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Dec 31, 2021
CPI Card Group Q4 2021 Earnings Report
CPI Card Group reported results for the fourth quarter and full year 2021, with net sales increasing 11% to $93.2 million and full year net sales increasing 20% to $375.1 million.
Key Takeaways
CPI Card Group Inc. reported an 11% increase in fourth-quarter net sales, reaching $93.2 million. However, net income decreased by 91% to $0.7 million, and Adjusted EBITDA decreased by 23% to $13.6 million due to increased costs and income tax benefits in the prior year. The company anticipates mid-single-digit net sales and Adjusted EBITDA growth for 2022.
Fourth Quarter Net Sales Increased 11% to $93.2 Million.
Net income decreased 91% to $0.7 million primarily due to income tax benefits in prior year and increased interest expense.
Adjusted EBITDA decreased 23% to $13.6 Million due to Impact of Previously Noted Cost Increases
Company Expects Mid-Single Digit Net Sales and Adjusted EBITDA Growth in 2022.
CPI Card Group
CPI Card Group
CPI Card Group Revenue by Segment
Revenue by Segment
Debit & Credit Revenue
CapyFin.comPrepaid Debit Revenue
CapyFin.com Forward Guidance
CPI currently projects mid-single digit net sales and Adjusted EBITDA growth in 2022.
Positive Outlook
- Strong growth expected in Debit and Credit segment
- Debit and Credit segment represented 79% of net sales in 2021.
- Company expects its full-year 2022 Adjusted EBITDA margin to be similar to the 2021 full-year margin.
- Improvement from the fourth quarter 2021 Adjusted EBITDA margin is expected due to the implementation of business initiatives
- Pricing initiatives, operating leverage from increased sales, and reduced levels of certain expenses incurred in the fourth quarter are expected to improve Adjusted EBITDA margin.
Challenges Ahead
- Anticipated declines in its Prepaid Debit segment due to comparisons with a record year in 2021.
- Prepaid Debit net sales increased 25% in 2021, aided by a large new portfolio addition and COVID-19-related customer inventory replenishment.
- gross profit margin decrease in Q4 was primarily due to increased labor costs
- net income decline was primarily due to income tax benefits in the prior year quarter and increased interest expense
- Operating income, net income, and Adjusted EBITDA benefited from higher net sales, but were negatively impacted by increased labor costs and higher SG&A expenses, including costs related to Sarbanes-Oxley compliance.
Revenue & Expenses
Visualization of income flow from segment revenue to net income