Financial Data and Key Metrics Changes - The company reported a 10% increase in net sales for Q1 2025, driven by strong performance in debit and credit cards as well as prepaid solutions [14][15] - Adjusted EBITDA declined by 8% to $21.2 million, with adjusted EBITDA margins decreasing from 20.5% to 17.2% due to lower gross margins and increased production costs [18][24] - Net income decreased by 12% primarily due to lower gross profit and higher interest expenses [18] Business Line Data and Key Metrics Changes - Both debit and credit segments experienced a 10% increase in sales, with growth led by contactless cards and eco-focused cards [7][15] - The prepaid segment also saw a 10% increase, driven by demand for higher-priced fraud prevention packaging solutions in healthcare [15][16] - Income from operations for the debit and credit segment decreased by 5%, while prepaid segment income from operations decreased by 9% due to lower gross margins [18][19] Market Data and Key Metrics Changes - The U.S. cards in circulation increased at a 9% CAGR over the past three years, indicating a healthy demand in the market despite economic uncertainties [21][22] - Current demand from customers remains strong, although there are concerns regarding potential recessionary conditions affecting issuances and customer purchases [22] Company Strategy and Development Direction - The acquisition of AeroEye Solutions is aimed at diversifying the business and enhancing market share by offering innovative payment technology solutions [6][10] - The company aims to support its vision of being a trusted partner for payment technology by focusing on innovation and diversification [10][12] - The integration of AeroEye is expected to generate revenue and cost synergies over time, with a focus on improving margins [12][13] Management's Comments on Operating Environment and Future Outlook - Management affirmed a 2025 organic outlook for mid- to high single-digit growth for net sales and adjusted EBITDA, despite market uncertainties [8][24] - The company is focused on balancing long-term investments with managing spending to improve margins as the year progresses [8][24] - Management acknowledged the impact of tariffs and operational inefficiencies but remains optimistic about future growth [23][52] Other Important Information - The company generated $5.6 million in cash from operating activities in Q1 2025, with free cash flow slightly positive at $300,000 [19][20] - The purchase price for AeroEye was $45.55 million, funded through cash and borrowings from a revolving credit facility [25][41] Q&A Session Summary Question: Can you provide more details on AeroEye's market position and customer overlap? - AeroEye services a segment of the market focused on nimble card programs, primarily catering to fintechs and smaller issuers, with minimal customer overlap with CPI [32][34] Question: What is the expected timeline for AeroEye's EBITDA margins to align with CPI's? - Current adjusted EBITDA margins for AeroEye are in the low double digits, with expectations to improve over time as integration progresses [36][37] Question: How was the acquisition financed and what is the current cash position? - The acquisition was financed with approximately $35 million drawn from the revolver and over $30 million in cash on hand [41] Question: What is the current pricing environment and its impact on gross margins? - The pricing environment is competitive, with some mix issues impacting gross margins, but overall, there is a trend towards a more rational pricing environment [46][49] Question: Can you clarify the startup costs for the new Indiana facility? - The transition involves overlapping costs as both facilities are operated simultaneously, with expectations for these costs to taper off in the future [56][59]

CPI Card Group Inc. (PMTS) came out with quarterly earnings of $0.40 per share, missing the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $0.46 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 $0.55 per share when it actually produced earnings of $0.57, delivering a surprise of 3.64%.Over the last four quarters, the comp ...

Table of Contents | UNITED STATES SECURITIES AND EXCHANGE COMMISSION | | --- | | Washington, D.C. 20549 | | Form 10-Q | | (Mark One) | | ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 | | For the Quarterly Period Ended March 31, 2025 | | or | | ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | For the Transition Period from to | | Commission File Number: 001-37584 | | CPI Card Group Inc. | | (Exact name of the regist ...

Non-GAAP Financial Measures 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 release, all reported on a continuing operations basis: EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, LTM Adjusted EBITDA and Net Leverage Ratio. These non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis between fisca ...

Exhibit 2.1 EXECUTION VERSION AGREEMENT AND PLAN OF MERGER by and among CPI CG INC., as Parent APOLLO MERGER SUBSIDIARY, INC., as Merger Sub, ARROWEYE SOLUTIONS, INC., as Company, and WT REPRESENTATIVE LLC, as Holder Representative May 6, 2025 1 | | | Page | | --- | --- | --- | | | ARTICLE I. CERTAIN DEFINITIONS; CONSTRUCTION | 2 | | 1.1 | Certain Definitions | 2 | | 1.2 | Additional Terms | 14 | | 1.3 | Certain Matters of Construction | 17 | | | ARTICLE II. THE MERGER | 18 | | 2.1 | The Merger | 18 | | 2.2 ...

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. But finding a great growth stock is not easy at all.By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks ...

Shares of CPI Card Group Inc. (PMTS) have gained 1.3% over the past four weeks to close the last trading session at $29.03, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $37 indicates a potential upside of 27.5%.The mean estimate comprises four short-term price targets with a standard deviation of $2.94. While the lowest estimate of $33 indicates a 13.7% increase from the curr ...

Financial Data and Key Metrics Changes - Net sales increased by 22% in Q4 2024, driven by strong performance in the prepaid segment and growth in debit and credit card volumes [24][25] - Adjusted EBITDA increased by 10%, while net income more than doubled [24] - Full-year net sales increased by 8%, with a 4% increase from debit and credit segments [28][32] - Gross profit for the full year increased by 10%, with gross margin rising from 35.0% to 35.6% [29] Business Line Data and Key Metrics Changes - Prepaid business grew by 26% for the year, exceeding $100 million in net sales, driven by demand for fraud prevention solutions and healthcare payment solutions [12][24] - Debit and credit business increased by 4% for the year, with strong growth in the second half, particularly in eco-focused contactless cards [12][28] - Income from operations for the prepaid segment increased by 106% in Q4, while the debit and credit segment's income decreased by 7% [33] Market Data and Key Metrics Changes - The prepaid segment saw a 59% increase in Q4, driven by strong demand for higher-priced fraud-focused packaging solutions [25] - Contactless cards represented approximately 90% of chip card volume in 2024, up from just over 80% in the prior year [28] - The total number of credit and debit cards in the US increased by 9% in 2024, indicating healthy growth in the card business [37][38] Company Strategy and Development Direction - The company aims to be the most trusted partner for innovative payment technology solutions, focusing on customer service, quality, innovation, and diversification [18][20] - Plans to expand into adjacent markets and enhance digital solutions, including healthcare payment solutions and closed-loop prepaid markets [20][21] - Investments in the Indiana factory and other initiatives to support long-term growth while balancing profitability [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid to high single-digit net sales growth in 2025, led by the debit and credit business [16][39] - The channel inventory situation is improving, and the market is expected to normalize during the year [39] - Anticipated adjusted EBITDA growth of mid to high single digits in 2025, with strong free cash flow generation [17][41] Other Important Information - The company generated over $34 million in free cash flow for the full year while increasing capital spending [14][34] - Completed several capital structure actions, including purchasing $9 million of stock and refinancing $285 million of senior notes [15][36] - The net leverage ratio improved to 3.0 times, down from 3.1 times at the end of 2023 [36] Q&A Session Summary Question: Can you provide details on the strong prepaid results and gross margins? - Management highlighted strong demand for higher-value packaging due to fraud protection and significant growth in the healthcare vertical [50][51] - Gross margins increased by 60 basis points, with operating leverage contributing to strong performance in the prepaid segment [52] Question: What is the outlook for inventory clearance and its impact? - Management indicated that inventory levels might increase slightly throughout 2025 but expect to bring the balance down by year-end [55] Question: Can you discuss the closed-loop market and its potential size? - The closed-loop market is believed to be four to five times larger than the open-loop market, presenting a significant opportunity for the company [62] Question: Update on the Indiana facility? - The Indiana facility is on track to be operational in the second half of 2025, with new equipment and automation being implemented [66][67] Question: What is the expected free cash flow for 2025? - Free cash flow is expected to be slightly below 2024 levels due to increased cash interest expense and higher capital spending [73]

Fourth Quarter 2024 Investor Presentation March 4, 2025 Cautionary Statements These risks and uncertainties include, but are not limited to: (i) risks relating to our business and industry, such as a deterioration in general economic conditions, including due to inflationary conditions, resulting in reduced consumer confidence and business spending, and a decline in consumer credit worthiness impacting demand for our products; the unpredictability of our operating results, including an inability to anticipa ...

Mike Salop - Head, Investor Relations John Lowe - President and Chief Executive Officer Jeff Hochstadt - Chief Financial Officer Conference Call Participants CPI Card Group Inc. (NASDAQ:PMTS) Q4 2024 Earnings Conference Call March 4, 2025 9:00 AM ET Company Participants Andrew Scutt - ROTH Capital Partners Jacob Stephan - Lake Street Capital Markets. Hal Goetsch - B. Riley Operator Welcome to CPI Card Group's fourth quarter 2024 earnings call. My name is Julianne, and I will be your operator today. If you a ...