Segment Reporting

3 Months Ended

Mar. 31, 2024

Segment Reporting

Segment Reporting

14. Segment Reporting

The Company has identified reportable segments that represent 10% or more of its net sales, EBITDA (as defined below) or total assets, or when the Company believes information about the segment would be useful to the readers of the financial statements. The Company’s chief operating decision maker is its Chief Executive Officer, who is charged with management of the Company and is responsible for the evaluation of operating performance and decision making about the allocation of resources to operating segments based on measures, such as net sales and EBITDA.

EBITDA is the primary measure used by the Company’s chief operating decision maker to evaluate segment operating performance. As the Company uses the term, “EBITDA” is defined as income before interest expense, income taxes, depreciation and amortization. The Company’s chief operating decision maker believes EBITDA is a meaningful measure and is useful as a supplement to GAAP measures as it represents a transparent view of the Company’s operating performance that is unaffected by fluctuations in property, equipment and leasehold improvement additions. The Company’s chief operating decision maker uses EBITDA to perform periodic reviews and comparison of operating trends and to identify strategies to improve the allocation of resources amongst segments.

As of March 31, 2024, the Company’s reportable segments were as follows:

●    Debit and Credit

●    Prepaid Debit

●    Other

Debit and Credit Segment

The Debit and Credit segment primarily produces Financial Payment Cards and provides integrated card services, including digital services, for card-issuing financial institutions primarily in the United States. Products produced by this segment primarily include EMV and non-EMV Financial Payment Cards, including contact and contactless cards, and Eco-Focused Cards. The Company also sells Card@Once instant card issuance solutions, and private label credit cards that are not issued on the networks of the Payment Card Brands. The Company provides print-on-demand services, where images, personalized payment cards, and related collateral are produced on a one-by-one, on demand basis for customers. This segment also provides a variety of integrated card services, including card personalization and fulfillment services and instant issuance services. The Debit and Credit segment facilities and operations are audited for compliance with the standards of the PCI Security Standards Council by multiple Payment Card Brands.

Prepaid Debit Segment

The Prepaid Debit segment primarily provides integrated prepaid card services to Prepaid Debit Card providers primarily in the United States, including tamper-evident security packaging. This segment also produces Financial Payment Cards issued on the networks of the Payment Card Brands that are included in the tamper-evident security packages. The Prepaid Debit segment facilities and operations are audited for compliance with the standards of the PCI Security Standards Council by multiple Payment Card Brands.

Other

The Other segment includes corporate expenses.

Performance Measures of Reportable Segments

Net sales and EBITDA of the Company’s reportable segments, as well as a reconciliation of total segment EBITDA to income from operations and net income for the three months ended March 31, 2024 and 2023, were as follows:

	Three Months Ended March 31, 2024
	Debit and Credit		Prepaid Debit		Other		Intersegment Eliminations		Total
Net sales	$	87,973	$	24,198	$	—	$	(235)	$	111,936
Cost of sales		56,478		14,175		—		(235)		70,418
Gross profit		31,495		10,023		—		—		41,518
Operating expenses		8,741		1,278		17,354		—		27,373
Income (loss) from operations	$	22,754	$	8,745	$	(17,354)	$	—	$	14,145
EBITDA by segment:
Income (loss) from operations	$	22,754	$	8,745	$	(17,354)	$	—	$	14,145
Depreciation and amortization		2,150		871		996		—		4,017
Other income (expense)		(62)		(1)		(2)		—		(65)
EBITDA	$	24,842	$	9,615	$	(16,360)	$	—	$	18,097
	Three Months Ended March 31, 2023
	Debit and Credit		Prepaid Debit		Other		Intersegment Eliminations		Total
Net sales	$	101,985	$	19,130	$	—	$	(263)	$	120,852
Cost of sales		63,801		14,220		—		(263)		77,758
Gross profit		38,184		4,910		—		—		43,094
Operating expenses		8,158		1,233		13,105		—		22,496
Income (loss) from operations	$	30,026	$	3,677	$	(13,105)	$	—	$	20,598
EBITDA by segment:
Income (loss) from operations	$	30,026	$	3,677	$	(13,105)	$	—	$	20,598
Depreciation and amortization		2,161		624		1,019		—		3,804
Other income (expense)		5		—		(119)		—		(114)
EBITDA	$	32,192	$	4,301	$	(12,205)	$	—	$	24,288

	Three Months Ended March 31,
	2024		2023
Net income	$	5,455	$	10,873
Interest, net		6,425		6,781
Income tax expense		2,200		2,830
Depreciation and amortization		4,017		3,804
EBITDA	$	18,097	$	24,288