CPI Card Group Inc. · NASDAQ:PMTS
CPI Card — Q1 2018 Earnings Presentation
18 slides from CPI Card's earnings presentation, May 8, 2018
Slide 1: First Quarter 2018 Earnings Conference Call
First Quarter 2018 Earnings Conference Call May 8, 2018 Copyright 2018 CPI Card Group
Slide 2: Safe Harbor
Safe Harbor Forward-Looking Statements Statements in this presentation that are not statements of historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may be identified by terms such as statement
Slide 3: Business Summary
Business Summary Scott Scheirman President and CEO Copyright 2018 CPI Card Group
Slide 4: Results Summary
Results Summary First Quarter 2018 Highlights • First quarter results in-line with expectations • Total net sales of $59 million, up 5% year-over-year • GAAP net loss of ~$7 million, Adjusted net loss* of ~$5 million • Adjusted EBITDA* of ~$3 million • $40 million of liquidity: $20 million of cash a
Slide 5: Strategy
Strategy Recap • CPI executing a strategy & plan that will enable it to better serve the needs of our customers, further capitalize on our addressable market, and deliver shareholder value • Goal is to be the partner of choice by providing market- leading quality products and service with a market c
Slide 6: Strategy: Four Key Strategic Priorities
Strategy Four Key Strategic Priorities to Enable CPI to Reach its Objectives #1 Deep customer focus Ensure the customer is at the center of all that we do • Focused on delighting our customers every day • Recent win with a leading prepaid provider and Card@Once® win with Sharetec System • Realignmen
Slide 7: Strategy: Four Key Strategic Priorities
Strategy Four Key Strategic Priorities to Enable CPI to Reach its Objectives #3 Market competitive business model While ensuring the highest quality and market-competitiveness • On track with the consolidation of personalization sites from three to two sites this summer • Benefits to cost structure
Slide 8: Summary
Summary • First quarter results were in-line with our expectations • Won new business with existing customers and added new customers • Good progress on strategies to drive long-term growth and deliver shareholder value • Look forward to sharing our continued progress Copyright 2018 CPI Card Group 8
Slide 9: Financial Summary
Financial Summary Lillian Etzkorn Chief Financial Officer Copyright 2018 CPI Card Group
Slide 10: Financial Results
Financial Results First Quarter First Quarter 2018 ($ in millions, except EPS) 2018 2017 Change Net sales: Products $ 27.6 $ 29.8 $ (2.2) Services 31.5 26.2 5.3 Total Net Sales $ 59.1 $ 56.0 $ 3.1 Gross Profit $ 14.4 $ 16.1 $ (1.7) gross margin 24.4% 28.7% Loss from Operations $ (4.0) $ (1.8) $ (2.2
Slide 11: Financial Results: Segment Review
Financial Results First Quarter 2018 Segment Review Net Sales EBITDA* ($ in millions) $37.1 $39.8 U.S. Debit and Credit** $5.7 $7.4 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Margin 15.4% 18.6% * See Appendix for definitions of our Non-GAAP financial measures $15.5 and reconciliations to the most $9.5 comparab
Slide 12: Operating and Free Cash Flow
Financial Results Operating and Free Cash Flow ($ in millions) Three Months Ended March 31, 2018 2017 Change Net Loss $ (7.3) $ (4.5) $ (2.8) Depreciation and amortization 5.2 4.5 0.7 Stock-based compensation expense 0.4 0.5 (0.1) Amortization of debt issuance costs and debt discount 0.5 0.5 0.0 Def
Slide 13: Debt and Liquidity
Financial Results Debt and Liquidity • Term Loan Has No Financial Covenants • Borrowing Under Revolver limited to $20 million above 7.0x Net Debt / LTM Adj. EBITDA ($ in millions) First Quarter 2018 2017 CPI Debt Maturities Term $(Millions) Loan Cash $20.2 $25.9 $313 Debt $312.5 $312.5 Net Debt $292
Slide 14: The Market: U.S. Market Conditions
The Market U.S. Market Conditions • Expect U.S. industry card manufacturing volume will be about flat in 2018 versus 2017 levels • EMV® card average selling prices expected to decline similar to 2017 • Expect personalization and fulfillment services to be characterized by more modest levels of deman
Slide 15: Appendix
Appendix Copyright 2018 CPI Card Group
Slide 16: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Financial Information 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: Adjusted Net (Loss) Income, Adjusted Diluted (Loss) Ear
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended March 31, 2018 2017 (in millions) EBITDA and Adjusted EBITDA: Net loss $ (7.3) $ (4.5) Interest expense, net 5.5 5.1 Income tax (benefit) (2.0) (2.3) Depreciation and amortization 5.2 4.5 EBITDA $ 1.5 $ 2.8 Adjustments to EBITDA Litigation and related charg
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended March 31, 2018 2017 (in millions) Weighted-average number of shares outstanding: Basic 11.1 11.1 Effect of dilutive equity awards — — Weighted-average diluted shares outstanding 11.1 11.1 Three Months Ended March 31, 2018 2017 Reconciliation of diluted (los