Segment Reporting

3 Months Ended

Mar. 31, 2025

Segment Reporting

Segment Reporting

13. Segment Reporting

The Company’s chief operating decision maker is its CEO, who is charged with the 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 the measures of net sales and EBITDA.

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, 2025, the Company’s reportable segments were as follows:

● Debit and Credit;

● Prepaid Debit; and

● Other.

Debit and Credit Segment

The Debit and Credit segment primarily produces secure debit and credit cards and provides card services, including digital services, for U.S. card-issuing financial institutions. Products produced by this segment primarily include payment cards, including contact, contactless, eco-focused, and magnetic stripe cards. This segment also provides personalization services; instant issuance solutions, which provide customers the ability to issue an instant personalized debit or credit card on-demand within a customer location; and other payment solutions such as digital push provisioning for mobile wallets.

Prepaid Debit Segment

The Prepaid Debit segment primarily provides integrated prepaid card services to prepaid program managers primarily in the U.S., including payment cards issued on the networks of the Payment Card Brands and related tamper-evident secure packaging.

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, 2025 and 2024, were as follows:

	Three Months Ended March 31, 2025
	Debit and Credit		Prepaid Debit		Other		Intersegment Eliminations		Total
Net sales
Products	$	69,625	$	—	$	—	$	(450)	$	69,175
Services		26,895		26,713		—		(22)		53,586
Total net sales		96,520		26,713		—		(472)		122,761
Cost of sales
Products (1)		46,735		—		—		(450)		46,285
Services (1)		16,433		16,219		—		(22)		32,630
Depreciation and amortization		2,098		1,052		—		—		3,150
Total cost of sales		65,266		17,271		—		(472)		82,065
Gross profit		31,254		9,442		—		—		40,696
Operating expenses		9,551		1,443		15,598		—		26,592
Income (loss) from operations	$	21,703	$	7,999	$	(15,598)	$	—	$	14,104
EBITDA by segment:
Income (loss) from operations	$	21,703	$	7,999	$	(15,598)	$	—	$	14,104
Depreciation and amortization		2,271		1,116		860		—		4,247
Other income (expense)		(7)		6		19		—		18
EBITDA	$	23,967	$	9,121	$	(14,719)	$	—	$	18,369
Gross profit margin		32.4%		35.3%		*		*		33.2%
EBITDA margin		24.8%		34.1%		*		*		15.0%

	Three Months Ended March 31, 2024
	Debit and Credit		Prepaid Debit		Other		Intersegment Eliminations		Total
Net sales
Products	$	58,371	$	—	$	—	$	(213)	$	58,158
Services		29,602		24,198		—		(22)		53,778
Total net sales		87,973		24,198		—		(235)		111,936
Cost of sales
Products (1)		38,015		—		—		(213)		37,802
Services (1)		16,592		13,359		—		(22)		29,929
Depreciation and amortization		1,871		816		—		—		2,687
Total 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
Gross profit margin		35.8%		41.4%		*		*		37.1%
EBITDA margin		28.2%		39.7%		*		*		16.2%

* Calculation not meaningful.

(1) Exclusive of depreciation and amortization.

Reconciliation of Net Income to EBITDA

	Three Months Ended March 31,
	2025		2024
Net income	$	4,774	$	5,455
Interest, net		7,685		6,425
Income tax expense		1,663		2,200
Depreciation and amortization		4,247		4,017
EBITDA	$	18,369	$	18,097

Balance Sheet Data of Reportable Segments

Total assets of the Company’s reportable segments as of March 31, 2025, and December 31, 2024, were as follows:

	March 31,		December 31,
	2025		2024
Debit and Credit	$	260,525	$	248,970
Prepaid Debit		54,376		60,621
Other		37,012		40,066
Total assets	$	351,913	$	349,657

Capital Expenditures of Reportable Segments

Total capital expenditures of the Company’s reportable segments as of March 31, 2025 and 2024, were as follows:

	Three Months Ended March 31,
	2025		2024
Debit and Credit	$	4,712	$	750
Prepaid Debit		589		756
Total capital expenditures	$	5,301	$	1,506