Slide 1: Q2 2022 Earnings Presentation
0 0 Q2 2022 EARNINGS PRESENTATION August 4, 2022
Slide 2: Disclaimers: Forward Looking Statements
1 1 Disclaimers Forward Looking Statements This presentation contains forward - looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although the Company believes that its plans, intentions, an
Slide 3: Key Highlights – Q2 2022
2 2 Key Highlights – Q2 2022 Adjusted EBITDA 1 of $40mm, 45% higher than Q2 ‘21 due to net sales momentum and a constant focus on process improvement This market cycle has created uncertainty in timing for our Arculus ramp up since some of our partners and targets have been impacted, but we remain f
Slide 4: Company Highlights: Partnership Momentum
3 3 Company Highlights CompoSecure is driving strong partnership momentum across the payment card and Arculus ecosystems Traditional Banks Payment Cards Digital Authentication Security FinTechs Marketing & Events FinTech & Technology Partners Truist Amex Delta Reserve FNBO Verizon Business Oxygen X
Slide 5: Positive Trends & Momentum across Payment Cards
4 4 1 American Express & JP Morgan Chase Earnings Presentations 2 Wall Street Journal – 8/2/22 3 Mintel Comperemedia – Note: Data are Estimates -60% -40% -20% 0% 20% 40% 60% 80% Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 American Express JP Morgan Chase Positive Trends & M
Slide 6: Positive Trends & Momentum across Payment Cards
5 5 Positive Trends & Momentum across Payment Cards ~40% ~60% ~50% Source: American Express Earnings Presentations (5 %) YoY Card Growth + 28 % + 46 % + 29 % + 63 % + 4 % + 0 % YoY Marketing & Business Development Spend Growth (35%) +43% + 59 % + 86 % + 140 % (16%) (52 %) American Express continues
Slide 7: ABI Research Projects Strong Metal Payment Cards Growth
6 6 29.6 34.9 42.1 49.1 56.5 63.6 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 0 10 20 30 40 50 60 70 2021E 2022F 2023F 2024F 2025F 2026F Worldwide Total Metal Cards Issued (MM) Penetration Rate of Total Payment Cards Issued ABI Research Projects Strong Metal Payment Cards Growth to Continue as Traditional Ba
Slide 8: The Arculus Platform Offers a Broad Range of Security & Authentication Solutions
7 7 The Arculus Platform Offers a Broad Range of Security & Authentication Solutions Targeting a Variety of Verticals FinTechs Financial Institutions Sports & Entertainment Gaming & Gambling Crypto Exchanges NFT Marketplaces KEY VERTICALS Telecom Healthcare B2B to Consumer Security Solutions Direct
Slide 9: Payment, Security, & Authentication Solutions
8 8 Payment, Security, & Authentication Solutions Payment Card Payment + Secure Authentication Card Digital Asset Cold Storage Card Digital Asset Cold Storage + Secure Authentication Card Payment + Digital Asset Cold Storage Card Secure Authentication Card HYBRID PRODUCTS CORE OFFERING Available Now
Slide 10: Crypto Winter Drives Consumer Need for Enhanced Protection of Digital Assets
9 9 “Coinbase warns customers they may lose crypto if company goes bankrupt” 1 “Big crypto lender Celsius freezes all account withdrawals” 2 “ Finblox withdrawal restrictions trigger concerns from the community” 3 “Crypto lender Babel Finance freezes all account withdrawals” 4 “Hong Kong crypto plat
Slide 11: Arculus Capability Roadmap
10 10 Arculus Capability Roadmap B2B to Consumer Security Solutions Direct to Consumer Cold Storage Solutions Access to DeFi Ecosystem through WalletConnect Integration Ability to View NFTs and Securely Send, Receive, & Store Keys to NFTs Cryptocurrency & Digital Asset Support Expansion Delivered in
Slide 12: Arculus Well Positioned for Growth
11 11 Arculus Well Positioned for Growth Current Challenges in the Digital Asset Market Drive an Increased Need for Consumers to Control their Private Keys This Market Cycle has Created Uncertainty in Timing for Anticipated Arculus Ramp Up since some Partners and Targets have been Impacted Confident
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Slide 14: Q2 2022 Results
13 13 Q2 2022 Results Net Sales Gross Margin Adjusted EBITDA 1 Adjusted EBITDA Margin 1 Q2 ‘22 Q2 ‘21 % Change Commentary $ 97 mm 61 % $ 40 mm 41% $63mm 56% $27mm 43% 55% 459bps 45% (272 bps) Increased momentum across domestic & international Process efficiencies mitigating increasing supply chain c
Slide 15: June YTD 2022 Results
14 14 June YTD 2022 Results Net Sales Gross Margin Adjusted EBITDA 1 Adjusted EBITDA Margin 1 1H ‘22 1H ‘21 % Change Commentary $ 181 mm 59% $ 73 mm 40% $ 127 mm 55% $ 57 mm 45% 43% 443bps 29% (450 bps) Excludes $37mm increase from re - valuation of earnout & warrants Includes (~$10mm) net impact fr
Slide 16: Net Sales Trend
15 15 Net Sales Trend In millions $46 $52 $64 $62 $70 $16 $14 $11 $22 $27 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 International Domestic $63 $66 $ 75 $84 $ 97 International Domestic 28 % 72 % 26 % 74 % 21 % 79 % 15 % 85% 26 % 74 % Domestic and international are both contributing to CompoSecure’s growth +71% Q
Slide 17: Earnings per Share: GAAP
16 16 15mm 5 Earnings per Share: GAAP Basic Q2 YTD ‘22 GAAP Net Income $61mm $0.56 14.0% $8mm 1 Three months ended 6/30/22 Six months ended 6/30/22 $61mm 27.5% $17mm 2 32mm 6 $0.52 $88mm $88mm 13.6% 27.6% $12mm 3 $24mm 4 15mm 5 32mm 6 $0.80 $0.75 Source: Company Financials 1 19.9% of Operating Net I
Slide 18: Earnings per Share: Non-GAAP
17 17 76mm 3 Earnings per Share: Non - GAAP Basic Q2 YTD ‘22 GAAP Net Income $61mm $0.33 100.0% $25mm 1 Three months ended 6/30/22 Six months ended 6/30/22 $61mm 100.0% $25mm 1 88mm 4 $0.29 $88mm $88mm 100.0% 100.0% $46mm 2 $46mm 2 76mm 3 88mm 4 $0.60 $0.52 Source: Company Financials 1 GAAP Net Inco
Slide 19: 2022 Guidance
18 18 2022 Guidance Net Sales Adjusted EBITDA 1 Prior 2022E 2021 $268mm $102mm $336mm - $376mm $100mm - $110mm 1 Adjusted EBITDA is a non - GAAP financial metric. For a reconciliation of Adjusted EBITDA to the most - comparable GAAP metric, plea se see the Appendix to this presentation $355mm - $ 38
Slide 20: Strategic Priorities
19 19 Strategic Priorities Leader in Metal Payment Cards, Security, Storage, and Authentication Technology Drive premium payment card sales through continued domestic growth, international expansion, and FinTechs Deliver innovative new card constructs and leverage our scale and existing relationship
Slide 21: Investor Relations Contact
20 20 Investor Relations Contact ir.composecure.com Anthony Piniella 908 - 898 - 8887 ir@composecure.com
Slide 22: @Compdecure
@Compdecure security lity
Slide 23: Environmental Initiatives
22 22 Environmental Initiatives 1 st Metal Card Manufacturer to Receive ICMA EcoLabel Standard Program Achieved ISO 14001 Certifications Obtained Certification for UL’s Environmental Claim Validation Program Carbon Neutral in June 2022 Evaluating New Equipment to Reduce Water Consumption in Q3 2022
Slide 24: Summary Equity Capitalization Table
23 23 CompoSecure, Inc. (Nasdaq: CMPO) Summary Equity Capitalization Table (with net exercise model) As of June 30, 2022 Holders # of Shares Issued & Outstanding # of Shares Issued & Outstanding Public Shareholders & PIPE Investors (Class A) 9.3mm 9.3mm Roman Sponsor (Class A) 5.8mm 5.8mm Historic C
Slide 25: Balance Sheets (Unaudited)
24 24 Balance Sheets ( Unaudited) Source: Company financials Note: Financial position has been derived from CompoSecure’s consolidated financial statements for the quarters ended June 30 , 2 022 and December 31, 2021 respectively. ($mm) Q2 2022A Q4 2021 Assets Current Assets Cash & cash equivalents
Slide 26: Statements of Operations (Unaudited)
25 25 Statements of Operations (Unaudited) Source: Company financials Note: Operating results have been derived from CompoSecure’s consolidated financial statements for the quarters ended June 30 , 2 022 and 2021 respectively ($mm) YTD Jun 2022A YTD Jun 2021A Revenue Net Sales $181.4 $126.5 Cost of
Slide 27: Statements of Cash Flows (Unaudited)
26 26 Statements of Cash Flows (Unaudited) Source: Company financials Note: Cash flows have been derived from CompoSecure’s consolidated financial statements for the quarters ended June 30, 2022 and 2021 respectively $37mm Impact ($mm) YTD Jun 2022A YTD Jun 2021A Cash flows from operating activities
Slide 28: Non-GAAP Adjusted EBITDA Reconciliation
27 27 Source: Company financials Non - GAAP Adjusted EBITDA Reconciliation (Unaudited) 1 2 Non - Cash Stock Option Expense : Non - cash stock option expenses related to the executive incentive plan Non - Cash Mark to Market Adjustments: Related to changes in fair value of liabilities for warrants, e
Slide 29: Non-GAAP EPS Reconciliation
28 28 Source: Company financials 1 Assumes treasury stock method, valuation at assumed FMV of $18.00 2 Assumes exercise net of strike price, valuation at assumed FMV of $10.00 Non - GAAP EPS Reconciliation (Unaudited) ($mm) BASIC DILUTED BASIC DILUTED GAAP Net Income $60.7 $60.7 $87.6 $87.6 Add back