CPI Card Group Inc. Reports Third Quarter 2021 Results
CPI Card Group Inc. (Nasdaq: PMTS) reported strong third-quarter financial results, with net sales increasing 20% year-over-year to $99.6 million and net income rising 14% to $6.6 million. Adjusted EBITDA jumped 23% to $21.5 million. The growth was driven by the success of contactless card solutions and new customer acquisitions, alongside ongoing demand for prepaid debit products. Despite challenges from labor shortages and supply chain issues, the company continues to focus on enhancing its offerings and improving operating efficiencies.
- Net sales grew 20% YoY to $99.6 million in Q3 2021.
- Net income increased 14% YoY to $6.6 million.
- Adjusted EBITDA rose 23% YoY to $21.5 million.
- Gross profit margin improved to 37.8%, up from 37.0% YoY.
- Net sales for prepaid debit segment increased 14% to $23.5 million.
- Increased labor costs and supply chain constraints could impact future profitability.
- Net income impacted by $7.6 million in debt extinguishment costs and interest expenses.
Net Sales Increased
Net Income Increased
Strong Growth Across Portfolio
“We continued to deliver strong performance in the third quarter, as we maintain our focus on providing high quality products and services that meet the needs of our diverse and growing customer base,” said
Scheirman continued, “We remain committed to our vision of being the partner of choice in payment solutions by providing market-leading quality products and customer service, while operating a market-competitive business model.”
2021 Business Highlights
- Our comprehensive end-to-end solutions contributed to earning new FinTech and traditional financial services customers.
-
Our innovative tamper-evident packaging solutions contributed to strong growth in our Prepaid Debit segment and further enhanced our leadership in the
U.S. open loop retail prepaid market.
-
We generated incremental net sales from customer demand for higher-priced contactless cards, as the
U.S. payment card market continues its ongoing transition to contactless solutions.
-
We continued to lead the eco-focused payment card market in the
U.S. , as evidenced by selling over 40 million eco-focused cards since launch in 2019.
- Our innovative personalization services contributed to net sales growth, including from our Card@Once® Software-as-a-Service instant issuance solutions and CPI On-Demand®.
-
We refinanced our debt in the first quarter of 2021, extending maturities and enhancing liquidity. We have reduced outstanding debt by more than
$30 million December 31, 2020 and our net leverage ratio was less than 4x atSeptember 30, 2021 .
Third Quarter 2021 Financial Highlights
Net sales increased
-
Debit and Credit segment net sales increased
21% to$76.1 million
-
Prepaid Debit segment net sales increased
14% to$23.5 million
Net sales in the prior year were impacted by lower customer demand than expected in both segments, which we believe was primarily attributable to the COVID-19 pandemic.
Gross profit increased
Income from operations increased
Third quarter 2021 net income was
Adjusted EBITDA increased
Year-to-date 2021 Financial Highlights
Net sales increased
-
Debit and Credit segment net sales increased
21% to$218.8 million
-
Prepaid Debit segment net sales increased
30% to$63.3 million
Net sales in the prior year were impacted by lower customer demand than expected in both segments, which we believe was primarily attributable to the COVID-19 pandemic.
Gross profit for the first nine months increased
Income from operations increased
For the year-to-date period, net income was
Adjusted EBITDA for the first nine months increased
Balance Sheet, Liquidity, and Cash Flow
As of
Total long-term debt principal outstanding as of
“Our customer-focused sales efforts and operating leverage have contributed to strong profit and cash flow growth in the first nine months of the year,” said
Full-Year 2021
CPI has delivered substantial growth in the first three quarters of 2021 with year-to-date increases in net sales of
- Net sales growth in the first nine months benefitted from significant new customer onboarding and prepaid debit card retail inventory replenishment
- The Company expects increased labor, materials, and certain other costs to begin to be more impactful in the fourth quarter
The Company is responding to the strong customer demand by hiring additional labor and investing in state-of-the-art equipment to increase future capacity and add new capabilities. The Company is also implementing selective price increases, while continuing to carefully manage our supply chain and inventory.
Benefits of price increases and equipment investments are expected to have limited impact in the 2021 fourth quarter. The Company expects fourth quarter sales growth and profit margins will not be as strong as the first nine months, but still expects to deliver strong growth in net sales, profit margins, and overall profitability for the full year ending
Conference Call and Webcast
Toll-Free Dial-In Number,
International Dial-In Number: (929) 526-1599
Conference ID: 009984
Webcast Link: 3Q21 Earnings Webcast
Participants are advised to login for the webcast 10 minutes prior to the scheduled start time.
A replay of the conference call and webcast will be available until
Toll-Free Dial-In Number,
International Dial-In Number: (929) 458-6194
Conference ID: 487043
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 stock-based compensation expense; estimated sales tax expense (benefit); restructuring and other charges; loss on debt extinguishment; foreign currency gain or loss; 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, 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 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.
Net Leverage Ratio
Management and various investors use the ratio of total debt, 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,” “guides,” “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, 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; a disruption or other failure in our supply chain or labor pool resulting in increased costs and inability to pass those costs on to our customers; our inability to recruit, retain and develop qualified personnel, including key personnel; 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 lack of eligibility to participate in government relief programs related to COVID-19 or inability to realize material benefits from such programs; our substantial indebtedness, including inability to make debt service payments or refinance such indebtedness; the restrictive terms of our indebtedness and covenants of future agreements governing indebtedness and the resulting restraints on our ability to pursue our business strategies; our limited ability to raise capital in the future; the effects of current or additional
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, free of charge, 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 nine months ended |
|
|
|
|
Exhibit B |
Condensed Consolidated Balance Sheets – Unaudited as of |
|
|
|
|
Exhibit C |
Condensed Consolidated Statements of Cash Flows - Unaudited for the nine months ended |
|
|
|
|
Exhibit D |
Segment Summary Information – Unaudited for the three and nine months ended |
|
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|
|
Exhibit E |
Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three and nine months ended |
|
EXHIBIT A
|
||||||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income |
||||||||||||||||
(Amounts in Thousands, Except Share and Per Share Amounts) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Net sales: |
|
|
|
|
|
|
|
|
||||||||
Products |
$ |
52,276 |
|
$ |
43,462 |
|
$ |
146,445 |
|
$ |
125,040 |
|
||||
Services |
|
47,326 |
|
|
39,240 |
|
|
135,468 |
|
|
103,009 |
|
||||
Total net sales |
|
99,602 |
|
|
82,702 |
|
|
281,913 |
|
|
228,049 |
|
||||
Cost of sales: |
|
|
|
|
|
|
|
|
||||||||
Products (exclusive of depreciation and amortization shown below) |
|
31,493 |
|
|
27,490 |
|
|
86,708 |
|
|
79,780 |
|
||||
Services (exclusive of depreciation and amortization shown below) |
|
28,368 |
|
|
22,133 |
|
|
77,975 |
|
|
60,986 |
|
||||
Depreciation and amortization |
|
2,056 |
|
|
2,472 |
|
|
6,736 |
|
|
7,938 |
|
||||
Total cost of sales |
|
61,917 |
|
|
52,095 |
|
|
171,419 |
|
|
148,704 |
|
||||
Gross profit |
|
37,685 |
|
|
30,607 |
|
|
110,494 |
|
|
79,345 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative (exclusive of depreciation and amortization shown below) |
|
19,469 |
|
|
15,617 |
|
|
55,363 |
|
|
48,893 |
|
||||
Depreciation and amortization |
|
1,514 |
|
|
1,508 |
|
|
4,873 |
|
|
4,498 |
|
||||
Total operating expenses |
|
20,983 |
|
|
17,125 |
|
|
60,236 |
|
|
53,391 |
|
||||
Income from operations |
|
16,702 |
|
|
13,482 |
|
|
50,258 |
|
|
25,954 |
|
||||
Other expense, net: |
|
|
|
|
|
|
|
|
||||||||
Interest, net |
|
(7,183 |
) |
|
(6,298 |
) |
|
(23,196 |
) |
|
(19,158 |
) |
||||
Other income (expense), net |
|
(6 |
) |
|
27 |
|
|
23 |
|
|
(8 |
) |
||||
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
(5,048 |
) |
|
(92 |
) |
||||
Total other expense, net |
|
(7,189 |
) |
|
(6,271 |
) |
|
(28,221 |
) |
|
(19,258 |
) |
||||
Income from continuing operations before income taxes |
|
9,513 |
|
|
7,211 |
|
|
22,037 |
|
|
6,696 |
|
||||
Income tax (expense) benefit |
|
(2,887 |
) |
|
(1,402 |
) |
|
(6,769 |
) |
|
2,178 |
|
||||
Net income from continuing operations |
|
6,626 |
|
|
5,809 |
|
|
15,268 |
|
|
8,874 |
|
||||
Net loss from discontinued operations, net of tax |
|
— |
|
|
— |
|
|
— |
|
|
(30 |
) |
||||
Net income |
$ |
6,626 |
|
$ |
5,809 |
|
$ |
15,268 |
|
$ |
8,844 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings per share: |
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share from continuing operations: |
$ |
0.59 |
|
$ |
0.52 |
|
$ |
1.36 |
|
$ |
0.79 |
|
||||
Diluted earnings per share from continuing operations: |
$ |
0.56 |
|
$ |
0.52 |
|
$ |
1.30 |
|
$ |
0.79 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share: |
$ |
0.59 |
|
$ |
0.52 |
|
$ |
1.36 |
|
$ |
0.79 |
|
||||
Diluted earnings per share: |
$ |
0.56 |
|
$ |
0.52 |
|
$ |
1.30 |
|
$ |
0.79 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average shares outstanding: |
|
11,238,678 |
|
|
11,230,028 |
|
|
11,234,054 |
|
|
11,228,116 |
|
||||
Diluted weighted-average shares outstanding: |
|
11,799,321 |
|
|
11,231,821 |
|
|
11,755,381 |
|
|
11,235,098 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income: |
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
6,626 |
|
$ |
5,809 |
|
$ |
15,268 |
|
$ |
8,844 |
|
||||
Total comprehensive income |
$ |
6,626 |
|
$ |
5,809 |
|
$ |
15,268 |
|
$ |
8,844 |
|
||||
EXHIBIT B
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(Amounts in Thousands, Except Share and Per Share Amounts) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
|
|
2021 |
|
2020 |
||||
|
|
|
|
|
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
$ |
20,853 |
|
$ |
57,603 |
|
||
Accounts receivable, net of allowances of |
|
65,450 |
|
|
54,592 |
|
||
Inventories |
|
46,442 |
|
|
24,796 |
|
||
Prepaid expenses and other current assets |
|
5,097 |
|
|
5,032 |
|
||
Income taxes receivable |
|
116 |
|
|
10,511 |
|
||
Total current assets |
|
137,958 |
|
|
152,534 |
|
||
Plant, equipment and leasehold improvements and operating lease right-of-use assets, net |
|
38,347 |
|
|
39,403 |
|
||
Intangible assets, net |
|
22,821 |
|
|
26,207 |
|
||
|
|
47,150 |
|
|
47,150 |
|
||
Other assets |
|
5,999 |
|
|
857 |
|
||
Total assets |
$ |
252,275 |
|
$ |
266,151 |
|
||
|
|
|
|
|
||||
Liabilities and stockholders’ deficit |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
$ |
18,795 |
|
$ |
18,883 |
|
||
Accrued expenses |
|
32,097 |
|
|
28,149 |
|
||
Current portion of long-term debt |
|
— |
|
|
8,027 |
|
||
Deferred revenue and customer deposits |
|
1,029 |
|
|
1,868 |
|
||
Total current liabilities |
|
51,921 |
|
|
56,927 |
|
||
Long-term debt |
|
303,251 |
|
|
328,681 |
|
||
Deferred income taxes |
|
6,657 |
|
|
7,409 |
|
||
Other long-term liabilities |
|
12,979 |
|
|
11,171 |
|
||
Total liabilities |
|
374,808 |
|
|
404,188 |
|
||
Commitments and contingencies |
|
|
|
|
||||
Series A Preferred Stock; |
|
— |
|
|
— |
|
||
Stockholders’ deficit: |
|
|
|
|
||||
Common stock; |
|
11 |
|
|
11 |
|
||
Capital deficiency |
|
(111,622 |
) |
|
(111,858 |
) |
||
Accumulated loss |
|
(10,922 |
) |
|
(26,190 |
) |
||
Total stockholders’ deficit |
|
(122,533 |
) |
|
(138,037 |
) |
||
Total liabilities and stockholders’ deficit |
$ |
252,275 |
|
$ |
266,151 |
|
||
EXHIBIT C
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(Amounts in Thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Nine Months Ended |
||||||
|
|
2021 |
|
2020 |
||||
Operating activities |
|
|
|
|
||||
Net income |
$ |
15,268 |
|
$ |
8,844 |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Loss from discontinued operations |
|
— |
|
|
30 |
|
||
Depreciation and amortization expense |
|
11,609 |
|
|
12,436 |
|
||
Stock-based compensation expense |
|
214 |
|
|
84 |
|
||
Amortization of debt issuance costs and debt discount |
|
1,880 |
|
|
2,503 |
|
||
Loss on debt extinguishment |
|
5,048 |
|
|
92 |
|
||
Deferred income taxes |
|
(752 |
) |
|
290 |
|
||
Other, net |
|
210 |
|
|
1,253 |
|
||
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
(10,846 |
) |
|
(16,165 |
) |
||
Inventories |
|
(21,831 |
) |
|
(1,109 |
) |
||
Prepaid expenses and other assets |
|
(3,340 |
) |
|
49 |
|
||
Income taxes receivable, net |
|
10,603 |
|
|
(3,630 |
) |
||
Accounts payable |
|
83 |
|
|
921 |
|
||
Accrued expenses |
|
6,419 |
|
|
4,112 |
|
||
Deferred revenue and customer deposits |
|
(843 |
) |
|
417 |
|
||
Other liabilities |
|
793 |
|
|
81 |
|
||
Cash provided by operating activities - continuing operations |
|
14,515 |
|
|
10,208 |
|
||
Cash used in operating activities - discontinued operations |
|
— |
|
|
(30 |
) |
||
Investing activities |
|
|
|
|
||||
Capital expenditures for plant, equipment and leasehold improvements |
|
(4,827 |
) |
|
(3,320 |
) |
||
Other |
|
156 |
|
|
— |
|
||
Cash used in investing activities |
|
(4,671 |
) |
|
(3,320 |
) |
||
Financing activities |
|
|
|
|
||||
Principal payments on First Lien Term loan |
|
(312,500 |
) |
|
- |
|
||
Principal payments on Senior Credit Facility |
|
(30,000 |
) |
|
- |
|
||
Principal payments on ABL Revolver |
|
(15,000 |
) |
|
- |
|
||
Proceeds from Senior Notes |
|
310,000 |
|
|
- |
|
||
Proceeds from ABL Revolver, net of discount |
|
14,750 |
|
|
- |
|
||
Proceeds from Senior Credit Facility, net of discount |
|
- |
|
|
29,100 |
|
||
Proceeds from exercises of stock options |
|
34 |
|
|
- |
|
||
Taxes withheld and paid on stock compensation |
|
(12 |
) |
|
- |
|
||
Debt issuance costs |
|
(9,452 |
) |
|
(2,507 |
) |
||
Payments on debt extinguishment |
|
(2,685 |
) |
|
- |
|
||
Payments on finance lease obligations |
|
(1,725 |
) |
|
(1,782 |
) |
||
Cash (used in) provided by financing activities |
|
(46,590 |
) |
|
24,811 |
|
||
Effect of exchange rates on cash |
|
(4 |
) |
|
(2 |
) |
||
Net (decrease) increase in cash and cash equivalents |
|
(36,750 |
) |
|
31,667 |
|
||
Cash and cash equivalents, beginning of period |
|
57,603 |
|
|
18,682 |
|
||
Cash and cash equivalents, end of period |
$ |
20,853 |
|
$ |
50,349 |
|
||
Supplemental disclosures of cash flow information |
|
|
|
|
||||
Cash paid (refunded) during the period for: |
|
|
|
|
||||
Interest, net |
$ |
22,107 |
|
$ |
17,454 |
|
||
Income taxes paid |
$ |
4,708 |
|
$ |
1,205 |
|
||
Income taxes (refunded) |
$ |
(9,846 |
) |
$ |
(259 |
) |
||
Right-to-use assets obtained in exchange for lease obligations: |
|
|
|
|
||||
Operating leases |
$ |
3,666 |
|
$ |
141 |
|
||
Financing leases |
$ |
484 |
|
$ |
1,618 |
|
||
Accounts payable, and accrued expenses for capital expenditures for plant, equipment and leasehold improvements |
$ |
1,005 |
|
$ |
127 |
|
||
EXHIBIT D
Segment Summary Information
For the Three and Nine Months Ended
(Dollars in Thousands)
(Unaudited)
|
|||||||||||||||
|
Three Months Ended |
||||||||||||||
|
2021 |
|
2020 |
|
$ Change |
|
% Change |
||||||||
Net sales by segment: |
|
|
|
|
|
|
|
|
|||||||
Debit and Credit |
$ |
76,121 |
|
$ |
62,710 |
|
$ |
13,411 |
21.4 |
% |
|||||
Prepaid Debit |
|
23,498 |
|
|
20,604 |
|
|
2,894 |
|
14.0 |
% |
||||
Eliminations |
|
(17 |
) |
|
(612 |
) |
|
595 |
|
* |
% |
||||
Total |
$ |
99,602 |
|
$ |
82,702 |
|
$ |
16,900 |
|
20.4 |
% |
||||
________________
* Calculation not meaningful
|
Nine Months Ended |
||||||||||||||
|
2021 |
|
2020 |
|
$ Change |
|
% Change |
||||||||
Net sales by segment: |
|
|
|
|
|
|
|
|
|||||||
Debit and Credit |
$ |
218,798 |
|
$ |
180,855 |
|
$ |
37,943 |
21.0 |
% |
|||||
Prepaid Debit |
|
63,339 |
|
|
48,680 |
|
|
14,659 |
|
30.1 |
% |
||||
Eliminations |
|
(224 |
) |
|
(1,486 |
) |
|
1,262 |
|
* |
% |
||||
Total |
$ |
281,913 |
|
$ |
228,049 |
|
$ |
53,864 |
|
23.6 |
% |
||||
Gross Profit |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended |
||||||||||||||||||||
|
2021 |
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
Gross profit by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debit and Credit |
$ |
28,176 |
37.0 |
% |
$ |
21,720 |
34.6 |
% |
$ |
6,456 |
29.7 |
% |
|||||||||
Prepaid Debit |
|
9,509 |
|
40.5 |
% |
|
8,887 |
|
43.1 |
% |
|
622 |
|
7.0 |
% |
||||||
Total |
$ |
37,685 |
|
37.8 |
% |
$ |
30,607 |
|
37.0 |
% |
$ |
7,078 |
|
23.1 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Nine Months Ended |
||||||||||||||||||||
|
2021 |
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
Gross profit by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debit and Credit |
$ |
83,988 |
38.4 |
% |
$ |
60,681 |
33.6 |
% |
$ |
23,307 |
38.4 |
% |
|||||||||
Prepaid Debit |
|
26,506 |
|
41.8 |
% |
|
18,664 |
|
38.3 |
% |
|
7,842 |
|
42.0 |
% |
||||||
Total |
$ |
110,494 |
|
39.2 |
% |
$ |
79,345 |
|
34.8 |
% |
$ |
31,149 |
|
39.3 |
% |
||||||
Income from Operations |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended |
||||||||||||||||||||
|
2021 |
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
Income (loss) from operations by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debit and Credit |
$ |
20,499 |
|
26.9 |
% |
$ |
14,734 |
|
23.5 |
% |
$ |
5,765 |
|
39.1 |
% |
||||||
Prepaid Debit |
|
8,492 |
|
36.1 |
% |
|
7,829 |
|
38.0 |
% |
|
663 |
|
8.5 |
% |
||||||
Other |
|
(12,289 |
) |
* |
% |
|
(9,081 |
) |
* |
% |
|
(3,208 |
) |
35.3 |
% |
||||||
Total |
$ |
16,702 |
|
16.8 |
% |
$ |
13,482 |
|
16.3 |
% |
$ |
3,220 |
|
23.9 |
% |
||||||
|
Nine Months Ended |
||||||||||||||||||||
|
2021 |
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
Income (loss) from operations by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debit and Credit |
$ |
60,911 |
|
27.8 |
% |
$ |
37,914 |
|
21.0 |
% |
$ |
22,997 |
|
60.7 |
% |
||||||
Prepaid Debit |
|
23,060 |
|
36.4 |
% |
|
15,379 |
|
31.6 |
% |
|
7,681 |
|
49.9 |
% |
||||||
Other |
|
(33,713 |
) |
* |
% |
|
(27,339 |
) |
* |
% |
|
(6,374 |
) |
23.3 |
% |
||||||
Total |
$ |
50,258 |
|
17.8 |
% |
$ |
25,954 |
|
11.4 |
% |
$ |
24,304 |
|
93.6 |
% |
||||||
EBITDA |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended |
||||||||||||||||||||
|
2021 |
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debit and Credit |
$ |
22,356 |
|
29.4 |
% |
$ |
16,993 |
|
27.1 |
% |
$ |
5,363 |
|
31.6 |
% |
||||||
Prepaid Debit |
|
9,040 |
|
38.5 |
% |
|
8,332 |
|
40.4 |
% |
|
708 |
|
8.5 |
% |
||||||
Other |
|
(11,130 |
) |
* |
% |
|
(7,836 |
) |
* |
% |
|
(3,294 |
) |
42.0 |
% |
||||||
Total |
$ |
20,266 |
|
20.3 |
% |
$ |
17,489 |
|
21.1 |
% |
$ |
2,777 |
|
15.9 |
% |
||||||
|
Nine Months Ended |
||||||||||||||||||||
|
2021 |
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debit and Credit |
$ |
67,078 |
|
30.7 |
% |
$ |
45,073 |
|
24.9 |
% |
$ |
22,005 |
|
48.8 |
% |
||||||
Prepaid Debit |
|
24,719 |
|
39.0 |
% |
|
16,974 |
|
34.9 |
% |
|
7,745 |
|
45.6 |
% |
||||||
Other |
|
(34,955 |
) |
* |
% |
|
(23,757 |
) |
* |
% |
|
(11,198 |
) |
47.1 |
% |
||||||
Total |
$ |
56,842 |
|
20.2 |
% |
$ |
38,290 |
|
16.8 |
% |
$ |
18,552 |
|
48.5 |
% |
||||||
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 |
|
$ |
20,499 |
|
|
$ |
8,492 |
|
|
$ |
(12,289 |
) |
|
$ |
16,702 |
|
Depreciation and amortization |
|
|
1,858 |
|
|
|
550 |
|
|
|
1,162 |
|
|
|
3,570 |
|
Other income (expenses) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(6 |
) |
EBITDA |
|
$ |
22,356 |
|
|
$ |
9,040 |
|
|
$ |
(11,130 |
) |
|
$ |
20,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||||||||||
|
|
Debit and Credit |
|
Prepaid Debit |
|
Other |
|
Total |
||||||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from operations |
|
$ |
14,734 |
|
|
$ |
7,829 |
|
|
$ |
(9,081 |
) |
|
$ |
13,482 |
|
Depreciation and amortization |
|
|
2,261 |
|
|
|
502 |
|
|
|
1,217 |
|
|
|
3,980 |
|
Other (expenses) |
|
|
(2 |
) |
|
|
1 |
|
|
|
28 |
|
|
|
27 |
|
EBITDA |
|
$ |
16,993 |
|
|
$ |
8,332 |
|
|
$ |
(7,836 |
) |
|
$ |
17,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Nine Months Ended |
||||||||||||||
|
|
Debit and Credit |
|
Prepaid Debit |
|
Other |
|
Total |
||||||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from operations |
|
$ |
60,911 |
|
|
$ |
23,060 |
|
|
$ |
(33,713 |
) |
|
$ |
50,258 |
|
Depreciation and amortization |
|
|
6,155 |
|
|
|
1,647 |
|
|
|
3,807 |
|
|
|
11,609 |
|
Other income (expenses) |
|
|
12 |
|
|
|
12 |
|
|
|
(5,049 |
) |
|
|
(5,025 |
) |
EBITDA |
|
$ |
67,078 |
|
|
$ |
24,719 |
|
|
$ |
(34,955 |
) |
|
$ |
56,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Nine Months Ended |
||||||||||||||
|
|
Debit and Credit |
|
Prepaid Debit |
|
Other |
|
Total |
||||||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from operations |
|
$ |
37,914 |
|
|
$ |
15,379 |
|
|
$ |
(27,339 |
) |
|
$ |
25,954 |
|
Depreciation and amortization |
|
|
7,207 |
|
|
|
1,599 |
|
|
|
3,630 |
|
|
|
12,436 |
|
Other (expenses) |
|
|
(48 |
) |
|
|
(4 |
) |
|
|
(48 |
) |
|
|
(100 |
) |
EBITDA |
|
$ |
45,073 |
|
|
$ |
16,974 |
|
|
$ |
(23,757 |
) |
|
$ |
38,290 |
|
EXHIBIT E
|
||||||||||||||||
Supplemental GAAP to Non-GAAP Reconciliation |
||||||||||||||||
(Dollars in Thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
EBITDA and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
6,626 |
|
$ |
5,809 |
|
$ |
15,268 |
|
$ |
8,844 |
|
||||
Net loss from discontinued operations |
|
— |
|
|
— |
|
|
— |
|
|
30 |
|
||||
Interest expense, net |
|
7,183 |
|
|
6,298 |
|
|
23,196 |
|
|
19,158 |
|
||||
Income tax expense (benefit) |
|
2,887 |
|
|
1,402 |
|
|
6,769 |
|
|
(2,178 |
) |
||||
Depreciation and amortization |
|
3,570 |
|
|
3,980 |
|
|
11,609 |
|
|
12,436 |
|
||||
EBITDA |
$ |
20,266 |
|
$ |
17,489 |
|
$ |
56,842 |
|
$ |
38,290 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjustments to EBITDA: |
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense |
|
116 |
|
|
25 |
|
|
214 |
|
|
84 |
|
||||
Sales tax (benefit) expense (1) |
|
— |
|
|
— |
|
|
(465 |
) |
|
293 |
|
||||
Severance and other charges (2) |
|
1,089 |
|
|
— |
|
|
1,250 |
|
|
1,229 |
|
||||
Loss on debt extinguishment (3) |
|
— |
|
|
— |
|
|
5,048 |
|
|
92 |
|
||||
Foreign currency (gain) loss |
|
5 |
|
|
(23 |
) |
|
(24 |
) |
|
10 |
|
||||
Subtotal of adjustments to EBITDA |
|
1,210 |
|
|
2 |
|
|
6,023 |
|
|
1,708 |
|
||||
Adjusted EBITDA |
$ |
21,476 |
|
$ |
17,491 |
|
$ |
62,865 |
|
$ |
39,998 |
|
||||
Net income margin (% of |
|
6.7 |
% |
|
7.0 |
% |
|
5.4 |
% |
|
3.9 |
% |
||||
Net income growth (% Change 2021 vs. 2020) |
|
14.1 |
% |
|
|
|
72.6 |
% |
|
|
||||||
Adjusted EBITDA margin (% of |
|
21.6 |
% |
|
21.1 |
% |
|
22.3 |
% |
|
17.5 |
% |
||||
Adjusted EBITDA growth (% Change 2021 vs. 2020) |
|
22.8 |
% |
|
|
|
57.2 |
% |
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||||
Free Cash Flow: |
|
|
|
|
|
|
|
|
||||||||
Cash provided by operating activities |
$ |
(8,231 |
) |
$ |
(1,838 |
) |
$ |
14,515 |
|
$ |
10,208 |
|
||||
Capital expenditures for plant, equipment and leasehold improvements |
|
(1,124 |
) |
|
(1,676 |
) |
|
(4,827 |
) |
|
(3,320 |
) |
||||
Free Cash Flow |
$ |
(9,355 |
) |
$ |
(3,514 |
) |
$ |
9,688 |
|
$ |
6,888 |
|
||||
________________ |
||
(1) |
Represents estimated sales tax (benefit) expense 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. During the year ended |
|
(2) |
The 2021 amount primarily relates to executive severance charges, and the prior year amounts relate to restructuring severance charges. |
|
(3) |
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. Additionally, the Company terminated its previous Revolving Credit Facility during the first quarter of 2020 and expensed the remaining unamortized deferred financing costs. |
|
|
Last Twelve Months Ended |
|||||||
|
|
|
|
|||||
|
2021 |
|
2020 |
|||||
Reconciliation of net income to LTM EBITDA and Adjusted EBITDA |
|
|
|
|
||||
Net income |
$ |
22,553 |
|
$ |
16,129 |
|
||
Net loss from discontinued operations |
|
31 |
|
|
61 |
|
||
Interest expense, net |
|
29,435 |
|
|
25,397 |
|
||
Income tax expense (benefit) |
|
5,642 |
|
|
(3,305 |
) |
||
Depreciation and amortization |
|
16,000 |
|
|
16,827 |
|
||
EBITDA |
$ |
73,661 |
|
$ |
55,109 |
|
||
|
|
|
|
|
||||
Adjustments to EBITDA: |
|
|
|
|
||||
Stock-based compensation expense |
|
266 |
|
|
136 |
|
||
Sales tax expense (1) |
|
168 |
|
|
926 |
|
||
Severance and other charges (2) |
|
1,290 |
|
|
1,269 |
|
||
Loss on debt extinguishment (3) |
|
5,048 |
|
|
92 |
|
||
Foreign currency (gain) loss |
|
(27 |
) |
|
7 |
|
||
Subtotal of adjustments to EBITDA |
$ |
6,745 |
|
$ |
2,430 |
|
||
LTM Adjusted EBITDA |
$ |
80,406 |
|
$ |
57,539 |
|
||
________________ |
||
(1) |
Represents estimated sales tax (benefit) expense 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. During the year ended |
|
(2) |
The 2021 amount primarily relates to executive severance charges, and the prior year amounts relate to restructuring severance charges. |
|
(3) |
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. Additionally, the Company terminated its previous Revolving Credit Facility during the first quarter of 2020 and expensed the remaining unamortized deferred financing costs. |
|
|
As of |
|||||||
|
|
|
|
|||||
|
2021 |
|
2020 |
|||||
Calculation of Net Leverage Ratio: |
|
|
|
|
|
|||
Debt principal outstanding |
$ |
310,000 |
|
|
$ |
342,500 |
|
|
Finance lease obligations |
|
3,951 |
|
|
|
5,192 |
|
|
Total Debt |
|
313,951 |
|
|
|
347,692 |
|
|
Less: Cash and cash equivalents |
|
(20,853 |
) |
|
|
(57,603 |
) |
|
Total Net Debt (a) |
$ |
293,098 |
|
|
$ |
290,089 |
|
|
LTM Adjusted EBITDA (b) |
$ |
80,406 |
|
|
$ |
57,539 |
|
|
Net Leverage Ratio (a)/(b) |
|
3.6 |
|
|
|
5.0 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20211105005285/en/
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InvestorRelations@cpicardgroup.com
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Source:
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