CPI Card Group Inc (PMTS)

[FUNMAN]

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.