CompoSecure, Inc. (NASDAQ:CMPO) Q4 2022 Earnings Call Transcript

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Jon Wilk: I’d say it’s actually fairly consistent Reggie in terms of strong visibility and what we refer to as the pipeline and the backlog. So that backlog is hard orders that cover kind of the next three or four months and that the pipeline that goes out further than that. And I think as you look into kind of the back half of the year, I think is when people, there’s more uncertainty out there. I think JPMorgan’s CEO did an interview recently commenting on the back half and uncertainty still remaining in the back half just in general. But if you look and we put some of the commentary in our deck, generally speaking our issuer clients believe that we are going to drive growth this year. They’re planning for it. That’s how we’re planning. And what we’ve said is we’re prepared if things turn, but we actually believe it could be a quite a nice year.

Reggie Smith: Understood. Thinking about your EBITDA guidance which is fairly strong; how should we think about debt repayment or use of cash as that EBITDA number continues to kind of grow?

Jon Wilk: So we’ve stated two priorities. I’ll reiterate for folks on the phone. Driving organic growth in the business and by that I mean the metal payment card business continuing to expand capacity, drive innovation around not just the form factor but new security technology, things like dynamic CVV, biometrics, the authentication and the integration of Arculus into credit and debit cards as kind of our first priority, and second paying down debt. We did a very nice job paying down debt this year, and I think Tim highlighted that in his comments. We’re talking about leverage ratios that went from, I think it was 3.6 down, well below 3 in total debt and secured debt at mid-2s down to 1.6. So we are de-levering through a combination of paying down debt and growing EBITDA. And Reggie, I like the fact that we’re doing it with both. For me, that’s the right way to approach it, but we will continue to pay down debt.

Reggie Smith: Got it. And if I could sneak one more; you had some really cool product announcements in your release and that you talked about earlier in the call. How should we think about, like how quickly can those go from kind of launch to like really seeing him out in the wild, if you will?

Jon Wilk: Yes. I think for us the types of products we talked about would be second half of this year into first half of next year when we start to see those things start to appear, but strong interest from our perspective in a number of those.

Reggie Smith: Perfect. Thank you.

Jon Wilk: I appreciate it, Reggie. Thank you.

Operator: Thank you. And there are no other questions in the queue. I’d like to turn back to Mr. Jon Wilk for any further remarks.

Jon Wilk: I just want to take a moment and thank all of the people who joined the webcast who are listening to the story. We are excited about the year that we just completed. We think as our first year as a public company raising guidance twice, finishing at the top end of that range. I’m extremely proud of what our team has accomplished. I’m even more excited for what’s ahead of us in terms of continued growth of our metal payment card business, domestically, internationally, and with fintech clients as well as continuing to push on the Arculus expansion, on security authentication as well as cold storage for digital assets. So thank you all for attending. We appreciate it and have a good night.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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