Slide 1: Q1 2023 Earnings Presentation
Qt: Earnin May 3, 2023 ®CompoSecuré 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 expe
Slide 3: Key Highlights
Key Highlights Q1 ‘23 vs. Q1 ‘22: Net Sales increased 13% to $95.3mm compared to $84.2mm driven by strong sales execution and demand from traditional financial institutions and FinTechs. Adjusted EBITDA' increased 6% to $35.5mm compared to $33.3mm The company extended its contract through July 2026
Slide 4: -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 Q1 '23 American Express JP Morgan Chase - 0.5 1.0 1.5 2.0 2.5 3.0 3.5 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 Q
Slide 5: - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Q3 '10 Q1 '11 Q3 '11
- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Q3 '10 Q1 '11 Q3 '11 Q1 '12 Q3 '12 Q1 '13 Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17 Q3 '17 Q1 '18 Q3 '18 Q1 '19 Q3 '19 Q1 '20 Q3 '20 Q1 '21 Q3 '21 Q1 '22 Q3 '22 Q1 '23 0.90% 0.95% 1.00% 1.05% 1.10% 1.15% 1.20% 1.25% Q3 '10 Q1 '11 Q3 '11
Slide 6: Large Issuers and Payment Networks Confident in Growth
Large Issuers and Payment Networks Confident in Growth AMERICAN] EXPRESS “Through it all, we've continued to attract and retain high-quality customers and our strategic investments have resulted in the momentum we've seen throughout last year and into 2023. We feel good about the decisions we're mak
Slide 7: 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 3 2014 2015
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 8: 2020 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 30F
2020 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F
Slide 9: Easy set-up process for FIDO2 compatible app Can be used for step-up authentication Simply
Easy set-up process for FIDO2 compatible app Can be used for step-up authentication Simply tap Arculus Key card for secure log-in Secure NFC connection
Slide 10: Critical Use Cases to Penetrate Passwordless Authentication Market
Critical Use Cases to Penetrate Passwordless Authentication Market @ Strong Customer Authentication ¥ Improved User Experience & Customer Service @® Turn Internet Payments into “Card Present” Transactions S Reduce Fraud (3) Authorize High Dollar (4) Authenticating a New Transactions (Wire, Zelle, or
Slide 11: The Arculus Platform Offers a Broad Range of Security & Authentication Solutions
im |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 12: Company Highlights
Company Highlights Payment Card Rocket Mortgage Ness Well | | ZA 'NBESTGO NecBANG Partnerships Expanded Token Support Conferences Consumer Cold Education Storage Int'l Campaign Expansion
Slide 13: Financial Overview
@ Financial Overview
Slide 14: Q1 2023 Results
Q1 2023 Results Strong sales execution and continued 9 $95.3mm $84.2mm 13% demand for premium payment cards Higher materials costs in-line with 9, 9, 56% 58% (194 bps) expectation of the mid-50s $13.4mm Q1 ‘23 change in fair value of | Netincome $10.7mm $26.9mm (60%) warrant, earnout consideration,
Slide 15: $62 $70 $84 $79 $74 $22 $27 $19 $15 $22 $84 $97 $103 $94
$62 $70 $84 $79 $74 $22 $27 $19 $15 $22 $84 $97 $103 $94 $95 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 International Domestic
Slide 16: Earnings per Share: GAAP
Earnings per Share: GAAP Three months ended Three months ended 3/31/23 3/31/22 $10.7mm = $10.7mm $26.9mm $26.9mm $2.3mm' = $10.7mm?2 $3.4mm> = $3.4mms 17.6mm 94.7mm 14.9mm 14.9mm Earnings per Share $0.13 $0.11 $0.23 $0.23
Slide 17: Adjusted Earnings per Share
Adjusted Earnings per Share Three months ended Three months ended 3/31/23 3/31/22 GAAP Net Income $10.7mm —- $10.7mm $26.9mm $26.9mm Adjusted Net Income $20.6mm'! $20.6mm! $20.4mm2 $20.4mm? Total Shares used in EPS 77.6mms ~—-89.8mm* 76.Amm*> 88.5mmé> Adjusted EPS® $0.27 $0.23 $0.27 $0.23 Source: Co
Slide 18: 2023 Guidance
2023 Guidance Reaffirming full year net sales and adjusted EBITDA guidance 2023E 2022 | NetSales | $400mm - $425mm $378mm B/(W) vs. ‘22 +6% / +12% Adjusted EBITDA' $145mm - $155mm $136mm B/(W) vs. '22 +7% / +14% ‘AcprtodEBITOA i non-GAAP fnancl metr For a reconctaton of Adjusted ESITOA tothe mort co
Slide 19: 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 20: Investor Relations Contact
20 Investor Relations Contact ir.composecure.com Sean Mansouri 720-350-2829 ir@composecure.com ®CompoSecure
Slide 21: Appendix
@ Appendix
Slide 22: Summary Equity Capitalization Table
CompoSecure, Inc. (Nasdaq: CMPO) Summary Equity Capitalization Table (with net exercise model) As of March 31, 2023 Current Enterprise Value is $952mm' # of Shares Issued & Outstandi # of Shares Issued & Outstanding Public Shareholders (including PIPE & Sponsor): Class A 18.4mm 18.4mm Historic Compo
Slide 23: Balance Sheet
($mm) Q1 2023A Q4 2022A Assets Current Assets Cash & cash equivalents $23 $14 Accounts receivable, net 39 37 Inventories 51 42 Prepaid expenses and other Current assets 4 4 Total Current Assets 117 97 Property and equipment, net 24 23 Deferred tax assets 28 26 Other assets 16 18 Total assets $186 $1
Slide 24: Income Statement
($mm) Q1 2023A Q1 2022A Revenue Net Sales $95 $84 Cost of Sales (42) (35) Gross Profit $53 $49 Operating Expenses Selling, general and administrative (24) (19) Income from operations $29 $30 Other expense Other income (expense), net (19) (3) Net Income $11 $27
Slide 25: Cash Flow Statement
($mm) Q1 2023A Q1 2022A Cash flows from operating activities Net income $11 $27 Depreciation 2 2 Equity compensation expense 4 1 Amortization of deferred finance costs 1 1 Change in fair value of earnout, warrant and derivative 13 (2) Accounts receivable (2) (11) Accounts payable 8 (2) Inventories (
Slide 26: Adjusted EBITDA Reconciliation
$mm Q1 2023A Q1 2022A Net Income $11 $27 Interest Expense 6 5 Depreciation and Amortization 2 2 Taxes - 1 1 Unadjusted EBITDA $18 $35 Non-Cash Stock Comp Expense 4 1 Mark-to-market Adjustments 13 - 2 Total EBITDA Adjustments $17 ($1) Adjusted EBITDA $35 $33 Adjusted EBITDA % 37% 40%
Slide 27: Adjusted EPS Reconciliation
($mm) BASIC DILUTED BASIC DILUTED GAAP Net Income $10.7 $10.7 $26.9 $26.9 Adjust for Tax Provision -1.3 -1.3 0.5 0.5 Tax Provision -5.6 -5.6 -5.4 -5.4 Tax Adjusted Net Income $3.9 $3.9 $22.0 $22.0 Fair Value and Stock Based Compensation Adjustment $16.8 $16.8 -$1.7 -$1.7 Total Adjusted Net Income $2