Gpgi, Inc. · NYSE:GPGI
Gpgi — CompoSecure — Q2 2023 Earnings Presentation
25 slides from Gpgi's earnings presentation, Aug 14, 2023
Slide 1: Earnings Presentation, August 14, 2023
Earnnn entation August 14, 2023 @®CompoSecure
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 Net Sales: Q2 ’23 vs. Q2 ‘22 increased 1% to $99mm compared to $97mm driven by strong domestic growth in the company’s premium payment card business which was up 11%; YTD up 7% to $194mm compared to $181mm prior year Continued focus on driving growth for payment card and Arculus product offe
Slide 4: Key Highlights
4 Key Highlights Customer & Conference News ➢ Announced a five-year contract extension through December 2028 as the exclusive provider of metal cards for one of our largest customers that was set to expire at the end of this year (see filed 8-K). We have now signed long-term renewals with both of ou
Slide 5: Large Issuers and Payment Networks Confident in Growth
Large Issuers and Payment Networks Confident in Growth Source: Q2 ‘23 Earnings Transcripts “We also remain focused on achieving our growth plan aspirations of annual revenue growth in excess of 10% and mid-teens EPS growth in 2024 and beyond in a steady-state macro environment. I continue to feel ve
Slide 6: Secure Authentication Market Demand
Secure Authentication Market Demand As life becomes more digitally connected, consumers increasingly expect that online transactions will be highly secure, simple, and convenient 6 Consumers are Ready to Transition Away from Password Login Methods Login Comfort1 68% 50% 48% Willing to Use Non-Passwo
Slide 7: Arculus Capabilities
Arculus Capabilities The Arculus premium metal card can combine functionality of both a credit/debit payment card and a secure authentication token or cold storage wallet 7 Arculus Authenticate™ Arculus Cold Storage™ FIDO2 passwordless hardware authenticator • Secure login on any iPhone, Android pho
Slide 8: Financial Overview
@ Financial Overview
Slide 9: Q2 2023 Results
Q2 2023 Results $36.9mm Q2 ‘23 Q2 YTD ‘22 Net Sales $98.5mm 37.4% $32.7mm 54.7% $97.2mm $60.7mm 60.5% $39.7mm 40.8% 1% Strong sales execution and continued demand for metal cards (46%) (580 bps) (7%) (337 bps) Net Income Gross Margin Adjusted EBITDA1 Adjusted EBITDA Margin1 Q2 ‘22 % Change Commentar
Slide 10: YTD June 2023 Results
YTD June 2023 Results $72.3mm YTD Jun ‘23 Q2 YTD ‘22 Net Sales $193.8mm 37.3% $43.4mm 55.3% $181.4mm $87.6mm 59.3% $73.0mm 40.2% 7% Strong sales execution and continued demand for metal cards (50%) (398 bps) (1%) (292 bps) Net Income Gross Margin Adjusted EBITDA1 Adjusted EBITDA Margin1 YTD Jun ‘22
Slide 11: Net Sales Trend
$70 $84 $79 $74 $78 $27 $19 $15 $22 $21 $97 $103 $94 $95 $99 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 International Domestic Net Sales Trend International mix is ~20 percent of total net sales, in line with long range view of business In millions International Domestic 28% 72% 21% 79% 19% 81% 16% 84% 11 2
Slide 12: Q2 Earnings per Share: GAAP
Q2 Earnings per Share: GAAP 18.5mm Basic Q2 YTD ‘22 GAAP Net Income $32.7mm $0.31 $5.7mm1 Three months ended 6/30/23 Three months ended 6/30/22 $32.7mm $10.1mm2 35.5mm $0.29 $60.7mm $60.7mm $8.5mm3 $16.7mm4 15.1mm 32.4mm $0.56 $0.52 Net Income used in EPS Total Shares used in EPS Earnings per Share
Slide 13: YTD Earnings per Share: GAAP
YTD Earnings per Share: GAAP 18.1mm Basic Q2 YTD ‘22 GAAP Net Income $43.4mm $0.45 $8.1mm1 Six months ended 6/30/23 Six months ended 6/30/22 $43.4mm $14.2mm2 35.2mm $0.41 $87.6mm $87.6mm $11.9mm3 $24.2mm4 15.0mm 32.3mm $0.80 $0.75 Net Income used in EPS Total Shares used in EPS Earnings per Share Di
Slide 14: Q2 Adjusted Earnings per Share
Q2 Adjusted Earnings per Share Source: Company Financials 1 GAAP Net Income of $32.7mm less Additional Tax Provision of $5.2mm less Fair Value Mark to Market Change for Warrants and Earnout and Equity Awards Adjustment of $4.6mm 2 GAAP Net Income of $60.7mm less Additional Tax Provision of $3.9mm le
Slide 15: YTD Adjusted Earnings per Share
YTD Adjusted Earnings per Share Source: Company Financials 1 GAAP Net Income of $43.4mm less Additional Tax Provision of $12.1mm add Fair Value Mark to Market Change for Warrants and Earnout and Equity Awards Adjustment of $12.2mm 2 GAAP Net Income of $87.6mm less Additional Tax Provision of $8.8mm
Slide 16: 2023 Guidance
2023 Guidance Reaffirming 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 $400mm -
Slide 17: Strategic Priorities
Strategic Priorities A leader in Metal Payment Cards, Security, Storage, and Authentication Technology Drive premium payment card sales through continued domestic growth, international expansion, and FinTechs Deliver innovative new card constructs and leverage our scale and existing relationships En
Slide 18: Investor Relations Contact
Investor Relations Contact ir.composecure.com Sean Mansouri 720-330-2829 ir@composecure.com 18 18
Slide 19: Appendix
@ Appendix oT A
Slide 20: Summary Equity Capitalization Table
CompoSecure, Inc. (Nasdaq: CMPO) Summary Equity Capitalization Table (with net exercise model) As of June 30, 2023 Holders # of Shares Issued & Outstanding # of Shares Issued & Outstanding Public Shareholders (including PIPE & Sponsor): Class A 18.7mm 18.7mm Historic CompoSecure Owners: Class B 59.9
Slide 21: Balance Sheet (Unaudited)
Balance Sheet (Unaudited) Source: Company financials Note: Financial position has been derived from CompoSecure’s consolidated financial statements for the quarters ended June 30, 2023 and December 31, 2022 respectively. 21 ($mm) Q2 2023A Q4 2022A Assets Current Assets Cash & cash equivalents $23 $1
Slide 22: Statement of Operations (Unaudited)
Statement of Operations (Unaudited) Source: Company financials Note: Operating results have been derived from CompoSecure’s consolidated financial statements for the three and six months ended June 30, 2023 and 2022 respectively 22 ($mm) Q2 2023A Q2 2022A YTD Jun 2023A YTD Jun 2022A Revenue Net Sale
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 six months ended June 30, 2023 and 2022 respectively 23 ($mm) YTD Jun 2023A YTD Jun 2022A Cash flows from operating activities Net income $43
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 $32.7 $32.7 $43.4 $43.4 Adjust for tax provision 1.0 1.0 -0.3 -0.3 Tax