
|
|||||||||||||||
|
Three Months Ended |
||||||||||||||||||||
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
Income (loss) from operations by segment: |
|
|
|
|
|
|
|||||||||||||||
Debit and Credit |
$ |
25,319 |
|
26.9 |
% |
$ |
20,258 |
|
27.8 |
% |
$ |
5,061 |
|
25.0 |
% |
||||||
Prepaid Debit |
|
5,316 |
|
27.7 |
% |
|
7,550 |
|
37.0 |
% |
|
(2,234 |
) |
(29.6 |
)% |
||||||
Other |
|
(15,581 |
) |
* |
% |
|
(12,021 |
) |
* |
% |
|
(3,560 |
) |
29.6 |
% |
||||||
Total |
$ |
15,054 |
|
13.3 |
% |
$ |
15,787 |
|
16.9 |
% |
$ |
(733 |
) |
(4.6 |
)% |
||||||
|
|
|
|
|
|
|
|||||||||||||||
|
Six Months Ended |
||||||||||||||||||||
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
Income (loss) from operations by segment: |
|
|
|
|
|
|
|||||||||||||||
Debit and Credit |
$ |
49,429 |
|
26.5 |
% |
$ |
40,412 |
|
28.3 |
% |
$ |
9,017 |
|
22.3 |
% |
||||||
Prepaid Debit |
|
11,284 |
|
29.2 |
% |
|
14,568 |
|
36.6 |
% |
|
(3,284 |
) |
(22.5 |
)% |
||||||
Other |
|
(27,678 |
) |
* |
% |
|
(21,424 |
) |
* |
% |
|
(6,254 |
) |
29.2 |
% |
||||||
Total |
$ |
33,035 |
|
14.7 |
% |
$ |
33,556 |
|
18.4 |
% |
$ |
(521 |
) |
(1.6 |
)% |
||||||
|
|
|
|
|
|
|
|||||||||||||||
EBITDA |
|
|
|
|
|
|
|||||||||||||||
|
Three Months Ended |
||||||||||||||||||||
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
EBITDA by segment: |
|
|
|
|
|
|
|||||||||||||||
Debit and Credit |
$ |
27,273 |
|
29.0 |
% |
$ |
22,322 |
|
30.6 |
% |
$ |
4,951 |
|
22.2 |
% |
||||||
Prepaid Debit |
|
5,899 |
|
30.7 |
% |
|
8,106 |
|
39.8 |
% |
|
(2,207 |
) |
(27.2 |
)% |
||||||
Other |
|
(14,562 |
) |
* |
% |
|
(10,820 |
) |
* |
% |
|
(3,742 |
) |
34.6 |
% |
||||||
Total |
$ |
18,610 |
|
16.4 |
% |
$ |
19,608 |
|
21.0 |
% |
$ |
(998 |
) |
(5.1 |
)% |
||||||
|
|
|
|
|
|
|
|||||||||||||||
|
Six Months Ended |
||||||||||||||||||||
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
EBITDA by segment: |
|
|
|
|
|
|
|||||||||||||||
Debit and Credit |
$ |
53,367 |
|
28.7 |
% |
$ |
44,722 |
|
31.3 |
% |
$ |
8,645 |
|
19.3 |
% |
||||||
Prepaid Debit |
|
12,463 |
|
32.2 |
% |
|
15,679 |
|
39.4 |
% |
|
(3,216 |
) |
(20.5 |
)% |
||||||
Other |
|
(26,025 |
) |
* |
% |
|
(23,825 |
) |
* |
% |
|
(2,200 |
) |
9.2 |
% |
||||||
Total |
$ |
39,805 |
|
17.7 |
% |
$ |
36,576 |
|
20.1 |
% |
$ |
3,229 |
|
8.8 |
% |
Reconciliation of Income (loss) from |
|
|
|
|
|||||||||||
Operations by Segment to EBITDA by Segment |
|
|
|
|
|||||||||||
|
Three Months Ended |
||||||||||||||
|
Debit and Credit |
Prepaid Debit |
Other |
Total |
|||||||||||
EBITDA by segment: |
|
|
|
|
|||||||||||
Income (loss) from operations |
$ |
25,319 |
$ |
5,316 |
|
$ |
(15,581 |
) |
$ |
15,054 |
|
||||
Depreciation and amortization |
|
1,950 |
|
584 |
|
|
1,037 |
|
|
3,571 |
|
||||
Other income (expenses) |
|
4 |
|
(1 |
) |
|
(18 |
) |
|
(15 |
) |
||||
EBITDA |
$ |
27,273 |
$ |
5,899 |
|
$ |
(14,562 |
) |
$ |
18,610 |
|
||||
|
|
|
|
|
|||||||||||
|
|
|
|
|
|||||||||||
|
Three Months Ended |
||||||||||||||
|
Debit and Credit |
Prepaid Debit |
Other |
Total |
|||||||||||
EBITDA by segment: |
|
|
|
|
|||||||||||
Income (loss) from operations |
$ |
20,258 |
$ |
7,550 |
|
$ |
(12,021 |
) |
$ |
15,787 |
|
||||
Depreciation and amortization |
|
2,060 |
|
558 |
|
|
1,199 |
|
|
3,817 |
|
||||
Other income (expenses) |
|
4 |
|
(2 |
) |
|
2 |
|
|
4 |
|
||||
EBITDA |
$ |
22,322 |
$ |
8,106 |
|
$ |
(10,820 |
) |
$ |
19,608 |
|
||||
|
|
|
|
|
|||||||||||
|
|
|
|
|
|||||||||||
|
Six Months Ended |
||||||||||||||
|
Debit and Credit |
Prepaid Debit |
Other |
Total |
|||||||||||
EBITDA by segment: |
|
|
|
|
|||||||||||
Income (loss) from operations |
$ |
49,429 |
$ |
11,284 |
|
$ |
(27,678 |
) |
$ |
33,035 |
|
||||
Depreciation and amortization |
|
3,931 |
|
1,182 |
|
|
2,068 |
|
|
7,181 |
|
||||
Other income (expenses) |
|
7 |
|
(3 |
) |
|
(415 |
) |
|
(411 |
) |
||||
EBITDA |
$ |
53,367 |
$ |
12,463 |
|
$ |
(26,025 |
) |
$ |
39,805 |
|
||||
|
|
|
|
|
|||||||||||
|
|
|
|
|
|||||||||||
|
Six Months Ended |
||||||||||||||
|
Debit and Credit |
Prepaid Debit |
Other |
Total |
|||||||||||
EBITDA by segment: |
|
|
|
|
|||||||||||
Income (loss) from operations |
$ |
40,412 |
$ |
14,568 |
|
$ |
(21,424 |
) |
$ |
33,556 |
|
||||
Depreciation and amortization |
|
4,297 |
|
1,097 |
|
|
2,645 |
|
|
8,039 |
|
||||
Other income (expenses) |
|
13 |
|
14 |
|
|
(5,046 |
) |
|
(5,019 |
) |
||||
EBITDA |
$ |
44,722 |
$ |
15,679 |
|
$ |
(23,825 |
) |
$ |
36,576 |
|
EXHIBIT E |
||||||||||||||||
|
||||||||||||||||
Supplemental GAAP to Non-GAAP Reconciliation |
||||||||||||||||
(dollars in thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
2022 |
2021 |
2022 |
2021 |
||||||||||||
EBITDA and Adjusted EBITDA: |
|
|
|
|
||||||||||||
Net income |
$ |
6,151 |
|
$ |
6,232 |
|
$ |
12,153 |
|
$ |
8,642 |
|
||||
Interest, net |
|
7,146 |
|
|
7,037 |
|
|
15,011 |
|
|
16,013 |
|
||||
Income tax expense |
|
1,742 |
|
|
2,522 |
|
|
5,460 |
|
|
3,882 |
|
||||
Depreciation and amortization |
|
3,571 |
|
|
3,817 |
|
|
7,181 |
|
|
8,039 |
|
||||
EBITDA |
$ |
18,610 |
|
$ |
19,608 |
|
$ |
39,805 |
|
$ |
36,576 |
|
||||
|
|
|
|
|
||||||||||||
Adjustments to EBITDA: |
|
|
|
|
||||||||||||
Stock-based compensation expense |
|
1,001 |
|
|
47 |
|
|
1,962 |
|
|
98 |
|
||||
Sales tax expense (benefit) (1) |
|
64 |
|
|
(385 |
) |
|
52 |
|
|
(465 |
) |
||||
Severance and other charges (2) |
|
— |
|
|
40 |
|
|
— |
|
|
161 |
|
||||
Loss on debt extinguishment (3) |
|
— |
|
|
— |
|
|
395 |
|
|
5,048 |
|
||||
Foreign currency loss (gain) |
|
15 |
|
|
(4 |
) |
|
15 |
|
|
(29 |
) |
||||
Subtotal of adjustments to EBITDA |
|
1,080 |
|
|
(302 |
) |
|
2,424 |
|
|
4,813 |
|
||||
Adjusted EBITDA |
$ |
19,690 |
|
$ |
19,306 |
|
$ |
42,229 |
|
$ |
41,389 |
|
||||
Net income margin (% of |
|
5.4 |
% |
|
6.7 |
% |
|
5.4 |
% |
|
4.7 |
% |
||||
Net income growth (% Change 2022 vs. 2021) |
|
(1.3 |
)% |
|
|
40.6 |
% |
|
||||||||
Adjusted EBITDA margin (% of |
|
17.4 |
% |
|
20.7 |
% |
|
18.8 |
% |
|
22.7 |
% |
||||
Adjusted EBITDA growth (% Change 2022 vs. 2021) |
|
2.0 |
% |
|
|
2.0 |
% |
|
||||||||
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
2022 |
2021 |
2022 |
2021 |
||||||||||||
Free Cash Flow: |
|
|
|
|
||||||||||||
Cash (used in) provided by operating activities |
$ |
7,813 |
|
$ |
22,602 |
|
$ |
(8,148 |
) |
$ |
22,746 |
|
||||
Capital expenditures for plant, equipment and leasehold improvements |
|
(5,025 |
) |
|
(1,179 |
) |
|
(8,179 |
) |
|
(3,703 |
) |
||||
Free Cash Flow |
$ |
2,788 |
|
$ |
21,423 |
|
$ |
(16,327 |
) |
$ |
19,043 |
|
___________________________ |
||
(1) |
Represents estimated sales tax benefit relating to a contingent liability due to historical activity in certain states where it is probable that the Company will be subject to sales tax plus interest and penalties. |
|
(2) |
The 2021 amount primarily relates to executive severance charges. |
|
(3) |
The company redeemed a portion of the Senior Notes in the second quarter of 2022 and expensed the associated portion of the unamortized deferred financing costs. Additionally, the Company terminated and repaid its Senior Credit Facility and First Lien Term Loan during the first quarter of 2021 and expensed the unamortized deferred financing costs and debt discount. |
|
|
|
||||||
|
Last Twelve Months Ended |
|||||||
|
|
|
||||||
|
2022 |
2021 |
||||||
Reconciliation of net income to LTM EBITDA and Adjusted EBITDA |
|
|
||||||
Net income |
$ |
19,452 |
|
$ |
15,941 |
|
||
Interest, net |
|
29,606 |
|
|
30,608 |
|
||
Income tax expense |
|
9,459 |
|
|
7,881 |
|
||
Depreciation and amortization |
|
14,240 |
|
|
15,098 |
|
||
EBITDA |
$ |
72,757 |
|
$ |
69,528 |
|
||
|
|
|
||||||
Adjustments to EBITDA: |
|
|
||||||
Stock-based compensation expense |
|
3,114 |
|
|
1,250 |
|
||
Sales tax benefit (1) |
|
(97 |
) |
|
(614 |
) |
||
Severance and other charges (2) |
|
1,089 |
|
|
1,250 |
|
||
Loss on debt extinguishment (3) |
|
395 |
|
|
5,048 |
|
||
Foreign currency loss (gain) |
|
29 |
|
|
(15 |
) |
||
Subtotal of adjustments to EBITDA |
$ |
4,530 |
|
$ |
6,919 |
|
||
LTM Adjusted EBITDA |
$ |
77,287 |
|
$ |
76,447 |
|
||
|
|
|
||||||
|
As of |
|||||||
|
|
|
||||||
|
2022 |
2021 |
||||||
Calculation of Net Leverage Ratio: |
|
|
||||||
Senior Notes |
$ |
290,000 |
|
$ |
310,000 |
|
||
ABL revolver |
|
25,000 |
|
|
— |
|
||
Finance lease obligations |
|
6,572 |
|
|
4,925 |
|
||
Total debt |
|
321,572 |
|
|
314,925 |
|
||
Less: Cash and cash equivalents |
|
(9,051 |
) |
|
(20,683 |
) |
||
Total Net Debt (a) |
$ |
312,521 |
|
$ |
294,242 |
|
||
LTM Adjusted EBITDA (b) |
$ |
77,287 |
|
$ |
76,447 |
|
||
Net Leverage Ratio (a)/(b) |
|
4.0 |
|
|
3.8 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220808005176/en/
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Source:
FAQ
What were the net sales figures for PMTS in Q2 2022?
How much did net income change for PMTS in Q2 2022?
What is the updated financial outlook for PMTS for 2022?
What were the financial highlights for PMTS in the first half of 2022?