CPI Card Group Inc. EBITDA Margin increased on 9.0 pp from -0.036% to 9.0% in 2018 and Revenue showed almost no change
03/06/2019 • About CPI Card Group Inc. (
$PMTS) • By InTwits
CPI Card Group Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 9.0% in 2018, -0.0% in 2017, 14.9% in 2016, 22.4% in 2015, 18.9% in 2014
- CPI Card Group Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's in pair with industry average of 5.2%
- CAPEX is quite volatile: $6m in 2018, $9m in 2017, $14m in 2016, $19m in 2015, $17m in 2014
- The company has potentially unprofitable business model: ROIC is 2.7%
- It operates with high leverage: Net Debt/EBITDA is 12.4x while industry average is -2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue showed almost no change in 2018. Revenue growth showed acceleration in 18Q4 - it increased 5.5% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 9.0 pp from -0.036% to 9.0% in 2018.
Gross Margin increased slightly on 1.3 pp from 29.4% to 30.7% in 2018. SG&A as a % of Revenue showed almost no change in 2018. SG&A as a % of Revenue grew at 3.1 pp per annum in the last 5 years.
Net Income margin decreased on 6.0 pp from -8.6% to -14.6% in 2018. Net Income margin declined at -5.6 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
CPI Card Group Inc.'s CAPEX/Revenue was 2.2% in 2018. CAPEX/Revenue decreased on 2.8 pp from 5.0% in 2015 to 2.2% in 2018. For the last three years the average CAPEX/Revenue was 3.4%. CAPEX as a % of Revenue declined at -1.0 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 12.4x and Debt / EBITDA is 13.3x. Net Debt / EBITDA jumped12.4x from to 12.4x in 2018. Debt increased slightly on 0.64% while cash dropped on 12.6%.
The company has no short term refinancing risk: short term debt is zero.
Management team
CPI Card Group Inc.'s CEO is Scott T Scheirman. Scott T Scheirman is a founder and has 1 year tenure with the company. CPI Card Group Inc.'s CFO is John D Lowe. John D Lowe has 1 year tenure at the company.
Financial and operational results
FY ended 12/31/2018
CPI Card Group Inc. ($PMTS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 261.0 | 374.1 | 308.7 | 254.9 | 255.8 | 0.4% |
| Gross Profit | 81.7 | 135.8 | 101.9 | 75.0 | 78.6 | 4.8% |
| SG&A | 42.6 | 61.1 | 66.7 | 67.3 | 68.0 | 1.1% |
| EBITDA | 49.3 | 83.7 | 45.9 | -0.1 | 23.0 | |
| Net Income | 13.3 | 30.9 | 5.4 | -22.0 | -37.5 | |
Balance Sheet
|
|---|
| Cash | 12.9 | 13.6 | 37.0 | 23.2 | 20.3 | -12.6% |
| Short Term Debt | 6.3 | 9.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 173.1 | 300.0 | 301.9 | 303.9 | 305.8 | 0.6% |
Cash flow
|
|---|
| Capex | 17.0 | 18.7 | 14.3 | 8.8 | 5.6 | -35.9% |
Ratios
|
|---|
| Revenue growth | 32.9% | 43.3% | -17.5% | -17.4% | 0.4% | |
| EBITDA growth | 21.8% | 69.9% | -45.2% | -100.2% | -25,367.0% | |
|
|---|
| Gross Margin | 31.3% | 36.3% | 33.0% | 29.4% | 30.7% | 1.3% |
| EBITDA Margin | 18.9% | 22.4% | 14.9% | -0.0% | 9.0% | 9.0% |
| SG&A, % of revenue | 16.3% | 16.3% | 21.6% | 26.4% | 26.6% | 0.2% |
| Net Income Margin | 5.1% | 8.2% | 1.7% | -8.6% | -14.6% | -6.0% |
| CAPEX, % of revenue | 6.5% | 5.0% | 4.6% | 3.4% | 2.2% | -1.2% |
|
|---|
| ROIC | 18.5% | 28.4% | 12.8% | -9.3% | 2.7% | 11.9% |
| Net Debt/EBITDA | 3.4x | 3.5x | 5.8x | | 12.4x |
CPI Card Group Inc. ($PMTS) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 55 | 61 | 71 | 69 | | -2.1% | 12.1% | 16.4% | 5.5% |
| EBITDA | 3 | 7 | 9 | 4 | | -6.5% | 50.4% | -44.8% | |
| Net Income | -7 | -17 | -6 | -7 | | | | | |
Balance Sheet
|
|---|
| Cash | 20 | 18 | 13 | 20 | | -22.0% | -1.0% | -13.5% | -12.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 304 | 305 | 305 | 306 | | 0.6% | 0.6% | 0.6% | 0.6% |
Ratios
|
|---|
| Gross Margin | 26.3% | 32.3% | 32.8% | 30.6% | | -2.4% | 1.9% | 1.0% | 1.9% |
| EBITDA Margin | 4.6% | 11.9% | 12.6% | 5.7% | | -0.2% | 3.0% | -14.0% | 32.4% |
| Net Income Margin | -13.3% | -27.2% | -8.6% | -10.7% | | -5.2% | -23.2% | -7.4% | 11.8% |
Peers in Technology Hardware, Storage &
Below you can find CPI Card Group Inc. benchmarking vs. other companies in Technology Hardware, Storage & industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Crossroads Systems Inc ($CRSS) | | -90.6% | -35.5% | -89.5% | 39,959.5% |
| Immersion Corporation ($IMMR) | | 19.8% | -9.9% | -38.7% | 217.0% |
| Veritec Inc ($VRTC) | | -42.2% | -28.0% | -52.2% | 53.1% |
| Boxlight Corporation ($BOXL) | | -88.5% | 503.2% | 26.4% | 47.0% |
| Pure Storage, Inc. ($PSTG) | | 308.2% | 152.4% | 67.9% | 38.6% |
| |
|---|
| Median (30 companies) | -16.9% | -3.3% | -4.3% | 2.1% | 5.6% |
|---|
| CPI Card Group Inc. ($PMTS) | | 43.3% | -17.5% | -17.4% | 0.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 99.1% | 99.3% | 99.7% | 99.4% | 99.8% |
| Pure Storage, Inc. ($PSTG) | 43.5% | 55.5% | 61.9% | 65.9% | 65.5% |
| NetApp, Inc. ($NTAP) | 62.0% | 62.6% | 60.8% | 61.3% | 62.7% |
| Avid Technology, Inc. ($AVID) | 61.4% | 60.9% | 65.0% | 57.8% | 57.9% |
| Datasea Inc ($DTSS) | | | | 39.3% | 54.4% |
| |
|---|
| Median (29 companies) | 38.6% | 35.0% | 39.3% | 39.6% | 38.8% |
|---|
| CPI Card Group Inc. ($PMTS) | 31.3% | 36.3% | 33.0% | 29.4% | 30.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 12.3% | 9.0% | -25.1% | -127.0% | 48.6% |
| Apple Inc. ($AAPL) | 33.1% | 35.3% | 32.7% | 31.2% | 30.8% |
| Western Digital Corporation ($WDC) | 20.1% | 18.7% | 12.5% | 21.4% | 27.5% |
| NetApp, Inc. ($NTAP) | 16.9% | 16.7% | 11.3% | 15.4% | 22.9% |
| Seagate Technology PLC ($STX) | 19.3% | 21.1% | 11.3% | 16.7% | 20.0% |
| |
|---|
| Median (29 companies) | 7.1% | 6.2% | 3.8% | 4.5% | 7.9% |
|---|
| CPI Card Group Inc. ($PMTS) | 18.9% | 22.4% | 14.9% | -0.0% | 9.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hewlett Packard Enterprise Company ($HPE) | 6.6% | 6.4% | 10.8% | 10.9% | 9.6% |
| Pure Storage, Inc. ($PSTG) | 28.7% | 24.2% | 8.9% | 10.4% | 6.3% |
| 3D Systems Corporation ($DDD) | 3.5% | 3.4% | 2.6% | 4.8% | 5.9% |
| Apple Inc. ($AAPL) | 5.2% | 4.8% | 5.9% | 5.4% | 5.0% |
| Western Digital Corporation ($WDC) | 4.2% | 4.2% | 4.5% | 3.0% | 4.0% |
| |
|---|
| Median (29 companies) | 2.6% | 2.9% | 1.7% | 1.8% | 2.4% |
|---|
| CPI Card Group Inc. ($PMTS) | 6.5% | 5.0% | 4.6% | 3.4% | 2.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Avid Technology, Inc. ($AVID) | | | | | 252.4% |
| Ionix Technology Inc ($IINX) | | | | 23.9% | 204.5% |
| Immersion Corporation ($IMMR) | 7.6% | 5.8% | -21.5% | -138.9% | 96.8% |
| HP Inc. ($HPQ) | 8.0% | 8.7% | 15.8% | 60.8% | 72.9% |
| NetApp, Inc. ($NTAP) | 12.5% | 14.8% | 7.3% | 14.0% | 28.1% |
| |
|---|
| Median (37 companies) | 5.9% | 5.0% | -2.6% | 1.6% | 3.1% |
|---|
| CPI Card Group Inc. ($PMTS) | 18.5% | 28.4% | 12.8% | -9.3% | 2.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NCR Corporation ($NCR) | 4.9x | 6.6x | 2.7x | 2.3x | 5.2x |
| Avid Technology, Inc. ($AVID) | -0.7x | 3.1x | 1.7x | 5.6x | 4.8x |
| Xerox Corporation ($XRX) | 3.5x | 3.5x | 3.1x | 3.0x | 3.0x |
| Electronics for Imaging, Inc. ($EFII) | -0.2x | 1.4x | 1.3x | 1.6x | 1.7x |
| Hewlett Packard Enterprise Company ($HPE) | -0.1x | 1.1x | 0.4x | 1.2x | 1.6x |
| |
|---|
| Median (19 companies) | -0.4x | 0.3x | 0.1x | 0.3x | 0.2x |
|---|
| CPI Card Group Inc. ($PMTS) | 3.4x | 3.5x | 5.8x | | 12.4x |
