CPI Card Group Inc. Reports Fourth Quarter and Full Year 2021 Results
CPI Card Group Inc. (PMTS) reported a strong performance for 2021, with net sales increasing 20% to $375.1 million. The company's net income fell slightly by 1% to $15.9 million, while Adjusted EBITDA rose 33% to $76.4 million. The fourth quarter saw an 11% sales increase to $93.2 million, but net income plummeted 91% to $0.7 million partly due to tax benefits in the prior year. For 2022, CPI anticipates mid-single digit growth in net sales and Adjusted EBITDA, driven by demand in the Debit and Credit segments.
- Full year net sales increased 20% to $375.1 million.
- Adjusted EBITDA increased 33% to $76.4 million.
- Strong growth in Debit and Credit segments contributed significantly to sales.
- New customers acquired, including from FinTechs, enhanced market position.
- Net leverage ratio improved to less than 4x as of December 31, 2021.
- Net income decreased 1%, influenced by prior year's tax benefits.
- Fourth quarter net income decreased 91% primarily due to income tax benefits and increased interest expense.
- Adjusted EBITDA in Q4 dropped 23% to $13.6 million, impacted by cost increases.
- Gross profit margin fell to 33.2% from 36.8% in the previous year due to rising labor costs.
Fourth Consecutive Year of Strong Sales Growth; Full Year Net Sales Increased
Fourth Quarter Net Sales Increased
Company Expects Mid-Single Digit
Full year net sales increased
“We believe our high-quality and innovative solutions have propelled us to significantly outpace market growth over the last four years,” said
Scheirman continued, “We continue to experience strong customer demand, especially in our Debit and Credit segment. Market growth has been healthy, as
For 2022, CPI currently projects mid-single digit net sales and Adjusted EBITDA growth, with strong growth expected in its Debit and Credit segment, which represented
The Company expects its full-year 2022 Adjusted EBITDA margin to be similar to the 2021 full-year margin. Improvement from the fourth quarter 2021 Adjusted EBITDA margin is expected due to the implementation of business initiatives, including price increases, operating leverage from increased sales, and reduced levels of certain expenses incurred in the fourth quarter.
CPI is a top payment solutions provider in the
The Company expects long-term market growth to be aided by the gradual transition to higher-priced contactless cards, including eco-focused cards, as well as continued financial payment card growth.
2021 Business Highlights
- The Company gained new FinTech and traditional financial services customers, benefiting from its offerings of comprehensive end-to-end solutions.
-
Incremental net sales were generated from customer demand for higher-priced contactless cards, as the
U.S. payment card market continues its gradual transition to contactless solutions. -
CPI continued to be a leading provider of eco-focused payment card solutions in the
U.S. , as evidenced by selling nearly 50 million eco-focused cards since launch in late 2019 through the end of 2021. - Innovative personalization services contributed to net sales growth, including from Card@Once® Software-as-a-Service-based instant issuance solutions and CPI On-Demand®.
-
Tamper-evident packaging solutions drove strong growth in the Prepaid Debit segment and further enhanced the Company’s leadership in the
U.S. retail prepaid debit market. -
The Company refinanced its debt in the first quarter of 2021, extending maturities and enhancing liquidity. Outstanding debt was reduced by more than
$30 million December 31, 2021 .
Fourth Quarter 2021 Financial Highlights
Net sales increased
-
Debit and Credit segment net sales increased
11% to$77.4 million -
Prepaid Debit segment net sales increased
6% to$15.9 million
In the fourth quarter, gross profit decreased slightly to
Year-over-year, income from operations decreased
The net income decline was primarily due to income tax benefits in the prior year quarter and increased interest expense. Operating income, net income, and Adjusted EBITDA benefited from higher net sales, but were negatively impacted by increased labor costs and higher SG&A expenses, including costs related to Sarbanes-Oxley compliance.
As noted in the Company’s third quarter earnings release on
Full Year
2021 Financial Highlights
Net sales increased
-
Debit and Credit segment net sales increased
18% to$296.2 million -
Prepaid Debit segment net sales increased
25% to$79.2 million
Net sales in the prior year were impacted by lower customer demand than expected in both segments, which we believe was primarily attributable to the COVID-19 pandemic.
Gross profit increased
Income from operations increased
The decrease in net income was due to income tax benefits in the prior year, including benefits related to the CARES Act;
Operating income, net income, and Adjusted EBITDA compared to the prior year benefited from higher net sales and the resulting operating leverage, partially offset by increased labor costs.
Balance Sheet, Liquidity, and Cash Flow
As of
The Company’s capital structure and allocation priorities are to maintain ample liquidity, invest in the business, including strategic acquisitions, deleverage the balance sheet, and return funds to stockholders.
Total long-term debt principal outstanding as of
“We delivered strong sales and operating income growth in 2021, driven by our high-quality, innovative solutions and deep customer relationships,” said
Conference Call and Webcast
Toll-Free Dial-In Number,
International Dial-In Number: (929) 526-1599
Conference ID: 163252
Webcast Link: 4Q Webcast Link
Participants are advised to login for the webcast 10 minutes prior to the scheduled start time.
A replay of the conference call and webcast will be available until
US dial-in number (Toll Free): (866) 813-9403
US dial-in number: (Local): (929) 458-6194
Conference ID: 879747
A webcast replay of the conference call will also be available on CPI Card Group Inc.’s Investor Relations web site: https://investor.cpicardgroup.com.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with
Adjusted EBITDA
Adjusted EBITDA is presented on a continuing operations basis and is defined as EBITDA (which represents earnings before interest, taxes, depreciation and amortization) adjusted for litigation; stock-based compensation expense; estimated sales tax expense, restructuring and other charges; loss on debt extinguishment; 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 in Exhibit E. 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 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. Adjusted EBITDA margin percentage as shown in Exhibit E is computed as Adjusted EBITDA divided by total net sales.
We define LTM Adjusted EBITDA as Adjusted EBITDA (defined previously) for the last twelve months. LTM Adjusted EBITDA is used in the computation of Net Leverage Ratio, and is reconciled in Exhibit E.
Adjusted EBITDA and Adjusted EBITDA Margin Expectations for 2022
We have provided Adjusted EBITDA and Adjusted EBITDA Margin expectations for 2022 on a non-GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled or cannot be reliably predicted because they are not part of the Company’s routine activities, any of which could be significant.
Free Cash Flow
We define Free Cash Flow as cash flow provided by (used in) operating activities (continuing operations) less capital expenditures. 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. Free Cash Flow should not be considered in isolation, or as a substitute for, cash (used in) provided by operating activities or any other measures of liquidity derived in accordance with GAAP.
Net Leverage Ratio
Management and various investors use the ratio of debt principal outstanding, plus finance lease obligations, less cash, divided by LTM Adjusted EBITDA, or “Net Leverage Ratio”, as a measure of our financial strength when making key investment decisions and evaluating us against peers.
About
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
Forward-Looking Statements
Certain statements and information in this 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,” “continue,” “committed,” “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, including statements about our strategic initiatives, capital allocation plans and expectations for 2022 net sales and Adjusted EBITDA, 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 and responses thereto on our business, including our supply chain, customer demand, workforce, operations and ability to comply with certain covenants related to our indebtedness; our transition to being an accelerated filer and complying with Section 404 of the Sarbanes-Oxley Act of 2002 and the costs associated with such compliance and implementation of procedures thereunder; our failure to maintain effective internal control over financial reporting or remediate material weaknesses; our inability to recruit, retain and develop qualified personnel, including key personnel; a disruption or other failure in our supply chain or labor pool resulting in increased costs and inability to pass those costs on to our customers and extended production lead times and difficulty meeting customers’ delivery expectations; our failure to retain our existing customers or identify and attract new customers; system security risks, data protection breaches and cyber-attacks; our substantial indebtedness, including inability to make debt service payments or refinance such indebtedness; the restrictive terms of our indebtedness and covenants of future agreements governing indebtedness and the resulting restraints on our ability to pursue our business strategies; 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; disruptions in production at one or more of our facilities; environmental, social and governance preferences and demands of various stakeholders and our ability to conform to such preferences and demands and to comply with any related regulatory requirements; the effects of climate change on our business our inability to adequately protect our trade secrets and intellectual property rights from misappropriation, infringement claims brought against us and risks related to open source software; defects in our software; our limited ability to raise capital in the future; problems in production quality, materials and process; our inability to develop, introduce and commercialize new products; 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, as well as potential new
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 or other events 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 the reports that the Company files or furnishes with the
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Exhibit A |
Condensed Consolidated Statements of Operations and Comprehensive Income - Unaudited for the three months and full years ended |
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Exhibit B |
Condensed Consolidated Balance Sheets – Unaudited as of |
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Exhibit C |
Condensed Consolidated Statements of Cash Flows - Unaudited for the years ended |
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Exhibit D |
Segment Summary Information – Unaudited for the three months and full years ended |
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Exhibit E |
Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three months and full years ended |
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EXHIBIT A |
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Condensed Consolidated Statements of Operations and Comprehensive Income |
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(Dollars in Thousands, Except Per Share Amounts) |
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(Unaudited) |
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Three Months Ended |
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Year Ended |
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2021 |
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2020 |
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2021 |
|
2020 |
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||||
Net sales: |
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|
|
|
|
|
|
|
|
|
|
|
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Products |
|
$ |
53,141 |
|
$ |
46,928 |
|
$ |
199,586 |
|
$ |
171,968 |
|
Services |
|
|
40,065 |
|
|
37,212 |
|
|
175,533 |
|
|
140,221 |
|
Total net sales |
|
|
93,206 |
|
|
84,140 |
|
|
375,119 |
|
|
312,189 |
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Cost of sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Products (exclusive of depreciation and amortization shown below) |
|
|
34,893 |
|
|
27,862 |
|
|
121,601 |
|
|
107,642 |
|
Services (exclusive of depreciation and amortization shown below) |
|
|
25,280 |
|
|
22,552 |
|
|
103,255 |
|
|
83,538 |
|
Depreciation and amortization |
|
|
2,101 |
|
|
2,763 |
|
|
8,837 |
|
|
10,701 |
|
Total cost of sales |
|
|
62,274 |
|
|
53,177 |
|
|
233,693 |
|
|
201,881 |
|
Gross profit |
|
|
30,932 |
|
|
30,963 |
|
|
141,426 |
|
|
110,308 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative (exclusive of depreciation and amortization shown below) |
|
|
20,338 |
|
|
16,898 |
|
|
75,701 |
|
|
65,791 |
|
Depreciation and amortization |
|
|
1,388 |
|
|
1,628 |
|
|
6,261 |
|
|
6,126 |
|
Total operating expenses, net |
|
|
21,726 |
|
|
18,526 |
|
|
81,962 |
|
|
71,917 |
|
Income from operations |
|
|
9,206 |
|
|
12,437 |
|
|
59,464 |
|
|
38,391 |
|
Other (expense) income, net: |
|
|
|
|
|
|
|
|
|
|
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|
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Interest, net |
|
|
(7,412) |
|
|
(6,239) |
|
|
(30,608) |
|
|
(25,397) |
|
Loss on debt extinguishment |
|
|
— |
|
|
— |
|
|
(5,048) |
|
|
(92) |
|
Other income (expense) |
|
|
(9) |
|
|
(9) |
|
|
14 |
|
|
(17) |
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Total other expense, net |
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|
(7,421) |
|
|
(6,248) |
|
|
(35,642) |
|
|
(25,506) |
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|
|
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|
|
|
|
|
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Income before income taxes |
|
|
1,785 |
|
|
6,189 |
|
|
23,822 |
|
|
12,885 |
|
Income tax (expense) benefit |
|
|
(1,112) |
|
|
1,127 |
|
|
(7,881) |
|
|
3,305 |
|
Net income from continuing operations |
|
|
673 |
|
|
7,316 |
|
|
15,941 |
|
|
16,190 |
|
Discontinued operations: |
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|
|
|
|
|
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Net loss from discontinued operation, net of tax |
|
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— |
|
|
(31) |
|
|
— |
|
|
(61) |
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Net income |
|
$ |
673 |
|
$ |
7,285 |
|
$ |
15,941 |
|
$ |
16,129 |
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Basic and diluted earnings per share: |
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Basic earnings per share from continuing operations: |
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$ |
0.06 |
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$ |
0.65 |
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$ |
1.42 |
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$ |
1.44 |
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Diluted earnings per share from continuing operations: |
|
$ |
0.06 |
|
$ |
0.65 |
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$ |
1.36 |
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$ |
1.44 |
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|
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|
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Basic earnings per share: |
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$ |
0.06 |
|
$ |
0.65 |
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$ |
1.42 |
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$ |
1.44 |
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Diluted earnings per share: |
|
$ |
0.06 |
|
$ |
0.64 |
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$ |
1.36 |
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$ |
1.44 |
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Basic weighted-average shares outstanding: |
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11,254,034 |
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11,230,482 |
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11,239,049 |
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11,228,707 |
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Diluted weighted-average shares outstanding: |
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|
11,779,079 |
|
|
11,326,078 |
|
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11,763,963 |
|
|
11,232,004 |
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|
|
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|
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|
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Comprehensive income |
|
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|
|
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|
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|
|
|
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Net income |
|
|
673 |
|
|
7,285 |
|
|
15,941 |
|
|
16,129 |
|
Total comprehensive income |
|
$ |
673 |
|
$ |
7,285 |
|
$ |
15,941 |
|
$ |
16,129 |
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EXHIBIT B |
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Condensed Consolidated Balance Sheets |
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(Dollars in Thousands, Except Share and Per Share Amounts) |
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(Unaudited) |
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2021 |
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2020 |
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Assets |
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Current assets: |
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|
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Cash and cash equivalents |
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$ |
20,683 |
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$ |
57,603 |
|
Accounts receivable, net of allowances of |
|
|
60,953 |
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|
54,592 |
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Inventories |
|
|
58,009 |
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|
24,796 |
|
Prepaid expenses and other current assets |
|
|
5,522 |
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|
5,032 |
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Income taxes receivable |
|
|
534 |
|
|
10,511 |
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Total current assets |
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|
145,701 |
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|
152,534 |
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Plant, equipment, leasehold improvements and operating leases right-of-use assets, net |
|
|
47,251 |
|
|
39,403 |
|
Intangible assets, net |
|
|
21,854 |
|
|
26,207 |
|
|
|
|
47,150 |
|
|
47,150 |
|
Other assets |
|
|
6,184 |
|
|
857 |
|
Total assets |
|
$ |
268,140 |
|
$ |
266,151 |
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|
|
|
|
|
|
|
|
Liabilities and stockholders’ deficit |
|
|
|
|
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|
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Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
26,443 |
|
$ |
18,883 |
|
Accrued expenses |
|
|
37,150 |
|
|
28,149 |
|
Current portion of Long-term debt |
|
|
— |
|
|
8,027 |
|
Deferred revenue and customer deposits |
|
|
1,182 |
|
|
1,868 |
|
Total current liabilities |
|
|
64,775 |
|
|
56,927 |
|
Long-term debt |
|
|
303,626 |
|
|
328,681 |
|
Deferred income taxes |
|
|
5,253 |
|
|
7,409 |
|
Other long-term liabilities |
|
|
15,506 |
|
|
11,171 |
|
Total liabilities |
|
|
389,160 |
|
|
404,188 |
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
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Series A Preferred Stock; |
|
|
— |
|
|
— |
|
Stockholders’ deficit: |
|
|
|
|
|
|
|
Common Stock; |
|
|
11 |
|
|
11 |
|
Capital deficiency |
|
|
(110,782) |
|
|
(111,858) |
|
Accumulated loss |
|
|
(10,249) |
|
|
(26,190) |
|
Total stockholders’ deficit |
|
|
(121,020) |
|
|
(138,037) |
|
Total liabilities and stockholders' deficit |
|
$ |
268,140 |
|
$ |
266,151 |
|
|
|
|
|
|
|
|
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|
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EXHIBIT C |
|
||||||
Condensed Consolidated Statements of Cash Flows |
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(Dollars in Thousands) |
||||||
(Unaudited) |
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|
|
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|
|
|
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|
|
Year Ended |
||||
|
|
2021 |
|
2020 |
||
Operating activities |
|
|
|
|
|
|
Net income |
|
$ |
15,941 |
|
$ |
16,129 |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
Loss from discontinued operations |
|
|
— |
|
|
61 |
Depreciation and amortization expense |
|
|
15,098 |
|
|
16,827 |
Stock-based compensation expense |
|
|
1,250 |
|
|
136 |
Amortization of debt issuance costs and debt discount |
|
|
2,367 |
|
|
3,453 |
Deferred income tax |
|
|
(2,156) |
|
|
1,043 |
Loss on debt extinguishment |
|
|
5,048 |
|
|
92 |
Other, net |
|
|
213 |
|
|
1,742 |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
(6,361) |
|
|
(11,662) |
Inventories |
|
|
(33,388) |
|
|
(6,105) |
Prepaid expenses and other assets |
|
|
(4,062) |
|
|
494 |
Income taxes |
|
|
9,977 |
|
|
(6,346) |
Accounts payable |
|
|
6,582 |
|
|
1,657 |
Accrued expenses |
|
|
10,365 |
|
|
2,958 |
Deferred revenue and customer deposits |
|
|
(690) |
|
|
1,404 |
Other liabilities |
|
|
45 |
|
|
192 |
Cash provided by operating activities - continuing operations |
|
|
20,229 |
|
|
22,075 |
Cash used in operating activities -discontinued operations |
|
|
— |
|
|
(61) |
Investing activities |
|
|
|
|
|
|
Capital expenditures for plant, equipment and leasehold improvements |
|
|
(10,074) |
|
|
(7,093) |
Other |
|
|
156 |
|
|
— |
Cash used in investing activities |
|
|
(9,918) |
|
|
(7,093) |
Financing activities |
|
|
|
|
|
|
Principal payments on First Lien Term Loan |
|
|
(312,500) |
|
|
— |
Principal payments on Senior Credit Facility |
|
|
(30,000) |
|
|
— |
Principal payments on ABL Revolver |
|
|
(15,000) |
|
|
— |
Proceeds from Senior Notes |
|
|
310,000 |
|
|
— |
Proceeds from ABL Revolver, net of discount |
|
|
14,750 |
|
|
— |
Proceeds from Senior Credit Facility, net of discount |
|
|
— |
|
|
29,100 |
Debt issuance costs |
|
|
(9,452) |
|
|
(2,507) |
Payments on finance lease obligations |
|
|
(2,171) |
|
|
(2,616) |
Payments on debt extinguishment and other |
|
|
(2,859) |
|
|
— |
Cash (used in) provided by financing activities |
|
|
(47,232) |
|
|
23,977 |
Effect of exchange rates on cash |
|
|
1 |
|
|
23 |
Net (decrease) increase in cash and cash equivalents |
|
|
(36,920) |
|
|
38,921 |
Cash and cash equivalents, beginning of period |
|
|
57,603 |
|
|
18,682 |
Cash and cash equivalents, end of period |
|
$ |
20,683 |
|
$ |
57,603 |
Supplemental disclosures of cash flow information |
|
|
|
|
|
|
Cash paid (refunded) during the period for: |
|
|
|
|
|
|
Interest |
|
$ |
22,268 |
|
$ |
22,750 |
Income taxes paid |
|
$ |
9,792 |
|
|
1,302 |
Income taxes (refunded) |
|
$ |
(9,846) |
|
$ |
(259) |
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
Operating leases |
|
$ |
6,932 |
|
$ |
3,260 |
Financing leases |
|
$ |
1,897 |
|
$ |
1,718 |
Accounts payable and accrued expenses for capital expenditures for plant, equipment and leasehold improvements |
|
$ |
2,972 |
|
$ |
1,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
EXHIBIT D |
|
|||||||||||||||
|
||||||||||||||||||||||||||
Segment Summary Information |
||||||||||||||||||||||||||
For the Three Months and Year Ended |
||||||||||||||||||||||||||
(Dollars in Thousands) |
||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Three Months Ended |
|
|
||||||||||||||||||||||
|
|
2021 |
|
2020 |
|
$ Change |
|
% Change |
|
|
||||||||||||||||
Net sales by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Debit and Credit |
|
$ |
77,406 |
|
$ |
69,572 |
|
$ |
7,834 |
|
11.3 |
% |
|
|||||||||||||
Prepaid Debit |
|
|
15,874 |
|
|
14,916 |
|
|
958 |
|
6.4 |
% |
|
|||||||||||||
Eliminations |
|
|
(74) |
|
|
(348) |
|
|
274 |
|
* |
% |
|
|||||||||||||
Total |
|
$ |
93,206 |
|
$ |
84,140 |
|
$ |
9,066 |
|
10.8 |
% |
|
|||||||||||||
* Calculation not meaningful
|
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Year Ended |
|
|||||||||||||||||||||||
|
|
2021 |
|
2020 |
|
$ Change |
|
% Change |
|
|||||||||||||||||
Net sales by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debit and Credit |
|
$ |
296,204 |
|
$ |
250,427 |
|
$ |
45,777 |
|
18.3 |
% |
||||||||||||||
Prepaid Debit |
|
|
79,213 |
|
|
63,596 |
|
|
15,617 |
|
24.6 |
% |
||||||||||||||
Eliminations |
|
|
(298) |
|
|
(1,834) |
|
|
1,536 |
|
* |
% |
||||||||||||||
Total |
|
$ |
375,119 |
|
$ |
312,189 |
|
$ |
62,930 |
|
20.2 |
% |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
||||||||||||||
|
|
2021 |
|
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
|
|||
Gross profit by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debit and Credit |
|
$ |
26,018 |
|
|
33.6 |
% |
$ |
25,152 |
|
36.2 |
% |
$ |
866 |
|
3.4 |
% |
Prepaid Debit |
|
|
4,914 |
|
|
31.0 |
% |
|
5,811 |
|
39.0 |
% |
|
(897) |
|
(15.4) |
% |
Total |
|
$ |
30,932 |
|
|
33.2 |
% |
$ |
30,963 |
|
36.8 |
% |
$ |
(31) |
|
(0.1) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
||||||||||||||
|
|
2021 |
|
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
|
|||
Gross profit by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debit and Credit |
|
$ |
110,006 |
|
|
37.1 |
% |
$ |
85,833 |
|
34.3 |
% |
$ |
24,173 |
|
28.2 |
% |
Prepaid Debit |
|
|
31,420 |
|
|
39.7 |
% |
|
24,475 |
|
38.5 |
% |
|
6,945 |
|
28.4 |
% |
Total |
|
$ |
141,426 |
|
|
37.7 |
% |
$ |
110,308 |
|
35.3 |
% |
$ |
31,118 |
|
28.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
||||||||||||||
|
|
2021 |
|
|
% of Net
|
|
2020 |
|
% of Net
|
|
|
$ Change |
|
% Change |
|
||
Income (loss) from Operations by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debit and Credit |
|
$ |
18,558 |
|
|
24.0 |
% |
$ |
16,934 |
|
24.3 |
% |
$ |
1,624 |
|
9.6 |
% |
Prepaid Debit |
|
|
3,850 |
|
|
24.3 |
% |
|
4,563 |
|
30.6 |
% |
|
(713) |
|
(15.6) |
% |
Other |
|
|
(13,202) |
|
|
* |
% |
|
(9,060) |
|
* |
% |
|
(4,142) |
|
(45.7) |
% |
Total |
|
$ |
9,206 |
|
|
9.9 |
% |
$ |
12,437 |
|
14.8 |
% |
$ |
(3,231) |
|
(26.0) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
||||||||||||||
|
|
2021 |
|
|
% of Net
|
|
2020 |
|
% of Net
|
|
|
$ Change |
|
% Change |
|
||
Income (loss) from Operations by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debit and Credit |
|
$ |
79,469 |
|
|
26.8 |
% |
$ |
54,848 |
|
21.9 |
% |
$ |
24,621 |
|
44.9 |
% |
Prepaid Debit |
|
|
26,910 |
|
|
34.0 |
% |
|
19,942 |
|
31.4 |
% |
|
6,968 |
|
34.9 |
% |
Other |
|
|
(46,915) |
|
|
* |
% |
|
(36,399) |
|
* |
% |
|
(10,516) |
|
(28.9) |
% |
Total |
|
$ |
59,464 |
|
|
15.9 |
% |
$ |
38,391 |
|
12.3 |
% |
$ |
21,073 |
|
54.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
||||||||||||||
|
|
2021 |
|
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
|
|||
EBITDA by segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debit and Credit |
|
$ |
20,421 |
|
|
26.4 |
% |
$ |
19,449 |
|
28.0 |
% |
$ |
972 |
|
5.0 |
% |
Prepaid Debit |
|
|
4,437 |
|
|
28.0 |
% |
|
5,182 |
|
34.7 |
% |
|
(745) |
|
(14.4) |
% |
Other |
|
|
(12,172) |
|
|
* |
% |
|
(7,812) |
|
* |
% |
|
(4,360) |
|
(55.8) |
% |
Total |
|
$ |
12,686 |
|
|
13.6 |
% |
$ |
16,819 |
|
20.0 |
% |
$ |
(4,133) |
|
(24.6) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
||||||||||||||
|
|
2021 |
|
|
% of Net
|
|
2020 |
|
% of Net
|
|
$ Change |
|
% Change |
|
|||
EBITDA by segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debit and Credit |
|
$ |
87,499 |
|
|
29.5 |
% |
$ |
64,522 |
|
25.8 |
% |
$ |
22,977 |
|
35.6 |
% |
Prepaid Debit |
|
|
29,156 |
|
|
36.8 |
% |
|
22,156 |
|
34.8 |
% |
|
7,000 |
|
31.6 |
% |
Other |
|
|
(47,127) |
|
|
* |
% |
|
(31,569) |
|
* |
% |
|
(15,558) |
|
(49.3) |
% |
Total |
|
$ |
69,528 |
|
|
18.5 |
% |
$ |
55,109 |
|
17.7 |
% |
$ |
14,419 |
|
26.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Income from |
|
|
|
|
|
|
|
|
|
|
|
|
Operations by Segment to EBITDA by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
||||||||||
|
|
Debit and Credit |
|
Prepaid Debit |
|
Other |
|
Total |
||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
18,558 |
|
|
3,850 |
|
|
(13,202) |
|
$ |
9,206 |
Depreciation and amortization |
|
|
1,871 |
|
|
587 |
|
|
1,031 |
|
|
3,489 |
Other (expenses) income |
|
|
(8) |
|
|
— |
|
|
(1) |
|
|
(9) |
EBITDA |
|
$ |
20,421 |
|
$ |
4,437 |
|
$ |
(12,172) |
|
$ |
12,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
||||||||||
|
|
Debit and Credit |
|
Prepaid Debit |
|
Other |
|
Total |
||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
16,934 |
|
$ |
4,563 |
|
$ |
(9,060) |
|
$ |
12,437 |
Depreciation and amortization |
|
|
2,522 |
|
|
617 |
|
|
1,252 |
|
|
4,391 |
Other (expenses) income |
|
|
(7) |
|
|
2 |
|
|
(4) |
|
|
(9) |
EBITDA |
|
$ |
19,449 |
|
$ |
5,182 |
|
$ |
(7,812) |
|
$ |
16,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
||||||||||
|
|
Debit and Credit |
|
Prepaid Debit |
|
Other |
|
Total |
||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
79,469 |
|
|
26,910 |
|
|
(46,915) |
|
|
59,464 |
Depreciation and amortization |
|
|
8,026 |
|
|
2,234 |
|
|
4,838 |
|
|
15,098 |
Other income (expenses) |
|
|
4 |
|
|
12 |
|
|
(5,050) |
|
|
(5,034) |
EBITDA |
|
$ |
87,499 |
|
$ |
29,156 |
|
$ |
(47,127) |
|
$ |
69,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
||||||||||
|
|
Debit and Credit |
|
Prepaid Debit |
|
Other |
|
Total |
||||
EBITDA by segment: |
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
54,848 |
|
|
19,942 |
|
|
(36,399) |
|
|
38,391 |
Depreciation and amortization |
|
|
9,729 |
|
|
2,216 |
|
|
4,882 |
|
|
16,827 |
Other (expenses) income |
|
|
(55) |
|
|
(2) |
|
|
(52) |
|
|
(109) |
EBITDA |
|
$ |
64,522 |
|
$ |
22,156 |
|
$ |
(31,569) |
|
$ |
55,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT E |
||
|
||||||||||||
Supplemental GAAP to Non-GAAP Reconciliation |
||||||||||||
(Dollars in Thousands) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
Reconciliation of net income (GAAP) to EBITDA and Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
673 |
|
$ |
7,285 |
|
$ |
15,941 |
|
$ |
16,129 |
Interest expense, net |
|
|
7,412 |
|
|
6,239 |
|
|
30,608 |
|
|
25,397 |
Income tax expense (benefit) |
|
|
1,112 |
|
|
(1,127) |
|
|
7,881 |
|
|
(3,305) |
Depreciation and amortization |
|
|
3,489 |
|
|
4,391 |
|
|
15,098 |
|
|
16,827 |
Net loss from discontinued operations |
|
|
— |
|
|
31 |
|
|
— |
|
|
61 |
EBITDA |
|
$ |
12,686 |
|
$ |
16,819 |
|
$ |
69,528 |
|
$ |
55,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
Sales tax (benefit) expense(1) |
|
|
(149) |
|
|
633 |
|
|
(614) |
|
|
926 |
Stock-based compensation expense |
|
|
1,036 |
|
|
52 |
|
|
1,250 |
|
|
136 |
Severance and other charges (2) |
|
|
— |
|
|
40 |
|
|
1,250 |
|
|
1,269 |
Loss on debt extinguishment (3) |
|
|
— |
|
|
— |
|
|
5,048 |
|
|
92 |
Foreign currency loss (gain) |
|
|
9 |
|
|
(3) |
|
|
(15) |
|
|
7 |
Subtotal of adjustments to EBITDA |
|
|
896 |
|
|
722 |
|
|
6,919 |
|
|
2,430 |
Adjusted EBITDA |
|
$ |
13,582 |
|
$ |
17,541 |
|
$ |
76,447 |
|
$ |
57,539 |
Net income margin (% of |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (decline) (% Change 2021 vs. 2020) |
|
|
(90.8)% |
|
|
|
|
|
(1.2)% |
|
|
|
Adjusted EBITDA margin (% of |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (decline) growth (% Change 2021 vs. 2020) |
|
|
(22.6)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
Free Cash Flow: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities |
|
$ |
5,714 |
|
$ |
11,867 |
|
$ |
20,229 |
|
$ |
22,075 |
Capital expenditures for plant, equipment and leasehold improvements |
|
|
(5,247) |
|
|
(3,773) |
|
|
(10,074) |
|
|
(7,093) |
Free cash flow - continuing operations |
|
$ |
467 |
|
$ |
8,094 |
|
$ |
10,155 |
|
$ |
14,982 |
| (1) |
Represents estimated sales tax (benefit) expense relating to a contingent liability due to historical activity in certain states where it is probable that the Company will be subject to sales tax plus interest and penalties. During the year ended |
| (2) | The 2021 amount primarily relates to executive severance charges, and the prior year amounts relate to restructuring severance charges. |
| (3) | The Company terminated and repaid its Senior Credit Facility and First Lien Term Loan during the first quarter of 2021 and expensed the unamortized deferred financing costs and debt discount. Additionally, the Company terminated its previous Revolving Credit Facility during the first quarter of 2020 and expensed the remaining unamortized deferred financing costs. |
|
|
|
|
|
|
|
As of |
||||
|
|
|
|
||
|
2021 |
|
2020 |
||
Calculation of Net Leverage Ratio: |
|
|
|
|
|
Debt principal outstanding |
$ |
310,000 |
|
$ |
342,500 |
Finance lease obligations |
|
4,925 |
|
|
5,192 |
Total Debt |
|
314,925 |
|
|
347,692 |
Less: Cash and cash equivalents |
|
(20,683) |
|
|
(57,603) |
Total Net Debt (a) |
$ |
294,242 |
|
$ |
290,089 |
LTM Adjusted EBITDA (b) |
$ |
76,447 |
|
$ |
57,539 |
Net Leverage Ratio (a)/(b) |
|
3.8 |
|
|
5.0 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220308005420/en/
(877) 369-9016
InvestorRelations@cpicardgroup.com
Media@cpicardgroup.com
Source:
FAQ
What were CPI Card Group's 2021 net sales figures?
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How did CPI Card Group's gross profit margin change in 2021?
