CPI Card Group Inc. Reports Third Quarter 2022 Results
CPI Card Group Inc. (PMTS) reported a significant financial performance for Q3 2022, with net sales rising 25% to $124.6 million and net income up 80% to $11.9 million. This marks the third consecutive record sales quarter, driven primarily by strong demand for contactless cards. Adjusted EBITDA increased 32% to $28.3 million, reflecting strong operating leverage. The company raised its full-year outlook, anticipating low 20% sales growth and high teens Adjusted EBITDA growth. CPI continues to lead in eco-focused payment solutions, enhancing profitability despite inflationary pressures.
- Net sales increased 25% year-over-year to $124.6 million.
- Net income rose 80% to $11.9 million.
- Adjusted EBITDA increased 32% to $28.3 million.
- Debit and Credit segment net sales grew 31% to $99.5 million.
- Company raised full-year outlook for sales growth to low 20%.
- Gross profit margin decreased from 39.2% to 36.7% year-over-year.
Net Sales Increased
Strong Sales Growth Across Portfolio and Improved Margins Drove Third Quarter Results
Company Increases 2022 Outlook for
Third quarter net sales increased
“Our outstanding financial results in the third quarter reflect continued strong demand for our differentiated payments solutions and solid execution from our dedicated team,” said
The Company now expects full-year growth in the low 20 percent range for sales and high teens for Adjusted EBITDA, an increase from the previous outlook of high teens growth for net sales and low double-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 third quarter of 2022, the Company has sold approximately 85 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 over 14,000 Card@Once® installations across more than 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 the credit limit on its ABL revolving credit facility from$20 million to$50 million in the first quarter. The Company’s Net Leverage Ratio was 3.6x at$75 million September 30, 2022 .
Third Quarter 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 and also benefited from strong sales of contact card sales, personalization services, and Card@Once® instant issuance solutions.$99.5 million
-
Prepaid Debit segment net sales increased
8% to , driven by increased sales with existing customers.$25.3 million
Third quarter gross profit increased
Year-over-year, income from operations increased
Year-to-date 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, and Card@Once® instant issuance solutions.$285.7 million
-
Prepaid Debit segment net sales increased
1% to . Prior year sales reflected benefits from the onboarding of new customer portfolios and retail inventory replenishment.$64.0 million
Gross profit for the first nine months increased
Year-over-year, income from operations increased
Profitability benefited from higher net sales and the resulting operating leverage, partially offset by increased production costs and higher SG&A expenses, including increased compensation-related expenses and compliance costs related to Sarbanes-Oxley. The increase in net income was also aided by the comparison to significant debt refinancing costs incurred in the 2021 first quarter.
Balance Sheet, Liquidity, and Cash Flow
As of
The working capital usage in the 2022 first nine months was primarily driven by a
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 are pleased with the operating leverage we generated from strong sales growth,” said
Conference Call and Webcast
Canada Toll-Free: 833-950-0062
International: 929-526-1599
Conference ID: 057319
Webcast Link: CPI Q3 webcast or at 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: 223308
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 nine months ended |
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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 nine months ended |
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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 |
||||||||||||||||
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||||||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income |
||||||||||||||||
(in thousands, except share and per share amounts) |
||||||||||||||||
(Unaudited) |
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||||||||
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Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
Net sales: |
|
|
|
|
|
|
|
|
||||||||
Products |
$ |
71,606 |
|
$ |
52,276 |
|
$ |
208,867 |
|
$ |
146,445 |
|
||||
Services |
|
52,971 |
|
|
47,326 |
|
|
140,442 |
|
|
135,468 |
|
||||
Total net sales |
|
124,577 |
|
|
99,602 |
|
|
349,309 |
|
|
281,913 |
|
||||
Cost of sales: |
|
|
|
|
|
|
|
|
||||||||
Products (exclusive of depreciation and amortization shown below) |
|
42,702 |
|
|
31,493 |
|
|
128,851 |
|
|
86,708 |
|
||||
Services (exclusive of depreciation and amortization shown below) |
|
31,190 |
|
|
28,368 |
|
|
85,625 |
|
|
77,975 |
|
||||
Depreciation and amortization |
|
2,245 |
|
|
2,056 |
|
|
6,564 |
|
|
6,736 |
|
||||
Total cost of sales |
|
76,137 |
|
|
61,917 |
|
|
221,040 |
|
|
171,419 |
|
||||
Gross profit |
|
48,440 |
|
|
37,685 |
|
|
128,269 |
|
|
110,494 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative (exclusive of depreciation and amortization shown below) |
|
23,403 |
|
|
19,469 |
|
|
67,335 |
|
|
55,363 |
|
||||
Depreciation and amortization |
|
1,592 |
|
|
1,514 |
|
|
4,454 |
|
|
4,873 |
|
||||
Total operating expenses |
|
24,995 |
|
|
20,983 |
|
|
71,789 |
|
|
60,236 |
|
||||
Income from operations |
|
23,445 |
|
|
16,702 |
|
|
56,480 |
|
|
50,258 |
|
||||
Other expense, net: |
|
|
|
|
|
|
|
|
||||||||
Interest, net |
|
(7,323 |
) |
|
(7,183 |
) |
|
(22,334 |
) |
|
(23,196 |
) |
||||
Other (expense) income, net |
|
(63 |
) |
|
(6 |
) |
|
(79 |
) |
|
23 |
|
||||
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
(395 |
) |
|
(5,048 |
) |
||||
Total other expense, net |
|
(7,386 |
) |
|
(7,189 |
) |
|
(22,808 |
) |
|
(28,221 |
) |
||||
Income before income taxes |
|
16,059 |
|
|
9,513 |
|
|
33,672 |
|
|
22,037 |
|
||||
Income tax expense |
|
(4,149 |
) |
|
(2,887 |
) |
|
(9,609 |
) |
|
(6,769 |
) |
||||
Net income |
$ |
11,910 |
|
$ |
6,626 |
|
$ |
24,063 |
|
$ |
15,268 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings per share: |
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share |
$ |
1.06 |
|
$ |
0.59 |
|
$ |
2.14 |
|
$ |
1.36 |
|
||||
Diluted earnings per share |
$ |
1.01 |
|
$ |
0.56 |
|
$ |
2.05 |
|
$ |
1.30 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average shares outstanding |
|
11,265,767 |
|
|
11,238,678 |
|
|
11,259,655 |
|
|
11,234,054 |
|
||||
Diluted weighted-average shares outstanding |
|
11,788,921 |
|
|
11,799,321 |
|
|
11,730,668 |
|
|
11,755,381 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income: |
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
11,910 |
|
$ |
6,626 |
|
$ |
24,063 |
|
$ |
15,268 |
|
||||
Total comprehensive income |
$ |
11,910 |
|
$ |
6,626 |
|
$ |
24,063 |
|
$ |
15,268 |
|
||||
EXHIBIT B |
||||||||
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(in thousands, except share and per share amounts) |
||||||||
(Unaudited) |
||||||||
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|
||
|
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|
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|
||||
|
|
2022 |
|
2021 |
||||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
21,507 |
|
|
$ |
20,683 |
|
Accounts receivable, net of allowances of |
|
|
75,749 |
|
|
|
60,953 |
|
Inventories |
|
|
72,219 |
|
|
|
58,009 |
|
Prepaid expenses and other current assets |
|
|
5,080 |
|
|
|
5,522 |
|
Income taxes receivable |
|
|
2,112 |
|
|
|
534 |
|
Total current assets |
|
|
176,667 |
|
|
|
145,701 |
|
Plant, equipment, leasehold improvements and operating lease right-of-use assets, net |
|
|
57,268 |
|
|
|
47,251 |
|
Intangible assets, net |
|
|
18,954 |
|
|
|
21,854 |
|
|
|
|
47,150 |
|
|
|
47,150 |
|
Other assets |
|
|
5,008 |
|
|
|
6,184 |
|
Total assets |
|
$ |
305,047 |
|
|
$ |
268,140 |
|
|
|
|
|
|
|
|
||
Liabilities and stockholders’ deficit |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
25,703 |
|
|
$ |
26,443 |
|
Accrued expenses |
|
|
34,384 |
|
|
|
37,150 |
|
Deferred revenue and customer deposits |
|
|
3,915 |
|
|
|
1,182 |
|
Total current liabilities |
|
|
64,002 |
|
|
|
64,775 |
|
Long-term debt |
|
|
310,091 |
|
|
|
303,626 |
|
Deferred income taxes |
|
|
6,445 |
|
|
|
5,253 |
|
Other long-term liabilities |
|
|
18,769 |
|
|
|
15,506 |
|
Total liabilities |
|
|
399,307 |
|
|
|
389,160 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Series A Preferred Stock; |
|
|
— |
|
|
|
— |
|
Stockholders’ deficit: |
|
|
|
|
|
|
||
Common stock; |
|
|
11 |
|
|
|
11 |
|
Capital deficiency |
|
|
(108,085 |
) |
|
|
(110,782 |
) |
Accumulated earnings (loss) |
|
|
13,814 |
|
|
|
(10,249 |
) |
Total stockholders’ deficit |
|
|
(94,260 |
) |
|
|
(121,020 |
) |
Total liabilities and stockholders’ deficit |
|
$ |
305,047 |
|
|
$ |
268,140 |
|
EXHIBIT C |
||||||||
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(in thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Nine Months Ended |
||||||
|
|
2022 |
|
2021 |
||||
Operating activities |
|
|
|
|
|
|
||
Net income |
|
$ |
24,063 |
|
|
$ |
15,268 |
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
11,018 |
|
|
|
11,609 |
|
Stock-based compensation expense |
|
|
2,928 |
|
|
|
214 |
|
Amortization of debt issuance costs and debt discount |
|
|
1,449 |
|
|
|
1,880 |
|
Loss on debt extinguishment |
|
|
395 |
|
|
|
5,048 |
|
Deferred income taxes |
|
|
1,192 |
|
|
|
(752 |
) |
Other, net |
|
|
437 |
|
|
|
210 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(14,862 |
) |
|
|
(10,846 |
) |
Inventories |
|
|
(13,916 |
) |
|
|
(21,831 |
) |
Prepaid expenses and other assets |
|
|
1,501 |
|
|
|
(3,340 |
) |
Income taxes, net |
|
|
(1,577 |
) |
|
|
10,603 |
|
Accounts payable |
|
|
(440 |
) |
|
|
83 |
|
Accrued expenses and other liabilities |
|
|
(3,208 |
) |
|
|
7,212 |
|
Deferred revenue and customer deposits |
|
|
2,733 |
|
|
|
(843 |
) |
Cash provided by operating activities |
|
|
11,713 |
|
|
|
14,515 |
|
Investing activities |
|
|
|
|
|
|
||
Capital expenditures for plant, equipment and leasehold improvements |
|
|
(14,440 |
) |
|
|
(4,827 |
) |
Other |
|
|
95 |
|
|
|
156 |
|
Cash used in investing activities |
|
|
(14,345 |
) |
|
|
(4,671 |
) |
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 |
|
Debt issuance costs |
|
|
(262 |
) |
|
|
(9,452 |
) |
Payments on debt extinguishment and other |
|
|
(831 |
) |
|
|
(2,663 |
) |
Proceeds from finance lease financing |
|
|
2,074 |
|
|
|
— |
|
Payments on finance lease obligations |
|
|
(2,457 |
) |
|
|
(1,725 |
) |
Cash provided by (used in) financing activities |
|
|
3,524 |
|
|
|
(46,590 |
) |
Effect of exchange rates on cash |
|
|
(68 |
) |
|
|
(4 |
) |
Net decrease in cash and cash equivalents |
|
|
824 |
|
|
|
(36,750 |
) |
Cash and cash equivalents, beginning of period |
|
|
20,683 |
|
|
|
57,603 |
|
Cash and cash equivalents, end of period |
|
$ |
21,507 |
|
|
$ |
20,853 |
|
Supplemental disclosures of cash flow information |
|
|
|
|
|
|
||
Cash paid during the period for: |
|
|
|
|
|
|
||
Interest |
|
$ |
27,026 |
|
|
$ |
22,107 |
|
Income taxes paid |
|
$ |
10,859 |
|
|
$ |
4,708 |
|
Income taxes (refunded) |
|
$ |
(449 |
) |
|
$ |
(9,846 |
) |
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
||
Operating leases |
|
$ |
816 |
|
|
$ |
3,666 |
|
Financing leases |
|
$ |
7,783 |
|
|
$ |
484 |
|
Accounts payable and accrued expenses for capital expenditures for plant, equipment and leasehold improvements |
|
$ |
1,781 |
|
|
$ |
1,005 |
|
EXHIBIT D |
|||||||||||||||
|
|||||||||||||||
Segment Summary Information |
|||||||||||||||
For the Three and Nine Months Ended |
|||||||||||||||
(dollars in thousands) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
Three Months Ended |
||||||||||||||
|
2022 |
|
2021 |
|
$ Change |
|
% Change |
||||||||
Net sales by segment: |
|
|
|
|
|
|
|
|
|||||||
Debit and Credit |
$ |
99,512 |
|
$ |
76,121 |
|
$ |
23,391 |
|
30.7 |
% |
||||
Prepaid Debit |
|
25,335 |
|
|
23,498 |
|
|
1,837 |
|
7.8 |
% |
||||
Eliminations |
|
(270 |
) |
|
(17 |
) |
|
(253 |
) |
* |
% |
||||
Total |
$ |
124,577 |
|
$ |
99,602 |
|
$ |
24,975 |
|
25.1 |
% |
||||
* Calculation not meaningful |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
||||||||||||||
|
2022 |
|
2021 |
|
$ Change |
|
% Change |
||||||||
Net sales by segment: |
|
|
|
|
|
|
|
|
|||||||
Debit and Credit |
$ |
285,708 |
|
$ |
218,798 |
|
$ |
66,910 |
|
30.6 |
% |
||||
Prepaid Debit |
|
64,010 |
|
|
63,339 |
|
|
671 |
|
1.1 |
% |
||||
Eliminations |
|
(409 |
) |
|
(224 |
) |
|
(185 |
) |
* |
% |
||||
Total |
$ |
349,309 |
|
$ |
281,913 |
|
$ |
67,396 |
|
23.9 |
% |
Gross Profit |
|||||||||||||||||||||
|
|
Three Months Ended |
|||||||||||||||||||
|
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
|||||||||
Gross profit by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debit and Credit |
|
$ |
38,071 |
|
|
38.3 |
% |
$ |
28,176 |
|
37.0 |
% |
$ |
9,895 |
|
35.1 |
% |
||||
Prepaid Debit |
|
|
10,369 |
|
|
40.9 |
% |
|
9,509 |
|
40.5 |
% |
|
860 |
|
9.0 |
% |
||||
Total |
|
$ |
48,440 |
|
|
38.9 |
% |
$ |
37,685 |
|
37.8 |
% |
$ |
10,755 |
|
28.5 |
% |
|
|
Nine Months Ended |
|
||||||||||||||||||
|
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
|||||||||
Gross profit by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debit and Credit |
|
$ |
104,389 |
|
|
36.5 |
% |
$ |
83,988 |
|
38.4 |
% |
$ |
20,401 |
|
|
24.3 |
% |
|||
Prepaid Debit |
|
|
23,880 |
|
|
37.3 |
% |
|
26,506 |
|
41.8 |
% |
|
(2,626 |
) |
|
(9.9 |
)% |
|||
Total |
|
$ |
128,269 |
|
|
36.7 |
% |
$ |
110,494 |
|
39.2 |
% |
$ |
17,775 |
|
|
16.1 |
% |
Income from Operations |
|||||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
Income (loss) from operations by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debit and Credit |
$ |
29,418 |
|
29.6 |
% |
$ |
20,499 |
|
26.9 |
% |
$ |
8,919 |
|
43.5 |
% |
||||||
Prepaid Debit |
|
9,109 |
|
36.0 |
% |
|
8,492 |
|
36.1 |
% |
|
617 |
|
7.3 |
% |
||||||
Other |
|
(15,082 |
) |
* |
% |
|
(12,289 |
) |
* |
% |
|
(2,793 |
) |
22.7 |
% |
||||||
Total |
$ |
23,445 |
|
18.8 |
% |
$ |
16,702 |
|
16.8 |
% |
$ |
6,743 |
|
40.4 |
% |
|
Nine Months Ended |
||||||||||||||||||||
|
2022 |
% of Net
|
2021 |
% of Net
|
$ Change |
% Change |
|||||||||||||||
Income (loss) from operations by segment: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debit and Credit |
$ |
78,847 |
|
27.6 |
% |
$ |
60,911 |
|
27.8 |
% |
$ |
17,936 |
|
29.4 |
% |
||||||
Prepaid Debit |
|
20,393 |
|
31.9 |
% |
|
23,060 |
|
36.4 |
% |
|
(2,667 |
) |
(11.6 |
)% |
||||||
Other |
|
(42,760 |
) |
* |
% |
|
(33,713 |
) |
* |
% |
|
(9,047 |
) |
26.8 |
% |
||||||
Total |
$ |
56,480 |
|
16.2 |
% |
$ |
50,258 |
|
17.8 |
% |
$ |
6,222 |
|
12.4 |
% |
EBITDA |
|||||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debit and Credit |
$ |
31,675 |
|
31.8 |
% |
$ |
22,356 |
|
29.4 |
% |
$ |
9,319 |
|
41.7 |
% |
||||||
Prepaid Debit |
|
9,638 |
|
38.0 |
% |
|
9,040 |
|
38.5 |
% |
|
598 |
|
6.6 |
% |
||||||
Other |
|
(14,094 |
) |
* |
% |
|
(11,130 |
) |
* |
% |
|
(2,964 |
) |
26.6 |
% |
||||||
Total |
$ |
27,219 |
|
21.8 |
% |
$ |
20,266 |
|
20.3 |
% |
$ |
6,953 |
|
34.3 |
% |
|
Nine Months Ended |
||||||||||||||||||||
|
2022 |
|
% of Net
|
|
2021 |
|
% of Net
|
|
$ Change |
|
% Change |
||||||||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debit and Credit |
$ |
85,042 |
|
29.8 |
% |
$ |
67,078 |
|
30.7 |
% |
$ |
17,964 |
|
26.8 |
% |
||||||
Prepaid Debit |
|
22,101 |
|
34.5 |
% |
|
24,719 |
|
39.0 |
% |
|
(2,618 |
) |
(10.6 |
)% |
||||||
Other |
|
(40,119 |
) |
* |
% |
|
(34,955 |
) |
* |
% |
|
(5,164 |
) |
14.8 |
% |
||||||
Total |
$ |
67,024 |
|
19.2 |
% |
$ |
56,842 |
|
20.2 |
% |
$ |
10,182 |
|
17.9 |
% |
||||||
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 |
$ |
29,418 |
|
$ |
9,109 |
|
$ |
(15,082 |
) |
$ |
23,445 |
|
||||
Depreciation and amortization |
|
2,271 |
|
|
529 |
|
|
1,037 |
|
|
3,837 |
|
||||
Other income (expenses) |
|
(14 |
) |
|
— |
|
|
(49 |
) |
|
(63 |
) |
||||
EBITDA |
$ |
31,675 |
|
$ |
9,638 |
|
$ |
(14,094 |
) |
$ |
27,219 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
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 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Nine Months Ended |
|||||||||||||||
|
Debit and Credit |
|
Prepaid Debit |
|
Other |
|
Total |
|||||||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
$ |
78,847 |
|
$ |
20,393 |
|
$ |
(42,760 |
) |
$ |
56,480 |
|
||||
Depreciation and amortization |
|
6,202 |
|
|
1,711 |
|
|
3,105 |
|
|
11,018 |
|
||||
Other income (expenses) |
|
(7 |
) |
|
(3 |
) |
|
(464 |
) |
|
(474 |
) |
||||
EBITDA |
$ |
85,042 |
|
$ |
22,101 |
|
$ |
(40,119 |
) |
$ |
67,024 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
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 |
|
||||
EXHIBIT E |
||||||||||||||||
|
||||||||||||||||
Supplemental GAAP to Non-GAAP Reconciliation |
||||||||||||||||
(dollars in thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
EBITDA and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
11,910 |
|
|
$ |
6,626 |
|
|
$ |
24,063 |
|
|
$ |
15,268 |
|
Interest, net |
|
|
7,323 |
|
|
|
7,183 |
|
|
|
22,334 |
|
|
|
23,196 |
|
Income tax expense |
|
|
4,149 |
|
|
|
2,887 |
|
|
|
9,609 |
|
|
|
6,769 |
|
Depreciation and amortization |
|
|
3,837 |
|
|
|
3,570 |
|
|
|
11,018 |
|
|
|
11,609 |
|
EBITDA |
|
$ |
27,219 |
|
|
$ |
20,266 |
|
|
$ |
67,024 |
|
|
$ |
56,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation expense |
|
|
966 |
|
|
|
116 |
|
|
|
2,928 |
|
|
|
214 |
|
Sales tax expense (benefit) (1) |
|
|
22 |
|
|
|
— |
|
|
|
74 |
|
|
|
(465 |
) |
Severance and other charges (2) |
|
|
— |
|
|
|
1,089 |
|
|
|
— |
|
|
|
1,250 |
|
Loss on debt extinguishment (3) |
|
|
— |
|
|
|
— |
|
|
|
395 |
|
|
|
5,048 |
|
Foreign currency loss (gain) |
|
|
64 |
|
|
|
5 |
|
|
|
79 |
|
|
|
(24 |
) |
Subtotal of adjustments to EBITDA |
|
|
1,052 |
|
|
|
1,210 |
|
|
|
3,476 |
|
|
|
6,023 |
|
Adjusted EBITDA |
|
$ |
28,271 |
|
|
$ |
21,476 |
|
|
$ |
70,500 |
|
|
$ |
62,865 |
|
Net income margin (% of |
|
|
9.6 |
% |
|
|
6.7 |
% |
|
|
6.9 |
% |
|
|
5.4 |
% |
Net income growth (% Change 2022 vs. 2021) |
|
|
79.7 |
% |
|
|
|
|
|
57.6 |
% |
|
|
|
||
Adjusted EBITDA margin (% of |
|
|
22.7 |
% |
|
|
21.6 |
% |
|
|
20.2 |
% |
|
|
22.3 |
% |
Adjusted EBITDA growth (% Change 2022 vs. 2021) |
|
|
31.6 |
% |
|
|
|
|
|
12.1 |
% |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Free Cash Flow: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash (used in) provided by operating activities |
|
$ |
19,861 |
|
|
$ |
(8,231 |
) |
|
$ |
11,713 |
|
|
$ |
14,515 |
|
Capital expenditures for plant, equipment and leasehold improvements |
|
|
(6,261 |
) |
|
|
(1,124 |
) |
|
|
(14,440 |
) |
|
|
(4,827 |
) |
Free Cash Flow |
|
$ |
13,600 |
|
|
$ |
(9,355 |
) |
|
$ |
(2,727 |
) |
|
$ |
9,688 |
|
____________________ | ||
(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 third 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 |
$ |
24,736 |
|
|
$ |
15,941 |
|
|
Interest, net |
|
29,746 |
|
|
|
30,608 |
|
|
Income tax expense |
|
10,721 |
|
|
|
7,881 |
|
|
Depreciation and amortization |
|
14,507 |
|
|
|
15,098 |
|
|
EBITDA |
$ |
79,710 |
|
|
$ |
69,528 |
|
|
|
|
|
|
|
|
|||
Adjustments to EBITDA: |
|
|
|
|
|
|||
Stock-based compensation expense |
|
3,964 |
|
|
|
1,250 |
|
|
Sales tax benefit (1) |
|
(75 |
) |
|
|
(614 |
) |
|
Severance and other charges (2) |
|
— |
|
|
|
1,250 |
|
|
Loss on debt extinguishment (3) |
|
395 |
|
|
|
5,048 |
|
|
Foreign currency loss (gain) |
|
88 |
|
|
|
(15 |
) |
|
Subtotal of adjustments to EBITDA |
$ |
4,372 |
|
|
$ |
6,919 |
|
|
LTM Adjusted EBITDA |
$ |
84,082 |
|
|
$ |
76,447 |
|
|
As of |
|||||||
|
|
|
|
|||||
|
2022 |
|
2021 |
|||||
Calculation of Net Leverage Ratio: |
|
|
|
|
|
|||
Senior Notes |
$ |
290,000 |
|
|
$ |
310,000 |
|
|
ABL revolver |
|
25,000 |
|
|
|
— |
|
|
Finance lease obligations |
|
10,256 |
|
|
|
4,925 |
|
|
Total debt |
|
325,256 |
|
|
|
314,925 |
|
|
Less: Cash and cash equivalents |
|
(21,507 |
) |
|
|
(20,683 |
) |
|
Total Net Debt (a) |
$ |
303,749 |
|
|
$ |
294,242 |
|
|
LTM Adjusted EBITDA (b) |
$ |
84,082 |
|
|
$ |
76,447 |
|
|
Net Leverage Ratio (a)/(b) |
|
3.6 |
|
|
|
3.8 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20221103005350/en/
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