Cpi Card Group Inc. · NASDAQ:PMTS
Cpi Card — Q3 2024 Earnings Presentation
18 slides from Cpi Card's earnings presentation, Nov 5, 2024
Slide 1: Third Quarter 2024 Investor Presentation
Third Quarter 2024 Investor Presentation November 5, 2024
Slide 2: Cautionary Statements
Cautionary Statements Forward Looking Statements Certain statements and information in this presentation (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
Slide 3: Agenda
Agenda 1 Overview and Strategy 2 Q3 Financial Review 3 2024 Outlook 4 Summary CPI Confidential and Proprietary | Not for distribution 3
Slide 4: Overview
Overview Accelerated growth in Q3 as expected ▪ Strong growth in debit and credit card sales ▪ Continued solid growth in Prepaid solutions, Card@Once® instant issuance and other card personalization services 2024 full-year outlook updated ▪ Mid-to-high single-digit increase in net sales (previously
Slide 5: Strategy Review
Strategy Review Build from Strong Foundation ▪ A leader in the U.S. payments market with portfolio that includes Secure Card, Personalization, Instant Issuance and Prepaid ▪ Strong value proposition from our focus on customer service, quality and innovation ▪ Strong and long-standing customer relati
Slide 6: Visa and Mastercard U.S. Cards in Circulation
Visa and Mastercard U.S. Cards in Circulation Cards in circulation have grown at a 9% CAGR over the last three years to 2.1 billion, up from 1.6 billion 2,094 2,115 2,056 1,978 2,008 1,885 1,914 1,829 1,758 1,783 1,679 1,714 1,627 763 767 753 725 739 679 693 656 674 645 616 636 606 1,303 1,331 1,348
Slide 7: 2024 Q3 Financial Review
2024 Q3 Financial Review CPI Confidential and Proprietary | Not for distribution 7
Slide 8: Q3 Highlights
Q3 Highlights Strong growth in debit and credit card sales; gross margin expansion; net income impacted by debt refinancing costs ▪ Net sales increased 18% to $124.8 million ▪ Gross margin increased from 34.1% to 35.8% ▪ Net income decreased 66% to $1.3 million due to debt refinancing costs; net inc
Slide 9: Third Quarter Financial Highlights
Third Quarter Financial Highlights (in millions, except per share data) Q3 24 Q3 23 % Change Commentary • Net sales increase driven primarily by strong growth Net Sales $ 124.8 $ 105.9 18% from contactless cards, led by eco-focused cards, and continued growth from Prepaid, instant Gross Profit $ 44.
Slide 10: Nine Months Financial Highlights
Nine Months Financial Highlights (in millions, except per share data) YTD 24 YTD 23 % Change Commentary Net Sales $ 355.5 $ 341.7 4% • Net Sales increase driven by increased Prepaid and contactless card sales, led by eco-focused cards, as well as growth in instant issuance and other card Gross Profi
Slide 11: Financial Highlights - Segments
Financial Highlights - Segments ($ in millions) Debit and Credit Q3 Net Sales & Operating Income Nine Months Net Sales & Operating Income - 1% $27.0 $75.9 $75.2 $20.8 $94.2 $93.2 $83.8 $94.2 $99.8 $93.2 24.8% 27.1% $279.0 $283.3 26.5% 24.0% 29.8% 27.2% 26.9% 26.9% 26.8% 28.2% 2023 2024 2023 2024 202
Slide 12: Balance Sheet, Liquidity, Net Leverage and Cash Flow
Balance Sheet, Liquidity, Net Leverage and Cash Flow $ in millions Our capital structure and allocation strategies are Sep. 30, Dec. 31, focused on: Balance Sheet, Liquidity and Net Leverage Ratio 2024 2023 1. Investing in the business, including strategic acquisitions Cash on hand $ 14.7 $ 12.4 1 2
Slide 13: 2024 Outlook
2024 Outlook Updated full year outlook for Net Sales and Adjusted EBITDA Full-year outlook 2024 ▪ Mid-to-high single-digit increase in net sales (previously mid-single digit) ▪ Low single-digit increase in Adjusted EBITDA (previously slight increase) ▪ Free Cash Flow slightly below the 2023 level (p
Slide 14: Summary
Summary Strong growth in debit and credit card sales in Q3 ▪ Led by eco-focused contactless cards ▪ Card growth complemented by continued growth in Prepaid solutions, instant issuance and other card personalization services Full year outlook updated ▪ Increased net sales, Adjusted EBITDA and Free Ca
Slide 15: Contact
Contact (877) 369-9016 investorrelations@cpicardgroup.com www.cpicardgroup.com 15
Slide 16: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA Margin Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 EBITDA represents earnings before interest, taxes, depreciation and Reconciliation of net income to EBITDA and Adjusted ($ in
Slide 17: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Last Twelve Months Ended LTM Adjusted EBITDA Reconciliation of net income to LTM EBITDA and Adjusted EBITDA: September 30, 2024 December 31, 2023 ($ in millions) Net income $ 15.5 $ 24.0 We define LTM Adjusted EBITDA as adjusted EBITDA Interest, net (1)
Slide 18: Supplemental Financial Measures
Supplemental Financial Measures Net Leverage Ratio As of September 30, 2024 December 31, 2023 Management and various investors use the ratio of debt Calculation of Net Leverage Ratio: ($ in millions) principal outstanding, plus finance lease obligations, less cash divided by LTM Adjusted EBITDA, or