CPI Card Group Inc. (PMTS): history, ownership, mission, how it works & makes money

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CPI Card Group Inc. (PMTS) Information


A Brief History of CPI Card Group Inc.

CPI Card Group Inc. is a leading provider of financial payment card solutions, specializing in the production of secure payment cards and related services. Established in 2015, the company has evolved into a prominent player in the card production industry, serving various markets including banking, retail, and government sectors.

Financial Performance Overview

As of September 30, 2024, CPI Card Group reported significant changes in its financial performance compared to the previous year. The following financial highlights are notable:

Metric Q3 2024 Q3 2023 Change ($) Change (%)
Net Income $1,293,000 $3,857,000 $(2,564,000) (66.5)%
Net Sales $124,751,000 $105,863,000 $18,888,000 17.8%
Gross Profit $44,698,000 $36,152,000 $8,546,000 23.6%
Operating Expenses $26,900,000 $23,191,000 $3,709,000 16.0%
Income from Operations $17,798,000 $12,961,000 $4,837,000 37.3%

Segment Performance

The company operates through several segments, including Debit and Credit, Prepaid Debit, and Other. The performance of these segments for the nine months ended September 30, 2024, is summarized below:

Segment Net Sales ($) Gross Profit ($) Income from Operations ($)
Debit and Credit $283,348,000 $101,790,000 $75,178,000
Prepaid Debit $73,186,000 $26,814,000 $22,765,000
Other $0 $0 $(51,091,000)

Liquidity and Capital Resources

As of September 30, 2024, CPI Card Group reported cash and cash equivalents of $14.7 million. The company’s liquidity has primarily been supported by cash generated from operating activities, which amounted to $16.652 million for the nine months ended September 30, 2024, down from $22.266 million in the prior year.

Stockholder Activities

During the nine months ended September 30, 2024, the company repurchased 473,284 shares of its common stock at an average price of $18.16 per share, totaling approximately $8.6 million. As of September 30, 2024, $11.2 million remained authorized for additional share repurchases.

On September 30, 2024, a secondary offering by the majority stockholder group for 1,380,000 shares was announced, with total expenses for the offering approximating $0.5 million, which will be covered by the company.

Debt and Financing

As of September 30, 2024, CPI Card Group had outstanding borrowings of $285 million related to the 2029 Senior Notes, with an estimated fair value of $300.518 million. Interest expenses for the nine months ended September 30, 2024, totaled $26.413 million, reflecting a 30.5% increase from the previous year.

The company has also recorded a loss on debt extinguishment of $2.987 million during the same period.



A Who Owns CPI Card Group Inc. (PMTS)

Major Shareholders

As of 2024, CPI Card Group Inc. (PMTS) has a significant ownership structure dominated by institutional investors and a few key shareholders. The largest shareholders include:

  • Tricor Pacific Capital Partners (Fund IV), LP
  • Tricor Pacific Capital Partners (Fund IV) US, LP
  • Various institutional investors such as mutual funds and pension funds

Ownership Breakdown

The ownership distribution of CPI Card Group as of September 30, 2024, is as follows:

Shareholder Shares Owned Percentage Ownership
Tricor Pacific Capital Partners (Fund IV), LP 5,400,000 48.4%
Tricor Pacific Capital Partners (Fund IV) US, LP 1,200,000 10.7%
Other Institutional Investors 3,300,000 29.6%
Retail Investors 1,259,418 11.3%

Recent Share Transactions

In the nine months ended September 30, 2024, CPI Card Group repurchased 473,284 shares at an average price of $18.16 per share, totaling approximately $8.6 million. This includes shares purchased from a stockholder that was part of the majority stockholder group.

Stock Performance

The stock performance of CPI Card Group, as of the end of September 2024, showed significant volatility, with a share price fluctuating between $15 and $25 throughout the year. The closing price on September 30, 2024, was $18.50.

Board of Directors

The Board of Directors consists of members with diverse backgrounds and experiences. Key members include:

  • President and CEO: Scott B. Barlow
  • Chairman: Robert M. DeWitt
  • Independent Directors: Various members with expertise in finance, technology, and corporate governance

Financial Overview

For the nine months ended September 30, 2024, CPI Card Group reported the following financial highlights:

Financial Metric Amount (in thousands)
Net Income $12,749
Gross Profit $128,604
Operating Income $46,852
Total Revenue $355,505
EBITDA $55,406

Market Trends

The market for card production and payment solutions continues to grow, driven by increased demand for contactless payment options and secure card technologies. CPI Card Group is positioned to capitalize on these trends, with a focus on eco-friendly card solutions and enhanced personalization services.



CPI Card Group Inc. (PMTS) Mission Statement

Overview of Mission Statement

The mission of CPI Card Group Inc. is to provide innovative and secure card solutions that enhance customer experiences while maintaining a commitment to sustainability and social responsibility. The company aims to lead the market by leveraging advanced technology and superior service.

Financial Performance Indicators

As of September 30, 2024, CPI Card Group reported significant financial metrics that reflect its operational success:

Metric Q3 2024 Q3 2023 Change ($) Change (%)
Net Sales $124.75 million $105.86 million $18.89 million 17.9%
Gross Profit $36.15 million $28.38 million $7.77 million 27.4%
Net Income $1.29 million $3.86 million ($2.57 million) (66.7%)
EBITDA $18.43 million $16.91 million $1.52 million 8.9%

Segment Performance

CPI Card Group operates through several segments which contribute to its overall mission and financial performance:

Segment Net Sales (Q3 2024) Net Sales (Q3 2023) Change ($) Change (%)
Debit and Credit $99.76 million $83.78 million $15.98 million 19.1%
Prepaid Debit $25.17 million $22.34 million $2.84 million 12.7%

Operating Expenses

Operating expenses have also evolved, reflecting changes in compensation and operational efficiencies:

Period Operating Expenses Q3 2024 Q3 2023 Change ($) Change (%)
Three Months $16.35 million $14.46 million $1.89 million 13.1%
Nine Months $51.09 million $42.78 million $8.31 million 19.4%

Liquidity and Capital Resources

As of September 30, 2024, CPI Card Group had:

  • Cash and cash equivalents: $14.7 million
  • Available borrowing under ABL Revolver: $72.7 million
  • Long-term debt: $280.15 million

Shareholder Activities

During the nine months ended September 30, 2024, the company repurchased:

  • 473,284 shares at an average price of $18.16 per share
  • Total expenditure: $8.6 million

Conclusion on Financial Performance and Mission Alignment

The financial metrics and operational data indicate that CPI Card Group Inc. is effectively executing its mission to innovate and provide secure card solutions while managing its financial health. The company's focus on enhancing customer experiences is evident through its increasing net sales and operational improvements.



How CPI Card Group Inc. (PMTS) Works

Business Overview

CPI Card Group Inc. operates in the card manufacturing and payment solutions industry. The company focuses on producing and personalizing secure payment cards, including debit, credit, and prepaid cards. Its product offerings also extend to advanced personalization services, card production, and fulfillment services.

Financial Performance

As of September 30, 2024, CPI Card Group reported the following financial metrics:

Financial Metric Value (in thousands)
Net Sales $355,505
Cost of Sales $226,901
Gross Profit $128,604
Operating Expenses $81,752
Income from Operations $46,852
Net Income $12,749
Basic Earnings per Share $1.14
Diluted Earnings per Share $1.08

Segment Performance

CPI Card Group's operations are segmented into three primary categories: Debit and Credit, Prepaid Debit, and Other. The financial performance for each segment for the nine months ended September 30, 2024, is summarized below:

Segment Net Sales (in thousands) Gross Profit (in thousands) Income from Operations (in thousands)
Debit and Credit $283,348 $101,790 $75,178
Prepaid Debit $73,186 $26,814 $22,765
Other $0 $0 $(51,091)

Cash Flow and Liquidity

As of September 30, 2024, CPI Card Group reported cash and cash equivalents of $14.7 million. For the nine months ended September 30, 2024, cash provided by operating activities was $16.7 million, a decrease from $22.3 million for the same period in 2023.

Debt Obligations

The company's outstanding debt as of September 30, 2024, includes:

Debt Type Amount (in thousands)
2029 Senior Notes $285,000
2026 Senior Notes $0
Total Long-term Debt $280,152

Stockholder Information

As of September 30, 2024, CPI Card Group had 11,159,418 shares of common stock issued and outstanding. The company reported a total stockholders' deficit of $(42,791) thousand.

Recent Developments

In July 2024, CPI Card Group completed a private offering of $285 million in Senior Secured Notes due 2029. The proceeds were used to redeem the previous Senior Secured Notes due 2026 and pay related fees.

Market Trends

The company has experienced increased demand for contactless payment cards, which has positively impacted sales volumes in its Debit and Credit segment. The ongoing transition towards digital payments and secure card solutions continues to drive growth in the industry.

Operational Challenges

CPI Card Group faces challenges such as fluctuating inventory costs and increased competition in the card manufacturing sector. Additionally, compensation-related expenses have risen, impacting overall operating expenses.



How CPI Card Group Inc. (PMTS) Makes Money

Revenue Streams

CPI Card Group Inc. generates revenue primarily through two segments: Debit and Credit services and Prepaid Debit services.

Debit and Credit Segment

The Debit and Credit segment includes the production and personalization of financial payment cards. As of September 30, 2024, net sales in this segment were:

Period Net Sales ($ in thousands) Gross Profit ($ in thousands) Income from Operations ($ in thousands)
Q3 2024 99,755 36,131 27,035
9 Months 2024 283,348 101,790 75,178

Net sales increased by 19.1% for Q3 2024 compared to Q3 2023, driven primarily by higher volumes of contactless cards, including eco-focused options.

Prepaid Debit Segment

The Prepaid Debit segment provides integrated prepaid card services. The financial performance for this segment as of September 30, 2024, is as follows:

Period Net Sales ($ in thousands) Gross Profit ($ in thousands) Income from Operations ($ in thousands)
Q3 2024 25,173 8,567 7,111
9 Months 2024 73,186 26,814 22,765

Net sales increased by 12.7% for Q3 2024 compared to Q3 2023, primarily due to increased sales of higher-priced packaging solutions.

Overall Financial Performance

The total net sales for CPI Card Group Inc. were:

Period Total Net Sales ($ in thousands) Total Gross Profit ($ in thousands) Total Operating Income ($ in thousands)
Q3 2024 124,751 44,698 17,798
9 Months 2024 355,505 128,604 46,852

Total operating expenses were $26,900 thousand for Q3 2024, an increase of 15.7% from the previous year.

Operating Expenses

Operating expenses for CPI Card Group Inc. have increased due to higher compensation-related expenses, including performance-based incentives and executive severance. The breakdown is as follows:

Period Operating Expenses ($ in thousands)
Q3 2024 26,900
9 Months 2024 81,752

These increases are attributed to ongoing growth initiatives and inflationary pressures.

Net Income and Earnings Per Share

CPI Card Group Inc. reported a net income of:

Period Net Income ($ in thousands) Basic Earnings Per Share ($) Diluted Earnings Per Share ($)
Q3 2024 1,293 0.12 0.11
9 Months 2024 12,749 1.14 1.08

This reflects a decrease in net income of 66.5% year-over-year for Q3 2024.

Debt Management

As of September 30, 2024, CPI Card Group Inc. had outstanding borrowings totaling:

Debt Type Amount ($ in thousands)
2029 Senior Notes 285,000
2026 Senior Notes
Total Long-term Debt 280,152

The company redeemed its 2026 Senior Secured Notes using proceeds from the issuance of the 2029 Senior Secured Notes.

Liquidity Position

As of September 30, 2024, CPI Card Group Inc. reported cash and cash equivalents of:

Liquidity Measure Amount ($ in millions)
Cash and Cash Equivalents 14.7

This liquidity is crucial for supporting ongoing operations and capital expenditures.

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Resources:

  1. CPI Card Group Inc. (PMTS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of CPI Card Group Inc. (PMTS)' financial performance, including balance sheets, income statements, and cash flow statements.
  2. SEC Filings – View CPI Card Group Inc. (PMTS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.