CPI Card Group Inc. · NASDAQ:PMTS
CPI Card — Q3 2017 Earnings Presentation
18 slides from CPI Card's earnings presentation, Nov 7, 2017
Slide 1: Third Quarter Earnings Conference Call
Third Quarter Earnings Conference Call November 7, 2017 Copyright 2017 CPI Card Group
Slide 2: Safe Harbor
Safe Harbor Forward-Looking Statements Statements in this presentation that are not statements of historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may be identified by terms such as statement
Slide 3: Business Summary
Business Summary Scott Scheirman President and CEO Copyright 2017 CPI Card Group
Slide 4: Third Quarter 2017 Key Takeaways
Third Quarter 2017 Key Takeaways • Confident in Long-Term Opportunities • Solid foundation in place – one of the leading providers in a market expected to grow long-term; diverse suite of products and differentiated solutions; talented and passionate team • Opportunities to enhance strategies and sh
Slide 5: Third Quarter 2017 Financial Summary
Third Quarter 2017 Financial Summary • Total net sales of $68.0 million • Net loss of $(0.7) million, or $(0.01) loss per diluted share • Adjusted Net Income of $1.1 million, or $0.02 per diluted share* • Adjusted EBITDA* of $9.6 million, 14.1% of net sales • Cash flow from operating activities of $
Slide 6: The Market: U.S. Market Conditions
The Market U.S. Market Conditions • Market for US Debit and Credit card manufacturing remains challenging due to lower levels of demand • Negative factors impacting card manufacturing market demand: • Pull forward into prior years of card reissuance activity • Portion of the market extending card ex
Slide 7: Q3 Highlights: New Products & Solution Areas Contributing to Growth
Q3 Highlights New Products & Solution Areas Contributing to Growth • Continued solid Card@Once® results • Installed base of ~6,700 in Q3 2017, up from ~6,400 at Q2 2017 • Growing customer interest for CPI Metal • Shipped first metal card orders in October • Solid customer demand and pipeline of new
Slide 8: CPI Focus
CPI Focus • Customer focus – deliver highest quality products, solutions and service • Establish clear strategy, plan and execute initiatives • Continue to provide innovative products and solutions in the market • Focus on increasing efficiencies and improving cost structure of the business • Empowe
Slide 9: Financial Summary
Financial Summary Lillian Etzkorn Chief Financial Officer Copyright 2017 CPI Card Group
Slide 10: Financial Results
Financial ($ in millions, except EPS and ASP) 2017 Third Quarter 2016 Change Results Net sales: Products $ 31.4 $ 37.5 $ (6.1) Services 36.6 43.7 (7.1) Total net sales $ 68.0 $ 81.2 $ (13.2) Gross Profit $ 21.0 $ 29.1 $ (8.1) gross margin 30.8% 35.8% Income from operations $ 3.5 $ 11.7 $ (8.2) Net (
Slide 11: Segment Results
Segment ($ in millions) Net Sales EBITDA* Results $39.3 $49.2 $12.9 $6.5 U.S. Debit and Q3 2017 Q3 2016 Q3 2017 Q3 2016 Credit Margin 16.5% 26.3% Net Sales EBITDA* $19.9 $23.1 $7.6 $8.6 U.S. Prepaid Debit Q3 2017 Q3 2016 Q3 2017 Q3 2016 Margin 38.2% 37.2% Net Sales EBITDA* $7.0 $7.7 U.K. $0.4 $0.9 L
Slide 12: Free Cash Flow
Free Cash Flow Positive Operating Cash Flow in Q3 2017 Expect continued positive operating cash flow for the balance of 2017 ($ in millions) Three Months Ended September 30, 2017 2016 Change Net income $ (0.7) $ 4.0 $ (4.8) Depreciation and amortization 4.5 4.2 0.2 Stock-based compensation expen
Slide 13: Debt and Liquidity
Debt and Liquidity Term Loan Has No Financial Leverage Covenants Borrowing Under Revolver limited to $20 million above 7.0x Net Debt / LTM Adjusted EBITDA ($ in millions) Third Quarter 2017 2016 CPI Debt Maturities Term $(Millions) Loan Cash $14.8 $21.3 $313 Debt $312.5 $312.5 Net Debt $297.7 $2
Slide 14: Appendix
Appendix Copyright 2017 CPI Card Group
Slide 15: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Financial Information In addition to financial results reported in accordance with U.S. generally accepted accounting principles (GAAP), we have provided the following non-GAAP financial measures in this presentation: Adjusted Net Income, Adjusted Diluted Earnings per Shar
Slide 16: Non-GAAP Reconciliation
Non-GAAP Three Months Ended September 30, Reconciliation 2017 2016 (in millions) EBITDA and Adjusted EBITDA: Net (loss) income $ (0.7) $ 4.0 Interest expense, net 5.3 5.0 Income tax (benefit) expense (0.8) 2.5 Depreciation and amortization 4.5 4.2 EBITDA $ 8.3 $ 15.8 Adjustments to EBITDA Stock-base
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended September 30, 2017 2016 (in millions) Weighted-average number of shares outstanding: Basic 55.6 55.3 Effect of dilutive equity awards 0.1 0.3 Weighted-average diluted shares outstanding 55.7 55.5 Three Months Ended September 30, 2017 2016 Reconciliation of
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation (in millions) Three Months Ended Three Months Ended Trailing Twelve September December 31, Trailing Twelve September June 30, March 31, December Months 30, 2017 June 30, 2017 March 31, 2017 2016 Months 30, 2016 2016 2016 31, 2015 EBITDA and Adjusted EBITDA: Net (loss) income