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• Net Sales Increase: 22% increase in Q4, driven by prepaid (59% increase) and debit/credit segments (12% increase).

• Prepaid Segment Growth: 26% growth for the year, exceeding $100 million in net sales.

• Debit and Credit Segment Growth: 4% increase for the year, with strong growth in eco-focused contactless cards.

• Free Cash Flow: Exceeded $34 million for the full year.

• Stock Repurchase: $9 million of stock repurchased at an average price of over $18.

• Debt Refinancing: Issued $285 million of new senior notes, extending debt maturity to 2029.

• Net Income Increase: More than doubled in Q4.

• Adjusted EBITDA: Increased 10% in Q4 to $21.9 million; full year increase of 3% to $91.9 million.

• Gross Margin: Decreased slightly in Q4 from 34.4% to 34.1%; full year increased from 35.0% to 35.6%.

• Net Leverage Ratio: Reduced to 3.0 times from 3.1 times at the end of 2023.

• 2025 Outlook: Mid to high single-digit net sales and adjusted EBITDA growth expected.

• Warning! GuruFocus has detected 3 Warning Sign with BSE:TLV.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CPI Card Group Inc (NASDAQ:PMTS) reported a 22% increase in net sales for the fourth quarter, driven by strong performance in both prepaid and debit/credit segments.

• The prepaid business grew by 26% for the year, exceeding $100 million in net sales, with significant contributions from healthcare payment solutions and eco-friendly card offerings.

• The company generated strong free cash flow, exceeding $34 million for the full year, despite higher capital spending.

• CPI Card Group Inc (NASDAQ:PMTS) successfully refinanced its debt, extending maturity to 2029, and reduced its majority shareholder's holdings, increasing public float.

• The company projects mid to high single-digit net sales growth for 2025, led by the debit and credit segment, and expects to reduce net leverage by year-end.

Negative Points

• Gross margins decreased slightly from 34.4% to 34.1% in the fourth quarter due to negative product mix.

• Net income for the full year decreased by 19% to $19.5 million, primarily due to debt refinancing costs and increased SG&A expenses.

• Adjusted EBITDA margins declined from 20.1% to 19.1% for the full year, impacted by increased employee performance-based incentive compensation expenses.

• The company anticipates adjusted EBITDA to be slightly down in the first quarter of 2025 due to timing of spending and mix.

• Free cash flow for 2025 is expected to be slightly below 2024 levels due to increased cash interest expenses and higher capital spending.