CPI Card Group Inc. · NASDAQ:PMTS
CPI Card — Investor Presentation (May 2024)
21 slides from CPI Card's investor presentation, May 2024
Slide 1: Investor Presentation May 2024
Investor Presentation May 2024
Slide 2: Disclaimer
Disclaimer 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 Litigation Reform Act of 1995, Sectio
Slide 3: Overview: CPI is a Payments Technology Company and Leading Provider of Cards
Overview: CPI is a Payments Technology Company and Leading Provider of Credit, Debit and Prepaid Card and Digital Solutions in the U.S. with a Track Record of Strong Growth We are the largest U.S.-based manufacturer of debit, credit and prepaid cards1. Our vision is to be the partner of choice by pr
Slide 4: Portfolio: Array of Debit, Credit and Prepaid Card and Digital Solutions
Portfolio: We Offer an Array of Debit, Credit and Prepaid Card and Digital Solutions, Including SaaS-based Instant Card Issuance Debit and Credit Segment: 2023 $361M Net Sales Customers include U.S. Financial Institutions, credit/debit processors, bank platforms and fintechs Secure Payment Cards Dat
Slide 5: Strategy: Key Strategic Priorities and Expansion into Adjacent Markets
Strategy: We Plan to Continue to Focus on the Key Strategic Priorities that have Driven Success Since 2018, while also Diversifying our Portfolio by Expanding into Adjacent Markets We aim to gain additional share in our traditional, growing markets, while also leveraging existing customer relationsh
Slide 6: Industry: Attractive and Growing Markets in the U.S. with Recurring Revenue
Industry: We Operate in Attractive and Growing Markets in the U.S. with Strong Recurring Revenue Our leading position and business model allow us to benefit from recurring revenue dynamics and continued market expansion U.S. Payment Card Recurring Demand Drivers1 Lost or Stolen Card Replacement Port
Slide 7: Industry: Credit and Debit Cards in Circulation Continue to Expand
Industry: Credit and Debit Cards in Circulation in the U.S. Market have Continued to Expand Visa and Mastercard U.S. cards in circulation have grown at a 9% CAGR over the last three years to 2.0 billion cards, up from 1.5 billion in 2020 2,023 1,942 1,971 1,885 1,915 1,829 1,758 1,783 1,714 1,679 1,
Slide 8: Customers: Long-term Trusted Relationships with Broad Customer Base
Customers: We Have Built Long-term Trusted Relationships with a Broad Base of Blue-Chip and Small and Medium Customers Thousands of direct and indirect customers with top 10 customer average tenure of more than 10 years Banks Processors/Bank Platforms Prepaid Fintech Strategic 5 of the top 6 A leade
Slide 9: Positioning: Competitive Advantage Through Differentiated Solutions
Positioning: We have Gained a Competitive Advantage by Offering Innovative, Differentiated and Proprietary Solutions Why We Win: We provide market-leading quality and customer service, innovative products, and robust end-to-end solutions ▪ Industry leading quality and customer service driving succes
Slide 10: Opportunity: Card Payments Remain Predominant at U.S. Point-of-Sale
Opportunity: Card Payments Continue to be the Predominant Payment Form at U.S. Point-of-Sale Card payments are expected to continue to take share from cash. Mobile payments have served as a complementary option to cards, rather than a replacement. More consumers find cards faster and more convenient
Slide 11: Opportunity: Higher-priced Eco-Focused Contactless Cards
Opportunity: The Trend Towards Higher-priced Eco-Focused Contactless Cards Should Aid Market Growth We have responded to customers’ ESG goals by developing innovative cards that incorporated recovered ocean- bound and recycled plastics U.S. eco-focused payment card market We are a leading eco-focuse
Slide 12: Opportunity: U.S. Transition to Higher-priced Contactless Cards
Opportunity: The U.S. Transition to Higher-priced Contactless Cards Continues to Progress We are well-positioned to capitalize on the transition to contactless cards with its diverse customer base U.S. began adopting the contactless standard later than the rest of the world Consumers use their cards
Slide 13: Opportunity: Adjacent Offerings Expand Addressable Market to ~$2 Billion
Opportunity: We have Initiated Adjacent Offerings that Potentially Expand our Addressable Market to ~$2 Billion1 Multiple opportunities to supplement growth by entering additional adjacent markets Health Savings Account Expansion to U.S. Digital Issuance with Push Payment Cards for the Gig (HSA) Exp
Slide 14: Financial Profile: Strong Financial Results over Past Five Years
Financial Profile: Execution of our Key Strategic Priorities has Driven Strong Financial Results over the past Five Years Strong Net Sales, Adjusted EBITDA1 and Net Income growth and improved financial position since foundational strategic priorities initiated in 2018 Net Income (Loss) from Continui
Slide 15: Capital Allocation: Enhanced Financial Profile
Capital Allocation: Strong Financial Performance in Recent Years has Significantly Enhanced our Financial Profile Improvement has created flexibility for future strategic actions • Net Leverage Ratio of 3.1x year-end 2023 (down from 11x 2018) Financial • Senior Notes balance of $268M at year-end 202
Slide 16: Management Team
Management Team: Our Leadership Reflects a Strong Mix of Company Experience and Outside Expertise Our leadership team has more than 150 years of John Lowe payment industry experience President & CEO Diane Felton Chief of Staff Jessica Browne Toni Thompson JD Porter Peggy O’Leary Jeff Hochstadt Beth
Slide 17: Summary: Established Market Leader Well Positioned for Continued Growth
Summary: CPI is an Established Market Leader Well Positioned for Continued Growth and Overall Share Gains Over the Long-Term Leading quality, innovation and customer service position CPI to capture incremental market share in a highly attractive industry, with opportunities to expand its addressable
Slide 18: Appendix
Appendix CPI Confidential and Proprietary | Not for distribution 18
Slide 19: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Year Ended December 31, 1) Represents net legal costs incurred in connection ($ in millions) 2023 2022 2021 2020 2019 2018 with certain patent and shareholder litigation. Reconciliation of net income from continuing operations to EBITDA and 2) Represent
Slide 20: Calculation of Net Leverage Ratio
Calculation of Net Leverage Ratio As of December 31, ($ in millions) 2023 2022 2021 2020 2019 2018 Calculation of Net Leverage Ratio: Senior Notes $ 267.9 $ 285.0 $ 310.0 $ 342.5 $ 312.5 $ 312.5 ABL revolver — 5.0 — — — — Finance lease obligations/Other 18.1 10.7 4.9 5.2 6.1 1.6 Total debt 286.0 300
Slide 21: Certain Non-GAAP Financial Measures
Certain Non-GAAP Financial Measures In addition to financial results reported in accordance with U.S. generally accepted accounting principles (“GAAP”), we have provided the following non-GAAP financial measures in this presentation, all reported on a continuing operations basis: EBITDA, Adjusted EB