FUNMAN
4 years ago
Is this correct? CPI Card Group reports Q3 results
Nov. 3, 2020 8:18 AM ET
By: Gaurav Batavia, SA News Editor
CPI Card Group (OTC:PMTS): Q3 GAAP EPS of $0.52.
Revenue of $82.7M (+15.4% Y/Y)
The devil is in the details and I've missed a lot of the details in the past 10 months. - FUNMAN
CPI Card Group Inc. Reports Third Quarter and Year-to-Date 2020 Results
Tue November 3, 2020 8:08 AM|Business Wire|About: PMTS
Net Sales of $82.7 Million, Up 15% and 11% Year-over-Year in the Third Quarter and First Nine Months
Net Income of $5.8 Million, Up 984% and 425% Year-over-Year in the Third Quarter and First Nine Months
Adjusted EBITDA of $17.5 Million, Up 43% and 39% Year-over-Year in the Third Quarter and First Nine Months
Cash of $50 Million at Quarter End
LITTLETON, Colo.--(BUSINESS WIRE)-- CPI Card Group Inc. (PMTS) (“CPI” or the “Company”) today reported financial results for the third quarter and nine months ended September 30, 2020.
“As we continue to navigate these unprecedented times, we are pleased with our strong third quarter performance,” said Scott Scheirman, President and Chief Executive Officer of CPI. “Our 15% top-line growth underscores the resilience of the business, our ability to capitalize on the dual interface card demand in the U.S. and the strong market for our innovative and differentiated products, including our eco-focused solutions. Operating margins also expanded significantly in the quarter, driven by operating leverage and ongoing efficiency initiatives. We continue to win new business with our existing customers, add new customers and pursue opportunities.”
Scheirman continued, “We remain steadfast and intensely focused on our strategies of deep customer focus, providing market-leading quality products and customer service, delivering innovative solutions and a market-competitive business model.”
Third Quarter and First Nine Months 2020 Financial Highlights
Net sales increased 15% and 11% year-over-year to $82.7 million and $228.0 million in the third quarter and first nine months of 2020, respectively. Gross profit increased 21% and 15% year-over-year in the third quarter and first nine months of 2020, respectively. Gross profit margins increased to 37.0% in the third quarter of 2020, compared to 35.4% in the prior year period, primarily due to higher net sales and operating leverage in the Debit and Credit segment. Gross profit margins increased to 34.8% from 33.7% in the first nine months of 2020 compared to the prior year.
Income from operations was $13.5 million and $26.0 million in the third quarter and first nine months of 2020, respectively, compared with $7.7 million and $21.1 million in the third quarter and first nine months of 2019, respectively. In the first nine months of 2019, the Company recognized a $6.0 million gain related to the cash settlement of litigation, which was included in income from operations.
Third quarter 2020 net income was $5.8 million, or $0.52 per diluted share, compared to a net loss of $0.7 million, or a $0.06 loss per diluted share, in the third quarter of 2019. For the first nine months, net income was $8.8 million, or $0.79 per diluted share, in 2020 compared to a net loss of $2.7 million, or a $0.24 loss per diluted share, in 2019.
Adjusted EBITDA increased 43% and 39% year-over-year to $17.5 million and $40.0 million in the third quarter and first nine months of 2020, respectively.
Third Quarter and First Nine Months 2020 Segment Information
Debit and Credit:
Net sales increased 22% and 19% year-over-year to $62.7 million and $180.9 million in the third quarter and first nine months of 2020, respectively. Growth for the third quarter and first nine months of 2020 was driven primarily by higher volumes of dual-interface EMV® card sales, including Second WaveTM cards featuring a core made with recovered ocean bound plastic. In addition, net sales increased from CPI On-Demand card personalization due to new customer wins and higher volumes from our existing customers, and from COVID-19 related government disbursement work. This growth was partially offset by COVID-19 impacts, including reduced volumes in card personalization stemming from fewer new accounts and requests for replacement cards. Card@Once® product sales were also impacted by COVID-19 due to reduced hours of operation, lack of access or closure of certain bank branches.
Prepaid Debit:
Net sales were up 1% and down 8% year-over-year to $20.6 million and $48.7 million for the third quarter and first nine months of 2020, respectively. Growth for the third quarter was primarily due to timing of certain customer sales, partially offset by reduced sales volumes primarily associated with COVID-19 impacts, including lower retail store traffic, which also impacted the decline in net sales for the first nine months of 2020.
Balance Sheet, Liquidity, and Cash Flow
As of September 30, 2020, cash and cash equivalents was $50.3 million. Cash used in operating activities was $1.8 million and capital expenditures were $1.7 million in the third quarter of 2020, yielding Adjusted Free Cash Flow use of $3.5 million. For the first nine months of 2020, cash provided by operating activities was $10.2 million and capital expenditures were $3.3 million, yielding Adjusted Free Cash Flow of $6.9 million. This compares with the first nine months of 2019 when cash used in operating activities was $3.0 million, or a $9.0 million cash usage when excluding the $6.0 million cash received from a litigation settlement, and capital expenditures were $3.3 million, resulting in Adjusted Free Cash Flow use of $12.3 million. For the first nine months of 2020, cash provided by operating activities and Adjusted Free Cash Flow increased $13.2 million and $19.2 million year-over-year, respectively.
Total long-term debt principal outstanding, comprised of the Company’s $30 million Senior Credit Facility and its $312.5 million First Lien Term Loan, was $342.5 million at September 30, 2020. Net of debt issuance costs and discount, total long-term debt was $335.8 million as of September 30, 2020. The Company’s Senior Credit Facility matures in May 2022 and the First Lien Term Loan matures in August 2022.
John Lowe, Chief Financial Officer, stated, “Top-line net sales growth and our commitment to operating efficiently resulted in strong year-over-year growth in Net Sales, Net Income, and Adjusted EBITDA. We are sharply focused on continuing to execute on our strategy and capitalizing on market opportunities.”
Additional Investor Commentary
The Company has provided additional written commentary regarding its quarterly performance and other business matters. This earnings press release and additional written commentary are available at investor.cpicardgroup.com.
EMV® is a registered trademark in the U.S. and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo, LLC.
Non-GAAP Financial Measures
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 release, all reported on a continuing operations basis: EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Free Cash Flow. These non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis between fiscal periods. We believe that these financial measures are appropriate to enhance an overall understanding of our underlying operating performance trends compared to historical and prospective periods and our peers. Management also believes that these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Our non-GAAP measures may be different from similarly titled measures of other companies. Investors are encouraged to review the reconciliation of these historical non-GAAP measures to their most directly comparable GAAP financial measures included in Exhibit E to this press release.
EBITDA
EBITDA represents earnings before interest, taxes, depreciation and amortization, all on a continuing operations basis. EBITDA is presented because it is an important supplemental measure of performance, and it is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is also presented and compared by analysts and investors in evaluating our ability to meet debt service obligations. Other companies in our industry may calculate EBITDA differently. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net (loss) income or net (loss) income from continuing operations as indicators of operating performance or any other measures of performance derived in accordance with GAAP. Because EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business.
Adjusted EBITDA
Adjusted EBITDA is presented on a continuing operations basis and is defined as EBITDA adjusted for litigation and related charges incurred in connection with certain patent and shareholder litigation; stock-based compensation expense; estimated sales tax expense (benefit); restructuring and other charges; loss on Revolving Credit Facility termination; foreign currency gain or loss; litigation settlement gain; and other items that are unusual in nature, infrequently occurring or not considered part of our core operations, as set forth in the reconciliation on Exhibit E. Adjusted EBITDA is also a defined computation in our First Lien Term Loan and Senior Credit Facility agreements, which generally conforms to the definition above, and impacts certain credit measures and covenants, including a covenant requiring the Company to have at least $25 million Adjusted EBITDA (as defined in our Senior Credit Facility) for the previous four consecutive fiscal quarters in total, at the end of each quarterly period ending on or after March 31, 2020. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, unusual or non-recurring losses or gains. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses or the cash requirements necessary to service interest or principal payments on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; (f) the impact of earnings or charges resulting from matters that we and the lenders under our credit agreement may not consider indicative of our ongoing operations; or (g) the impact of any discontinued operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-operating, unusual or non-recurring charges that are deducted in calculating net (loss) income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results.
In addition, certain of these expenses represent the reduction of cash that could be used for other purposes. Further, although not included in the calculation of Adjusted EBITDA presented in this release, the measure as defined in our credit facilities may at times allow us to add estimated cost savings and operating synergies related to operational changes ranging from acquisitions to dispositions to restructurings and/or exclude one-time transition expenditures that we anticipate we will need to incur to realize cost savings before such savings have occurred. Adjusted EBITDA margin percentage as shown in Exhibit E is computed as Adjusted EBITDA divided by total net sales.
Adjusted Free Cash Flow
We define Adjusted Free Cash Flow as cash flow provided by (used in) operating activities - continuing operations, less capital expenditures from continuing operations, adjusted for cash received from a litigation settlement gain in the second quarter of 2019. We use this metric in analyzing our ability to service and repay our debt. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service our debt, nor does it reflect the cash impacts of our discontinued operations. Adjusted Free Cash Flow should not be considered in isolation, or as a substitute for, cash (used in) provided by operating activities - continuing operations or any other measures of liquidity derived in accordance with GAAP.
About CPI Card Group Inc.
CPI Card Group® is a payment technology company and leading provider of credit, debit and prepaid solutions delivered physically, digitally and on-demand. CPI helps our customers foster connections and build their brands through innovative and reliable solutions, including financial payment cards, personalization, and Software-as-a-Service (SaaS) instant issuance. CPI has more than 20 years of experience in the payments market and is a trusted partner to financial institutions and payments services providers. Serving customers from locations throughout the United States, CPI has a large network of high security facilities, each of which is registered as PCI compliant by one or more of the payment brands: Visa (V), Mastercard®, American Express® and Discover®. Learn more at www.cpicardgroup.com.
Forward-Looking Statements
Certain statements and information in this earnings release (as well as information included in other written or oral statements we make from time to time) may contain or constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe,” “estimate,” “project,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” “guides,” “provides guidance,” “provides outlook,” or other similar expressions are intended to identify forward-looking statements, which are not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us, and other information currently available. Such forward-looking statements, because they relate to future events, are by their very nature subject to many important risks and uncertainties that could cause actual results or other events to differ materially from those contemplated.
These risks and uncertainties include, but are not limited to: the potential effects of COVID-19 on our business, including our supply-chain, customer demand, workforce, operations and ability to comply with certain covenants in our credit facilities; a decline in U.S. and global market and economic conditions and resulting decreases in consumer and business spending; our lack of eligibility to participate in government relief programs related to COVID-19 or inability to realize material benefits from such programs; our substantial indebtedness, including inability to make debt service payments or refinance such indebtedness; costs and impacts to our financial results relating to the obligatory collection of sales tax and claims for uncollected sales tax in states that impose sales tax collection requirements on out-of-state businesses, and challenges to our income tax positions; the restrictive terms of our credit facilities and covenants of future agreements governing indebtedness and the resulting restraints on our ability to pursue our business strategies; our limited ability to raise capital in the future; system security risks, data protection breaches and cyber-attacks; failure to comply with regulations, customer contractual requirements and evolving industry standards regarding consumer privacy and data use and security, including with respect to possible exposure to litigation and/or regulatory penalties under applicable data privacy and other laws for failure to so comply; interruptions in our operations, including our IT systems, or in the operations of the third parties that operate the data centers or computing infrastructure on which we rely; disruptions in production at one or more of our facilities; our inability to adequately protect our trade secrets and intellectual property rights from misappropriation or infringement, claims that our technology is infringing on the intellectual property of others, and risks related to open source software; defects in our software; problems in production quality, materials and process; a disruption or other failure in our supply chain; our failure to retain our existing customers or identify and attract new customers; a loss of market share or a decline in profitability resulting from competition; our inability to recruit, retain and develop qualified personnel, including key personnel; our inability to sell, exit, reconfigure or consolidate businesses or facilities that no longer meet with our strategy; our inability to develop, introduce and commercialize new products; the effect of legal and regulatory proceedings; failure to meet the continued listing standards of the Toronto Stock Exchange or the rules of the OTCQX® Best Market; a continued decrease in the value of our common stock combined with our common stock no longer being traded on a United States national securities exchange, which may prevent investors or potential investors from investing or achieving a meaningful degree of liquidity; developing technologies that make our existing technology solutions and products obsolete or less relevant or a failure to introduce new products and services in a timely manner; quarterly variation in our operating results; our inability to realize the full value of our long-lived assets; our failure to operate our business in accordance with the Payment Card Industry (“PCI”) Security Standards Council security standards or other industry standards; costs relating to product defects and any related product liability and/or warranty claims; maintenance and further imposition of tariffs and/or trade restrictions on, or slow-downs or interruptions in our ability to obtain, goods imported into the United States; our dependence on licensing arrangements; risks associated with international operations; non-compliance with, and changes in, laws in the United States and in foreign jurisdictions in which we operate and sell our products; our ability to comply with a wide variety of environmental, health and safety laws and regulations and the exposure to liability for any failure to comply; risks associated with the controlling stockholders’ ownership of our stock; potential conflicts of interest that may arise due to our board of directors being comprised in part of directors who are principals of our largest stockholder; and other risks that are described in Part I, Item 1A – Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2019 and filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2020, Part II, Item 1A – Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, and filed with the SEC on November 3, 2020, and our other reports filed from time to time with the SEC.
We caution and advise readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof. These statements are based on assumptions that may not be realized and involve risks and uncertainties that could cause actual results to differ materially from the expectations and beliefs contained herein. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
For more information:
CPI encourages investors to use its investor relations website as a way of easily finding information about the company. CPI promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information and press releases. CPI uses its investor relations site (http://investor.cpicardgroup.com) as a means of disclosing material information and for complying with its disclosure obligations under Regulation FD.
CPI Card Group Inc. Earnings Release Supplemental Financial Information
FUNMAN
5 years ago
CPI Card Group EPS misses by $0.12, misses on revenue
Nov. 6, 2019 8:21 AM ET
About: CPI Card Group Inc. (PMTS)
By: Pranav Ghumatkar, SA News Editor
CPI Card Group (NASDAQ:PMTS): Q3 GAAP EPS of -$0.06 misses by $0.12.
Revenue of $71.68M (+1.0% Y/Y) misses by $3.5M.
I think they are going to be the last buggy whip manufacturer.
CPI Card Group Inc. Reports Third Quarter and Year-to-Date 2019 Results
Wed November 6, 2019 8:15 AM|Business Wire|About: PMTS
Third Quarter Net Sales Up 1% Year Over Year, 3% Excluding Canada
Net Sales Up 10% Through First Nine Months, 13% Excluding Canada
Continuing Operations - GAAP Net Loss of $0.7 Million in Third Quarter and Net Loss of $2.2 Million through First Nine Months, an Improvement of 40% and 71% Year Over Year, Respectively
Adjusted EBITDA of $12.3 Million and $28.8 Million in Third Quarter and First Nine Months, Up 34% and 31% Year Over Year, Respectively
Cash of $14.3 Million, Available Revolver of $20.0 million, Available Liquidity of $34.3 Million at Quarter End
Call scheduled for Wednesday, November 6, 2019 at 9:00 a.m. Eastern Time
LITTLETON, Colo.--(BUSINESS WIRE)-- CPI Card Group Inc. (PMTS) (“CPI Card Group” or the “Company”) today reported financial results for the third quarter and nine months ended September 30, 2019.
“We delivered solid results once again this quarter as we continue to execute on our customer-centric strategy,” said Scott Scheirman, President and Chief Executive Officer of CPI. “During the third quarter, our U.S. Debit and Credit segment performed well, delivering 7% net sales growth, expanding operating margins and securing a meaningful new business win with the launch of Second Wave™ financial payment cards made with recovered ocean-bound plastic. This solid performance, along with our strong U.S. Prepaid segment results, further propelled our business to improve our bottom-line results and significantly increase Adjusted EBITDA in the quarter and year to date. Through commitment to our key strategies, we continue to execute towards achieving our vision of being the partner of choice for our customers by providing market-leading quality products and customer service with a market-competitive business model.”
Financial results for the comparative 2018 periods, including non-GAAP measures, discussed in this press release reflect continuing operations unless otherwise noted. The sale of CPI U.K., which occurred in August 2018 and had historically been reported as the U.K. Limited segment, was accounted for as discontinued operations and comparative financial information has been restated in accordance with U.S. GAAP (“GAAP”) requirements.
Third Quarter and First Nine Months 2019 Consolidated Financial Highlights from Continuing Operations
Net sales increased 1.0% to $71.7 million in the third quarter of 2019, bringing year-to-date net sales to $205.4 million, a year-over-year increase of 9.7%. Excluding Canada, net sales were up 3.3% and 12.9% for the third quarter and year to date, respectively. Third quarter income from operations was $8.0 million, up 70.0% year over year. For the year-to-date period, income from operations increased $16.7 million year over year to $21.6 million, which includes a previously disclosed $6.0 million cash litigation settlement gain received in the second quarter of 2019.
Third quarter 2019 net loss from continuing operations was $0.7 million, or $0.06 per share, compared to a net loss of $1.1 million, or $0.10 per share in the third quarter of 2018. For the year-to-date periods, net loss from continuing operations was $2.2 million, or $0.20 per share, in 2019 compared to a net loss of $7.6 million, or $0.68 per share, in the first nine months of 2018.
Adjusted EBITDA was $12.3 million for the third quarter of 2019. For the year-to-date period, Adjusted EBITDA, which excludes the $6 million cash litigation settlement gain recorded in the second quarter, was $28.8 million. Year over year, Adjusted EBITDA increased 34.4% and 30.7% in the third quarter and first nine months of 2019, respectively.
Third Quarter and First Nine Months Segment Information from Continuing Operations
U.S. Debit and Credit:
Third quarter net sales of $51.5 million represented an increase of 7.3% year over year. This contributed to a year-over-year net sales increase of 17.5% in the year-to-date period, to $151.5 million. These increases were driven by continued strong performance in personalization and fulfillment services, a shift towards higher-priced dual-interface EMV cards, and strong net sales from Card@Once.
U.S. Prepaid Debit:
Net sales were $20.5 million in the third quarter of 2019, representing a decline of 3.5% compared with the third quarter of 2018. For the first nine months of 2019, net sales were $53.2 million, an increase of 2.0% compared with the year-ago period, which benefited from strong 2018 net sales including portfolio wins that, as expected, did not recur in the 2019 periods.
Balance Sheet, Liquidity, and Cash Flow from Continuing Operations
During the third quarter of 2019, cash used in operating activities was $2.0 million and included continued investments in inventory to support the growth of the business. Third quarter capital expenditures were $0.6 million. This resulted in negative adjusted free cash flow during the third quarter of $2.7 million. Year to date, cash used in operating activities was $3.0 million, inclusive of the $6.0 million cash litigation settlement gain recorded in the second quarter. Year to date, and consistent with seasonal patterns, adjusted free cash flow was negative $12.3 million, and was impacted by year-to-date inventory investments of $12.3 million.
As of September 30, 2019, cash and cash equivalents was $14.3 million and no borrowings were outstanding on the Company’s revolving credit facility. The revolving credit facility had available borrowings of $20.0 million and matures August 17, 2020.
Total debt principal outstanding, comprised of the Company’s First Lien Term Loan, was $312.5 million at September 30, 2019, unchanged from December 31, 2018. Net of debt issuance costs and discount, total debt was $307.3 million as of September 30, 2019. The Company’s First Lien Term Loan matures in August 2022.
John Lowe, Chief Financial Officer, stated, “We are encouraged by the progress we have made driving top-line and profit growth by executing on our key strategies, which enhanced our operating leverage as we continue to focus on the long-term growth of the business. As we continue to build upon this success, we believe we have adequate cash and operating cash flows to support our business plan.”
EMV® is a registered trademark or trademark of EMVCo LLC in the United States and other countries.
Non-GAAP Financial Measures
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 release, all reported on a continuing operations basis: EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow, and Total Net Sales Growth Excluding Canada. These non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis between fiscal periods. We believe that these financial measures are appropriate to enhance an overall understanding of our underlying operating performance trends compared to historical and prospective periods and our peers. Management also believes that these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Our non-GAAP measures may be different from similarly titled measures of other companies. Investors are encouraged to review the reconciliation of these historical non-GAAP measures to their most directly comparable GAAP financial measures included in Exhibit E to this press release.
EBITDA
EBITDA represents earnings before interest, taxes, depreciation and amortization, all on a continuing operations basis. EBITDA is presented because it is an important supplemental measure of performance, and it is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is also presented and compared by analysts and investors in evaluating our ability to meet debt service obligations. Other companies in our industry may calculate EBITDA differently. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net (loss) income or net (loss) income from continuing operations as indicators of operating performance or any other measures of performance derived in accordance with GAAP. Because EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business.
Adjusted EBITDA
Adjusted EBITDA is presented on a continuing operations basis and is defined as EBITDA adjusted for litigation and related charges incurred in connection with certain patent and shareholder litigation; a litigation settlement gain in the second quarter of 2019; stock-based compensation expense; restructuring and other charges; foreign currency gain or loss; and other items that are unusual in nature, infrequently occurring or not considered part of our core operations, as set forth in the reconciliation on Exhibit E. Adjusted EBITDA is also a defined term in our existing credit agreement, which generally conforms to the definition above, and impacts certain credit measures and compliance targets within the credit agreement. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, non-cash or non-recurring losses or gains. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses or the cash requirements necessary to service interest or principal payments on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; (f) the impact of earnings or charges resulting from matters that we and the lenders under our credit agreement may not consider indicative of our ongoing operations; or (g) the impact of any discontinued operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-cash, non-operating or non-recurring charges that are deducted in calculating net (loss) income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results.
In addition, certain of these expenses can represent the reduction of cash that could be used for other purposes. Further, although not included in the calculation of Adjusted EBITDA, the measure may at times allow us to add estimated cost savings and operating synergies related to operational changes ranging from acquisitions to dispositions to restructurings and/or exclude one-time transition expenditures that we anticipate we will need to incur to realize cost savings before such savings have occurred. Further, management and various investors use the ratio of total debt less cash to Adjusted EBITDA, or "net debt leverage", as a measure of our financial strength and ability to incur incremental indebtedness when making key investment decisions and evaluating us against peers. The metric “total debt less cash” includes borrowed long term debt, letters of credit, and capital lease obligations, less cash. Adjusted EBITDA margin percentage as shown in Exhibit E is computed as Adjusted EBITDA divided by total net sales.
Adjusted Free Cash Flow
We define Adjusted Free Cash Flow as cash flow from continuing operations less capital expenditures from continuing operations, adjusted for cash received from a litigation settlement gain in the second quarter of 2019. We use this metric in analyzing our ability to service and repay our debt. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service our debt, nor does it reflect the cash impacts of our discontinued operations.
Total Net Sales Growth Excluding Canada
Total Net Sales Growth Excluding Canada, is a computation of the change in the Company’s Net Sales over the prior year period, excluding the net sales attributable to the Canadian operations. Canada sales were included in the Other segment during 2018 and the first quarter of 2019. The Canadian subsidiary was sold April 1, 2019, and the sale agreement excluded the portion of the business relating to Financial Payment Cards. That business migrated to the Company’s operations in the U.S. or to other service providers in 2019. The Canada-related sales in the second and third quarter of 2019 represents the Financial Payment Card business sales that migrated to the Company’s operations in the U.S. We computed the Total Net Sales excluding Canada, and the resulting year over year Total Net Sales Growth percentage excluding Canada, in Exhibit E. We believe that this financial measure is useful to investors in their analysis of our results of operations and provides improved comparability between fiscal periods.
About CPI Card Group Inc.
CPI Card Group® is a payment technology company and leading provider of credit, debit and prepaid solutions delivered physically, digitally and on-demand. CPI helps our customers foster connections and build their brands through innovative and reliable solutions, including financial payment cards, personalization and fulfillment, and Software-as-a-Service (SaaS) instant issuance. CPI has more than 20 years of experience in the payments market and is a trusted partner to financial institutions and payments services providers. Serving customers from locations throughout the United States, CPI has a large network of high security facilities, each of which is registered as PCI compliant by one or more of the payment brands: Visa (V), Mastercard®, American Express and Discover®. Learn more at www.cpicardgroup.com.
Conference Call and Webcast
CPI Card Group Inc. will hold a conference call on November 6, 2019 at 9:00 a.m. ET to review its third quarter and year-to-date 2019 results. To participate in the Company's conference call via telephone or online:
Participant Toll-Free Dial-In Number: (800) 860-2442
Participant International Dial-In Number: (412) 858-4600
Webcast Link: https://services.choruscall.com/links/pmts191106.html
Participants are advised to login for the live webcast 10 minutes prior to the scheduled start time.
A replay of the conference call and webcast will be available until November 20, 2019 at:
Replay: (877) 344-7529 or (412) 317-0088;
Conference ID: 10135256
Webcast replay: http://investor.cpicardgroup.com
Forward-Looking Statements
Certain statements and information in this earnings release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “1933 Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “1934 Act”). The words “believe,” “estimate,” “project,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us and other information available. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. We are making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated. These risks and uncertainties include, but are not limited to: our substantial indebtedness, including inability to make debt service payments or refinance such indebtedness; the restrictive terms of our credit facility and covenants of future agreements governing indebtedness and the resulting restraints on our ability to pursue our business strategies; our limited ability to raise capital in the future; system security risks, data protection breaches and cyber-attacks and possible exposure to litigation and/or regulatory penalties under applicable data privacy and other laws for failure to prevent such incidents; interruptions in our operations, including our information technology systems, or in the operations of the third parties that operate the data centers or computing infrastructure on which we rely; our failure to maintain our listing on the NASDAQ Capital Market; our inability to adequately protect our trade secrets and intellectual property rights from misappropriation or infringement, claims that our technology is infringing on the intellectual property of others, and risks related to open source software; defects in our software; problems in production quality and process; our failure to retain our existing customers or identify and attract new customers; a loss of market share or a decline in profitability resulting from competition; our inability to recruit, retain and develop qualified personnel, including key personnel; our inability to sell, exit, reconfigure or consolidate businesses or facilities that no longer meet with our strategy; our inability to develop, introduce and commercialize new products; the effect of legal and regulatory proceedings; developing technologies that make our existing technology solutions and products less relevant or a failure to introduce new products and services in a timely manner; quarterly variation in our operating results; our inability to realize the full value of our long-lived assets; our failure to operate our business in accordance with the PCI Security Standards Council (“PCI”) security standards or other industry standards such as Payment Card Brand certification standards; costs relating to the obligatory collection of sales tax and claims for uncollected sales tax in states that impose sales tax collection requirements on out-of-state retailers; disruption or delays in our manufacturing operations or supply chain; a decline in U.S. and global market and economic conditions and resulting decreases in consumer and business spending; costs relating to product defects and any related product liability and/or warranty claims; maintenance and further imposition of tariffs and/or trade restrictions on goods imported into the United States; our dependence on licensing arrangements; non-compliance with, and changes in, laws in the United States and in foreign jurisdictions in which we operate and sell our products; risks associated with the controlling stockholders’ ownership of our stock; and other risks that are described in Part I, Item 1A – Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 6, 2019 and our other reports filed from time to time with the Securities and Exchange Commission (the “SEC”).
We caution and advise readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof. These statements are based on assumptions that may not be realized and involve risks and uncertainties that could cause actual results to differ materially from the expectations and beliefs contained herein. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
For more information:
CPI encourages investors to use its investor relations website as a way of easily finding information about the company. CPI promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information and press releases. CPI uses its investor relations site (http://investor.cpicardgroup.com) as a means of disclosing material information and for complying with its disclosure obligations under Regulation FD.
CPI Card Group Inc. Earnings Release Supplemental Financial Information
FUNMAN
5 years ago
CPI Card Group® Brings Second WaveTM Cards to New Industry Sectors Including Transit, Hospitality and More
Mon October 28, 2019 9:00 AM
Business Wire|About: PMTS
They are still alive and kicking. They've managed to flatten out revenues, and are still generating a quarter of a billion dollars in sales. But they still cannot stem the tide of BIG losses.
Company’s Second Wave Cards, made with Recovered Ocean-Bound Plastic, Help Multiple Card Industry Market Segments Embrace Environmental Responsibility
LITTLETON, Colo.--(BUSINESS WIRE)-- CPI Card Group Inc. (PMTS) (Nasdaq: PMTS, TSX: PMTS) (“CPI”), a payment technology company and leading provider of credit, debit and prepaid solutions, today announced the introduction of Second Wave cards for markets including transit, hospitality, entertainment and more. The expansion of Second Wave into new use-cases and markets empowers companies across various card industry segments to incorporate more environmentally-friendly solutions into their products – and offer a product that resonates with environmentally-conscious cardholders.
First launched in September 2019, Second Wave payment cards feature a core made with recovered ocean-bound plastic. Aimed at reducing first-use plastic and diverting plastic waste from entering the ocean, Second Wave now includes cards for access applications such as travel, ticketing, lodging, entertainment and more. Using an embedded chip that enables radio-frequency identification (RFID) contactless functionality, Second Wave offers a seamless cardholder experience while aligning with broader consumer values and desires to support the environment.
“Cards are a staple in a multitude of sectors, from transportation and travel to hospitality and entertainment. Through Second Wave, we’re providing businesses across these industries with a more eco-friendly alternative to cards made with first-use plastic,” said Jack Jania, VP of Product Management and Innovation, CPI Card Group. “We’re proud to be a leader in developing card options that help our clients provide unique choices and support their customers’ eco-friendly interests.”
CPI’s Second Wave access cards can support the majority of chip technologies and applications currently in the market, empowering companies across multiple segments of the card industry with a simple and effective way to participate in protecting the environment. CPI estimates that for every one million Second Wave cards produced, over one ton of plastic will be diverted from entering the world’s oceans, waterways and shorelines. In “Payment Industry Introduces Recovered Ocean-Bound Plastic Card,” a white paper recently published by CPI, the company highlights just how incorporating recovered ocean-bound plastic into card products can combat the issue of plastic waste in oceans while supporting organizational goals to be more environmentally conscious.
To learn more about Second Wave, visit CPI Card Group’s website here.
About CPI Card Group
CPI Card Group® is a payment technology company and leading provider of credit, debit and prepaid solutions delivered physically, digitally and on-demand. CPI helps our customers foster connections and build their brands through innovative and reliable solutions, including financial payment cards, personalization and fulfillment, and Software-as-a-Service (SaaS) instant issuance. CPI has more than 20 years of experience in the payments market and is a trusted partner to financial institutions and payments services providers. Serving customers from locations throughout the United States, CPI has a large network of high security facilities, each of which is registered as PCI compliant by one or more of the payment brands: Visa (V), Mastercard®, American Express and Discover®. Learn more at www.cpicardgroup.com.
https://cts.businesswire.com/ct/CT?id=bwnews&sty=20191028005100r1&sid=acqr7&distro=nx&lang=en
View source version on businesswire.com: https://www.businesswire.com/news/home/20191028005100/en/
ICR Inc. for CPI Card Group
Sourav Das
203-682-8283
media@cpicardgroup.com
Source: CPI Card Group
Copyright Business Wire 2019
FUNMAN
5 years ago
CPI Card Group EPS beats by $0.19, misses on revenue
Aug. 7, 2019 8:27 AM ET|About: CPI Card Group Inc. (PMTS)
By: Gaurav Batavia, SA News Editor
CPI Card Group (NASDAQ:PMTS): Q2 GAAP EPS of $0.14 beats by $0.19.
Revenue of $66.9M (+8.9% Y/Y) misses by $1.56M.
For complete details click on the link:
https://seekingalpha.com/pr/17596226-cpi-card-group-inc-reports-second-quarter-first-half-2019-results
CPI Card Group Inc. Reports Second Quarter and First Half 2019 Results
Wed August 7, 2019 8:15 AM|Business Wire|About: PMTS
Second Quarter Net Sales Up 9% Year Over Year, Up 15% in First Half
Continuing Operations - GAAP Net Income Improves to $1.6 Million in Second Quarter, Improves 76% to $1.5 Million Net Loss in First Half
Adjusted EBITDA of $8.5 Million in Second Quarter, Up 28% Year Over Year to $16.5 Million in First Half
Cash of $17.5 Million, Available Revolver of $20.0 million, Available Liquidity of $37.5 Million at Quarter End
Call scheduled for Wednesday, August 7, 2019 at 9:00 a.m. Eastern Time
LITTLETON, Colo.--(BUSINESS WIRE)-- CPI Card Group Inc. (PMTS) (“CPI Card Group” or the “Company”) today reported financial results for the second quarter and first half ended June 30, 2019.
“Our customer-centric strategy continues to yield positive top-line momentum, as reflected in the 15% year-over-year net sales growth we have delivered so far this year,” said Scott Scheirman, President and Chief Executive Officer of CPI. “During the first half, our U.S. Debit and Credit segment increased net sales 24% on greater volume and product diversification, and our Prepaid Debit segment grew net sales 6% on top of a particularly strong first half in 2018. We’ve executed solidly towards our goal of being the partner of choice for our customers by providing market-leading quality products and customer service with a market-competitive business model.”
Financial results for the comparative 2018 periods, including non-GAAP measures, discussed in this press release reflect continuing operations unless otherwise noted. The sale of CPI U.K., which occurred in August 2018 and had historically been reported as the U.K. Limited segment, was accounted for as discontinued operations and comparative financial information has been restated in accordance with U.S. GAAP (“GAAP”) requirements.
Second Quarter and First Half 2019 Consolidated Financial Highlights from Continuing Operations
Net sales increased 8.9% to $66.9 million in the second quarter of 2019, bringing year-to-date net sales to $133.8 million, a year-over-year increase of 15.0%. During the second quarter, the Company recognized in income from operations a $6.0 million gain related to the cash settlement of litigation. The litigation has been disclosed in the Company’s SEC filings since the Company brought the complaint in 2017, and details of the settlement are disclosed in the Company’s Form 10-Q filed earlier today. The gain from this settlement, as well as a more favorable net sales mix, drove second quarter and first half 2019 income from operations to $10.1 million and $13.7 million, respectively, compared with $2.7 million and $0.3 million in the second quarter and first half of 2018, respectively.
Second quarter 2019 net income from continuing operations was $1.6 million, or $0.14 per diluted share, compared to a net loss of $0.8 million, or $0.07 per diluted share in the second quarter of 2018. For the year-to-date periods, net loss from continuing operations was $1.5 million, or $0.14 per diluted share, in 2019 compared to a net loss of $6.5 million, or $0.58 per diluted share, in 2018.
Adjusted EBITDA, which excludes the $6 million litigation settlement gain, was $8.5 million and $16.5 million for the second quarter and first half 2019, respectively. Year over year, second quarter 2019 Adjusted EBITDA was down 4.4%, and first half 2019 Adjusted EBITDA was up 28.1%.
Second Quarter and First Half Segment Information from Continuing Operations
U.S. Debit and Credit:
Second quarter net sales of $51.1 million represented an increase of 16.5% year over year. This contributed to a first half net sales year-over-year increase of 23.5%, to $100.0 million. These increases were driven by a double-digit percentage increase in EMV® card manufacturing volumes, propelled by dual-interface EMV® cards, as well as higher card personalization and fulfillment sales.
U.S. Prepaid Debit:
Second quarter net sales increased 3.5% year over year to $16.0 million and first half net sales increased 5.7% year over year to $32.7 million. These increases were on top of strong 2018 net sales, which included portfolio wins that, as expected, did not recur in the 2019 periods.
Balance Sheet, Liquidity, and Cash Flow from Continuing Operations
During the second quarter of 2019, the Company generated cash from operating activities of $9.2 million, inclusive of the $6.0 million litigation settlement gain, and spent $0.5 million on capital expenditures. This resulted in adjusted free cash flow generation of $2.7 million in the second quarter. As expected, and consistent with historical seasonal cash flow patterns, the Company’s operations generated a use of cash during the first half of 2019.
As of June 30, 2019, cash and cash equivalents was $17.5 million, an increase of $9.6 million from March 31, 2019. As of June 30, 2019, the Company’s revolving credit facility had no borrowings outstanding and available borrowings of $20.0 million. The revolving credit facility matures August 17, 2020.
Total debt principal outstanding, comprised of the Company’s First Lien Term Loan, was $312.5 million at June 30, 2019, unchanged from December 31, 2018. Net of debt issuance costs and discount, total debt was $306.8 million as of June 30, 2019. The Company’s First Lien Term Loan matures in August 2022.
John Lowe, Chief Financial Officer, stated, “We continue to be encouraged by solid year-over-year net sales growth which, in turn, yielded greater operating leverage and enabled us to generate cash in the second quarter. We believe we have adequate cash and liquidity to support our business plan.”
EMV® is a registered trademark or trademark of EMVCo LLC in the United States and other countries.
Non-GAAP Financial Measures
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 release, all reported on a continuing operations basis: EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Free Cash Flow. These non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis between fiscal periods. We believe that these financial measures are appropriate to enhance an overall understanding of our underlying operating performance trends compared to historical and prospective periods and our peers. Management also believes that these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Our non-GAAP measures may be different from similarly titled measures of other companies. Investors are encouraged to review the reconciliation of these historical non-GAAP measures to their most directly comparable GAAP financial measures included in Exhibit E to this press release.
EBITDA
EBITDA represents earnings before interest, taxes, depreciation and amortization, all on a continuing operations basis. EBITDA is presented because it is an important supplemental measure of performance, and it is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is also presented and compared by analysts and investors in evaluating our ability to meet debt service obligations. Other companies in our industry may calculate EBITDA differently. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net (loss) income or net (loss) income from continuing operations as indicators of operating performance or any other measures of performance derived in accordance with GAAP. Because EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business.
Adjusted EBITDA
Adjusted EBITDA is presented on a continuing operations basis and is defined as EBITDA adjusted for impairments; litigation and related charges incurred in connection with certain patent and shareholder litigation; a litigation settlement gain in the second quarter of 2019; stock-based compensation expense; restructuring and other charges; foreign currency gain or loss; and other items that are unusual in nature, infrequently occurring or not considered part of our core operations, as set forth in the reconciliation on Exhibit E. Adjusted EBITDA is also a defined term in our existing credit agreement, which generally conforms to the definition above, and impacts certain credit measures and compliance targets within the credit agreement. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, non-cash or non-recurring losses or gains. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses or the cash requirements necessary to service interest or principal payments on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; (f) the impact of earnings or charges resulting from matters that we and the lenders under our credit agreement may not consider indicative of our ongoing operations; or (g) the impact of any discontinued operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-cash, non-operating or non-recurring charges that are deducted in calculating net (loss) income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results.
In addition, certain of these expenses can represent the reduction of cash that could be used for other purposes. Further, although not included in the calculation of Adjusted EBITDA, the measure may at times allow us to add estimated cost savings and operating synergies related to operational changes ranging from acquisitions to dispositions to restructurings and/or exclude one-time transition expenditures that we anticipate we will need to incur to realize cost savings before such savings have occurred. Further, management and various investors use the ratio of total debt less cash to Adjusted EBITDA, or "net debt leverage", as a measure of our financial strength and ability to incur incremental indebtedness when making key investment decisions and evaluating us against peers. The metric “total debt less cash” includes borrowed long term debt, letters of credit, and capital lease obligations, less cash. Adjusted EBITDA margin percentage as shown in Exhibit E is computed as Adjusted EBITDA divided by total net sales.
Adjusted Free Cash Flow
We define Adjusted Free Cash Flow as cash flow from continuing operations less capital expenditures from continuing operations, adjusted for cash received from a litigation settlement gain in the second quarter of 2019. We use this metric in analyzing our ability to service and repay our debt. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service our debt, nor does it reflect the cash impacts of our discontinued operations.
About CPI Card Group Inc.
CPI Card Group® is a payment technology company and leading provider of credit, debit and prepaid solutions delivered physically, digitally and on-demand. CPI helps our customers foster connections and build their brands through innovative and reliable solutions, including financial payment cards, personalization and fulfillment, and Software-as-a-Service (SaaS) instant issuance. CPI has more than 20 years of experience in the payments market and is a trusted partner to financial institutions and payments services providers. Serving customers from locations throughout the United States, CPI has a large network of high security facilities, each of which is registered as PCI Card compliant by one or more of the payment brands: Visa (V), Mastercard®, American Express and Discover®. Learn more at www.cpicardgroup.com.
Conference Call and Webcast
CPI Card Group Inc. will hold a conference call on August 7, 2019 at 9:00 a.m. ET to review its second quarter and first half 2019 results. To participate in the Company's conference call via telephone or online:
Participant Toll-Free Dial-In Number: (800) 860-2442
Participant International Dial-In Number: (412) 858-4600
Webcast Link: https://services.choruscall.com/links/pmts190807.html
Participants are advised to login for the live webcast 10 minutes prior to the scheduled start time.
A replay of the conference call and webcast will be available until August 21, 2019 at:
Replay: (877) 344-7529 or (412) 317-0088;
Conference ID: 10133684
Webcast replay: http://investor.cpicardgroup.com
Forward-Looking Statements
Certain statements and information in this earnings release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “1933 Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “1934 Act”). The words “believe,” “estimate,” “project,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us and other information available. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. We are making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated. These risks and uncertainties include, but are not limited to: our substantial indebtedness, including inability to make debt service payments or refinance such indebtedness; the restrictive terms of our credit facility and covenants of future agreements governing indebtedness and the resulting restraints on our ability to pursue our business strategies; our limited ability to raise capital in the future; system security risks, data protection breaches and cyber-attacks and possible exposure to litigation and/or regulatory penalties under applicable data privacy and other laws for failure to prevent such incidents; interruptions in our operations, including our information technology systems, or in the operations of the third parties that operate the data centers or computing infrastructure on which we rely; our failure to maintain our listing on the NASDAQ Capital Market; our inability to adequately protect our trade secrets and intellectual property rights from misappropriation or infringement, claims that our technology is infringing on the intellectual property of others, and risks related to open source software; defects in our software; problems in production quality and process; our failure to retain our existing customers or identify and attract new customers; a loss of market share or a decline in profitability resulting from competition; our inability to recruit, retain and develop qualified personnel, including key personnel; our inability to sell, exit, reconfigure or consolidate businesses or facilities that no longer meet with our strategy; our inability to develop, introduce and commercialize new products; the effect of legal and regulatory proceedings; developing technologies that make our existing technology solutions and products less relevant or a failure to introduce new products and services in a timely manner; quarterly variation in our operating results; infringement of our intellectual property rights, or claims that our technology is infringing on third-party intellectual property; our inability to realize the full value of our long-lived assets; our failure to operate our business in accordance with the PCI Security Standards Council (“PCI”) security standards or other industry standards such as Payment Card Brand certification standards; costs relating to the obligatory collection of sales tax and claims for uncollected sales tax in states that impose sales tax collection requirements on out-of-state retailers; disruption or delays in our manufacturing operations or supply chain; a decline in U.S. and global market and economic conditions and resulting decreases in consumer and business spending; costs relating to product defects and any related product liability and/or warranty claims; maintenance and further imposition of tariffs and/or trade restrictions on goods imported into the United States; our dependence on licensing arrangements; non-compliance with, and changes in, laws in the United States and in foreign jurisdictions in which we operate and sell our products; risks associated with the controlling stockholders’ ownership of our stock; and other risks that are described in Part I, Item 1A – Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 6, 2019 and our other reports filed from time to time with the Securities and Exchange Commission (the “SEC”).
We caution and advise readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof. These statements are based on assumptions that may not be realized and involve risks and uncertainties that could cause actual results to differ materially from the expectations and beliefs contained herein. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
For more information:
CPI encourages investors to use its investor relations website as a way of easily finding information about the company. CPI promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information and press releases. CPI uses its investor relations site (http://investor.cpicardgroup.com) as a means of disclosing material information and for complying with its disclosure obligations under Regulation FD.
FUNMAN
6 years ago
CPI Card Group (NASDAQ:PMTS) Q2 2018 Earnings Conference Call August 9, 2018 9:00 AM ET
No analyst listened to the call or asked questions.
Executives
William Maina – Investor Relations
Scott Scheirman – President and Chief Executive Officer
John Lowe – Chief Financial Officer
Analysts
Operator
Welcome to the CPI Card Group Second Quarter 2018 Earnings Conference Call. At this time, all participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded.
I would now like to turn the conference over to William Maina. Investor Relations please go ahead.
William Maina
Thank you Kate and good afternoon everyone. Welcome to the CPI Card Group second quarter 2018 earnings conference call. Participating on today's call from CPI Card Group are Scott Scheirman, President and Chief Executive Officer and John Lowe, Chief Financial Officer.
Before we begin, I would like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. Please refer to the disclosures at the end of the Company's earnings press release for information about forward-looking statements that may be made or discussed on this call. The earnings press release is posted on CPI's website.
Please note there is also a presentation that accompanies this conference call and is also accessible in the IR section of our website. Please review the information along with our filings with the SEC and on SEDAR for a disclosure of factors that may impact subjects discussed on this call. All forward-looking statements made today reflect our current expectations only and we undertake no obligation to update any statements to reflect the events that occur after this call.
Also during the course of today's call, the company will be discussing one or more non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income and loss, adjusted diluted earnings and loss per share, and free cash flow, all reported on a continuing operations basis. Please see the earnings press release on CPI's website for all the disclosures required by the SEC, including reconciliations of the most comparable GAAP measures.
Please note that this call will conclude after our prepared remarks. And now I'd like to turn the call over to Scott Scheirman, President and Chief Executive Officer. Scott?
Scott Scheirman
Thanks Will and good afternoon everyone. Thank you for joining us on our second quarter 2018 conference call. Before we begin, I'd like to formally introduce and welcome John Lowe, who joined CPI as our new CFO about eight weeks ago.
John joins us from SquareTwo Financial Corporation, a Denver-based financial services company, where he served as Chief Financial Officer. During his eight year tenure at SquareTwo, John helped to nearly double the size of the company before it was acquired in June 2017. We couldn't be more excited to have John as part of the CPI team, and he has already started to make a positive impact during his brief time with us.
As you probably read in our press release this morning, we have announced the sale of our U.K. business to SEA Equity. We believe the sale of our U.K. business will strategically enable us to sharpen our focus on executing our key priorities across our core customers, markets and businesses, including secure cards, personalization, instant issuance and prepaid.
In summary, we believe this transaction will benefit both organizations, better enabling CPI and the U.K. business to excel in their respective core markets. I'd like to take this opportunity to thank our U.K. colleagues and wish them all well.
Now turning to the second quarter. We delivered solid second quarter 2018 results, with operating performance in line with our expectations. A summary of these results can be found on Slide 4 of the presentation. And as a reminder, all of the figures presented reflect our U.K. Limited segment accounted for the discontinued operation as required under U.S. GAAP. We generated revenue of $61.5 million, up 12% year-over-year.
We delivered revenue growth across both our U.S. Debit and Credit and Prepaid Debit segments. Prepaid Debit growth in the second quarter was strong, up 26% compared to the year-ago period, reflecting our recent portfolio wins. Our U.S. Debit and Credit segment growth was 3.5% year-over-year, primarily reflecting growth of our emerging solutions, including Card@Once and CPI Metals.
We were also pleased to have sequential and year-over-year growth in our EMV cards sold in the second quarter. We reported a GAAP net loss from continuing operations of approximately $800,000 in the second quarter and adjusted net income from continuing operations of approximately $1 million. We posted adjusted EBITDA from continuing operations of approximately $9 million in the second quarter up 24% year-over-year.
And finally we ended the second quarter with $37.8 million of total liquidity, comprised of $17.8 million of cash on our balance sheet and $20 million available under our revolving credit facility. Overall, we are pleased with our second quarter results, which reflect good progress against our strategy and plan to get CPI fit for growth. We are tracking in line with our business plan through the first half of 2018.
Turning now to Slide 5. I'd like to provide you with a brief reminder of our go-forward strategy and then, over the following several slides, I will provide you with a few examples of how we have continued to execute against this strategy in the second quarter and year-to-date. As we have shared with you on our previous two earnings calls, our overarching plan is to be the partner-of-choice by providing market-leading quality products and customer service with a market competitive business model.
We are doing this by focusing on four strategic priorities, which we are instilling at every level of the organization. These priorities include: First, deep customer focus; second, market-leading quality products and customer service; third, a market competitive business model; and fourth, continuous innovation.
Now turning to Slide 6 and starting with our first priority, deep customer focus. By intensifying our focus and efforts on delighting our customers every day, including the recent reorganization of our U.S. operations to better align our organization structure with the needs of our clients, we are making good strides in strengthening our existing customer partnerships.
As a result of our continued efforts, I'm happy to share with you a recent Debit Card portfolio win, which I believe is a good example of our ability to win new business by putting the customer first. This win is with Hancock Whitney Bank, a longstanding customer of CPI, which recently launched a major company-wide rebranding effort. In support of that effort, they partnered with CPI to quickly manufacture the new debit cards to resonate their brand vision.
Turning now to our second priority, market-leading quality products and customer service. We remain laser focused on delivering our unique end-to-end suite of financial card products and solutions to the market, combined with the highest levels of quality and customer service. We believe our ongoing efforts in this area will enable us to further expand our wallet with our existing customers and also allow us to win business with new customers.
One recent success story I would like to highlight is our collaboration with Commercial Business Systems, a provider of premium software and IT services for credit unions. We partnered with Commercial Business Systems to integrate their credit union accounting and management system with Card@Once. This integrated offering will provide an end-to-end print and activation instant issuance solution to credit unions that enable them to respond immediately to members for new and replacement cards.
Building on success story, the continued positive momentum of our Card@Once instant issuance solution is evidence of our ability to offer market-leading and differentiated solutions with excellent customer support. We ended the second quarter of 2018 with approximately 8,400 Card@Once installations, up from approximately 7,700 installations in the prior quarter and an increase of 31% from approximately 6,400 installations in the second quarter of 2017.
We are pleased with our second quarter Card@Once performance, and we see continued opportunities to grow this business with both new and existing customers. For example, in the second quarter, Midland Bank, based in Illinois, expanded their relationship with us by placing an order for our next-generation instant issuance solution to be deployed across their bank branch footprint.
In addition to that, Midland recently completed the acquisition of another local bank, which is an existing Card@Once customer and will be upgrading that bank from an earlier model to our next-generation solution. In addition, First US Bank, which is an existing CPI personalization client, is expanding their offering to their end customers by deploying our Card@Once instant issuance solutions.
Turning to our third priority, which can be found on Slide 7, our market competitive business model. We continue to advance our initiatives to drive productivity and efficiency improvements throughout the business through three key areas, including business process improvements and efficiencies, a continued focus on direct and indirect procurement savings and an optimized footprint.
We remain on track and are in final stages of the consolidation of our U.S. personalization sites from three sites to two sites. As a reminder, the benefit to our cost structure from the personalization site consolidation will primarily be in 2019. With respect to our fourth priority, continuous innovation, I'd like to provide you with a couple of updates.
For CPI Metals, we continue to see good interest from our customers for this premium product, and we are encouraged by the level of interaction we are having with our clients regarding their metal card strategies. Acorns, the country's fastest-growing financial system with 3.5 million users, recently engaged us to produce an encased Tungsten CPI Metals Debit Card with a green custom core. While still early, we are also encouraged by the metal card order activity that contributed to our second quarter results.
For dual interface EMV cards, we remain in active conversations with many customers regarding their dual interface product road maps and how we can play a role in fulfilling their future needs. We manufactured modest levels of dual interface EMV cards in the second quarter. However, we continue to expect that dual interface will not contribute to our 2018 revenue in a meaningful way.
Finally, I would like to cover the industry trends that we are currently seeing in the market. Overall, market conditions are consistent with what we discussed with you on our last earnings call. We continue to expect the U.S. industry card manufacturing volume will be essentially flat in 2018 versus 2017 levels and then return to growth in 2019.
In addition, we anticipate that the average selling prices will continue to decline in the market during the course of the year, similar to 2017. For card personalization and fulfillment, our expectation is for more modest levels of demand in 2018, driven by steady-state new card issuance, expiration and lost, stolen card replacement activity. For U.S. Prepaid, we continue to expect that CPI will participate in the prepaid industry's modest growth this year.
I will now turn the call over to John Lowe to review our detailed financial and operating results in the second quarter. John?
John Lowe
Thanks, Scott, and good morning, everyone. Before taking you through the quarter, I'd first like to say how excited I am to join CPI Card Group. I've been here for nearly two months, and my time with the company has served to further solidify the reasons why I decided to join the CPI team. From a business perspective, I was very attracted to CPI's strong position in our market space, its talented and dedicated team and history as an innovator in the industry.
In my short tenure at CPI, I have been excited to learn that our management team is very focused on serving our customers, improving business performance and making investments to put CPI on a path of financial improvement and growth. This is a direct credit to the organizational culture that Scott has instilled into CPI and the hard work of the entire organization.
Looking ahead, my focus will be finding areas where we, as a company, can drive even greater value to our customers and continue to improve our performance. To that end, I'm excited to partner with Scott and the rest of the team to build on our leadership position in the market and further our company's long-term vision for growth and innovation. Before I discuss our financial results for the quarter, I'd like to share some more on the sale of our UK business, which closed on August 3. The UK business is in a challenging market and had an operating loss of US$2.8 million for the six months ended June 30.
We sold the UK business for US$4.5 million and will receive approximately $0.3 million in cash proceeds after paying off the UK business's debt and other liabilities. In addition, the structure of the sale created a future tax benefit to CPI of approximately US$3 million. As a result of the UK performance and the sale, we recorded impairments and asset write-downs of the UK business of US$14.8 million. All of the UK business's historical financial results, including its impairments and asset write-downs, are presented in our earnings release and financial statements as discontinued operations as required under U.S. GAAP.
Now turning to our results. On Slide 11, you will see an overview of our second quarterof 2018. All of the financial results I'm sharing today reflect continuing operations and exclude our UK business segment which, as I described, is treated as a discontinued operations. Total net sales were $61.5 million, an increase of 12.1% from $54.8 million in the second quarter of 2017.
Product net sales increased 18.2% year-over-year to $31.5 million in the second quarter. This growth was driven primarily by strong growth in our Card@Once business unit, but we see strong interest in our Card@Once product offerings. In addition, we had continued performance in our secured card unit, where we delivered 1.6% year-over-year and 14% sequential growth in the number of U.S. Debit and Credit EMV chip cards sold.
Services net sales increased 6.3% year-over-year to $30 million, primarily driven by strong growth in our U.S. Prepaid Debit segment, partially offset by a modest decline in card personalization and fulfillment revenue compared to the second quarter of 2017.
Gross profit for the second quarter was $19.9 million, up 19.3% year-over-year and representing a gross margin of 32.3% compared with $16.7 million and 30.4% in the second quarter of 2017. Our SG&A expenses for the second quarter of 2018 continue to be impacted by restructuring charges, related to consolidation of our footprint. In addition, we continue to invest in our dedicated workforce here at CPI.
Income from operations in the second quarter of 2018 was $2.7 million compared with an operating income of $0.7 million in the prior year period. The year-over-year changes in our gross profit and income from operations for the second quarter of 2018 primarily reflect our top line growth and ongoing cost reductions and efficiency initiatives, partially offset by strategic investments in our business to enhance our products, solutions and go-to-market strategy.
We reported a GAAP net loss from continuing operations of $0.8 million or a $0.07 loss per diluted share in the second quarter of 2018. This is compared with net loss from continuing operations of $3.3 million or a $0.30 loss per diluted share in the prior year period, retroactively adjusted to reflect the one-for-five reverse stock split in December of 2017.
Turning to our non-GAAP metrics. Adjusted EBITDA from continuing operations for the second quarter of 2018 was $8.9 million, up 24.1% from $7.2 million in the second quarter of 2017. Adjusted EBITDA margin was 14.5% compared with 13.1% in the prior year period. The year-over-year changes in our adjusted EBITDA and EBITDA margin primarily reflect the same factors, which impacted our reported income from operations. Adjusted net income from continuing operations was $1.1 million in the second quarter of 2018 or $0.10 per diluted share compared with $1.1 million loss or an $0.10 loss per share in the year-ago period.
Now I will review our segments for the second quarter of 2018 on Slide 12. U.S. Debit and Credit segment net sales were $43.8 million for the second quarter, a 3.5% increase from the prior year period. The corresponding segment EBITDA was $9.9 million compared with $7.9 million in the prior year period. The year-over-year growth in our U.S. Debit and Credit segment was primarily driven by an increase in revenue from our emerging products and solutions, including Card@Once and metal cards, partially offset by a decrease in revenue from non-EMV and other sales, card personalization and fulfillment and EMV card revenues due to lower average selling prices.
CPI sold 19.1 million EMV cards in the second quarter of 2018, up from 18.8 million cards in the second quarter of 2017 and also up from 16.8 million cards in Q1 of 2018. U.S. Prepaid Debit segment net sales were $15.4 million in the second quarter, up $3.2 million or 25.9% year-over-year. The increase in revenue was primarily driven by additional volume from recent client portfolio wins discussed on our last earnings call. Prepaid Debit segment EBITDA was $4.7 million, up from $3.6 million recorded in the prior year period.
Turning to our cash flow overview on Slide 13. Cash provided by continuing operations for the second quarter was $0.2 million compared with cash used in continuing operations of $1 million in the prior year period. Capital expenditures from continuing operations in the second quarter of 2018 were $1.4 million, down from $2.1 million in the prior year period, yielding second quarter 2018 negative free cash flow of $1.2 million, which is an improvement of $1.9 million from second quarter 2017.
Moving on to Slide 14. Our ending cash balance as of June 30 was $17.8 million, down from $20.2 million at Q1 2018 and $23.2 million at year-end of 2017. We ended the quarter with total debt principal outstanding of $312.5 million and a net debt balance of $294.7 million. Netting the deferred financing costs and discounts, our recorded total debt balance was $304.8 million. At June 30, 2018, our net debt leverage ratio was 12.1x. As of June 30, 2018, we had a $14 million revolving credit facility, which is undrawn and has $20 million available for borrowing. Our term loan has no financial covenants and do not mature until August 2022.
Total available liquidity was $37.8 million as of June 30, 2018. As a reminder, our business segment results do fluctuate from quarter to quarter based on several factors, including ordering patterns of our customers and seasonality. In addition, we believe we have adequate cash and liquidity to support our business plan. I will now turn the call back over to Scott for some closing remarks. Scott?
Scott Scheirman
Thanks, John. In summary, we are pleased with our second quarter results and are on track with our business plan through the first half of 2018. The execution of our key priorities is driving solid progress in terms of new business wins as well as business process improvements and an unwavering focus on serving our customers well. While we still have a lot to do, I am pleased with all that we have accomplished so far and want to thank our entire CPI organization for their dedication and tireless efforts towards our goals. We look forward to sharing our continued progress with you. Operator, you may now end the call.
Question-and-Answer Session
Q -
Operator
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
FUNMAN
6 years ago
CPI Card Group Completes Sale of its U.K. Business to SEA Equity
Sure would have liked PMTS to have released their business plan/turnaround strategy, even now. They are executing, but we don't know their intentions. That's too bad since I am interested and they seem to be in the middle of turning the ship around.
Thu August 9, 2018 8:00 AM
Divestiture Enables Company to Sharpen its Focus on Executing Strategic Priorities
LITTLETON, Colo.--(BUSINESS WIRE)-- CPI Card Group Inc. (Nasdaq: PMTS; TSX: PMTS) (“CPI Card Group” or the “Company”), a global leader in financial and EMV® chip card production and related services, today announced the sale of its U.K. business to SEA Equity, a private investment firm focused on investments in companies across the United Kingdom and Europe.
“Divesting our U.K. business is a key strategic step toward optimizing CPI’s portfolio and focus,” said Scott Scheirman, President and CEO of CPI Card Group (PMTS). “With this transaction, we are becoming even better positioned to serve our customers by focusing on our core businesses including card manufacturing, personalization, instant issuance and prepaid. We are continuing to execute on our key strategic priorities and are moving forward with our vision to provide customers with unmatched solutions, innovation and world-class service.”
Mr. Scheirman continued, “We thank the employees of our U.K. business for their contributions to CPI and wish them all the best. We believe that they will continue to effectively serve their markets and customers in the future under SEA Equity’s ownership.”
Elliott Nicholson, partner at SEA Equity, said: “We are excited to add the U.K. business to our portfolio. With its best-in-class product offering, award winning service and high quality operations, we believe the business is well-positioned for the future. We look forward to working with the management team, led by Nick Cahn, to further strengthen its value proposition and market position.”
About CPI Card Group
CPI Card Group is a leading provider in payment card production and related services, offering a single source for credit, debit and prepaid debit cards, including EMV® chip, personalization, instant issuance, fulfillment and mobile payment services. With more than 20 years of experience in the payments market and as a trusted partner to financial institutions, CPI’s solid reputation of product consistency, quality and outstanding customer service supports our position as a leader in the market. Serving our customers from locations throughout the United States and Canada, we have a leading network of high security facilities in the United States and Canada, each of which is certified by one or more of the payment brands: Visa (V), MasterCard, American Express, Discover and Interac in Canada. Learn more at www.cpicardgroup.com.
EMV is a registered trademark or trademark of EMVCo LLC in the United States and other countries.
SEA Equity is a private investment firm backing small and medium sized companies across the UK and Europe. SEA Equity approaches investments with an entrepreneurial mindset and works alongside experienced management teams to promote transformational growth through geographic expansion, strategic acquisitions and operational improvements.
http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180809005085r1&sid=acqr7&distro=nx&lang=en
View source version on businesswire.com: https://www.businesswire.com/news/home/20180809005085/en/
CPI Card Group Inc. Investor Relations
William Maina
(877) 369-9016
InvestorRelations@cpicardgroup.com
or
CPI Card Group Inc. Media Relations
Media@cpicardgroup.com
or
SEA Equity
Elliott Nicholson
+44 (0) 203 675 7732
Elliott.Nicholson@seaequity.com
or
For more information, please refer to the SEA Equity website: www.seaequity.com
Source: CPI Card Group Inc.
Copyright Business Wire 2018
FUNMAN
6 years ago
PMTS EPS of $0.10 beats by $0.35
Revenue of $61.45M (- 6.7% Y/Y) misses by $-1.61M
Net Sales of $61.5 million, up 12% year-over-year
Read it all here:
https://seekingalpha.com/pr/17241118-cpi-card-group-inc-reports-second-quarter-2018-results
CPI Card Group Inc. Reports Second Quarter 2018 Results
Thu August 9, 2018 8:00 AM
Q2: 08-05-18 Earnings Summary
Continuing Operations - GAAP Net Loss of $0.8 million; Adjusted Net Income of $1.1 million
Adjusted EBITDA of $8.9 million
Q2 Ending Cash of $17.8 million, Available Revolver of $20.0 million, Available Liquidity of $37.8 million
Call scheduled for Thursday, August 9, 2018 at 9:00 a.m. Eastern Time
LITTLETON, Colo.--(BUSINESS WIRE)-- CPI Card Group Inc. (Nasdaq:PMTS; TSX:PMTS) (“CPI Card Group” or the “Company”) today reported financial results for the second quarter ended June 30, 2018.
Scott Scheirman, President and Chief Executive Officer of CPI, stated, “We are pleased with our second quarter results, which include 12% year-over-year revenue growth driven by strong performance in Prepaid and growth of our emerging products and solutions. We are tracking in line with our business plan through the first half of 2018. During the second quarter, we continued to expand relationships with new and existing customers by executing on our strategic priorities of deep customer focus, providing market-leading quality products and customer service, a market competitive business model and continuous innovation. At the same time, we made an important strategic move to sharpen our focus on our core customers, markets, products and solutions by selling our U.K. business.”
Second Quarter 2018 – Continuing Operations Consolidated Financial Highlights
Financial results included in this press release for all periods reflect continuing operations. The sale of CPI U.K., which had historically been reported as the U.K. Limited segment, has been accounted for as a discontinued operation, and comparative financial information has been restated in accordance with U.S. GAAP (“GAAP”) requirements.
Net sales were $61.5 million in the second quarter of 2018, representing an increase of 12% from the second quarter of 2017. Income from operations was $2.7 million in the second quarter of 2018, up from $0.7 million in the second quarter of 2017. GAAP net loss from continuing operations in the second quarter of 2018 was $0.8 million, or a loss from continuing operations of $0.07 per diluted share, compared to a net loss from continuing operations of $3.3 million, or a loss from continuing operations of $0.30 per diluted share, in the second quarter of 2017.
Adjusted EBITDA for the second quarter of 2018 was $8.9 million, compared with $7.2 million in the prior year period, primarily reflecting revenue growth from more profitable emerging products and solutions. Adjusted Net Income from continuing operations in the second quarter of 2018 was $1.1 million, or an adjusted income from continuing operations of $0.10 per diluted share, compared with Adjusted Net Loss from continuing operations of $1.1 million in the second quarter of 2017.
All earnings per share amounts reflect the one-for-five reverse stock split, which occurred in December 2017.
Second Quarter 2018 – Continuing Operations Segment Information
U.S. Debit and Credit:
Net sales were $43.8 million in the second quarter of 2018, representing an increase of 3.5% from the second quarter of 2017. The increase in U.S. Debit and Credit segment net sales was driven predominantly by an increase in revenue from our emerging products and solutions, including Card@Once® and metal cards, partially offset by decreases in Non-EMV and other sales, card personalization and fulfillment and EMV® card revenues due to lower EMV® card average selling prices. Sales volumes of EMV® cards increased in the second quarter of 2018 compared to first quarter of 2018 and the second quarter of 2017.
U.S. Prepaid Debit:
Net sales were $15.4 million in the second quarter of 2018, representing an increase of 25.9% from the second quarter of 2017. The year-over-year increase in U.S. Prepaid Debit segment net sales was driven primarily by additional sales volumes from a new portfolio win with an existing customer.
Balance Sheet, Cash Flow, Liquidity
Cash used in operating activities for the first half of 2018 was $1.4 million, and capital expenditures totaled $2.1 million. Free cash flow for the first half of 2018 was a use of $3.5 million, on a continuing operations basis.
At June 30, 2018, the Company had $17.8 million of cash and cash equivalents and a $40.0 million revolving credit facility, of which $20.0 million was available for borrowing.
Total debt principal outstanding, comprised of the Company’s First Lien Term Loan, was $312.5 million at June 30, 2018, unchanged from December 31, 2017. Net of debt issuance costs and discount, recorded debt was $304.8 million as of June 30, 2018. The Company’s First Lien Term Loan matures on August 17, 2022 and includes no financial covenants.
John Lowe, Chief Financial Officer, stated, “I am thrilled to be part of the CPI Card Group (PMTS) team. When deciding to join CPI, I was attracted to its strong position in our market space, its talented and dedicated team and history as an innovator in the industry. My past eight weeks with the Company have served to further solidify the reasons why I joined CPI, and I look forward to partnering with Scott and the entire CPI team to advance our long-term strategy for growth and profitability. Our second quarter financial and operating performance is reflective of the solid progress we are making against our key strategic priorities, and we believe we have adequate cash and liquidity to support our business plan moving forward.”
EMV® is a registered trademark or trademark of EMVCo LLC in the United States and other countries.
FUNMAN
6 years ago
Business Development Manager - South Central
They keep looking to hire people in the same roles repetitively. Something isn't quite right.
CPI Card Group Nashville, TN
job type Full-Time
Perform duties to increase profitable dollar sales by effectively building buying relationships with customers/prospects, aggressively soliciting new business, and discovering new opportunities to meet customer needs.
Scope:
Under general supervision, solicit business from targeted market segments by calling regularly on all customers/prospects to develop and maintain strong working relationships with key decision makers. The associate must remain flexible and proactive in dealing with changing priorities. The associate will gather data, analyze programs, problems and products, and utilize counselor selling and negotiation skills in building value-added relationships. The associate will remain knowledgeable about our programs, products, market conditions and competitors and keep management informed of trends and customer expectations to assist in new product/program development. Major challenges include: developing a thorough understanding of our capabilities; keeping current on changes in the marketplace and with our competition; learning competitor's sales strategies and thwarting their efforts in order to maintain/grow our business; effectively defining, evaluating, and communicating issues externally and internally; establishing priorities and managing time. The associate must be effective in differentiating our products and services in a market that many perceive as a commodity business. Performance is measured by increased dollar sales, account profitability, current and accurate customer information, ability to develop contacts and relationships, and the further enhancement of CPI's image and market position.
PRINCIPAL ACCOUNTABILITIES
1. Maximize sales growth and profitability.
2. Utilize a "solutions based" selling approach to build and maintain relationships at all levels within our account base. The quality and depth of these relationships will differentiate CPI from our competition.
3. Plan, execute, and monitor territorial coverage to optimize our effectiveness and return on selling expense.
4. Work with marketing, customer service, technical support, and operations to develop a strategic plan for the geographic area by account.
5. Contribute to the company's financial goals through accurate budgeting, forecasting,expense control, and selling and negotiating higher price points.
6. Systematically gather data from the marketplace regarding competitive strategies and customer needs and communicate/translate information into new product/market opportunities.
7. Must be a team player working with all personnel and resources in maintaining and growing a customer focused organization.
REQUIREMENTS
Prior payment industry knoweldege/ experience is required
A minimum of 5 years of selling experience
Applicants currently living in the South Central territory (AK, LA, MS, OK, TX) preferred
CPI Card Group
CPI Card Group is a leading provider in payment card production and related services, offering a single source for credit, debit and prepaid debit cards including EMV chip, personalization, instant issuance, fulfillment and mobile payment services. With more than 20 years of experience in the payments market and as a trusted partner to financial institutions, CPI's solid reputation of product consistency, quality and outstanding customer service supports our position as a leader in the market.
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