Slide 1: Q4 2022 Earnings Presentation
Q4 Earning March 1, 20235 @CompoSecure ar 202? entation
Slide 2: Disclaimers
() 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, and e
Slide 3: Key Highlights
Key Highlights Full Year ‘22 vs. Full Year ‘21: Net Sales increased 41% to $378mm ($370mm to $380mm guidance range) compared to $268mm driven by both domestic (+35%) and international (+68%) customers. Net income increased 58% to $132mm from $82mm. Adjusted EBITDA’ increased 33% to $136mm ($130mm to
Slide 4: Payment Card Update
Payment Card Update Shipped approximately 30mm payment cards globally 2022 vs. 22mm in 2021 Continued growth from new and existing traditional banking and fintech customers Existing | | Unveiled new payment card tech innovations to deliver distinct experiences to consumers i . Ef o Dedicated to sust
Slide 5: -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% Q1 '20 Q2
-40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 American Express JP Morgan Chase Online In-Store Other Digital Wallet Debit/Credit/Store/ Gift Card
Slide 6: Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21
Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 New Cards (MM) Marketing & Business Development Spend ($B)
Slide 7: Large Issuers and Payment Networks Confident in Growth
Large Issuers and Payment Networks Confident in Growth JPMORGAN CHASE & Co. “Our 2022 performance shows that our strategy is “While we are ready for a range of scenarios, our working...based on our performance to date and what we expectation is for another strong performance. So, as we see for 2023,
Slide 8: CompoSecure's Payment Card Innovation
CompoSecure’s Payment Card Innovation Pioneering technology has enabled the introduction of distinguishing features to further instill feelings of quality, durability, exclusivity, and status Lux Glass Echo Mirror Airplane Corning Gorilla Glass Buffed Stainless Steel Aluminum from Retired w/Metal Fr
Slide 9: The Arculus Platform Offers a Broad Range of Security & Authentication Solutions
@ The Arculus Platform Offers a Broad Range of Security & Authentication Solutions for B2B & B2C Secure Authentication Card Digital Asset Cold Storage Card Payment (Credit/Debit) + Payment (Credit/Debit) + Secure Authentication Card Digital Asset Cold Storage Card
Slide 10: 0% 10% 20% 30% 40% 50% 60% 70% Password PIN Code One-Time Password Security
0% 10% 20% 30% 40% 50% 60% 70% Password PIN Code One-Time Password Security Questions Email Address Responding to Email/Text to Prove Ownership Phone Number Answering Questions Related to Private Information Home Address Providing Identification in Person Providing Digital Identification Receiving a
Slide 11: Arculus Update
Arculus Update Security €) arcuLus Digital Authentication Pilot for Global Cryptocurrency Exchange / BaaS Provider Li Security and digital authentication solution certified by FIDO2, Visa, & Mastercard can help banks and consumers protect their accounts with two or three- factor authentication We ar
Slide 12: Arculus Partners Leveraging Social Media to Promote
Arculus Partners Leveraging Social Media to Promote 1:50 7 Search MELD @ @MELD Defi (3) Chainge_677B7D2F55 V A #25DaysOfMELD Day 17 is here! & ‘¥ !We're happy to announce our partnership with @thisisarculus, a leading cold storage wallet solution, to offer even more unique features for our MELD Debi
Slide 13: Financial Overview
@ Financial Overview
Slide 14: Full Year 2022 Results
FES Ss Full Year 2022 Results Demand for premium metal $378mm $268mm 41% cards, strong sales execution, & increased international demand Economics of scale & 58% 54% 398 bps efficiencies mitigated increasing supply chain costs $42.3mm net increase from re- $152mm $o5mm Boe valuation of earnout & war
Slide 15: Q4 2022 Results
FES Ss Q4 2022 Results Demand for premium metal $94mm $75mm 25% cards, strong sales execution, & increased international demand Economics of scale & 54% 52% 145 bps efficiencies mitigated increasing supply chain costs $4.2mm net increase from re- 22mm $20mm 124 valuation of earnout & warrants Exclud
Slide 16: Q4 Q1 Q2 Q3 Q4 International Domestic
Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 International Domestic
Slide 17: Earnings per Share: GAAP
() Earnings per Share: GAAP 12/31/22 Source: Company Financials 121.4% of Operating Net Income of $25 6mm less 100% of C-Corp Costs of $3.2mm 2214% of Operating Net Income of $25,6mm less 100% of C-Corp Costs of $3.2mm 5 214% of Operating Net income of $144.0mm less 100% of C-Corp Costs of $12.2mm 3
Slide 18: Adjusted Earnings per Share
() Adjusted Earnings per Share 12/31/22 12/31/22 GAAP Net Income $22mm $22mm $132mm $132mm Adjusted Net Income $18mm' $18mm! $83mm2 $83mm2 % of GAAP Net Income 79% 79% 63% 63% Total Shares used in EPS 76.4mm* 88.3mm* 75.7mms 88.0mm®> Adjusted EPS® $0.23 $0.20 $1.10 $0.94 Source: Company Financials G
Slide 19: 2023 Guidance
20235 Guidance Full year net sales and adjusted EBITDA guidance 2023E CESS © s4comm-sa2smm B/(W) vs. ‘22 +6% / +12% Adjusted EBITDA' $145mm - $155mm B/(W) vs. ’22 +7% / +14% ® ‘Adjusted EBITDA is a non-GAAP financial metric. For a reconciliation of Adjusted EBITDA to the most-comparable GAAP metric,
Slide 20: Strategic Priorities
Strategic Priorities A 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 relationships En
Slide 21: Investor Relations Contact
Investor Relations Contact ir.composecure.com Sean Mansouri 720-550-2829 ir@composecure.com @CompoSecure
Slide 22: Appendix
@ Appendix Zz ¢: ‘|
Slide 23: Summary Equity Capitalization Table
@ CompoSecure, Inc. (Nasdaq: CMPO) Summary Equity Capitalization Table (with net exercise model) As of December 31, 2022 Current Enterprise Value is $900mm! Poder # of Shares Issued & Outstandin: # of Shares Issued & Outstanding Public Shareholders (including PIPE & Sponsor): Class A 16.4mm 16.4mm H
Slide 24: Balance Sheet
($mm) Q4 2022A Q4 2021 Assets Current Assets Cash & cash equivalents $14 $22 Accounts receivable, net 37 28 Inventories 42 26 Prepaid expenses and other Current assets 4 3 Total Current Assets 97 78 Property and equipment, net 23 22 Deferred tax assets 26 26 Other assets 18 5 Total assets $163 $131
Slide 25: Income Statement
($mm) Q4 2022A Q4 2021A FY 2022A FY 2021A Revenue Net Sales $94 $75 $378 $268 Cost of Sales (44) (36) (159) (123) Gross Profit $50 $39 $220 $145 Operating Expenses Selling, general and administrative (25) (30) (105) (63) Income from operations $25 $9 $115 $81 Other expense Other income (expense), ne
Slide 26: Cash Flow Statement
($mm) FY 2022A FY 2021A Cash flows from operating activities Net income $132 $83 Depreciation 9 10 Equity compensation expense 11 6 Inventory reserve 2 1 Amortization of deferred finance costs 2 2 Mark-to-market adjustments (23) (10) Change in assets and liabilities (19) (3) Accounts receivable (9)
Slide 27: Adjusted EBITDA Reconciliation
$mm Q4 2022A Q4 2021A FY 2022A FY 2021A Net Income $22 $20 $132 $83 Interest Expense 6 3 23 12 Depreciation and Amortization 2 3 9 10 Taxes 1 -1 4 -1 Unadjusted EBITDA $31 $25 $167 $105 Non-Cash Stock Comp Expense 4 4 11 10 Mark-to-market Adjustments -4 -8 -43 -13 Total EBITDA Adjustments ($1) ($4)
Slide 28: Adjusted Net Income and EPS Reconciliation
($mm) BASIC DILUTED BASIC DILUTED GAAP Net Income $22.4 $22.4 $131.8 $131.8 Add back tax provision 0.6 0.6 4.4 4.4 Tax Provision on 100% of Taxable Income -4.8 -4.8 -22.4 -22.4 Adjusted Net Income $18.2 $18.2 $113.8 $113.8 Fair Value and Stock Based Compensation Adjustment -$0.5 -$0.5 -$30.8 -$30.8