Q4 2024 Earnings Presentation March 5, 2025 Disclaimers 2 Executive Summary Foundational year: High-single digit Net Sales growth, robust Free Cash Flow, international momentum and unique product innovations Net Sales: Q4 '24 vs. Q4 '23 increased 1% to $100.9mm compared to $99.9mm; FY increased 8% to $420.6mm compared to $390.6mm driven by continued domestic & international growth Adjusted EBITDA: Q4 '24 vs. Q4 '23 decreased 10% to $33.6mm compared to $37.2mm driven by investment to build out M&A function; ...

Financial Data and Key Metrics Changes - In Q4 2024, net sales increased by 1% to $100.9 million, while full-year net sales grew 8% to $420.6 million [22][25] - Adjusted EBITDA in Q4 decreased by 10% to $33.6 million, but full-year adjusted EBITDA increased by 4% to $151.4 million [24][26] - The company reported a net loss of $48.4 million in Q4 compared to a net income of $31 million in the same quarter last year [23][26] - Adjusted net income for Q4 was up 8% to $24.8 million, driven by interest rate savings [24] - As of December 31, 2024, cash and cash equivalents were $77.5 million, and total debt was $197.5 million, significantly improved from $41.2 million and $340.3 million respectively a year earlier [28] Business Line Data and Key Metrics Changes - Domestic sales were flat year-over-year, while international net sales increased by 7% to $15.4 million in Q4 [22] - For the full year, domestic sales increased by 7%, and international sales grew by 11%, indicating successful expansion in key global markets [25][26] Market Data and Key Metrics Changes - The payment card industry continues to show strength, supported by healthy consumer spending and demand for premium products [17] - Major customers like Capital One reported strong new account growth, indicating resilience in the market despite economic uncertainties [17] Company Strategy and Development Direction - The company is focusing on accelerating organic growth in payment cards, enhancing operational efficiency through the CompoSecure Operating System, and pursuing accretive M&A opportunities [15][30] - The spin-off of Resolute Holdings is seen as a strategic move to position the company for accelerated growth and diversification of revenue [15][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term potential of the business, emphasizing the significant upside due to low market penetration [10][12] - For 2025, the company expects mid-single-digit growth in both net sales and adjusted EBITDA, with sales momentum anticipated to build throughout the year [15][30] Other Important Information - The company reported its first quarter of positive net contribution from Arculus in Q4, with Arculus generating $10.5 million in revenue for the full year [14][21] - The CompoSecure Operating System is being implemented to enhance efficiency across all business functions, with a focus on cultural change and operational excellence [11][40] Q&A Session Summary Question: Revenue growth acceleration in 2025 - Management indicated they are not providing quarter-by-quarter guidance but have good visibility based on backlog and pipeline [36] Question: Details on the CompoSecure Operating System - The Operating System encompasses all functions of the company, aiming to drive efficiencies and improve operations [38][40] Question: Arculus revenue and contribution expectations - Management noted a strong exit rate for Arculus in Q4, contributing positively to the overall results for 2025 [46] Question: Domestic vs. international growth pipeline - Management expects international sales to contribute about 20% of revenue, with variability in timing due to order sizes [50] Question: Impact of Resolute on P&L for 2025 - The impact is significant across organic growth, operational improvements, and M&A activities [54][56] Question: Size of potential M&A deals - Management is open to exploring a broad spectrum of acquisition sizes, focusing on value and return for investors [96][99]

CompoSecure, Inc. (CMPO) came out with quarterly earnings of $0.27 per share, beating the Zacks Consensus Estimate of $0.21 per share. This compares to earnings of $0.26 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 28.57%. A quarter ago, it was expected that this company would post earnings of $0.29 per share when it actually produced earnings of $0.27, delivering a surprise of -6.90%.Over the last four quarters, the compan ...

Corporate Structure and Spin-off - As of February 28, 2025, Resolute owned approximately 51% of the voting power of the Company's common stock, establishing the Company as a "controlled company" under Nasdaq rules[26]. - The Company completed the spin-off of Resolute Holdings Management, Inc. on February 28, 2025, distributing one share of Resolute Holdings Common Stock for every twelve shares of Class A Common Stock held[27]. - The distribution of Resolute Holdings shares will be treated as a taxable dividend for existing stockholders[27]. - The spin-off is expected to increase the aggregate value of the Company and Resolute Holdings over time, making both stocks more attractive to investors[28]. Management and Growth Strategy - The Management Agreement with Resolute Holdings stipulates a quarterly management fee of 2.5% of Holdings' last 12 months' Adjusted EBITDA[31]. - The Management Agreement has an initial term of 10 years and will automatically renew for successive ten-year terms unless terminated[33]. - The Company aims to accelerate organic growth in 2025 by winning new customers and expanding programs with existing customers[39]. - The Company plans to utilize strong free cash flow to drive growth through accretive M&A transactions, leveraging Resolute Holdings' expertise[42]. Technology and Innovation - The Company is developing the CompoSecure Operating System to improve operational efficiency across the organization[40]. - The Arculus technology is designed to transform payment cards into multifunctional devices, enhancing digital security through passwordless authentication[41]. - The market for passwordless authentication products is estimated to grow from $18.4 billion in 2024 to approximately $86.4 billion by 2033, presenting a lucrative opportunity for the company[49]. - The Arculus Cold Storage Wallet was launched in October 2021, providing a secure solution for digital asset storage and transactions[60]. - The Arculus Cold Storage Wallet utilizes a three-factor authentication system, enhancing security for users' private keys[62]. - The Arculus Authenticate solutions are FIDO2 certified, providing a passwordless and hardware-based secure authentication experience[60]. - The Company has over 65 U.S. and foreign patents issued, with more than 35 patent applications pending, indicating a strong focus on innovation[68]. - The research and development team focuses on innovations in metal form factors, secure authentication, and digital asset storage technology, with over 65 patents issued and 35 pending[95]. Market and Sales Performance - The global addressable payment card market is projected to reach 10.3 billion cards in circulation by 2024, with an estimated 5.2 billion new cards issued in that year[43]. - The company's metal payment card sales represented less than 0.6% of the estimated addressable market in 2024, indicating significant growth potential[49]. - The company's net sales from non-U.S. metal payment card programs totaled $77 million in 2024, over four times the $19 million reported in 2018[52]. - The Company produced metal payment cards for 8 of the top 10 U.S. card issuers in 2024, showcasing its strong market presence[51]. - The Company has expanded its card programs from approximately 60 in 2018 to over 150 in 2024, reflecting its growth strategy[50]. - The Company has over 150 card programs for major clients like American Express and JP Morgan Chase, which represented 63.2% of net sales for the year ended December 31, 2024[75]. Security and Compliance - Identity fraud losses in the U.S. reached $23 billion in 2023, a 13% increase from the previous year, highlighting the need for enhanced security solutions[49]. - Payment card fraud losses worldwide exceeded $34 billion in 2023, marking a 1% increase from the prior year, emphasizing the ongoing challenges in card security[49]. - The Company maintains extensive compliance with payment card industry security standards, which acts as a barrier to entry for new competitors in the payment card market[97]. - The Company’s manufacturing operations are designed to meet diverse client needs, with a focus on high security and compliance throughout the production process[88]. Sustainability and Corporate Responsibility - The Company achieved carbon neutral operations in 2023 and 2024 through production efficiencies and purchasing carbon offsets[112]. - Water usage was reduced by approximately 31.5% compared to 2022, saving about 1.5 million gallons[116]. - The Company improved energy efficiency by converting approximately 100% of lighting fixtures in its facilities to LED[116]. - The Company was awarded the EcoVadis Silver Medal for the second consecutive year, improving its score from 60 in 2023 to 67 in 2024[116]. - The Company utilizes 65% post-consumer recycled stainless steel in its metal card products, enhancing its sustainability profile compared to plastic cards[54]. Financial and Debt Management - As of December 31, 2024, the Company had $197.5 million in variable rate debt outstanding under the 2024 Credit Facility, exposing it to interest rate risk[375]. - A 100 basis point change in interest rates would result in an approximate $4.0 million increase or decrease in annual interest expense[376]. - The Company entered into an interest rate swap agreement on January 11, 2022, with a notional amount of $125,000 and a fixed rate of 1.90%[377]. - The fair value of the interest rate swap was determined to be $2.7 million at December 31, 2024[378]. Employment and Workforce - The Company employs approximately 1,000 full-time employees, with a gender distribution of 46% female and 54% male[118].

Financial Performance Expectations - CompoSecure expects to report net sales for FY 2024 of $420.6 million, aligning with previous guidance of $418 to $424 million[6] - The company anticipates a net income loss in the range of $(89.2) million to $(87.7) million for FY 2024[6] - Adjusted EBITDA is expected to be between $149.4 million and $151.4 million, consistent with prior guidance of $148 to $151 million[6] Spin-off of Resolute Holdings - The Board approved a spin-off of Resolute Holdings, with a record date for shareholders set for February 20, 2025, and distribution expected on February 28, 2025[3] - Shareholders will receive one share of Resolute Holdings for every twelve shares of CompoSecure[3] - The spin-off is expected to be taxable for both CompoSecure and its shareholders[2] - "When-issued" trading for Resolute Holdings is expected to begin on February 20, 2025, under the ticker "RHLD"[11] Future Profitability of Resolute Holdings - Resolute Holdings anticipates limited profitability in FY 2025 as it builds out its operations and infrastructure[5] Share Repurchase Authorization - CompoSecure's share repurchase authorization has been increased from $40 million to $100 million[2] Financial Reporting Timeline - The financial information provided is preliminary and subject to finalization, with the audited results to be reported in late February or early March[8]

FY 2024 Net Sales up 8% to $420.6 million — In-Line with Preliminary Results on February 10, 2025 FY 2024 Cash Flow from Operations up 24% to $129.6 million and Free Cash Flow up 62% to $84.9 million Company Expects Mid-Single Digit Growth for 2025 Net Sales and Adjusted EBITDA Completed Spin-Off of Resolute Holdings on February 28, 2025 SOMERSET, N.J., March 05, 2025 (GLOBE NEWSWIRE) -- CompoSecure, Inc. (NASDAQ:CMPO), a leader in metal payment cards, security, and authentication solutions, today announced ...

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Core Viewpoint - CompoSecure, Inc. (CMPO) has experienced significant selling pressure, resulting in a 23.1% decline in stock price over the past four weeks, but analysts anticipate better earnings than previously predicted, indicating a potential turnaround for the stock [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2]. - CMPO's current RSI reading is 28.3, suggesting that the heavy selling pressure may be exhausting, and a trend reversal could be imminent [5]. Group 2: Fundamental Analysis - There has been a consensus among sell-side analysts to raise earnings estimates for CMPO, with a 1.3% increase in the consensus EPS estimate over the last 30 days, which often correlates with price appreciation [6]. - CMPO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [7].

Core Viewpoint - CompoSecure, Inc. has successfully completed the spin-off of its subsidiary, Resolute Holdings Management, Inc., into a separate public company as of February 28, 2025 [1]. Group 1: Spin-off Details - Each stockholder of CompoSecure common stock as of February 20, 2025, received one share of Resolute Holdings common stock for every twelve shares of CompoSecure held [2]. - The distribution of shares in Resolute Holdings will be treated as a taxable dividend for CompoSecure shareholders for U.S. federal and applicable state and local tax purposes [3]. - Resolute Holdings common stock will begin trading on Nasdaq under the ticker symbol "RHLD," while CompoSecure will continue trading under "CMPO" [3]. Group 2: Company Profiles - CompoSecure, founded in 2000, specializes in metal payment cards and security solutions, providing trust and exceptional experiences in both physical and digital transactions [4]. - Resolute Holdings is an alternative asset management platform focused on long-term value creation through operational management services and a systematic approach to capital allocation and M&A [5].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for CompoSecure, Inc. (CMPO) despite higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.21 per share, reflecting a year-over-year decrease of 19.2%, while revenues are projected to be $101.56 million, an increase of 1.7% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 17.5% higher in the last 30 days, indicating a reassessment by analysts regarding the company's earnings prospects [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +4.76%, indicating a likelihood of beating the consensus EPS estimate [10][11]. Historical Performance - CompoSecure has beaten consensus EPS estimates three out of the last four quarters, although it delivered a surprise of -6.90% in the last reported quarter [12][13]. Conclusion - CompoSecure is viewed as a strong candidate for an earnings beat, but investors should consider other factors influencing stock performance beyond just earnings results [14][16].