Slide 1: Q3 2023 Earnings Presentation
Q3 2023 Earnings Presentation November 9, 2023
Slide 2: Disclaimers
2 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 ex
Slide 3: Summary
Summary Enhanced Arculus Authenticate (hardware passkeys received official designation as Microsoft FIDO2 security key vendor) and Arculus Cold Storage offering (hardware integration with MetaMask, substantial expansion of digital asset support through custom tokens, and cross-chain DeFi capabilitie
Slide 4: Key Highlights: Payment Card
4 Key Highlights Payment Card Ø Record quarterly domestic net sales in Company’s history Ø New metal card programs • American Express Hilton Aspire • American Express SAS Elite • Axis Magnus Ø Continued progress across new product innovations – Lux Glass, Dynamic EVC, Biometrics, and LED Industry Co
Slide 5: Key Highlights: Arculus Authenticate and Cold Storage
5 Key Highlights Arculus Authenticate Ø Hardware passkeys received official designation as a Microsoft FIDO2 security key vendor – compatible within ecosystem Ø Offers users a reliable and user-friendly secure passwordless authentication solution – can be integrated into payment card Arculus Cold St
Slide 6: Recent Trends across Payment Cards
-32% 30% 14% 4% 51% 9% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% Q1 '20Q2 '20Q3 '20Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22Q3 '22Q4 '22 Q1 '23 Q2 '23Q3 '23 American Express JP Morgan Chase Recent Trends across Payment Cards 1 American Express & JP Morgan Chase Earnings Presentations 2Am
Slide 7: Card Issuer and Payment Network Sentiment
Card Issuer and Payment Network Sentiment Source: Q3 ‘23 Earnings Transcripts “We feel really good about the quality of our new card acquisitions, which I talked about earlier, and I continue to see great demand for our products across a wide range of attractive investment opportunities. Given this
Slide 8: Financial Overview
Financial Overview
Slide 9: Q3 2023 Results
Q3 2023 Results $35.5mm Q3 ‘23 Q2 YTD ‘22 Net Sales $96.9mm 36.7% $38.0mm 50.5% $103.3mm $21.9mm 59.8% $32.7mm 31.6% (6.2%) Record domestic quarter offset by lower international sales 74% (931 bps) 8.8% 505 bps Net Income Gross Margin Adjusted EBITDA1 Adjusted EBITDA Margin1 Q3 ‘22 % Change Commenta
Slide 10: YTD September 2023 Results
YTD September 2023 Results $107.9mm YTD Sep ‘23 Q2 YTD ‘22 Net Sales $290.7mm 37.1% $81.5mm 53.7% $284.7mm $109.5mm 59.5% $105.6mm 37.1% 2.1% Record net sales year to date driven by continued strong US demand offset by international business impacted by global economic conditions (26%) (577 bps) 2.1
Slide 11: Net Sales Trend
$84 $79 $74 $78 $84 $19 $15 $22 $21 $13 $103 $94 $95 $99 $97 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 International Domestic Net Sales Trend YTD, international mix is ~20 percent of total net sales, in line with long range view of business In millions International Domestic 13% 87% 21 % 79 % 19% 81% 16% 8
Slide 12: Balance Sheet (Unaudited)
Balance Sheet (Unaudited) Source: Company financials Note: Financial position has been derived from CompoSecure’s consolidated financial statements for the quarters ended September 30, 2023 and December 31, 2022 respectively. 12 ($mm) Q3 2023A Q4 2022A Assets Current Assets Cash & cash equivalents $
Slide 13: Q3 Earnings per Share: GAAP
Q3 Earnings per Share: GAAP 19.1mm Basic Q2 YTD ‘22 GAAP Net Income $38.0mm $0.39 $7.5mm1 Three months ended 9/30/23 Three months ended 9/30/22 $38.0mm $12.3mm2 35.8mm $0.34 $21.9mm $21.9mm $2.8mm3 $3.6mm4 15.4mm 19.7mm $0.18 $0.18 Net Income used in EPS Total Shares used in EPS Earnings per Share D
Slide 14: YTD Earnings per Share: GAAP
YTD Earnings per Share: GAAP 18.4mm Basic Q2 YTD ‘22 GAAP Net Income $81.5mm $0.86 $15.8mm1 Nine months ended 9/30/23 Nine months ended 9/30/22 $81.5mm $26.5mm2 35.4mm $0.75 $109.5mm $109.5mm $15.5mm3 $30.9mm4 15.1mm 32.8mm $1.02 $0.94 Net Income used in EPS Total Shares used in EPS Earnings per Sha
Slide 15: Q3 Adjusted Earnings per Share
Q3 Adjusted Earnings per Share Source: Company Financials 1 GAAP Net Income of $38.0mm less Additional Tax Provision of $4.9mm less Fair Value/Mark to Market Changes for Warrants and Earnouts and Equity Awards Adjustment of $11.4mm. 2 GAAP Net Income of $21.9mm less Additional Tax Provision of $4.9m
Slide 16: YTD Adjusted Earnings per Share
YTD Adjusted Earnings per Share Source: Company Financials 1 GAAP Net Income of $81.5mm less Additional Tax Provision of $17.0mm plus Fair Value/Mark to Market Changes for Warrants and Earnouts and Equity Awards Adjustment of $0.7mm. 2 GAAP Net Income of $109.5mm less Additional Tax Provision of $13
Slide 17: 2023 Guidance
2023 Guidance Revising full year net sales and adjusted EBITDA guidance Net Sales Adjusted EBITDA1 2022 $378mm $136mm 1 Adjusted EBITDA is a non-GAAP financial metric. For a reconciliation of Adjusted EBITDA to the most-comparable GAAP metric, please see the Appendix to this presentation $400mm - $4
Slide 18: Strategic Priorities
Strategic Priorities A leader in Metal Payment Cards, Security, Storage, and Authentication Technology Drive premium payment card sales through continued domestic growth, international expansion, and FinTechs Deliver innovative new card constructs and leverage our scale and existing relationships En
Slide 19: Investor Relations Contact
Investor Relations Contact ir.composecure.com Sean Mansouri 720-330-2829 ir@composecure.com 19 19
Slide 20: Appendix
Appendix
Slide 21: Summary Equity Capitalization Table
CompoSecure, Inc. (Nasdaq: CMPO) Summary Equity Capitalization Table (with net exercise model) As of September 30, 2023 Holders # of Shares Issued & Outstanding # of Shares Issued & Outstanding Public Shareholders (including PIPE & Sponsor): Class A 19.3mm 19.3mm Historic CompoSecure Owners: Class B
Slide 22: Statement of Operations (Unaudited)
Statement of Operations (Unaudited) Source: Company financials Note: Operating results have been derived from CompoSecure’s consolidated financial statements for the three and nine months ended September 30, 2023 and 2022 respectively 22 ($mm) Q3 2023A Q3 2022A YTD Sep 2023A YTD Sep 2022A Revenue Ne
Slide 23: Statement of Cash Flows (Unaudited)
Statement of Cash Flows (Unaudited) Source: Company financials Note: Cash flows have been derived from CompoSecure’s consolidated financial statements for the nine months ended September 30, 2023 and 2022 respectively 23 ($mm) YTD Sep 2023A YTD Sep 2022A Cash flows from operating activities Net inco
Slide 24: Non-GAAP Adjusted EBITDA Reconciliation (Unaudited)
Non-GAAP Adjusted EBITDA Reconciliation (Unaudited) Source: Company financials Non-Cash Equity Awards: Equity based expenses related to the equity incentive plan Non-Cash Mark-to-Market Adjustments: Related to changes in fair value of liabilities for warrants, earnouts and derivatives assets. 1 2 1
Slide 25: Non-GAAP EPS Reconciliation (Unaudited)
Non-GAAP EPS Reconciliation (Unaudited) Source: Company financials 1 Assumes treasury stock method, valuation at assumed FMV of $18.00 2 Includes options, RSUs, and ESPP shares 25 ($mm) BASIC DILUTED BASIC DILUTED GAAP Net Income $38.0 $38.0 $81.5 $81.5 Adjust for tax provision 0.9 0.9 0.7 0.7 Tax P