CPI Card Group Inc. · NASDAQ:PMTS
CPI Card — FY2019 Earnings Presentation
21 slides from CPI Card's earnings presentation, Mar 9, 2020
Slide 1: Fourth Quarter and Full Year 2019 Earnings Conference Call
Fourth Quarter and Full Year 2019 Earnings Conference Call March 9, 2020 Copyright 2020 CPI Card Group
Slide 2: Safe Harbor
Safe Harbor Forward-Looking Statements: Certain statements and information in this presentation (as well as information included in our accompanying written or oral statements) may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Sec
Slide 3: Business Summary
Business Summary Scott Scheirman President and CEO Copyright 2020 CPI Card Group
Slide 4: Fourth Quarter and Full Year 2019 Highlights
Fourth Quarter and Full Year 2019 Highlights Highlights from Continuing Operations* • Strong Q4 and full year 2019 results driven by crisp execution of our customer-centric strategy • We believe we gained market share across all business units in 2019 • Net sales increased year over year by 6% for Q
Slide 5: 2019 Business Highlights
2019 Business Highlights Growth Through Targeted Initiatives • Deep customer focus • Winning in dual interface through experience, differentiated products, and expanded relationships • Built upon our relationship with one of the largest U.S.-based card-issuing financial institutions to provide them
Slide 6: Strategic Priorities
Strategic Priorities Deep Customer Focus • Be the trusted partner in payments • Exceed expectations through high quality, collaboration and innovative products Market-Leading Quality Products and Customer Service • Continually raise the bar on delivering innovative, quality products • Deliver except
Slide 7: Strong Portfolio of Differentiated Products and Solutions
Strong Portfolio of Differentiated Products and Solutions We believe we can continue to win in the markets we serve and leverage our business model for improved profitability as the top-line grows U.S. Debit and Credit Segment U.S. Prepaid Debit Segment Secure Card Card@Once® Personalization Prepaid
Slide 8: Summary
Summary • We executed well in 2019 on our strategies and operational initiatives to deliver strong top-line growth, significantly improving bottom-line performance and offering more robust products and solutions to customers. • We remain committed to our vision of being the partner of choice by prov
Slide 9: Financial Summary
Financial Summary John Lowe Chief Financial Officer Copyright 2020 CPI Card Group
Slide 10: Fourth Quarter and Full Year 2019 Results
Fourth Quarter and Full Year 2019 Results* Solid Execution of Our Strategic Priorities ($ in millions) Net Sales Gross Profit 9% 16% $278.1 $91.3 $255.8 $78.6 6% 5% $68.5 $72.6 $21.0 $22.0 Q4 2018 Q4 2019 FY 2018 FY 2019 Q4 2018 Q4 2019 FY 2018 FY 2019 Margin 30.6% 30.3% 30.7% 32.8% • Net sales year
Slide 11: Fourth Quarter and Full Year 2019 Results
Fourth Quarter and Full Year 2019 Results* Solid Execution Relative to Strategic Priorities ($ in millions) Net Loss from Continuing Operations Adjusted EBITDA**,*** 39% $37.6 $27.1 Q4 2018 Q4 2019 FY 2018 FY 2019 -$2.1 -$4.3 74% -$7.2 $8.8 $5.1 Q4 2018 Q4 2019 FY 2018 FY 2019 -$14.8 • Full year 201
Slide 12: Segment Results
Segment Results U.S. Debit and Credit • Fourth quarter: • Net sales of $61.6 million, up 24% year over year • Income from operations of $11.4 million, up 68% from Q4 2018 • Full year 2019: • Net sales of $213.1 million, up 19% year over year • Income from operations of $36.0 million, up 61% from 201
Slide 13: Cash, Debt and Liquidity
Cash, Debt and Liquidity • New $30 million Senior Credit Facility • Provides liquidity as Revolver was set to mature August 20201 • Provides approximately $27 million in additional net cash to execute our strategic plan • Funded by two current First Lien Term Loan lenders • Total cash as of the clos
Slide 14: U.S. Market Outlook in 2020
U.S. Market Outlook in 2020* U.S. Debit and Credit Segment U.S. Prepaid Debit Segment Secure Card Card@Once® Personalization Prepaid • We expect steady card • We expect strong market • We expect low but steady • We expect the open loop manufacturing volume growth. growth in the number of small marke
Slide 15: Appendix
Appendix Copyright 2020 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, all on a continuing operations basis: Operating Margin
Slide 17: Non-GAAP Measures
Non-GAAP Measures Reconciliation (1) Represents net legal costs incurred in connection with certain patent and shareholder litigation. (2) Represents executive severance charges in 2019. Represents employee and lease termination costs incurred in 2018 in connection with the decision to consolidate t
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation (1) During the second quarter of 2019, the Company recognized in operating income a $6.0 million gain related to the cash settlement of litigation. The litigation has been disclosed in the CPI’s SEC filings since CPI brought the complaint in 2017, and details of the settlemen
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation (1) Represents net legal costs incurred in connection with certain patent and shareholder litigation. (2) Represents executive severance charges in 2019. Represents employee and lease termination costs incurred in 2018 in connection with the decision to consolidate three pers
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Copyright 2020 CPI Card Group 20
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation (1) During the second quarter of 2019, the Company recognized in operating income a $6.0 million gain related to the cash settlement of litigation. The litigation has been disclosed in the CPI’s SEC filings since CPI brought the complaint in 2017, and details of the settlemen